Big Sucker Rally of 2009 Has Started

Recommended reading, economic debates, predictions and opinions.
FinEcon
Veteran Contributor
Veteran Contributor
Posts: 1306
Joined: 03 Aug 2005 13:41

Post by FinEcon »

Mike Schimek wrote:
“It's clear Mr. Roubini hasn't done his homework, yet again.”
That's one of the things that disappoints me about Jim Rogers and Peter Schiff. These are the two fellows who's opinions I give the most weight to and whom I follow very closely and attentively, but I wish they were more diplomatic and respectful when criticizing or disagreeing with other people's opinions.
Compared to Samuelson, Fama and the EMH bunch these two are like a couple of English gentleman.
Show me the incentive and I will show you the outcome

--Charlie Munger
User avatar
ghariton
Veteran Contributor
Veteran Contributor
Posts: 15954
Joined: 18 Feb 2005 18:59
Location: Ottawa

Re: Big Sucker Rally of 2009 Has Started

Post by ghariton »

Dark Bear wrote:I believe we have just started the big sucker rally of 2009 although a bit late in coming. We should get a nice rally here that you can sell into before we get destroyed in the next leg down.
I thought I would bump this up.

(Nothing personal Dark Bear. You just happened to be the OP. But you had lots of company.)

Georgr
The juice is worth the squeeze
Dark Bear
Contributor
Contributor
Posts: 252
Joined: 16 Jan 2009 12:25

Re: Big Sucker Rally of 2009 Has Started

Post by Dark Bear »

Thanks ghariton, it looks like I turned out to be the sucker. Luckily I never shorted the market and just stayed in bonds or cash at that time.

You don't suppose you bringing this forward might be thinking we are on the verge of a real crash over the next few years just as everyone thinks it won't happen.
ig17
Veteran Contributor
Veteran Contributor
Posts: 3418
Joined: 21 Feb 2005 20:54

Re: Big Sucker Rally of 2009 Has Started

Post by ig17 »

Dark Bear wrote:You don't suppose you bringing this forward might be thinking we are on the verge of a real crash over the next few years just as everyone thinks it won't happen.
Who is everyone?

I've seen quite a few studies lately, looking at different valuation metrics, all saying that stock markets are expensive.

Expensive markets = high risk of crash
User avatar
ghariton
Veteran Contributor
Veteran Contributor
Posts: 15954
Joined: 18 Feb 2005 18:59
Location: Ottawa

Re: Big Sucker Rally of 2009 Has Started

Post by ghariton »

I believe we have just started the big sucker rally of 2009 although a bit late in coming. We should get a nice rally here that you can sell into before we get destroyed in the next leg down.
That's from the first post in this thread, dated 2009.

Forecasting is very difficult, especially when it's about the future. I have certainly taken this lesson to heart.

George
The juice is worth the squeeze
Flaccidsteele
Veteran Contributor
Veteran Contributor
Posts: 4523
Joined: 06 Mar 2014 12:52
Location: Retired Gen Xer somewhere on the planet earth

Re: Big Sucker Rally of 2009 Has Started

Post by Flaccidsteele »

ghariton wrote:
I believe we have just started the big sucker rally of 2009 although a bit late in coming. We should get a nice rally here that you can sell into before we get destroyed in the next leg down.
That's from the first post in this thread, dated 2009.

Forecasting is very difficult, especially when it's about the future. I have certainly taken this lesson to heart.

George
I agree. I would even say that it is impossible.
HardWorker
Veteran Contributor
Veteran Contributor
Posts: 2564
Joined: 31 Dec 2006 10:49
Location: Southern Ontario

Re: Big Sucker Rally of 2009 Has Started

Post by HardWorker »

I stuck with a 100% equities during the crash and run up, and I was rewarded very nicely. My only regret is not buying more, but I didn't have the funds because of a wedding, paying off a mortgage, and toying with a business. I added small amounts via regular payments as usual, but I didn't want to risk borrowing money to invest.

