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Thread: Business Cycle Buy & Hold Strategy

  1. #1

    Default Business Cycle Buy & Hold Strategy

    I thought it might be a good to start a discussion about this position trade strategy. It is based on the 8.6 year Business Cycle developed by Martin Armstrong at Princeton Economics princetoneconomics.blogspot.com/2006/06/86-year-review.html

    He had a little problem with the CIA which he pleaded out and is now serving time for fraud http://en.wikipedia.org/wiki/Martin_A._Armstrong This info has been modified since last I looked at it

    His cycle seems to follow the stock market fairly well, but some say that this is the case due to data mining after the fact. (Can't find the post where this was discussed - will post when I find it)

    I back tested the method and it provides an amazing return over a 17 year period. The excel spreadsheet can be found here http://www.tsptalk.com/mb/showpost.p...&postcount=112. It shows an amazing ability to safeguard your investment in a bear market.

    alevin has another method that may verify/support this strategy and I will post first in her thread and then here any findings in support of the BCBH postion strategy.

    I'm starting a tracker for this strategy.

    That's it for now. Good luck out there.
    Last edited by malyla; 01-31-2009 at 11:56 AM. Reason: additional info
    100% I August 14 (cob 8/14). Trying it again until Oct.


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  3. #2

    Default Re: Business Cycle Buy & Hold Strategy

    Patiently waiting for June 2011 (the end of this bear market) to move into stocks. Bonds are doing well again (positive return ytd).

    Just waiting....... But TSP is safe (Baring a worldwide financial collapse).

    Oh so bored..... time to look at ETF trading in my personnal account. I've got to put some of this market knowledge to work while I wait for the Bear to get sleepy again. See you at ETFTALK.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  5. #3

    Default Re: Business Cycle Buy & Hold Strategy

    Here is the 'latest' from Armstrong. He wrote it in prison.

    http://www.contrahour.com/contrahour...nArmstrong.pdf

    I am a little perplexed with the March 2008 - March 2009 prediction of an upswing in stocks as this did not happen, however, I also recognize that the excessive government intervention and unbelievable bank leveraging may just have caused an anomalous element to be present which does not follow his theory. I am still reading his paper to determine if this biz-cycle theory may still be valid. Page 22-27 are very interesting (gets to the point finally - "Europe knows all about cancelling currencies").
    Last edited by malyla; 04-21-2009 at 09:56 AM.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  7. #4

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by malyla View Post
    Here is the 'latest' from Armstrong. He wrote it in prison.

    http://www.contrahour.com/contrahour...nArmstrong.pdf

    I am still reading his paper to determine if this biz-cycle theory may still be valid.
    This was a fantastic read and there is no doubt The Biz-Cycle Theory is well validated by the most brilliant and financially gifted minded individuals to live.

    This is the main reason why High Risk should dominate from the bottom to the top and Safety should dominate from top to bottom.

    Thanks so much for sharing this.

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  9. #5

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    Default Re: Business Cycle Buy & Hold Strategy

    This article is also pertinent: http://safehaven.com/article-13145.htm

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  11. #6

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by Birchtree View Post
    This article is also pertinent: http://safehaven.com/article-13145.htm
    Thus, as the shadow banking system continues to collapse, velocity should move well below its mean, greatly impairing the efficacy of monetary policy. This means that M2 growth will not necessarily be transferred into higher GDP. For example, in Q4 of 2008 annualized GDP fell 5.8% while M2 expanded by 15.7%. The same pattern appears likely in Q1 of this year.


    I see this quote as the most fundamental KEY to understanding the overall picture - but a lot of info to digest. Looking at the nuts and bolts undoubted forces us to recognize many complicated pieces.

    Still the cylinical waves - dominate everything

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  13. #7

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by Birchtree View Post
    This article is also pertinent: http://safehaven.com/article-13145.htm
    Thanks Birchtree.
    "In the U.S. from 1874-94 and 1928-41, Treasury bonds returned 0.9% and 7% per annum, respectively, more than common stocks. In Japan's recession from 1988-2008, Treasury bond returns exceeded those on common stocks by an even greater 8.4%. Thus, historically, risk taking has not been rewarded in deflation. The premier investment asset has been the long government bond" from http://safehaven.com/article-13145.htm

    The back testing I did following the method of going into safety (F fund) during recessions (recessions are economic downturns as defined by Armstrong's 8.6 Business Cycle) is surported by this article on deflationary pressures in economic downturns. The link of deflationary GDP to the National debt was eye-opening. Thanks again.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  15. #8

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by malyla View Post
    Here is the 'latest' from Armstrong. He wrote it in prison.

    http://www.contrahour.com/contrahour...nArmstrong.pdf

    Page 22-27 are very interesting (gets to the point finally - "Europe knows all about cancelling currencies").
    Armstrong did mention this current uptrend with an ending date of April 16, 2009. That makes this a very interesting week - will we get above the high of last week(4/17/09)?
    According to Armstrong, there should be another uptrend at the end of 2009 and late summer 2010 before the bottom in June 2011 and the resumption of a bull market (page 26). I will follow this with interest.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  17. #9

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by Steadygain View Post
    This is the main reason why High Risk should dominate from the bottom to the top and Safety should dominate from top to bottom.

    Thanks so much for sharing this.
    Interesting way to put tsp investing. Thanks and you are welcome
    100% I August 14 (cob 8/14). Trying it again until Oct.


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  19. #10

    Default Re: Business Cycle Buy & Hold Strategy

    Now here is the latest from Martin Armstrong http://fofoa.blogspot.com/2009/04/ma...man-sachs.html

    Not about the business cycle but his take on the Goldman-Sachs conspiracy(dated April 9, 2009)

    FWIW

    A pdf can be found here http://www.scribd.com/doc/14227076/B...he-Curtain4909

    with a followup article(pdf) here http://www.scribd.com/doc/14268132/F...litical-Change

    You will need to signin to download the pdf but you can read it without signing in.

    Armstrong certainly has a lot to say.....
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  21. #11

    Default Re: Business Cycle Buy & Hold Strategy

    There is a MoneyWeek online article this week about Martin Armstrong here
    http://economicedge.blogspot.com/200...k-article.html

    You can also get the pdf articles from this blogspot without signing in.

    The SEC has agreed to look at Armstrong's case. Lets hope he doesn't have any accidents before he gets his review.
    100% I August 14 (cob 8/14). Trying it again until Oct.

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  23. #12

    Default Re: Business Cycle Buy & Hold Strategy

    Quote Originally Posted by malyla View Post
    There is a MoneyWeek online article this week about Martin Armstrong here
    http://economicedge.blogspot.com/200...k-article.html

    You can also get the pdf articles from this blogspot without signing in.

    The SEC has agreed to look at Armstrong's case. Lets hope he doesn't have any accidents before he gets his review.
    Malyla,
    I'm just closing up - so will come back tomorrow to catch up.

    There are 3 (only 3) that stood out to me as TRUE GENIUSES

    1. Paul Krugman - winner of 2008 Noble Prize in Economics

    2. Adam Hamilton - only discovered him within the week (from Lady)
    He is the one that convinced me we hit the BOTTOM

    3. Martin Armstrong - today from you. I saved his PDF earlier and will come back to this stuff tomorrow.

    It is very rare someone screams out to me as being a Genius, but when they do I lose myself and thoroughly enjoy it.

    Thank you !!! and have a wonderful night.

    Steady

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