What's new
Fantasy Football - Footballguys Forums

Welcome to Our Forums. Once you've registered and logged in, you're primed to talk football, among other topics, with the sharpest and most experienced fantasy players on the internet.

Stock Thread (19 Viewers)

Lack of supply IF there's sustained demand is going to drive prices higher.  But again, if there's not sustained demand, then that should materialize in inventory spikes.  So maybe it's some sort of leading indicator?  Is there history that indicates that's the case?  It's the receding water ahead of a tsunami?  I'm just trying to understand why that alone should sound an alarm to people. 
"I don't know, Bob."

 
We'll agree to disagree.

I don't see enough evidence that the bull is concluding, just maturing, I'm starting to see cracks in it. The end of a bull market usually finishes with a wild melt-up that concludes with massive gains. I'm not tying to capture all of them, but I want some. 

My opinion is simply that it is time to turn the autopilot switch off and start paying MUCH closer attention. Inflation, housing, debt, rates are the key things I'm watching. 
Even if we could identify a pattern like that which was true during the vast majority of occurrences (we can't), that doesn't mean it's going to hold true for this specific one.

Look at Siff's chart, the last two bull's didn't end with a melt up, and you could argue that this one just had one- last year the market was up ~22%, and we were up another ~7-8% in January before the sell off.

Most savvy investors are always paying attention to those things, I know I have been. The problem is, they don't tell you when to take action. What are you going to do at what levels of inflation, housing, debt, rates, etc?

 
I've spoken my thoughts here, clearly they aren't appreciated, I'll keep my housing opinions to myself moving forward. 
I value your posts on the issue - affordability is an important factor in the housing market.  I think you're correct that housing price increases as we've seen the past 5-6 years results in a wealth effect that spills over into the greater economy in a positive way, and if home price appreciation reverses it will have spillover effects.

That said, you didn't counter Bob's points w/re to supply/demand.  Instead of taking that personally, perhaps acknowledge that Bob has a point?  

 

 
I value your posts on the issue - affordability is an important factor in the housing market.  I think you're correct that housing price increases as we've seen the past 5-6 years results in a wealth effect that spills over into the greater economy in a positive way, and if home price appreciation reverses it will have spillover effects.

That said, you didn't counter Bob's points w/re to supply/demand.  Instead of taking that personally, perhaps acknowledge that Bob has a point?  

 
I really wasn't even trying to make a point.  Just asking a question.  If you successfully navigated the route from point A to point B, help the people wandering off the path with a map, Magellan.

 
I value your posts on the issue - affordability is an important factor in the housing market.  I think you're correct that housing price increases as we've seen the past 5-6 years results in a wealth effect that spills over into the greater economy in a positive way, and if home price appreciation reverses it will have spillover effects.

That said, you didn't counter Bob's points w/re to supply/demand.  Instead of taking that personally, perhaps acknowledge that Bob has a point?  

 
I have no reason to engage further. I answered his first question at the bottom of the previous page, he decided to continue hurling insults, I'm done speaking my thoughts on the subject. 

 
You answered a question nobody asked (maybe?) and not the one that was asked. 

Insults.  :lmao:

Didn't know you were the hypersensitive type, Kanye

 
Housing starts and sales are good recession indicators.  It's worth discussing in here, unless you don't care about that 50% drop out there somewhere.
Do you know if/how inventory ties in as an indicator?  Does it matter that existing home sales are down because people simply aren't selling?

 
Do you know if/how inventory ties in as an indicator?  Does it matter that existing home sales are down because people simply aren't selling?
Historically it has been (new houses for sale and sold).  There is always the question of whether backtested results will carry forward into the future.  

The question you're asking is "Is this time different?"  If I was capable of answering those questions I'd be writing you from my Hawaiian island instead of down home Alabama.

 
Last edited by a moderator:
Historically it has been.  There is always the question of whether backtested results will carry forward into the future.  

The question you're asking is "Is this time different?"  If I was capable of answering those questions I'd be writing you from my Hawaiian island instead of down home Alabama.
No, I'm looking for the bold.

 
There is no inventory of existing homes.

Which means people aren't putting existing homes on the market.

Which might mean they can't afford a home across town, so they're simply staying put.  But at some point that's going to show up as increased inventory because there are people who will have to move. 

