Two books that may help you with tour timing ambitions:
The Complete Idiot's Guide to Market Timing
Scott Barrie
How Technical Analysis Works
Bruce M. Kamich
Good luck.
Try:
1) "Getting Started in Technical Analysis" by Schwager.
2) Technical Analysis Explained by Pring.
I'll NOT recommend "How I Trade For A Living" by Gary Smith.
Jun_Yu or whoeve you are:
Try _The Intelligent Investor_, by Benjamin Bradley.
Or, if you're comfortable with numerology, stick with "technical" analysis.
<shrug>
"Elle" <> wrote
> Jun_Yu or whoeve you are:
>
> Try _The Intelligent Investor_, by Benjamin Bradley.
If you find a copy, let me know.
Elle <> wrote:
> Try _The Intelligent Investor_, by Benjamin Bradley.
> Or, if you're comfortable with numerology, stick with "technical" analysis.
> <shrug>
Why do you dismiss technical analysis? There are succesful market timers with
established (and independently verified track records) and there are those who
are nothing but snake oil salesmen (Bob Prechter comes to mind).
BTW, the Intelligent Investor is written by Benjamin Graham ;-)
Buffet, Graham's disciple eschews market timing & technical analysis but he practices
it all the time. I don't have the quote handy but he's been quoted as saying that
we're in a bear market that would last 17-18yrs - exactly as long as the
bull market that finished in 2000.
That's market timing. No different than what most "technical analysists" do.
-Sanjay
Sanjay wrote:
> Elle <> wrote:
> > Try _The Intelligent Investor_, by Benjamin Bradley.
> > Or, if you're comfortable with numerology, stick with "technical" analysis.
> > <shrug>
>
> Why do you dismiss technical analysis? There are succesful market timers with
> established (and independently verified track records) and there are those who
> are nothing but snake oil salesmen (Bob Prechter comes to mind).
>
> BTW, the Intelligent Investor is written by Benjamin Graham ;-)
>
> Buffet, Graham's disciple eschews market timing & technical analysis but he practices
> it all the time. I don't have the quote handy but he's been quoted as saying that
> we're in a bear market that would last 17-18yrs - exactly as long as the
> bull market that finished in 2000.
>
> That's market timing. No different than what most "technical analysists" do.
Depends on what you mean by "practicing" market timing. Commenting
about the current market is not what I'd call "practicing market
timing". Buffet's method can be simplified to "buy well managed
companies at reasonable prices." Well, you can argue that buying at
reasonable prices may be a form of market timing. But that would be
stretching it quite a bit.
>
> -Sanjay
"Elle" <> wrote in message
news:Ls4Gf.2353$
> Jun_Yu or whoeve you are:
>
> Try _The Intelligent Investor_, by Benjamin Bradley.
>
A really "Intelligent Investor" would know the book is by Benjamin Graham!
My revised edition is also "updated with new commentary by Jason Zweig". But
then I own and read these things.
> Or, if you're comfortable with numerology, stick with "technical"
> analysis. <shrug>
>
Actually TA is very simple. Even the innumerate can follow it. I don't
recommend it though.
"Sanjay" <> wrote
> Elle <> wrote:
>> Try _The Intelligent Investor_, by Benjamin Bradley.
>> Or, if you're comfortable with numerology, stick with "technical"
>> analysis.
>> <shrug>
>
> Why do you dismiss technical analysis? There are succesful market timers
> with
> established (and independently verified track records) and there are those
> who
> are nothing but snake oil salesmen (Bob Prechter comes to mind).
>
> BTW, the Intelligent Investor is written by Benjamin Graham ;-)
Right. Post-o.
> Buffet, Graham's disciple eschews market timing & technical analysis but
> he practices
> it all the time.
What they eschew is timing based on technical analysis.
Graham and other value investors promote selling when a stock becomes
overvalued, as measured by company financial nuts and bolts. You can call
that a kind of timing, sure. But it is based not on mere share price
"patterns" but instead on what I describe below.
