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  #1541  
Old 12-06-2018, 01:02 PM
A Student A Student is offline
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My question: at what point do I start to jump back in if Iím expecting things to get worse before they get better? Maybe gradually dollar cost average riding the market down? Or just keep hoarding cash and try to call the bottom, likely at some point in 2019 or 2020, potentially right around the 2020 election? I actually threw a little money into the market today for the first time since March or so, but Iím still reluctant to make any big moves. In any case, Iím going to keep a yearís worth of expenses in cash just in case this turns into something like 2008 where people are losing their jobs.
sell cash backed puts with a strike where you would be ok getting in. Today, I was getting over 10% premium on atm puts expiring in Jan 2020 on individual stocks.
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  #1542  
Old 12-06-2018, 01:10 PM
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LifeIsAPoissonProcess LifeIsAPoissonProcess is offline
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For real though, I'm interested to see some actuaries trying to time the market. Using traditional metrics it seemed the market was overpriced at 20,000 - and yet here we are over 24,000 spouting the same woes we saw last year at this time before just missing 27,000.
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  #1543  
Old 12-06-2018, 01:19 PM
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The Sad Man The Sad Man is offline
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Originally Posted by LifeIsAPoissonProcess View Post
For real though, I'm interested to see some actuaries trying to time the market. Using traditional metrics it seemed the market was overpriced at 20,000 - and yet here we are over 24,000 spouting the same woes we saw last year at this time before just missing 27,000.
and of course, like always here, we'll see bias where the ones who fail in their timing remain silent.
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  #1544  
Old 12-06-2018, 02:12 PM
d123454321 d123454321 is offline
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At this mornings low the S&P was at 15x forward earnings which roughly matched the valuation at 2016 low.

Average PE since 1995 has been closer to 17...several years from 1998 to 2002 where there was bubble and it was over 20, and 2008-13 saw it depressed well below 15 despite low interest rates.

Average has been 17 during both a big boom and bust but average interest rate over the period was about 4% on 10Y note...now it's not even 3%, yet PE is 15 which is lower than historical average.

Valuations seem solid here.

https://goo.gl/images/avyo7H

Last edited by d123454321; 12-06-2018 at 02:14 PM.. Reason: Include link to chart
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  #1545  
Old 12-06-2018, 02:20 PM
d123454321 d123454321 is offline
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If traditional methods inlude CAPE then they will continue to overstate valuations.

The big tax cut 10% boost to EPS is not reflected in past earnings so any metric using historical earnings misses that. It is like not on leveling historical data...just misleading. Same with buybacks which permanently reduce share count, stocks pay less dividend and do more buybacks in last 2 decades, so in return there should be more appreciation in lieu of dividends but many metrics that use very long historical period do not capture that shift to buybacks, really since 21st century.



Some use Market Cap to GDP which misses how global GDP is growing faster than US GDP and much of earnings growth is from fast growing overseas economies so when ratio seems high, that scares many people when it is expected with an oranges to apples comparison.

If those are traditional methods some use than yeah it kept many out for last several years.
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  #1546  
Old 12-06-2018, 04:45 PM
MathGeek92 MathGeek92 is offline
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Quote:
Originally Posted by LifeIsAPoissonProcess View Post
For real though, I'm interested to see some actuaries trying to time the market. Using traditional metrics it seemed the market was overpriced at 20,000 - and yet here we are over 24,000 spouting the same woes we saw last year at this time before just missing 27,000.
By time the market, do you mean outperform (adding alpha) or simply trying to make calls on tops and bottoms? I never try and call the top or bottom of an index.. too difficult, but I do try and outperform

I've posted trades I've done many times. And for fun, I'll post my position trades today and the corresponding benchmark (had to do a little work to get the benchmark price, so I approximated it at the time of my trades)

FB - 135.23 average buy in price / NASDAQ 7015
T - 30.05/ DOW 24253
QCOM 55.75 NASDAQ 7003
Cash/ Govt t bils proxy.. Although I write cash covered puts weekly - but deep OTM on names I would go long on. If I get hit I'll post them.

Please post.

YTD returns for me are more than 20% after taxes
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  #1547  
Old 12-06-2018, 05:52 PM
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LifeIsAPoissonProcess LifeIsAPoissonProcess is offline
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Originally Posted by MathGeek92 View Post
By time the market, do you mean outperform (adding alpha) or simply trying to make calls on tops and bottoms? I never try and call the top or bottom of an index.. too difficult, but I do try and outperform

I've posted trades I've done many times. And for fun, I'll post my position trades today and the corresponding benchmark (had to do a little work to get the benchmark price, so I approximated it at the time of my trades)

FB - 135.23 average buy in price / NASDAQ 7015
T - 30.05/ DOW 24253
QCOM 55.75 NASDAQ 7003
Cash/ Govt t bils proxy.. Although I write cash covered puts weekly - but deep OTM on names I would go long on. If I get hit I'll post them.

Please post.

YTD returns for me are more than 20% after taxes
Just adding alpha. Is your whole portfolio in individual stocks?
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  #1548  
Old 12-07-2018, 08:02 AM
MathGeek92 MathGeek92 is offline
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Originally Posted by LifeIsAPoissonProcess View Post
Just adding alpha. Is your whole portfolio in individual stocks?
That’s always been my definition. Otherwise you’re using an index, right? Like the sector SPDRs?

Speaking of which. I was lazy when I put In The benchmark on the trades above. I’ll update when I get the time and use the appropriate SPDR to measure any alpha I realize

Last edited by MathGeek92; 12-07-2018 at 11:31 AM..
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  #1549  
Old 12-07-2018, 09:46 AM
A Student A Student is offline
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Quote:
Originally Posted by LifeIsAPoissonProcess View Post
For real though, I'm interested to see some actuaries trying to time the market. Using traditional metrics it seemed the market was overpriced at 20,000 - and yet here we are over 24,000 spouting the same woes we saw last year at this time before just missing 27,000.
Your first mistake is using the DJIA as an index representing the "market", that is a crappy index for many reasons, and should go the way of GE.

Second, it depends on what you mean by timing. I wait until actual prices are less then my target price and then I'm willing to pay for the expected cash flows. So, yes, I do time the market and sell (or not buy) when actual prices are higher than I want and I buy when prices are lower then I want.

Its worked - since 1/1/2008, (so including the stock market correction), I have outperformed the SP500 by 4.2%/yr (on geometric average). Over a 10 yr timeframe and a full market cycle (bear and bull), that's pretty good.
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  #1550  
Old 12-07-2018, 12:14 PM
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djdadude djdadude is offline
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Bloodbath continues, and we are back negative for the year. I NEED TO STOP CHECKING THE MARKET.
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