But without inventory, of course sales are declining.  That's a U-turn in housing recovery? (Ignoring that the term recovery is an absolute joke in most areas at this point)





Lack of supply IF there's sustained demand is going to drive prices higher.  But again, if there's not sustained demand, then that should materialize in inventory spikes.  So maybe it's some sort of leading indicator?  Is there history that indicates that's the case?  It's the receding water ahead of a tsunami?  I'm just trying to understand why that alone should sound an alarm to people. 
This

 
The most important thing - and one that I’ve mentioned over and over is - Do you have a thought through plan?  What is the set of investing rules you live by?  How, specifically, do you determine value or momentum or trend?  What market forces cause you to act or react?

One of the worst mistakes you can make is to “preact”.  That is make market decisions BEFORE CONFIRMATION of your specific set of rules.  Doing that causes Whipsaws...where you inevitably wind up selling near the low and buying near the high.  Part of it is just human emotion.  Part of it is trying to use logic to determine what the market is going to do next.  We seek explanations for why the market does what it does.  When simpler is often better - ie rather than focus on what “might” happen at some time in the future ...why not relax -have a home brew- and ask the question: “in general - on your investing time horizon- is the market still going up or has it turned down?”

It’s also important to understand that markets don’t roll over on a dime.  It takes some time for a major trend to flip.  And during a trend transition (especially from bull to bear) the “forces that be” signal multiple opportunities to unwind.  In general, one might expect 4-10 months of transition from a confirmed bull market to a confirmed bear market.  And increase in volatility and sharp corrections/snap backs would be part of the signal.

The ideal goal of exiting at THE market high is unrealistic.  And for sure there will be pain during the transition.  But the point is - IF you have a plan you will be just fine.  So relax.

I do want to stress the importance of following your plan.  As you know Recognizing the trend for what it is and responding to that trend is what I find to be easiest and most straightforward. As such I remain long.  If you invest on momentum again I’d think you’d still be long the market.  And if you are a value investor...we’ll I’m guessing you are likely concerned and possibly out of the market because many traditional measures of market value suggest this market is over-valued.  "Suum cuique"

So for shiz and giggles we’ll run a quick experiment looking at how one might of done over the past 20+ years on the chart I posted.  We’ll have 3 portfolios.  The Lazy Trend; The “Total Market” Buy/Hold and the 60/40 Buy/Hold.  (note: Buy and Hold looks best at or near all-time highs - so our SPY B/H and 60/40 B/H should kill).

Each of the Portfolios will begin with $10k.  The Lazy Trend will invest 100% in the Total Market Fund in Bull Markets and 100% Total US Bonds in Bear Markets.  The Total Market Buy and Hold will do just that- 100% Total Market Fund.  And the 60/40 will invest 60% into Total Market and 40% into Total US Bonds.

We have 5 Trend Periods. "Generally" the trends are:

  1. Bull from 1995-2000
  2. Bear from 2001-2003
  3. Bull from 2004-2007
  4. Bear from 2008-2009
  5. Bull from 2010-Present
Let’s start with the 60/40 Portfolio:

$10k to Start turns into $72303.

  1. 1995-2000     $10000->$24051     CAGR=15.75%
  2. 2001-03     $24051->$25080     CAGR=1.41%
  3. 2004-07     $25080->$33803     CAGR=7.75%
  4. 2008-09     $33803->$31482     CAGR=-3.49%
  5. 2010-18     $31482->$72303     CAGR 10.83%
Now the Buy and Hold Total Market Portfolio:

$10k to Start turns into $94739.

  1. 1995-2000     $10000->$29364     CAGR=19.67%
  2. 2001-03     $29364->$27143     CAGR=-2.59%
  3. 2004-07     $27143->$39439     CAGR=9.79%
  4. 2008-09     $39439->$31958     CAGR=--9.98%
  5. 2010-18     $31958->$94739     CAGR 14.39%
Finally the Lazy Trend

$10k to Start turns into $171790.

