dajo9;842820969 said:

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btw, I have an update for this thread. The market continues to go up and I built up some cash. So I sold a little more of my equities and paid off the mortgage on my rental.

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Congratulations. Good job.

I just want to point out that the choice wasn't Hillary vs Trump. The choice initially was Trump vs Kasich, Bush, Rubio and a bunch of crazy people and/or idiots.

You (meaning "conservatives") don't get a pass for the republicans choosing Trump as their candidate with overwhelming support.

Democrats have to live with the fact that Hillary was the best option we made available but that doesn't absolve Republicans for going out of their way to choose Trump as their nominee.

Unit2Sucks;842821061 said:

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I just want to point out that the choice wasn't Hillary vs Trump. The choice initially was Trump vs Kasich, Bush, Rubio and a bunch of crazy people and/or idiots.

You (meaning "conservatives") don't get a pass for the republicans choosing Trump as their candidate with overwhelming support.

Democrats have to live with the fact that Hillary was the best option we made available but that doesn't absolve Republicans for going out of their way to choose Trump as their nominee.

---

Come on, Unit. You must realize this kind of attitude is what's wrong with our political discourse. What does grouping all Republicans and pointing fingers accomplish? It would be like me blaming you as an American because Americans voted for Trump. If we don't treat each other as individual human beings, and if what we each as individuals believe doesn't matter, what's the point? Step back far enough, and every person is responsible for everything because we human beings are responsible for all this mess and our fallen state, and you and I are both part of the human race. Let's discuss ideas and not grouping, dividing to vilify or blame, and pointing fingers.

A Pew Poll in September reported that 63% of those polled were not satisfied with their choice. It's obvious that Clinton and Trump were choices of a small swath of the electorate. Clinton was arguably the worst Presidential candidate in recent history. A ham sandwich could have beaten both of them

There are a lot of things wrong with our political discourse but having people take responsibility for their choices is not one of them.

Conservatives have spent 16 of the last 24 years at war with the federal government and obstructing all progress. It's a little too soon to wipe that all under the rug and ask people to stop pointing fingers. I recall a lot of republicans requesting an end to finger pointing during the disastrous denouement of the last republican administration so the only surprise is that you all are distancing yourself from the guy you overwhelmingly selected out of a "crowded" field of 17 this early.

calbear93;842821096 said:

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Come on, Unit. You must realize this kind of attitude is what's wrong with our political discourse. What does grouping all Republicans and pointing fingers accomplish? It would be like me blaming you as an American because Americans voted for Trump. If we don't treat each other as individual human beings, and if what we each as individuals believe doesn't matter, what's the point? Step back far enough, and every person is responsible for everything because we human beings are responsible for all this mess and our fallen state, and you and I are both part of the human race. Let's discuss ideas and not grouping, dividing to vilify or blame, and pointing fingers.

---

Unit2Sucks;842821100 said:

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There are a lot of things wrong with our political discourse but having people take responsibility for their choices is not one of them.

Conservatives have spent 16 of the last 24 years at war with the federal government and obstructing all progress. It's a little too soon to wipe that all under the rug and ask people to stop pointing fingers. I recall a lot of republicans requesting an end to finger pointing during the disastrous denouement of the last republican administration so the only surprise is that you all are distancing yourself from the guy you overwhelmingly selected out of a "crowded" field of 17 this early.

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How about $10 trillion = doubling of national debt the last 8 years by the dems, People on both sides need to understand government does not know what is best. Therefore less government may be a better option. At a minimum put decision making closer to where people live and less from D.C.

dajo9;842820969 said:

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btw, I have an update for this thread. The market continues to go up and I built up some cash. So I sold a little more of my equities and paid off the mortgage on my rental.

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Good job Dajo. The expectation of lower taxes being the main cause of the stock market rise got you there...you benefited from the election...Go figure

Goobear;842821139 said:

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How about $10 trillion = doubling of national debt the last 8 years by the dems, People on both sides need to understand government does not know what is best. Therefore less government may be a better option. At a minimum put decision making closer to where people live and less from D.C.