Now I'm thinking it's time to sell because of the high run up, even though I know market timing is a fallacy. Ahhh, the wonderful human psyche :D
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Big Sucker Rally of 2009 Has Started

Post by SQRT »

Hadn't seen this thread before. Remarkable how wrong the posters were. That's why I never predict the future, especially in writing.
User avatar
parvus
Veteran Contributor
Veteran Contributor
Posts: 10014
Joined: 20 Feb 2005 16:09
Location: Waiting for the real estate meltdown on Rua Açores.

Re: Big Sucker Rally of 2009 Has Started

Post by parvus »

You'll note that most of day-traders/market technicians seem to have disappeared. Either they made huge profits and don't wish to share their secrets, or contrariwise ...
Wovon man nicht sprechen kann, darüber muß man schweigen — a wit
Imagefiniki, the Canadian financial wiki Your go-to guide for financial basics
Image
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Big Sucker Rally of 2009 Has Started

Post by SQRT »

parvus wrote:You'll note that most of day-traders/market technicians seem to have disappeared. Either they made huge profits and don't wish to share their secrets, or contrariwise ...
Could be. I find the most remarkable part is their apparent confidence in their predictions. I am reminded of the description of George W ". Often wrong but never in doubt". Surprising people actually think they can know the unknowable.
User avatar
newguy
Veteran Contributor
Veteran Contributor
Posts: 8088
Joined: 10 May 2009 18:24
Location: Montreal

Re: Big Sucker Rally of 2009 Has Started

Post by newguy »

SQRT wrote:
parvus wrote:You'll note that most of day-traders/market technicians seem to have disappeared. Either they made huge profits and don't wish to share their secrets, or contrariwise ...
Could be. I find the most remarkable part is their apparent confidence in their predictions. I am reminded of the description of George W ". Often wrong but never in doubt". Surprising people actually think they can know the unknowable.
I still daytrade on occasion. Did quite a bit this winter. It's too physically demanding at my age and I'm still hoping to have a computer learn how to do it.

Daytraders, technicians etc.. have confidence in the confidence of their predictions, not what √ said.

newguy
User avatar
ghariton
Veteran Contributor
Veteran Contributor
Posts: 15954
Joined: 18 Feb 2005 18:59
Location: Ottawa

Re: Big Sucker Rally of 2009 Has Started

Post by ghariton »

newguy wrote:[I'm still hoping to have a computer learn how to do it.
My understanding is that many quants rely solely on their computers. They write (or purchase) a program and just turn it on. periodically they review the results and tweak the program. But they do no trading themselves.
Daytraders, technicians etc.. have confidence in the confidence of their predictions, not what √ said.
They only have to be right 51% of the time. On thousands of trades per day, that's still very profitable.

George
The juice is worth the squeeze
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: Big Sucker Rally of 2009 Has Started

Post by Shakespeare »

They only have to be right 51% of the time. On thousands of trades per day, that's still very profitable.
Only if trading costs are negligible - i.e. for trading houses not home traders, who will have a higher hurdle.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
User avatar
newguy
Veteran Contributor
Veteran Contributor
Posts: 8088
Joined: 10 May 2009 18:24
Location: Montreal

Re: Big Sucker Rally of 2009 Has Started

Post by newguy »

Shakespeare wrote:
They only have to be right 51% of the time. On thousands of trades per day, that's still very profitable.
Only if trading costs are negligible - i.e. for trading houses not home traders, who will have a higher hurdle.
Not really right 51% of the time but an expectancy > 1. For symmetric p&l then 51% is ok.

Trading costs are way lower today. eg. I started in '95 at ~$25/rt on all futs and later it was negotiated lower to $12-$18 when I started doing 50 lots in tbonds. Now at IB it's less than $5/rt and figuring in a seat lease/purchase I doubt that the big guys do much better than half that. Remember they are volume limited by the size of the market. Futures sound big but in reality you run out liquidity pretty fast compared to stocks and forex, not that I'll ever have to worry about it. There's size limits as well but that's a regulation only and subject to all the jokes.