> I don't have the quote handy but he's been quoted as saying that
> we're in a bear market that would last 17-18yrs - exactly as long as the
> bull market that finished in 2000.
>
> That's market timing. No different than what most "technical analysists"
> do.
Sanjay,
First, watch your English. I don't have patience with people on Usenet who
don't know grammar well. In other words, parsing someone's really crappy
English via online forum is often an exercise in futility. Example: Saying a
bear market will last X years is not market timing. I can guess at what
you're trying to say, but that's time intensive and discourteous to me. Now
maybe yours was a post-o, in which case all is forgiven. But I'm guessing
from your name "Sanjay" that English may not be your first language. Suffer
with the stereotype or bear with this discussion.
A few observations:
-- From my reading, most timers lose their shirts.
-- However, some timers do fine. But that is to be expected on the basis of
a normal distribution.
-- One article in a reputable journal I read a few years ago reported that,
yes, one can time the market and make money, not counting transaction costs.
Counting transaction costs, it's a much worse bet.
-- "Technical" analysis is an abuse of words. What's under consideration in
TA is to use numerical share price patterns to predict the future, without
consideration for the nuts and bolts of how a company is actually run and
what sort of record of profit making it has had in the past.
-- I think it is likely we are in a secular bear market and will be for at
least a few more years. So buy-and-hold won't make person meaningful money
in the short run. (But with dividend reinvestment, it is a perfectly valid
approach for the long run for people who don't like risk-taking.) Can value
investing be used to make some money during a secular bear market? Sure. A
few weeks ago I assembled a screen using parameters culled largely from
Graham but refined using input from Buffet and other value investors. Only
two stocks came close in my screen, NX and PKX, both steel companies.
They're both up about 20% today, and, more importantly, are no longer Value
investor picks, at least by my screen. (I could say that my prediction was
damn savvy. Or I could say I got lucky. I think I'll say nothing and just
keep experimenting with Value investing.) Now will other "bargain" stocks
recur through the secular bear market? I expect so. Graham or one Value
investing site I'm reading counsels selling after either (1) two years blah
blah or (2) IIRC a 50% rise in the stock price; or (3) when certain company
parameters (/not/ share price per se) indicate doom, whichever comes first.
Lastly, mimf has some crackpots that destroy the fabric of online adult
communications. You join in with them, and you're on killfile. That /is/ a
shot over the bow. Take the offer or leave it.
In article <>,
"Ed" <> wrote:
I would reco Gary Smith's book, now dated, but basic ideas intact.
also, "How to Buy" and "When to Sell" by Justin Mamis
"Elle" <> wrote
> You join in with them, and you're on killfile.
How terrible. Sanjay, I can tell you that being in the name of the months
killfile is a really bad experience.
Be real careful.
Buffet does practice market timing and it is not just buying
companies at reasonable prices. He buys/sells stocks,
bonds, currencies, businesses.
There is even a book titled "Trade Like Warren Buffet", which
I haven't read, but looks interesting.
I do agree that his approach is fundamental rather than technical.
Kaspa
I think you're abusing the word "reasonable prices" below. Or it's a very
loaded phrase and so shouldn't be presumed to mean the same thing to all
people.
"kaspakhine" <> wrote
> Buffet does practice market timing and it is not just buying
> companies at reasonable prices. He buys/sells stocks,
> bonds, currencies, businesses.
>
>
>
> There is even a book titled "Trade Like Warren Buffet", which
> I haven't read, but looks interesting.
>
>
>
> I do agree that his approach is fundamental rather than technical.
>
> Kaspa
>
Elle wrote:
> "Sanjay" <> wrote
> > Elle <> wrote:
>
> Sanjay,
>
> First, watch your English. I don't have patience with people on Usenet who
> don't know grammar well. In other words, parsing someone's really crappy
> English via online forum is often an exercise in futility. Example: Saying a
> bear market will last X years is not market timing. I can guess at what
> you're trying to say, but that's time intensive and discourteous to me. Now
> maybe yours was a post-o, in which case all is forgiven. But I'm guessing
> from your name "Sanjay" that English may not be your first language. Suffer
> with the stereotype or bear with this discussion.