---

Couldn't agree more - Wars have consequences and the stimulus was regrettable but necessary for the nation's recovery from the financial crisis. We probably would have recovered quicker with a larger stimulus and may have actually increased our debt burden by less had we done so but there was no consensus there.

Right now conditions are ripe for a much reduced deficit. Do you expect the current administration to eliminate the deficit and begin paying down the debt? Do you think that is necessary for the good of our country?

calbear93;842821096 said:

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Come on, Unit. You must realize this kind of attitude is what's wrong with our political discourse. What does grouping all Republicans and pointing fingers accomplish? It would be like me blaming you as an American because Americans voted for Trump. If we don't treat each other as individual human beings, and if what we each as individuals believe doesn't matter, what's the point? Step back far enough, and every person is responsible for everything because we human beings are responsible for all this mess and our fallen state, and you and I are both part of the human race. Let's discuss ideas and not grouping, dividing to vilify or blame, and pointing fingers.

---

Yes Unit 2, you are the problem. The false criminalization and deligitimization of Democratic candidates has nothing to do with the problems of our political discourse.

Goobear;842821139 said:

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How about $10 trillion = doubling of national debt the last 8 years by the dems, People on both sides need to understand government does not know what is best. Therefore less government may be a better option. At a minimum put decision making closer to where people live and less from D.C.

---

If you blame the Dems for the increased debt of the last 8 years that shows you don't understand how government revenue and expenditures work. If I am wrong, you will be able to point out to me the specific actions taken by Dems the last 8 years that doubled the debt. That increase in debt was all baked into the cake back in 2008 when the Great Recession hit, combined with the Iraq War and Bush tax cuts.

As for me benefiting from the election - yes that was my expectation from the beginning. I am counting on my big tax cut. Looks like I may be paying my Obamacare tax a little longer - happy to be paying it - but if struggling rust belt folks want me to not pay it, well, they won the election.

Unit2Sucks;842821100 said:

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There are a lot of things wrong with our political discourse but having people take responsibility for their choices is not one of them.

Conservatives have spent 16 of the last 24 years at war with the federal government and obstructing all progress. It's a little too soon to wipe that all under the rug and ask people to stop pointing fingers. I recall a lot of republicans requesting an end to finger pointing during the disastrous denouement of the last republican administration so the only surprise is that you all are distancing yourself from the guy you overwhelmingly selected out of a "crowded" field of 17 this early.

---

Unit, who are you addressing? I along with the Republicans on this board personally did what you are saying we did? Are we guilty by association? If so, so are all Americans. I guess I am not clear on what you are saying and why you are saying it? Because I am a Republican, you want to rebuke all Republicans and feel superior irrespective what any one of us believe or how we voted? If you weren't an American, I would guess you would blame all American for electing Trump and going to war. You are narrowing the group just enough to make sure you are not included. I am sorry, but you disappoint me. I guess we are done. You can respond but no point from my end responding to you or the person I previously identified as intentionally divisive because you two refuse to discuss civilly but would rather pretend to be superior for no apparent reason. Whatever but I had hoped you and I could discuss without stereotyping or grouping but clearly there is nothing to be gained by engaging in further discussion with you.

Cb93 you doth protest too much. You make sweeping generalizations when it suits your world view. I haven't ever blamed a single individual (save for Trump who is a menace) for the situation we are in but I do lay this presidency at the feet of conservatives because they overwhelmingly chose the president. It took almost 8 full years for conservatives to abandon GWB but just two months into this presidency it appears that many conservatives are trying to wash their hands of this narcissist.

You blame our problems on the level of discourse? I blame it on our politicians and the people who elected them.

I also find that when the sides inevitably switch (majority party becomes opposition) the roles change naturally and the majority party vociferously complains when the other party adopts the tactics of opposition. I don't think the current opposition party (which is the democrats despite what President Bannon would have is believe) is even close to being as divisive or destructive as the last opposition party was. I'm sure others agree with me and others disagree with me. Some of us are right. I feel confident that I am.