Data fees went from $350/mo to free as well. If you want low barrier to entry gambling, it's cheaper than Vegas.

newguy
User avatar
newguy
Veteran Contributor
Veteran Contributor
Posts: 8088
Joined: 10 May 2009 18:24
Location: Montreal

Re: Big Sucker Rally of 2009 Has Started

Post by newguy »

ghariton wrote:
newguy wrote:[I'm still hoping to have a computer learn how to do it.
My understanding is that many quants rely solely on their computers. They write (or purchase) a program and just turn it on. periodically they review the results and tweak the program. But they do no trading themselves.
To me that's the holy grail of trading. When I started (around 2000 when bid/ask/volume info became available on the feeds) it seemed like a sure thing. In fact 1 or 2 systems did quite well. My plan was to get ~10 uncorrelated systems and the capital to use them all. Still working on it.

The real problem is that as you age, some utility function hits an inflection point and if you have the capital, trading is no longer worth it. It's a great hobby though. Discretionary trading is too much like work unless you have the gambling gene, then it's just throwing money away.

newguy
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Big Sucker Rally of 2009 Has Started

Post by SQRT »

newguy wrote:
The real problem is that as you age, some utility function hits an inflection point and if you have the capital, trading is no longer worth it. It's a great hobby though. Discretionary trading is too much like work unless you have the gambling gene, then it's just throwing money away.

newguy
This would be my view also but I say give it a go, just don't try to convince me you have a sure fire system.
User avatar
ghariton
Veteran Contributor
Veteran Contributor
Posts: 15954
Joined: 18 Feb 2005 18:59
Location: Ottawa

Re: Big Sucker Rally of 2009 Has Started

Post by ghariton »

newguy wrote:some utility function hits an inflection point and if you have the capital, trading is no longer worth it.
Happened to me in 2000, but I kept trading anyway. I was back at work in 2001, in which year I worked harder, and made more money, than ever before or since. (I had retired in 1999.) In retrospect I think it was greed -- I was fearless. :roll:
It's a great hobby though.
Yes. That's where play money comes in -- about 3% to 5% of my portfolio. I keep learning the hard way that I'm not cut out to be a trader.

George
The juice is worth the squeeze
User avatar
SkaSka
Contributor
Contributor
Posts: 727
Joined: 29 Nov 2012 01:21
Location: Raincouver

Re: Big Sucker Rally of 2009 Has Started

Post by SkaSka »

I know I should know better than to read too much into all the outrageous bubble and crash financial pornography that seems to be raging on at the moment and I just have to say thanks for this thread because it snaps me out of it everytime :thumbsup:
User avatar
CROCKD
Veteran Contributor
Veteran Contributor
Posts: 3343
Joined: 15 Aug 2008 16:59
Location: GTA

Re: Big Sucker Rally of 2009 Has Started

Post by CROCKD »

Risk rising: Why investing gurus are worried that this bull market can't last
The most worrisome part about Mr. Shiller’s warning: He has been right before.
" A verbal contract isn't worth the paper it is written on " Samuel Goldwyn
"The light at the end of the tunnel may be a freight train coming your way" Metallica - No Leaf Clover
User avatar
Wallace
Veteran Contributor
Veteran Contributor
Posts: 2422
Joined: 30 Nov 2005 19:05
Location: Waterloo Ont
Contact:

Re: Big Sucker Rally of 2009 Has Started

Post by Wallace »

CROCKD wrote:Risk rising: Why investing gurus are worried that this bull market can't last
The most worrisome part about Mr. Shiller’s warning: He has been right before.
And he'll be right again, but when??? :)

When does a recovery stop being a "recovery" and start being a "bull" market? Most of the financial Gurus are calling this a 6 year Bull market, but is it? In 2008 we went through one of the biggest crashes in history and if you look at 10 or 15 year charts instead of the 5 year ones, prices are not that much above their 2007-8 highs. Yet it is now 6-7 years later, with many companies having grown considerably in that time. Maybe the market is not so overpriced. And there are a lot more people in it, with lots more money. All of my children are in the market in one way or another, and at a much earlier age than I was. It is so easy nowadays to invest.