>
>
> Lastly, mimf has some crackpots that destroy the fabric of online adult
> communications. You join in with them, and you're on killfile. That /is/ a
> shot over the bow. Take the offer or leave it.
Sanjay, if I were you, I'd be really scare by now. Watch your steps my
friend. You don't want to incur the ire of Elle.
"Elle" <> wrote
>I think you're abusing the word "reasonable prices" below.
You said:
First, watch your English. I don't have patience with people on Usenet who
don't know grammar well.
That's fine but how about people that can't count?
the word "reasonable prices"
That's two words.
I'm just real pleased that I had two grammer's. Knew 'em both purty well.
PeterL <> wrote:
>
> Depends on what you mean by "practicing" market timing. Commenting
> about the current market is not what I'd call "practicing market
Peter,
I think that's my point. Everyone at some point is doing "market timing"
but "technical analysis" and "market timing" still has a bad reputation.
Buffet moves heavily into cash when stock market cycles are negative
(as he is now). He warned about this in the late 90's prior to the
crash. He's very recently on the record as saying '06 will be a
horrible year for the dollar, stocks and even politics and Washington
will be shaken up.
That's timing the market - plain & simple. But Buffett (and the
majority of wall street) all belittle technical analysis and
market timing.
I'm not attackign Buffet - I've read a lot about him and have slowly
realized that there is so much overlap between him and the "timing"
approaches he criticizes.
Fidelity's Magellan fund had a team of market timers looking at seasonality,
price/volume and other indicators along with fundamentals (ex. it's better
to buy Disney in October than January over any given year).
> timing". Buffet's method can be simplified to "buy well managed
> companies at reasonable prices." Well, you can argue that buying at
> reasonable prices may be a form of market timing. But that would be
> stretching it quite a bit.
No, Buffet says that "ideally" he'd like to buy & hold but the reality is
that it never works out that way.
"Sanjay" <> wrote
> Buffet moves heavily into cash when stock market cycles are negative
> (as he is now).
If you mean Buffet's Berkshire Hathaway, the most recent I've read on this
is that BH does not deal all that much in stocks these days. From a poster
at misc.invest.financial-plan this past week:
---
There's a lot of focus on Buffett's Graham & Dodd style stock picking
but Berkshire really uses a lot of its capital buying profitable
enterprises outright (no doubt analyzing them for fundamental value).
Hysteria has little or nothing to do with it because a lot of the time
they're not even publicly traded securities. Like, here in the Bay area
he just bought a PR firm called BusinessWire; from the stories, the deal
was consummated over a few exchanges of information. It was privately
held, has a long record of profitability, and is a valuable "franchise".
There are dozens of companies like this under the Berkshire umbrella.
So his decisions about whether or not to invest cash are a lot different
than an individual investor's. Perhaps more similar to private equity
investors, who he ostensibly is competing with. Though from the seller's
perspective Buffett may be a more appealing buyer (he typically leaves
good management in place and doesn't disturb the companies he buys).
But for all we know he may deploy 1/3 of his cash next week for the
businesses ConAgra is about to spin off, or god knows what. The fact
that he isn't buying publicly traded securities doesn't necessarily say
much about the market...
---
kaspakhine <> wrote:
> I do agree that his approach is fundamental rather than technical.
And I say there's a fine line between technical and fundamental.
Elle <> wrote:
> But for all we know he may deploy 1/3 of his cash next week for the
> businesses ConAgra is about to spin off, or god knows what. The fact
> that he isn't buying publicly traded securities doesn't necessarily say
> much about the market...
this person is misinformed about Buffet. Buffet has positioned himself
heavily in cash prior to every major market correction that I can
recall.
