There was one answer that I never heard which immediately occurred to me.
There was real fear for a while that the US market was truly done for that society would break down. The event was really bad but as is always the case the fear exceeded the reality even if the event is not over which is something that I think people should be braced for.
What Dow 10,000 should mean to people is that in fact the US financial system has not been totaled. I have to say really doubt that a lot of people waited until March to sell out completely and then never got back in thus missing the entire snapback. If the Dow can retrace half of what it lost it can make back all that it lost. This is not a prediction about when a new high is made and I still believe there will be another scare the hell out of them decline in this cycle. Even if from here the next 20% were to be down the snapback should give confidence that the US market and financial system are not permanently broken, a lot of people thought that it was.
Going a little further below the surface, the US may not be the best investment choice but long term lag, if correct, is not permanently broken. If there really are people who sold out at the low and never got back in they should probably pick a percentage to start with right now, and then put that same number (10%, 20%, 25%, whatever) in on some fixed frequency (monthly, quarterly, whatever) and realize that while they may have had bad luck with this event they don't have to repeat their behavior in future events.
The first picture was taken in Kanab, UT we are staying here until Monday as we took in Zion yesterday and go to Bryce on Sunday. The other two pictures were taken in Zion National Park. The scenery all around here is just amazing.Today we are headed to the Best Friends Animal Sanctuary (the show Dogtown on the Nat Geo channel is about this place) for a day of volunteering.
6 comments:
Roger,
Miss your Saturday videos. Will you be getting back to them? I think they have been absent for several weeks now.
Some discussion on when to sell a mutual fund.
Interested how some of you determine when its time to sell a mutual fund. I suppose many would have sold everything 2 years ago before the serious paper or real loss. If you held on, maybe you have recovered more or less. I know one way some use to make a decision is to sell when the S+P 500 goes below the 200 day moving average. If you did that now and waited to break the 200 day, you would have a loss of about 20% from todays top. Some will use a percent from a recent high for the fund. If you own OAKBX now you will loose about 14% if it breaks 200 day MA. Who wants to have those losses? You might use a percent drop from a recent high. The high now is 25.28. You might say I sell if it goes 7% below the recent high. So you sell at 23.51. If you use a trendline and sell if price breaks that at about 24.50.
What do you do if anything to decide when to sell a fund?
I am glad to see you recognize the real strength in this market
When to sell is very difficult as there are commonly several false sell signals prior to a true top, thus sells are more difficult to identify IMO. There is no one reliable indicator.
Buys are easier. Coppock guide or other good buy signals have very few false buy signals. While nothing is perfect the Coppock guide buy signal earlier this year is a very strong indicator for the future.
http://www.blogher.com/happy-tax-break-pet-owners
Roger, did you know about this???
:-)
It is a fascinating situation, on the one hand the US must find a way to balance consumption with production and export as economic drivers while much of the developing world, Asia in particular, must navigate essentially the opposite, increasing internal consumption to balance heavy reliance on production, export and the dollar peg. There is some evidence of, and I suspect a whole lot more, of conversations going on between all parties involved at multiple levels in attempts to synchronize this to some degree; everyone knows this is unstable and unsustainable and a serious mistake could lead to economic depression, not just here but globally (the developing countries have more to lose if that happens as do their leaders; e.g., many of them don't just failed leadership, they revolt and/or execute them.
I continue to play this tactically with good results -- three 4-baggers, a 6 and a 7 since April -- but the emphasis in strategic accounts remains preservation of capital (long but defensive). It will stay that way until I see more evidence global imbalances are being worked out successfully. The more interesting and frankly promising evidence is occurring in the US rather than Asia; e.g., industrial production in the US is starting to accelerate (5.2% annualized in Q3) while sovereign wealth funds in countries such as China are being spent on infrastructure (partially to compensate for lack of consumption) and buying US debt to maintain the currency stability. We live in interesting times.
PS: You may not have the day to spare but the run on Hwy 12 from Bryce Cyn to Capital Reef National Park through Escalante and Boulder (Utah) has to be experienced to be believed: Escalante Cyn is lovely and Capital Reef is grand but there is one stretch of Hwy that will literally leave you breathless (unless you suffer from vertigo in which case it may leave you catatonic) and another stretch with mountains, literally, of nothing but Aspens.
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