Nevertheless we are almost certainly nearer the top than the bottom, and I have lightened up on equities to have some cash on hand. But I just don't see the massive storm clouds that hung over the market in 2008, so I remain, for the most part, invested.

It remains to be seen whether Mr Schiller's adjusted P/E ratio is the prognosticator he thinks it is.
"Why do I have to go to school? If I watch YouTube I'll know everything."
- Grandson #2
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33399
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Big Sucker Rally of 2009 Has Started

Post by AltaRed »

Wallace wrote:Nevertheless we are almost certainly nearer the top than the bottom, and I have lightened up on equities to have some cash on hand. But I just don't see the massive storm clouds that hung over the market in 2008, so I remain, for the most part, invested.
I remain invested as well, but in response to the part I have underlined, we don't know what we don't know. The same scoundrels are in charge of financial markets and the White House remains Wall Street friendly. Derivatives remain unregulated AFAIK and we don't yet know how Argentina's default will play out globally.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
Benchwarmer
Contributor
Contributor
Posts: 616
Joined: 04 Dec 2010 20:39

Re: Big Sucker Rally of 2009 Has Started

Post by Benchwarmer »

AltaRed wrote:we don't know what we don't know.
When it comes to equities, this often-repeated saying applies to me: "I know enough to know that I don't know."

It is better to be reactive rather than proactive. With the latter, I end up outsmarting myself, or worse yet, end up being just plain wrong. That doesn't mean I buy-and-hold (I don't). Being able to predict the future & being profitable are not necessarily the same thing.
User avatar
ghariton
Veteran Contributor
Veteran Contributor
Posts: 15954
Joined: 18 Feb 2005 18:59
Location: Ottawa

Re: Big Sucker Rally of 2009 Has Started

Post by ghariton »

AltaRed wrote:Derivatives remain unregulated AFAIK
But the SEC is working on it,

Some idea of what may be involved in the regulation of derivatives can be gleaned from this document.

(The wheels grind exceedingly fine, but they grind exceedingly slow.)


George
The juice is worth the squeeze
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33399
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Big Sucker Rally of 2009 Has Started

Post by AltaRed »

Me thinks GS has too many claws in the machinery and the operators of that machinery. I will believe it when I see it.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
parvus
Veteran Contributor
Veteran Contributor
Posts: 10014
Joined: 20 Feb 2005 16:09
Location: Waiting for the real estate meltdown on Rua Açores.

Re: Big Sucker Rally of 2009 Has Started

Post by parvus »

ghariton wrote:
AltaRed wrote:Derivatives remain unregulated AFAIK
But the SEC is working on it,

Some idea of what may be involved in the regulation of derivatives can be gleaned from this document.

(The wheels grind exceedingly fine, but they grind exceedingly slow.)


George
Okay, let's just nationalize every form of liquidity that exists, police black markets in finance as well as we police drug markets ... oh wait.

The key question is not what the SEC can do, since it inevitably reponds to barn fires well after the horses have been burnt to a crisp, but what the Fed can threaten GS with.

Three options: a global clearing house for derivatives, so that there is always a counter-party match instead of the notional amounts at risk that give writers like Michael Lewis so much purchase; higher capital reserves in case a big bet fails (and dump VAR); alternatively, restricting investment banks from being publicly traded companies, so that only partners bear the risk.

Now where have I gone wrong here? Lehman failed. Bear Stearns should have been allowed to fail. So should Merrill Lynch, Wachovia, Washington Mutual, AIG.

But of course, commercial paper would have seized up. That's what the Fed should be looking at.

How do you make orderly markets in a crisis. Yes, you put speed limits on big institutions. Mebbe you dismantle big institutions. But you really have to understand the difference between normal lending and speculative lending. Can normal lending be protected when speculative lending has been caught naked?
Wovon man nicht sprechen kann, darüber muß man schweigen — a wit
Imagefiniki, the Canadian financial wiki Your go-to guide for financial basics
Image
Post Reply