He has also gone on the record as saying "The market is due for a
correction, I can't tell you exactly when but it will happen" each
time it happens.
So yes - his cash position reflects his feelings on the market.
Elle <> wrote:
> Graham and other value investors promote selling when a stock becomes
> overvalued, as measured by company financial nuts and bolts. You can call
> that a kind of timing, sure. But it is based not on mere share price
> "patterns" but instead on what I describe below.
TA is not just looking at "patterns". Elle, you're arguing against something
you know nothing about it.
> First, watch your English. I don't have patience with people on Usenet who
> don't know grammar well. In other words, parsing someone's really crappy
> English via online forum is often an exercise in futility. Example: Saying a
> bear market will last X years is not market timing. I can guess at what
To say that the market will behave a certain way for a certain period of
time is timing. You're an idiot who doesn't like to be proven wrong.
> -- "Technical" analysis is an abuse of words. What's under consideration in
> TA is to use numerical share price patterns to predict the future, without
> consideration for the nuts and bolts of how a company is actually run and
> what sort of record of profit making it has had in the past.
TA is not about predicting the future. Again, you're arguing against something
you don't even understand.
> Lastly, mimf has some crackpots that destroy the fabric of online adult
> communications. You join in with them, and you're on killfile. That /is/ a
> shot over the bow. Take the offer or leave it.
You're just one nasty, bitter unhappy bitch.
-Sanjay
"Sanjay" <> wrote
> Elle <> wrote:
>
>> Graham and other value investors promote selling when a stock becomes
>> overvalued, as measured by company financial nuts and bolts. You can call
>> that a kind of timing, sure. But it is based not on mere share price
>> "patterns" but instead on what I describe below.
>
> TA is not just looking at "patterns".
Pfft. That's all I need to read. You're uneducated.
"Sanjay" <> wrote
> Elle <> wrote:
>
>> But for all we know he may deploy 1/3 of his cash next week for the
>> businesses ConAgra is about to spin off, or god knows what. The fact
>> that he isn't buying publicly traded securities doesn't necessarily say
>> much about the market...
>
> this person is misinformed about Buffet. Buffet has positioned himself
> heavily in cash prior to every major market correction that I can
> recall.
Buffet or Berkshire Hathaway? (Though Buffet owns roughly 38% of BH,
according to Wikipedia.)
> He has also gone on the record as saying "The market is due for a
> correction, I can't tell you exactly when but it will happen" each
> time it happens.
The market is overvalued by a number of value investing metrics. Buffet
literally and figuratively is a student of Benjamin Graham. It's no surprise
that he'd say that, if his choices were between stocks and cash, he'd favor
cash.
But if the market drops into value range, I suspect BH would continue
emphasis on its capital investments.
> So yes - his cash position reflects his feelings on the market.
Provide a citation, and I'll believe you. Right now, I trust the poster at
MIFP more. Wikipedia's discussion of BH seems to support his claim that BH
is not all that much about stock investing.
Or, tell you what, I have your number. You're an idiot who trusts the stars
to tell him what kind of day he'll have.
Sanjay. Everyone who buys or sells stocks, funds, ETFs, Gold or whatever is
timing the market and timing the investment vehicle they deal in. Who would
buy a stock or fund unless they thought it would provide a total return in
the future made up of some combination of dividends and capital gain? Their
time scale may be short or long term but they hope to get a return
This includes Graham and Buffett, who buy (or bought in Graham's case)
stocks when they are cheap and sell them later when they are dear. That is
what value investing is all about, buying when the indicators say the stock
is cheap and predicting the future, that the price will rise to a more
normal value. The main point of Fundamental Analysis is to find undervalued
stocks so they can be bought and then expected to increase in value. In
other words, stock timing. Caliban/Caroline/Elle/. is trying to time steel
stocks.