  1. 1995-2000     $10000->$29364     CAGR=19.67%
  2. 2001-03     $29364->$35837     CAGR=6.87%
  3. 2004-07     $35837->$52072     CAGR=9.79%
  4. 2008-09     $52072->$57949     CAGR=5.49%
  5. 2010-18     $57949->$171790    CAGR 14.39%
My point here is this- HAVE A FRICKEN PLAN.  FOLLOW THE PLAN.  ADJUST AND MODIFY FROM EXPERIENCE NOT ON THE FLY.

I do believe we are in the late innings of this Bull Run...and there are some major concerns.  So I watch and follow the plan...I think you should too!

Edit: even with some concerns, I think it will take some time (maybe quite some time) for the trend to flip.  Of course the future is always unknown and there will likely be a time when a future trend flip doesn't follow past scripts.  But odds are this market will follow in the same general pattern as past markets. 

 
Last edited by a moderator:
I'm far more ignorant than pretty much all of you in regards to the stock market, so forgive me for being an idiot, but in regards to Siff's post just above:

-If I understand correctly, the three approaches were:

  -100% into the "total market" for the bull market, and then when the market turned to a bear market, all money was pulled out and put into the "bond market"

  -100% into the "total market" and just buy and hold, staying in the "total market" the entire time

  -60% into the "total market" and 40% into the "bond market", and just buy and hold, staying 60/40 the entire time

By "total market" and "bond market", what do you mean exactly? S&P 500 mutual funds & same type of thing for bonds, or just that the investor would only invest in either the stock market or bonds, whether or not he was purchasing individual stocks, mutual funds, etc.? And based on your numbers, doesn't that mean that the lazy approach is by far the best approach and you should move everything into the stock market during confirmed bull runs and then put it all into bonds during confirmed bear runs? Finally, if that is or at least has been the best approach over the last 23 years, where are the "best" places to park the money in both the stock market and the bond market for the non-savvy investor until he can educate himself and become more savvy? 

I'm trying to educate myself and develop a plan thanks to this thread and all of you posting here, but until I'm better educated I'm looking for general information on the quote/unquote "safest" or "easiest" places to put my money while I continue to learn. Not a "just buy Amazon/Apple/etc" type of thing, I understand there's no easy solution. More just general advice I guess. 

 
I'm trying to educate myself and develop a plan thanks to this thread and all of you posting here, but until I'm better educated I'm looking for general information on the quote/unquote "safest" or "easiest" places to put my money while I continue to learn. Not a "just buy Amazon/Apple/etc" type of thing, I understand there's no easy solution. More just general advice I guess. 
There is honestly a really easy solution here...https://www.bogleheads.org/

I mean i follow along with people's individual plays, but at the end of the day I stick to nearly all index funds at the cheapest possible fee structure allocated to my goals and risk tolerance.  

 
There is honestly a really easy solution here...https://www.bogleheads.org/

I mean i follow along with people's individual plays, but at the end of the day I stick to nearly all index funds at the cheapest possible fee structure allocated to my goals and risk tolerance.  
for right or wrong ...big Vanguard guy here.  :thumbup:  though I do have some Berkshire-Hathaway and some individual stocks - but majority is in Vanguard funds.

 
I'm trying to educate myself and develop a plan thanks to this thread and all of you posting here, but until I'm better educated I'm looking for general information on the quote/unquote "safest" or "easiest" places to put my money while I continue to learn. Not a "just buy Amazon/Apple/etc" type of thing, I understand there's no easy solution. More just general advice I guess. 
What's your risk tolerance?  How much can you see your money decrease without freaking out?

This page has some amazing breakdowns of popular portfolio constructions and how they perform over time.   It can be as easy as a three fund portfolio (though if I were picking I'd go with the Coffeehouse, rebalance annually and mostly forget about it the rest of the time).  It can be very simple (these are both very simple).  The risk can be tailored to your tolerance (mostly - this is all based on past market behavior).

