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Old Yesterday, 10:29 AM
 
7,729 posts, read 3,873,155 times
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Quote:
Originally Posted by mathjak107 View Post
so you think timing works for the small investor ? ha ha ha produce one academic study supporting that theory.

while your at it compare morningstars small investor returns with the funds as they track investor money flow . there are near zero funds that have investors not only beating the funds they were in but they clearly under perform the funds they were in .

The "expert"s warn against "market timing" because the ignorant will misundertand what timing is. It is not daytrading. It is not catching the exact top or bottom.



What exactly do you think those fund managers are doing? They are deciding when is the right "time" to buy or sell positions within a basket. While they are constrained by the fund's directives they have flexibility within a range and they use that range to lighten or load their holdings.



Do you think Warren Buffet is no better than you or anyone else? Do you think he "buys and holds"? Do you think he doesn't take profits when a market is near the end of a bull and pour it back in during a bear?



You can stay "in" the market but what you buy or sell within the market can be cyclical. If you don't like "market timing" then what do you think about "stock timing"?
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Old Yesterday, 11:07 AM
 
4,310 posts, read 1,605,617 times
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Quote:
Originally Posted by mathjak107 View Post
so you think timing works for the small investor ? ha ha ha produce one academic study supporting that theory.

Since you asked: "The Earnings-Price Anomaly" Ball, Ray. "The earnings-price anomaly." Journal of Accounting and Economics 15.2-3 (1992): 319-345.

The "Post Earnings Announcement Drift" effect where returns can be predicted to "beat the market" as a whole has been thoroughly tested by academics and has been proven to be true. They call it "excess returns" or "anomalous returns." It is a well-known market inefficiency based on the fact that the market does not adjust the price of a stock for good news instantaneously.

Example: Jones Inc. reports $0.50 per share earnings versus $0.10 expected. Company says demand and orders for their new product is exceeding expectations. Stock jumps from $30 to $33 the next day. Small investor buys here at $33. Over the next several weeks, analysts and institutions reevaluate Jones higher and bid it up to $40.

The strategy is easily employed by the small investor: simply buy stocks of a company a few days after they just had a strong positive earnings surprise. Hold for the medium term, at least a few months. Over time and with enough transactions, statistically you are more likely to beat the market averages than not.
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Old Yesterday, 11:38 AM
 
7,729 posts, read 3,873,155 times
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Originally Posted by Elliott_CA View Post
Example: Jones Inc. reports $0.50 per share earnings versus $0.10 expected. Company says demand and orders for their new product is exceeding expectations. Stock jumps from $30 to $33 the next day. Small investor buys here at $33. Over the next several weeks, analysts and institutions reevaluate Jones higher and bid it up to $40.

But in that example, investors are not responding soly to the earnings but to the projections. The company is not just reporting that they did well last quarter but will continue doing well in upcoming quarters. In fact, the forward guidance often has a bigger effect than the actual earnings. I've seen plenty of cases where a company reported great earnings and the stock dived. And vice-versa.
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Old Yesterday, 12:45 PM
 
65,883 posts, read 67,167,185 times
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Quote:
Originally Posted by Elliott_CA View Post
Since you asked: "The Earnings-Price Anomaly" Ball, Ray. "The earnings-price anomaly." Journal of Accounting and Economics 15.2-3 (1992): 319-345.

The "Post Earnings Announcement Drift" effect where returns can be predicted to "beat the market" as a whole has been thoroughly tested by academics and has been proven to be true. They call it "excess returns" or "anomalous returns." It is a well-known market inefficiency based on the fact that the market does not adjust the price of a stock for good news instantaneously.

Example: Jones Inc. reports $0.50 per share earnings versus $0.10 expected. Company says demand and orders for their new product is exceeding expectations. Stock jumps from $30 to $33 the next day. Small investor buys here at $33. Over the next several weeks, analysts and institutions reevaluate Jones higher and bid it up to $40.

