in NFI and elsewhere, and my puts on high flyers have not paid off. I obviously am no good as an investor, and I'm sick of the craziness and seeming manipulation of the markets, and will be looking to exist individual stock ownership -- hopefully with some of my skin still intact.
No you got it backwards.
Re-read my original post, first. Not anyone is going to give you the "holy grail". Period.
The deck is unfolding, however, and that's much easier than trying to understand things that really don't matter, like idle chatter.
Clarity: I talked about the May '04 takeout on the yields. Do some work and re-read --backwards. I clearly stated the implications of the IRX, TNX, TYX. Do some homework, then come back and we "might" agree, or disagree.
This is/was a polite forum, let's keep it this way.
Re-read this again:
by: airbus69 03/10/04 05:53 am
Msg: 9555 of 10380
Imagine getting 25% of par, on _gov't debt. The best part of the story is the snipet at the bottom of the news story. Key word is: pensioners, amongst Italy, Germany and Japan.
"The hard part is yet to come."
<<Argentina has yet to convince angry bondholders to accept its proposal to repay just 25 percent of the $88 billion it defaulted on and many are clamoring for their respective governments to protect their investments.
Italian Prime Minister Silvio Berlusconi said on Tuesday Italy was working through diplomatic channels to try and convince Argentina to sweeten its debt offer. Bondholders want to recover at least 65 percent of their investments.
Italy -- like Japan and Germany -- has legions of individual investors including pensioners who have been stuck with bad Argentine debt.
Argentina argues it cannot repay more than 25 percent of the defaulted debt without endangering its faster-than-expected recovery from economic crisis and inflicting more pain on the 50 percent of the population living in poverty. (Additional reporting by Lucas Bergman, Cesar Illiano, Jorge Otaola and Walter Bianchi) >>
Next move? If you mean the next big major trend--the lasting opportunity in the markets--my guess would that it will be on the short side of both equity and high grade debt. (Failure of the markets' central theme--very cheap money.)
But the road from here to there is paved with a lot of small themes and choices. We're still selling some longs--e.g. AEP last week. Looking at some potential hedge shorts--RKH vs. BTO. And, even, thinking about an interim long position in 3x tax exempts, though the latter is certainly risky in view of the high grade bond charts.
Whoever advocated patience is right. Big, important trends almost never turn on a dime, so it's largely a matter of closing out the thing that's failing and moving the money to the thing that's gathering strength.
I mean it would be nice if there were an early stage major trend coming out of its base every week, but that's not the way it works. If we get a 70's style trading range market, as many seem to think, then we'll all be going through this process more often than we've become accustomed to.
On the long side, I'd tend to look at emerging themes still close to a substantial base, particularly on a successful re-test move:
(In the case of EWJ, I'd study the chart of the Nikkei since 1990. There's a big area of multi-year resistance overhead which is going to be critical for that market.)
Incidentally, if you're getting annihilated in some of these highly-leveraged rate plays, might not be a bad idea to sell on a failed bounce back towards the top, (like the right shoulder in ACG.) Happens more often than not, particularly in formerly very strong markets.
Yep. One of the things that the long bull market from '82-'00 mistaught people was the notion that you always get dead cat bounces. History will tell you not so in bear and trading range markets, ONLY in bull markets(which IMO we are not in with equities). Having the patience to wait for charts to repair themselves is called for. In particular re: NFI, take a look at the 7/02-10/02 period. When it breached its 40 week MA then, it took three months of backing and filling before it finally started firmly back up.
<I got some cash (thank God), sitting on the sidelines, what's the next move? IMH?, more ACG?, more NFI? How about that liquor store? or what about a laundramat in Brooklyn? I have to say, my patience with this market is running thin.>
I think sometimes, perhaps often, sitting on the sidelines with (excrutiating) patience is EXACTLY the right move. Better to do NOTHING and gain NOTHING, than do SOMETHING and get spanked. That's a lesson I very much hope I've learned and internalized.
