If you have CNBC on this morning you have heard them say that the late Feb dip has now been made back. So in less than two months we made back that little hit.This is a great microcosm for how fast moves down tend to work, although admittedly seven weeks is a short time.
I was quite consistent in saying that bear markets don't start with single day drops like the one we had on February 27. I took no action into that decline as I don't think it makes sense for folks with longer term views to try to trade around down a little.
To be clear this was not anything clever on my part, not even close. The action from late February and early March was something that has played out over and over in the past so really this was more about having seen this movie before in the domestic market.
11 comments:
I thought we were in a bear market ;)
http://tinyurl.com/33z4e2
It all depends on your perspective I suppose. If you look at the market over the past 7 - 8 years you could say equities have been a horrible investment.
overlay a simple 200 DMA; interesting.
Too bad tomk and others went into large cash positions after the fall, yet still claim a nice gain. lmao yeah right.
The past 8 years in domestic, large-cap equities haven't been very generous from a buy-and-hold perspective, that's for sure. Don't know if you caught this paper at http://tinyurl.com/2yh3vm but it offers a perspective that you might find of interest (hat tip to Mebane Faber at http://tinyurl.com/2c4v2p); strategic allocation does not necessarily have to be hyper-complicated.
Abstract: We investigate more than a dozen of factors formed on firm characteristics and risk measures that have been claimed to be able to explain cross-sectional asset returns in the literature. In accordance to Fama and French (1993, 1996a), we use these factors in asset pricing, and show that the market portfolio, liquidity and coskewness explain the stock returns as well as the famous Fama-French three factors with momentum. In particular, in most sample periods tested, individual stocks' alphas are insignificant with only two factors, market portfolio and liquidity; in addition, many factors are redundant in asset pricing and are likely to come from data-mining.
Anon 10:50
Funny, I just checked gains from my 2/28/07 statement to last Friday (4/13/07). Up 7.48%
YTD = up 9.9%
I'm feeling pretty stupid right now.
You stated you went something like 50% cash when your model told you to after the big fall? Either way you are lying about something.
Yeah, I'm lying. Here's my trade diary for my TAA strategy from late February. Each position represents approx 6% of my TAA portfolio:
Open Ticker Sector Price Last Last Gain/Loss Status
02/28/07 ENPIX Oil & Gas $39.37 03/06/07 $38.81 -1.422% CLOSED
02/28/07 BMPIX Basic Materials $49.45 04/13/07 $53.26 7.705% OPEN
02/28/07 UTPIX Utilities $25.52 04/13/07 $27.92 9.404% OPEN
02/28/07 TCPIX Telecom $28.09 03/09/07 $27.74 -1.246% CLOSED
02/28/07 MLPIX Mid Value $47.73 04/13/07 $49.13 2.933% OPEN
02/28/07 FXI China $98.30 03/05/07 $91.00 -7.426% CLOSED
02/28/07 EWM Malaysia $10.08 03/05/07 $8.93 -11.409%CLOSED
02/28/07 EWS Singapore $11.68 03/05/07 $10.85 -7.106% CLOSED
02/28/07 ILF Latin Am $165.75 03/09/07 $168.50 1.659% CLOSED
02/28/07 EWG Germany $27.58 03/09/07 $27.38 -0.725% CLOSED
02/28/07 REPIX Real Estate $59.75 03/06/07 $56.72 -5.071% CLOSED
03/13/07 UUPIX Ultra Emerging $31.03 04/13/07 $37.62 21.238% OPEN
03/13/07 UNPIX Ultra Intl $33.66 04/13/07 $37.81 12.329% OPEN
03/15/07 ENPIX Oil & Gas $39.41 04/13/07 $45.81 16.240% OPEN
03/15/07 EWS Singapore $11.78 04/13/07 $13.02 10.526% OPEN
03/15/07 REPIX Real Estate $57.19 04/13/07 $57.44 0.437% OPEN
03/15/07 EWD Sweden $31.65 04/13/07 $35.73 12.891% OPEN
03/15/07 TCPIX Telecom $27.67 04/13/07 $29.68 7.264% OPEN
03/19/07 ULPIX Ultra Bull $68.60 04/13/07 $73.36 6.939% OPEN
03/20/07 EPP Pacific $130.06 04/13/07 $141.74 8.980% OPEN
03/20/07 EWG Germany $27.67 04/13/07 $30.53 10.336% OPEN
03/20/07 ILF Latin Am $171.15 04/13/07 $189.80 10.897%OPEN
04/02/07 RYLIX Leisure $36.09 04/13/07 $36.61 1.441% OPEN
Here's my B&H portfolio allocations. My B&H porfolio is approximately 50% of total investable assets:
VIGRX 7.2%
IWD 7.3%
IWO 7.1%
IWN 7.1%
IWC 7.4%
VDMIX 7.6%
DOL 8.0%
PISRX 8.2%
DLS 8.7%
VEIEX 7.9%
VGSIX 5.0%
USO 1.9%
VFSTX 6.5%
VBMFX 6.5%
VIPSX 3.7%
Do you really think I'd waste my time fabricating returns? I post my timing, allocation, and top sector/country ranks here on a weekly basis. During the Feb sell off I was posting blow by blow changes in my timimg model as they occured. Go back and look through Rogers archives.
Sheesh, do want me to post every trade I make in real time or should I just give you my log-on credentials so you can peruse my accounts?
I apologize and after going back and reading your old posts I concur that you are telling the truth. Thanks tomk for everything you post here at roger's blog.
With regard to RW’s 11:29 post, there’s a plain English version of the monograph “Too Many Factors! Do We Need Them All?” by Soosung Hwang and Chensheng Lu.
You can find it here:
http://www.cxoadvisory.com/blog/external/blog4-10-07/
Interesting stuff, if you can read it. The CXO Advisory version is for dummies… like me.
"Sheesh, do you want me to post every trade I make in real time or should I just give you my log-on credentials so you can peruse my accounts?"
Sure, that would be great!
Larry, how 'bout I just send you check? ;)
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