I'm far more ignorant than pretty much all of you in regards to the stock market, so forgive me for being an idiot, but in regards to Siff's post just above:

-If I understand correctly, the three approaches were:

  -100% into the "total market" for the bull market, and then when the market turned to a bear market, all money was pulled out and put into the "bond market"

  -100% into the "total market" and just buy and hold, staying in the "total market" the entire time

  -60% into the "total market" and 40% into the "bond market", and just buy and hold, staying 60/40 the entire time

By "total market" and "bond market", what do you mean exactly? S&P 500 mutual funds & same type of thing for bonds, or just that the investor would only invest in either the stock market or bonds, whether or not he was purchasing individual stocks, mutual funds, etc.? And based on your numbers, doesn't that mean that the lazy approach is by far the best approach and you should move everything into the stock market during confirmed bull runs and then put it all into bonds during confirmed bear runs? Finally, if that is or at least has been the best approach over the last 23 years, where are the "best" places to park the money in both the stock market and the bond market for the non-savvy investor until he can educate himself and become more savvy? 
One thing to be aware of here is that it isn't easy to identify and act on a "bull" and "bear" market.  #3, for simplicity, is by far the easiest to do, though I'd recommend (as above) a bit more diversification than just 60/40.  It turns out diversification is the greatest insurance you get get in the markets, and even roughly done works well.  Adding in a bit of large, a bit of small, and some real estate does wonders for drawdown amelioration.

 
Last edited by a moderator:
Thanks, guys - exactly the kind of info I'm looking for  :thumbup:   I don't have FBG-type money in my 401k, Roth, and other investments but it's a lot to me, and up until now I've been playing it safe with my choices. I'm mostly interested in diversifying my portfolio at this point, and my risk tolerance is closer to medium at this point in my life. All your comments are greatly appreciated, and I'll be sure to check out the provided links. 

 
I'll do my best to answer as many of the questions posted above as I can.

First of all - the purpose here is more "educational" than "you absolutely need to do this". I question the preferred methods of financial advisors and big financial institutions.  Why?  Because their number one goal is to make money for themselves - and if you happen to make money along the way...that's great too.  But it is not their priority.  No one and I mean NO ONE cares more about your money than you do.

To answer the first question.  In this experiment we have 3 scenarios.

#1: Lazy Portfolio.  Is a stratgey that goes LONG a Total US Market Fund when the Market is Trending Bullish.  The Strategy sells out of that fund and goes 100% into a Total US Bond Fund when the Market is Trending Bearish.  I used Vanguard Funds in this experiment.   This is a Lazy Portfolio which means you only need to look at a chart 1x per month - at the end of the month and then determine if the market is bullish or bearish.  In this case I used a Moving Average Cross to determine trend.  To make the case for the Lazy Portfolio even lazier...trades were made at the beginning or end of the year. 

#2: Buy and Hold a fund made up of the SP500 for the entire time.  Make no mistake.  In a bull market there is really no better place you could be than 100% long the SP500.  I know that's not what they tell you (they tell you to diversify)...but it is the truth.  Test any formal Buy and Hold Diversified Strategy you want against Buy and Hold $SP500 Fund- and I doubt you can beat Long the $SP500 Fund. 

#3: Is the Oldsmobile of Investing Strategies.  Long 60% Stock; Long 40% Bonds.  

Again for the purpose of the experiment I used Vanguard Funds VTSMX for the Long Stock Position.

Funds charge for their services.  I'm not sure what the industry average is...let's say 1%, but some charge more than that.  1% MATTERS.  It's quite possible that the more basic your portfolio is - the better your long term results will be because that fee funds charge eats...year over year...and the difference in holding a 1% fee fund  vs a 2% fee fund over your lifetime is significant.

Vanguard is great for cheap fees.  Fidelity and Schwab also have cheap fees.  Pick funds that charge you as little as possible.  

The Portfoliocharts.com page that Sand listed is AWESOME!  What a great resource.  I really appreciate all the things you post Sand. 

I ran the Coffeehouse Portfolio through the same time periods as the other 3 Portfolios and here is what I come up with:

Coffeehouse

  1. 1995-2000     $10000->$20267     CAGR=12.49%
  2. 2001-03     $20267->$24547     CAGR=6.60%
  3. 2004-07     $24547->$35223     CAGR=9.45%
  4. 2008-09     $35223->$32893     CAGR=-3.36%
  5. 2010-18     $32893->$67851    CAGR 9.37%
When running it straight from 1995-Present I come up with:

  1. 1995-2018     $10000->$68904     CAGR=8.72%
Goes back to my point---If you are just going to Buy and Hold - I don't think you can do better long term than just holding 100% SP500.  If someone can show results otherwise...I'll happily agree.

