Market timing is unnecessary

Discussion in 'Strategy Building' started by mrmarket, Oct 29, 2003.

  1. Since the market is upwardly biased in the long run, there is no need to try to be a market timer. The only skill you need is being able to identify stocks that will outperform the market. If you have this skill, in the long run you will make money.
  2. hwaxen


    To be successful in this assumption, you probably need to start investing when you are 10 years old to give yourself the maximum chance for success.

    You could find a stock that drops 3% a year when the market drops 5%. Your stock is going down but it is outperforming the market. The market comes back at 3% a year and your stock comes back at 4% a year. Again you outperform but for what benefit.

    You need more in your analysis.
  3. ElCubano


    assuming you never need your money again........:D
  4. Can I just say...I love you, Mr. Market!!!!

  5. Oh, is that all there is to it? Piece'a cake! :D

    (You're preaching to the wrong choir here, MrM. Even though basic market returns are a virtual lock to outgun all but about maybe 5 people on here, they'd rather not here about it!:D)
  6. Guess you haven't heard:

    Past performance does not guarantee future results

    There's been 20 year periods where the market made no new highs.

    I wouldn't want to try this approach in light of all the baby boomer retirements coming up. With a negative savings rate and a high liquidation rate, US markets are going to have it tough for the next 20 years.
  7. Mecro


    You're so smart. Why did not I think of that?

  8. Daryn


    I would recommend you check the expiry date on your meats and cheeses!
  9. gms


    To do as you say, there is another "skill" necessary along with identifying stocks that will outperform the market. And that would be being able to outlive the amount of time you need to hold. But that presuposses you can identify stocks that, not may, but "will" outperform the market, as you said. But if you knew how to do that with that much certainty, you wouldn't have any losers at all in your portfolio. And if you didn't have any losers in your portfolio, you wouldn't have to live so long in order to reap the supposed benefits of holding until they've outperformed the market.

    Your stock selection model's ok mr. market, but some of us see how we can make your kinds of gains (or better) without exposing any of our positions to the degree of loss yours gyrate through, and yet, are able to achieve the kinds of gains you claim, not in a few weeks or a few months as it often takes yours to do, but in hours or days, which is not only more profitable, but also a better use of working capital.
  10. gnome


    He didn't... explains why he says such things.
    #10     Oct 29, 2003