I'm sorry you say you will no longer engage but you have every right to do so.

Market Commentary and Why I'm Bearish:

Inflows into ETF's have been running at a rate that is 4X that of 2016, which has lead to this rally lasting a lot longer than people had thought it could.

Based pretty much on "Animal" Spirits"... given that Consumer Confidence is the highest since 2001 and the National Federation of Independent Business (NFIB) poll is at the highest since Feb. 2004. We are talking about the latter being in the 10th decile and the former in the 9th decile. The Atlanta FED puts out a GDP Now forecast which has Q-1 GDP running at only a 1.2% rate. However, it will take some time before the "Animal Spirits" actually translate into higher economic growth.

Also interesting to note, when the NFIB and Consumer Confidence is in the top deciles, the Energy Sector has historically been the best sector in the S&P 500. This, has obviously not been the case as it has been the weakest sector year to date. Another potential problem given that many companies in the energy patch have financed their growth via high-yield bonds. The HY sector has been hit lately by a double-whammy.... rising rates, and lower crude prices. Declines in the HY bond sector usually leads equities, but the timing of this can be rather challenging to pin-point.

Since 1900, post-Presidential election years have seen stocks down from 2/28 to the trough in H-1, 27 out of 29 times and 66% of the time the decline exceeds 5%.

For the first time this year, inflows into Equities have surpassed those into Bonds ($82 Billion vs $80 Billion).
I take this as yet another "contrary" type indicator that is reflective of this rally becoming long in the tooth and very much "believed" in.

Insider selling is the highest in roughly a decade and short-selling has all but disappeared..... reflecting complacency.

The NYSE A/D line (breadth) looks as though it might have peaked on March 1st, the trading day after Trump's "State of the Union Address". That week, also saw Investor's Intelligence Bullish Sentiment peak at 63.1% Bulls and only 16.5% Bears, for a Bull/Bear ratio of 3.82. We have since backed off a bit down to 3.05 as of March 14th, given that Bulls have pulled back down to 53.4% and the Correction Camp is now back up to 29.1% from an extremely low 20.4% at end of February.

Technically speaking, the S&P sold off from its recent high of March 1st (when it rallied sharply after Trump's "State of the Union Address") for 6 straight days and penetrated the 10 day moving average. When it does this, it heads straight for the 21 day moving average; which it did. Support was found at the 21 day MA and another rally emerged. Any close BELOW the 21 day MA (currently around 2370) would most likely confirm a trend change ... especially if accompanied by a penetration of the previous week's low in the S&P.

The majority of market index gains occur between November and April (90%), with Nov, Dec, and Jan. being particularly strong.
You can literally sit out the other 7 months of the year.... and especially the Summer and not miss a thing.
Hence, we are entering a seasonal "Danger Zone" with the market's valuation really stretched.
It's time to really scale back one's risk.

Shorter-term, markets have a historical tendency to sell off after a major options/futures expiration day like today.
For traders, next week should be most telling.

Happy St. Patrick's Day!

Talkin' my language Wags. Contrarian indicators, not just one or two, have served me well over the years. I'm big on the breadth indicators too. I have "workspaces" set-up in various platforms (Thinkorswim, TradeStation and MultiCharts) that emphasize such a macro analysis.

Not sure I'll lighten-up my longs, or just add more SPY puts, basically affording me some protection or insurance to stay long a little longer...

Yup Cal89.