But I think you can do better than that.  I wholeheartedly disagree that it is difficult to identify and determine trend.  Especially when you take a broad view of the market.  It doesn't need to be complicated.  It doesn't need to take a lot of time.  In this case the Lazy Portfolio is following along a monthly chart and actually making investment decisions annually (if at all).  My view is that it is far easier and far more portifable to spend time learning how to identify that trend and being aligned to the trend (ie: Bullish when the market trends bullish and Conservative  when the market trends bearish). In the Lazy Portfolio a 200 point swing in the market on any given day is just noise.  And while times like early February might be uncomfortable - the Lazy Portfolio is an example of a set plan of ACTION - and you know precisely what to do and when to do it.

For the Lazy Portfolioer..the trend remains Bullish - even after the action of February.  While I do believe that we can expect some increase in volatility...and while I do believe we are in the later stage of this bull market.  Odds favor remaining long until that trend has flipped.  Could that occur in the next 30 days...unlikely but anything is possible.  Most major trend rolls are drawn out...and as I said the powers that be will flash their signals and provide multiple exit opportunities.  So Relax because Emotions are a traders and investors' biggest enemy.

Notes: I ran some scenarios for different portfolios that Sand listed.

To test this : Again I ran the numbers for 4 of the Portfolios from Portfoliocharts.com from Jan 2007-Present (I'm limited because some funds in these portfolios don't go back to 1995).  Buy and Hold the Diversified Portfolio vs. Buy and Hold Vanguard VTSMX (Total Market Fund).  Here's those results:

Jan 2007-Present

  1. 7Twelve     CAGR 4.35%   vs    VTSMX   CAGR 8.75%
  2. All-Season CAGR 6.24%   vs    VTSMX   CAGR 8.75%
  3. Ivy              CAGR 3.87%   vs   VTSMX   CAGR 8.75%
  4. C.House    CAGR 5.78%   vs    VTSMX   CAGR 8.75%
Ah...but Siff..you're cherry picking by starting near the top of a bull market into a huge bear market....ok...here's the what the portfolios look like from 2009-Present (bottom of a bear market into one if not the biggest bull market of your lifetime)

January 2009-Present

  1. 7Twelve     CAGR 8.8%   vs   VTSMX   CAGR 15.88%
  2. All-Season CAGR 8.33%  vs   VTSMX   CAGR 15.88%
  3. Ivy             CAGR 9.10%   vs   VTSMX   CAGR 15.88%
  4. C.House    CAGR 10.99%   vs  VTSMX  CAGR 15.88%
 
Last edited by a moderator:
Any short term Total US Bond Fund's that anyone here would recommend? US treasuries are obviously the safest, but looking at the yields...yeesh. 

 
Forget housing, new theory, much quicker death to the bull market, a trade war - who doesn't like a good ol' fashioned trade war? What isn't there to like?

 
But I think you can do better than that.  I wholeheartedly disagree that it is difficult to identify and determine trend.  Especially when you take a broad view of the market.  It doesn't need to be complicated.  It doesn't need to take a lot of time.  In this case the Lazy Portfolio is following along a monthly chart and actually making investment decisions annually (if at all).  My view is that it is far easier and far more portifable to spend time learning how to identify that trend and being aligned to the trend (ie: Bullish when the market trends bullish and Conservative  when the market trends bearish). In the Lazy Portfolio a 200 point swing in the market on any given day is just noise.  And while times like early February might be uncomfortable - the Lazy Portfolio is an example of a set plan of ACTION - and you know precisely what to do and when to do it.

For the Lazy Portfolioer..the trend remains Bullish - even after the action of February.  While I do believe that we can expect some increase in volatility...and while I do believe we are in the later stage of this bull market.  Odds favor remaining long until that trend has flipped.  Could that occur in the next 30 days...unlikely but anything is possible.  Most major trend rolls are drawn out...and as I said the powers that be will flash their signals and provide multiple exit opportunities.  So Relax because Emotions are a traders and investors' biggest enemy.
Just to clarify- are you saying that if this trend change takes place say in March, you wouldn't make any changes until Dec 31st?