OK, thx phage.But now that we're all getting annihilated, can we start speaking English that I can understand? I got some cash (thank God), sitting on the sidelines, what's the next move? IMH?, more ACG?, more NFI? How about that liquor store? or what about a laundramat in Brooklyn? I have to say, my patience with this market is running thin.
I've shown a bunch of high grade bond charts with similar high-probability topping patterns.
On average, the measuring implication of these tops is about the bottoms of 2000.
So, the market appears to be setting up for a major bear move in high grade debt. Unfortunately, these charts don't tell you how long until the patterns are proven or how long the bear move might last in terms of time.
I look at it from a practical point of view. There are a number of areas of good support below present prices--places where exceptionally large #'s of shares have changed hands. Good reaction moves might take place from these levels and could be exploited by those with the discipline to get out when the bear trend reasserts itself.
But I wouldn't buy with the intention of holding, as in 2000, until the bearish suggestions of these charts are proven false or until the bear move develops and completes a cycle base. That's harvest time for the investor who's refused to chase, exercised a selling discipline, or sold this market short.
It often helps to step back to review your investment objectives and to ask whether your methods are a logical way to accomplish them.
IMO, this is where all of us get in real trouble from time to time. For instance, swing traders should have covered their short sales of the recent downtrend under clear reversals in ALL major sentiment indicators, reversals in key internals indicators like BP, and, finally, reversals in stocks and indicies themselves down around the bottom of the price channel.
You don't want to be a "swing trader" when it's time to sell short and something else when it's time to cover.
On the other hand, it's completely logical for longer term investors to maintain a good selling discipline here or for those with standing equity liability to begin to phase in short sales.
Events in the bond markets--and, by extension, rate sensitive investment media--are even clearer and more dramatic. These are future textbook charts that are fairly screaming for clear thinking and quick precise action. If we buy some of those very attractively priced Muni's tomorrow, the fail point of the trade will be defined before the deal is done.
You don't write blank checks, and the older you get the more important this becomes.
All this commentary on Warren Buffet's wisdom and selling discipline is naught but pap, IMHO. Does anyone have a solid idea of why ACG has taken such a precipitous fall today? The only somewhat solid explanation I have seen about the decrease in interest sensitive vehicles is something about Merrill Lynch advising their clients to get out of REITs. Help would be gratefully received.
This is the one that really knocks me out. I still don't know how the thing will ultimately resove; but it's got to be among the two or three most ominous charts I've ever seen.
I doubt you'll quit investing forever! Instead of quitting altogether, learn from your mistakes. I learned:1) don't use margin unless it's a golden opportunity, and 2) diversify more across the different sectors. I had most of my money in mortgage companies, when Buffet recommends to diversify. I turned my back on Buffet's philosophy, only to lose a lot of money. IT WILL NEVER HAPPEN AGAIN! btw, another Buffet philosophy is: when your stock goes down - don't sell, if anything, buy more.
((I doubt you'll quit investing forever! Instead of quitting altogether, learn from your mistakes. I learned:1) don't use margin unless it's a golden opportunity, and 2) diversify more across the different sectors. I had most of my money in mortgage companies, when Buffet recommends to diversify. I turned my back on Buffet's philosophy, only to lose a lot of money. IT WILL NEVER HAPPEN AGAIN! btw, another Buffet philosophy is: when your stock goes down - don't sell, if anything, buy more. ))
Unless you have $31 Billion in cash, NEVER average down. What that means is, that your original buy was simply wrong. You are not alone, it happens every day. Hold onto your cash, until things quiet a bit, and you have a sign that the selling is overdone. Take your profit on the 2nd position when indications are there. Don't chase a falling market, only look at Buffet in the grand scheme of things. i.e., cash build.
Unfortunately only about .1% of us can learn from theory and other's mistakes/advice. The rest of us learn the way a donkey does - with a two-by-four between the eyes. Tends to make an impression. :>(