The strategy is easily employed by the small investor: simply buy stocks of a company a few days after they just had a strong positive earnings surprise. Hold for the medium term, at least a few months. Over time and with enough transactions, statistically you are more likely to beat the market averages than not.
show me where as a group small investors do better then the investments they were in did in any study involving timing of any sort where they are in or out of the market . . ...

do you really think the typical small investor is going to pull off trading strategies ??? NONSENSE !!!
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Old Yesterday, 01:13 PM
 
7,729 posts, read 3,873,155 times
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Originally Posted by mathjak107 View Post
show me where as a group small investors do better then the investments they were in did in any study involving timing of any sort where they are in or out of the market . . ...

do you really think the typical small investor is going to pull off trading strategies ??? NONSENSE !!!

I'm not concerned about small investors "as a group". You keep on listening to your financial investors advising you to keep putting into the market as it crashes, just like you probably did in 2000 and 2008.
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Old Yesterday, 01:17 PM
 
Location: Norfolk
1,660 posts, read 2,014,324 times
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Originally Posted by jrkliny View Post
So when the market dropped, you sold stock. That is an emotional decision I try to avoid. It is likely now is the time to buy instead of selling. Laddered CDs will not keep up with inflation.

1) The market ain't done dropping. Of that, I am sure.


2) Why is it, when women make a financial decision, it's "emotional" and when men make a financial decision, it's the result of good, hard research. LOL.
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Old Yesterday, 01:21 PM
 
65,883 posts, read 67,167,185 times
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Originally Posted by oceangaia View Post
I'm not concerned about small investors "as a group". You keep on listening to your financial investors advising you to keep putting into the market as it crashes, just like you probably did in 2000 and 2008.
which is the right thing to do and we profited nicely as did most here who stayed invested and added money . ... markets always recover , and if you don't have at least a decade then you may want to rethink equities . a 50/50 mix has never ever lost money over any 10 or 20 year period .

if i had money to invest at this stage it all would be going in . no one will likely catch the bottom , nor do most of us care to .

there will always be investors who exhibit poor investor behavior and buy at the highs and sell out at the lows . then they complain on the forums how the markets burned them .
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Old Yesterday, 01:36 PM
 
7,729 posts, read 3,873,155 times
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Quote:
Originally Posted by mathjak107 View Post
which is the right thing to do and we profited nicely as did most here who stayed invested and added money . ... markets always recover , and if you don't have at least a decade then you may want to rethink equities . a 50/50 mix has never ever lost money over any 10 or 20 year period .

if i had money to invest at this stage it all would be going in . no one will likely catch the bottom , nor do most of us care to .

No one has ever "lost money" in a savings account over any 10 or 20 year history, either. If you want to wait 10 years to get back to even, rock on. Nasdaq was 5000 in Feb, 2000. Didn't get back there until 2015. The experts advised the small investors to stay the course even while they were having their big investors get out. It isn't about what the markets eventually do but what they can do if you can invest wisely not out of blind faith. Buffet doesn't "buy and hold" or "dollar cost average" to justify being in bad stocks or sectors. Bad being defined by what he expects it to do in the next few years not what it did in the last few years. Nor do he particularly "diversify". Over 40% of Berkshire Hathaway is in banking stocks.
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Old Yesterday, 01:38 PM
 
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well stick to a savings account . you also would be wrong about that because savings accounts run negative real returns after inflation and taxes over 50% of the time . it is real returns that count , not nominal .

you got to do what you got to do .

yes you are right ,,,all the money all of us here invested over decades of time in plain ole funds never made a whole lot of money for us ........ just nonsense
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Old Yesterday, 01:42 PM
 
7,729 posts, read 3,873,155 times
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Originally Posted by mathjak107 View Post
well stick to a savings account . you also would be wrong about that because savings accounts run negative real returns after inflation and taxes over 50% of the time . it is real returns that count , not nominal .

you got to do what you got to do .

That was actually my point, that just because you recover your losses and "make money" over a ten year period doesn't mean you did well economically. Keep drinking the Koolaid. Merrill Lynch loves you.


Maybe if you had invested more wisely you would have money to invest right now...
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