In some circles it is politically correct to do the timing by using
Fundamental data like EPS, P/E, Yield, ROCE, ROA, Profit margin, Gearing,
Quick Ratio, Price/Book, etc., and their histories. However, much of this
data is out of date, manipulated or even plain fraudulent. Even when the
data is correct the actual prices often ignore the fundamentals and go a
different way, up when they should go down and vice versa. Sometimes it will
work and sometimes it won't.
TA tries to go by what is actually happening rather than what "should"
happen by some guru's theory. Its basis is that price changes have a large
random component but that they are not completely randomly and in among the
random noise there are also definite trends. The object is to detect what
the trends are and when they are changing, however imperfectly, and take
advantage of the edge this gives to make more than just by holding the
market portfolio.
TA is no more numerology than FA. It just uses different numbers and
methods. Neither works all the time but both can be useful. Probably most
investors use a bit of both.
The B&Her is also timing the market and the funds or stocks he buys. His
prediction of the future is that eventually his funds and stocks will be
worth more than when he bought them. Otherwise, why buy them? He is making a
further prediction, that his long term returns will be greater than putting
his money in the Bank, CDs or Treasury bills.
And while everyone is doing timing it is still politically correct to keep
repeating "Timing doesn't work" like a Buddhist mantra!
"Sanjay" <> wrote in message
news:wI7Gf.61486$
> PeterL <> wrote:
>>
>> Depends on what you mean by "practicing" market timing. Commenting
>> about the current market is not what I'd call "practicing market
>
> Peter,
>
> I think that's my point. Everyone at some point is doing "market timing"
> but "technical analysis" and "market timing" still has a bad reputation.
>
> Buffet moves heavily into cash when stock market cycles are negative
> (as he is now). He warned about this in the late 90's prior to the
> crash. He's very recently on the record as saying '06 will be a
> horrible year for the dollar, stocks and even politics and Washington
> will be shaken up.
>
> That's timing the market - plain & simple. But Buffett (and the
> majority of wall street) all belittle technical analysis and
> market timing.
>
> I'm not attackign Buffet - I've read a lot about him and have slowly
> realized that there is so much overlap between him and the "timing"
> approaches he criticizes.
>
> Fidelity's Magellan fund had a team of market timers looking at
> seasonality,
> price/volume and other indicators along with fundamentals (ex. it's better
> to buy Disney in October than January over any given year).
>
>> timing". Buffet's method can be simplified to "buy well managed
>> companies at reasonable prices." Well, you can argue that buying at
>> reasonable prices may be a form of market timing. But that would be
>> stretching it quite a bit.
>
> No, Buffet says that "ideally" he'd like to buy & hold but the reality is
> that it never works out that way.
>
"Elle" <> wrote in message
news:jk8Gf.11099$
> "Sanjay" <> wrote
>> Elle <> wrote:
>>
>>> Graham and other value investors promote selling when a stock becomes
>>> overvalued, as measured by company financial nuts and bolts. You can
>>> call
>>> that a kind of timing, sure. But it is based not on mere share price
>>> "patterns" but instead on what I describe below.
>>
>> TA is not just looking at "patterns".
>
> Pfft. That's all I need to read. You're uneducated.
Look like you've lost another fan. Just you, the cat, and your TV set.
David,
I agree 100%. I study fundamentals and TA and make the best decision I
can.
Right now the fundamentals say gold will continue to move up (based on
supply & demand). But when I read the charts I see potentially a big
move down that can last for quite some time (3-6months).
It's different strokes for different folks.
I follow Buffet & other value investors very carefully and take leads
from them from time to time.
> The B&Her is also timing the market and the funds or stocks he buys. His
> prediction of the future is that eventually his funds and stocks will be
> worth more than when he bought them. Otherwise, why buy them? He is making a
> further prediction, that his long term returns will be greater than putting
> his money in the Bank, CDs or Treasury bills.
> And while everyone is doing timing it is still politically correct to keep
> repeating "Timing doesn't work" like a Buddhist mantra!
-Sanjay