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Thread: Buy and Hold

  1. #85

    Default Re: Buy and Hold

    Quote Originally Posted by tsptalk View Post
    The Dumb Money is getting pretty worried...



    Chart provided courtesy of www.sentimentrader.com
    Oh no doubt...but thats a sentiment, done via survey, correct? Or something else.

    A quick check of our tracker still shows nearly 60% of us still has half or more of their investments in stocks.
    CURRENTLY 100% G (as of COB 03/13/2020) 3rd March IFT

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  3. #86

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    Default Re: Buy and Hold

    Quote Originally Posted by FireWeatherMet View Post
    Dumb money still buying...so we're not near a bottom yet.
    Quite the statement. What do you think a pension fund does when something like occurs? Sells 100% and goes to cash?

    Bottoms are a process, they don't just stop here and go up. In hindsight it all looks so easy. It paid enormously to buy in chunks as the market went lower in 2008 even if you didn't go 'all in' at the bottom. (nobody did that).

    Right now the risk/reward is very positive for incremental buying at these levels.

    is that smart money similar to the NAAIM that Coolhand follows?
    Not even close. The dumb money trades in the first half hour, smart money in the last half hour.

    NAAIM website says: "It is important to recognize that the NAAIM Exposure Index is not predictive in nature and is of little value in attempting to determine what the stock market will do in the future."

    However, right now the median exposure in NAAIM is 10% long. Minimum is 200% short. These are extremes and the only time sentiment matters. When hedge funds and active management funds are median 10% long, there is a good deal of FOMO when things start going higher.

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  5. #87

    Default Re: Buy and Hold

    Quote Originally Posted by FireWeatherMet View Post
    Oh no doubt...but thats a sentiment, done via survey, correct? Or something else.
    That is actually a compilation of sentimentraders various sentiment indicators (put/ call ratios, surveys, Rydex fund allocations, etc.)

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  7. #88

    Default Re: Buy and Hold

    Quote Originally Posted by shitepoke View Post
    Tom...how up to date is this chart...is that smart money similar to the NAAIM that Coolhand follows?
    That one was from COB 3/16.

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  9. #89

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    Default Re: Buy and Hold

    Smart Money Indicator, Everything You should Know

    the Smart Money Index states that savvy investors and traders should bet on the stock market's direction towards the end of the day since that is what the "smart money" is doing, and bet against the stock market's direction at the start of the day since that is what the "dumb money" is doing.
    https://sentimentrader.com/blog/smar...u-should-know/

    I subscribed to Jason on and off over the years but I feel the past year his data has been all over the place. The amount of information he puts out can be overwhelming. A few weeks ago he sent out that 50 page sentiment report. For every signal that told me to buy, there was one that said sell. Every one that said sell, it said buy. Great service, but just gave me sensory overload.

    The following is for those who take a long term view to their 401k and don't try to catch a one day dead cat bounce WITH THEIR RETIREMENT MONEY. If you're going to do that, use small amounts you can afford to lose in a real trading account.


    As far as long term buying and holding right here, to all those thinking we're going 20, 30, 40% lower, a bell or siren doesn't go off at the bottom. "I"ll buy when it looks safe," sounds about as confident as, "I'll get out when it looks bad." Many of my co-workers were saying, "Yeah it's going up, but I'll just get out as soon as it looks bad." Some of them bailed after being down 20-30%. Not a confident plan.

    The point of the game is not to get the absolute bottom or top. It's impossible and nobody on this planet has done it with consistency though so many always claim they did. Backtested studies don't count either. Everyone's backtested study is perfect, that's why they're using it. If it didn't beat the market in hindsight they wouldn't bother with it now.

    The point is to have a long term financial plan in place. Make purchases incrementally and ramp up your purchases at times like this.

    Everybody is watching this virus despite the other problems taking place right now (see prior posts). All it will take is a spark - whether that spark is a vaccine, something that fights the virus, or even an indication the deaths are flattening out or going down. 100 million people are not going to die from this.

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  11. #90

    Default Re: Buy and Hold

    Quote Originally Posted by Bullitt View Post
    Quite the statement. What do you think a pension fund does when something like occurs? Sells 100% and goes to cash?

    Bottoms are a process, they don't just stop here and go up. In hindsight it all looks so easy. It paid enormously to buy in chunks as the market went lower in 2008 even if you didn't go 'all in' at the bottom. (nobody did that).

    Right now the risk/reward is very positive for incremental buying at these levels.
    Bullitt, I was simply referring to the regular people who have individual accounts, and the ability to easily move their own money, namely all 1000+ of us on the Tracker. For many years I was considering myself in the "Dumb Money" category.

    I certainly hope you're not using regular market techniques in this once in a lifetime event. Everything is shutting down faster than in 2008.
    The drops in 2008 and 2000-2002 were down over 60% from their highs. This is likely to be worse...we're only 30-40% down off highs. We might only be half way there.

    I hope you weren't in "Buy&Hold" mode on this one. The motto of our site says it all.

    TSP.jpg
    CURRENTLY 100% G (as of COB 03/13/2020) 3rd March IFT


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  13. #91

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    Default Re: Buy and Hold

    FireWeatherMet, thanks for your concern. Dumb money / smart money isn't really a good name for that indicator and I think they need to think of new terms such as algorithm trading and non-algorithm trading. I don't particularly care for the word 'dumb'.

    They've said it's different every single crisis. Every single one. Every time it's worse, it's different, it's the end. Tech bubble was a once in a lifetime. 9/11 was once in a lifetime. Financial crisis was once in a lifetime. This is once in a lifetime. If this happened 10 years ago it wouldn't have the traction it does because social media wasn't used by everyone to include grandma and grandpa. Fear is the pandemic right now.

    How about the statement buy when there is blood in the street. What does that mean? Wait until the market gives the all clear? Anyone who's looked at the market seriously knows there is never an all clear signal.

    In 2008's swoon, purchases at October 2008 lows panned out very positively over the next 10 years. Of course, waiting until March 2009 would have been better, but the point is, the long term goals are all that matter. With stocks stretched below their 200 DMA's, the odds are good that a reversion to the mean is in the future. Someone who needs this money in the next 2 years should not be playing it the same as someone who needs it in 5, 10, 20 years - and all those time frames should be playing it according to their goals as well.

    Judging by a slew of panic indicators to include the amount of posts at bogleheads.org of people asking either, "should I sell", "should I move to bonds", "is it safe to be in the market", "will I be okay", tells me that even some of the hardest 'buy and holders' are capitulating right now.

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