 
Just to clarify- are you saying that if this trend change takes place say in March, you wouldn't make any changes until Dec 31st?
NO NO NO.

I'm saying when I ran the Lazy Portfolio...positions were opened/closed at the end/beginning of a year- it was just an easier simulation to run as this is educational.

If THIS market continues to tank and rolls over let's say a month or two from now...we'd exit VTSMX at that time.  Following a trend does not mean you time the market to catch the absolute market top and bottom.  It means you have the observational skill of a low minded chimp with the ability to ascertain the market in general is moving either up or down.  The goal is to capture 75-90% of a primary trend...not all of it.

Today SUCKS.  Days like this SUCK.  But look at the chart I posted.  In general which direction does the market look like it is moving?  See the forest through the trees if you have a long horizon.

 
NO NO NO.

I'm saying when I ran the Lazy Portfolio...positions were opened/closed at the end/beginning of a year- it was just an easier simulation to run as this is educational.

If THIS market continues to tank and rolls over let's say a month or two from now...we'd exit VTSMX at that time.  Following a trend does not mean you time the market to catch the absolute market top and bottom.  It means you have the observational skill of a low minded chimp with the ability to ascertain the market in general is moving either up or down.  The goal is to capture 75-90% of a primary trend...not all of it.

Today SUCKS.  Days like this SUCK.  But look at the chart I posted.  In general which direction does the market look like it is moving?  See the forest through the trees if you have a long horizon.
That's what I thought, just wanted to clarify what you meant. Making investment decisions annually has been better than buy and hold, but making them monthly is better than annually.

What time frame MA's are those on the chart? It seems like a couple of other times they came very close to crossing, and may actually have in real time prior to the monthly bar closing.

 
@siffoin do your charts predict a president that doesn't act rationally, and has nearly no concept of well, anything?
My only real hope here is simple:

The only thing this moron is measuring himself on that he can look at it in black and white is the stock market. He has to see this reaction today as a precursor to what would happen should he enact steel & aluminum tariffs. Hopefully he walks back off the ledge, bc this would be a slippery slope, and honestly, I don't have a plan for a trade war. Maybe I'd just put my money in the Yen until it would settle... But if he does follow through on this, it is the spark to what could be big trouble. 

 
Last edited by a moderator:
That's what I thought, just wanted to clarify what you meant. Making investment decisions annually has been better than buy and hold, but making them monthly is better than annually.

What time frame MA's are those on the chart? It seems like a couple of other times they came very close to crossing, and may actually have in real time prior to the monthly bar closing.
There are a couple of whipsaws on the chart.  From June 2010-Sept 2010.  The result of those would be a loss of appox 16 SPY Pts.  Investing through whipsaws is frustrating...in hindsite it's a missed opportunity of 16 pts out of 160 of the trend.  Whipsaws happen.  I'd suggest spending time on how to overcome that flaw of trend following as a primary exercise.

 
@siffoin

Is $1,465 any moving average for Amazon? I've got the 20 day around $1,455 and the 50 day around $1,390 - Saw a huge bounce off of $1,465, so trying to put the pieces together on this one. 

 
There are a couple of whipsaws on the chart.  From June 2010-Sept 2010.  The result of those would be a loss of appox 16 SPY Pts.  Investing through whipsaws is frustrating...in hindsite it's a missed opportunity of 16 pts out of 160 of the trend.  Whipsaws happen.  I'd suggest spending time on how to overcome that flaw of trend following as a primary exercise.
For sure, wasn't meant to be taken as a criticism, just a question. These are monthly bars obviously- when you make your investment decisions, I assume it's using a shorter time frame (weekly or daily)?

 
@siffoin

Is $1,465 any moving average for Amazon? I've got the 20 day around $1,455 and the 50 day around $1,390 - Saw a huge bounce off of $1,465, so trying to put the pieces together on this one. 
I think $1400ish is in play.

60 min chart is bearish.

Daily chart with support at 1400->1275->1200 (ish).  We play a Zone with support levels.

It's tough to get a perfect read on what this market is doing...that's why I think it's better to take the wide-view

 
Hate to say this, but the market needs to sell aggressively until the moron decides this is a bad idea. 

We’ll get it right back once he does, but if he doesn’t, IDK.

 

Users who are viewing this thread

Top