I'm actually more of a stock-picker but I'm a big fan of keeping it simple (KISS) when it comes to Technical Analysis and using just a few moving averages and the Breadth:

http://stockcharts.com/freecharts/gallery.html?$NYAD

calbear93;842821213 said:

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Unit, who are you addressing? I along with the Republicans on this board personally did what you are saying we did? Are we guilty by association? If so, so are all Americans. I guess I am not clear on what you are saying and why you are saying it? Because I am a Republican, you want to rebuke all Republicans and feel superior irrespective what any one of us believe or how we voted? If you weren't an American, I would guess you would blame all American for electing Trump and going to war. You are narrowing the group just enough to make sure you are not included. I am sorry, but you disappoint me. I guess we are done. You can respond but no point from my end responding to you or the person I previously identified as intentionally divisive because you two refuse to discuss civilly but would rather pretend to be superior for no apparent reason. Whatever but I had hoped you and I could discuss without stereotyping or grouping but clearly there is nothing to be gained by engaging in further discussion with you.

---

Another conservative who needs a safe space.

Wags;842821221 said:

---

Market Commentary and Why I'm Bearish:

Inflows into ETF's have been running at a rate that is 4X that of 2016, which has lead to this rally lasting a lot longer than people had thought it could.

Based pretty much on "Animal" Spirits"... given that Consumer Confidence is the highest since 2001 and the National Federation of Independent Business (NFIB) poll is at the highest since Feb. 2004. We are talking about the latter being in the 10th decile and the former in the 9th decile. The Atlanta FED puts out a GDP Now forecast which has Q-1 GDP running at only a 1.2% rate. However, it will take some time before the "Animal Spirits" actually translate into higher economic growth.

Also interesting to note, when the NFIB and Consumer Confidence is in the top deciles, the Energy Sector has historically been the best sector in the S&P 500. This, has obviously not been the case as it has been the weakest sector year to date. Another potential problem given that many companies in the energy patch have financed their growth via high-yield bonds. The HY sector has been hit lately by a double-whammy.... rising rates, and lower crude prices. Declines in the HY bond sector usually leads equities, but the timing of this can be rather challenging to pin-point.

Since 1900, post-Presidential election years have seen stocks down from 2/28 to the trough in H-1, 27 out of 29 times and 66% of the time the decline exceeds 5%.

For the first time this year, inflows into Equities have surpassed those into Bonds ($82 Billion vs $80 Billion).
I take this as yet another "contrary" type indicator that is reflective of this rally becoming long in the tooth and very much "believed" in.

Insider selling is the highest in roughly a decade and short-selling has all but disappeared..... reflecting complacency.

The NYSE A/D line (breadth) looks as though it might have peaked on March 1st, the trading day after Trump's "State of the Union Address". That week, also saw Investor's Intelligence Bullish Sentiment peak at 63.1% Bulls and only 16.5% Bears, for a Bull/Bear ratio of 3.82. We have since backed off a bit down to 3.05 as of March 14th, given that Bulls have pulled back down to 53.4% and the Correction Camp is now back up to 29.1% from an extremely low 20.4% at end of February.

Technically speaking, the S&P sold off from its recent high of March 1st (when it rallied sharply after Trump's "State of the Union Address") for 6 straight days and penetrated the 10 day moving average. When it does this, it heads straight for the 21 day moving average; which it did. Support was found at the 21 day MA and another rally emerged. Any close BELOW the 21 day MA (currently around 2370) would most likely confirm a trend change ... especially if accompanied by a penetration of the previous week's low in the S&P.

The majority of market index gains occur between November and April (90%), with Nov, Dec, and Jan. being particularly strong.
You can literally sit out the other 7 months of the year.... and especially the Summer and not miss a thing.
Hence, we are entering a seasonal "Danger Zone" with the market's valuation really stretched.
It's time to really scale back one's risk.

Shorter-term, markets have a historical tendency to sell off after a major options/futures expiration day like today.
For traders, next week should be most telling.

Happy St. Patrick's Day!

---

In other words, you are selling and are recommending others to do the same?

Wow disappointing Cal people use technical analysis....I personally tested hundreds of thousands technical model relationships empirically with a CFA friend and very few were actually of statistically significant predictive value...

Wags;842821221 said:

---

Market Commentary and Why I'm Bearish:

Inflows into ETF's have been running at a rate that is 4X that of 2016, which has lead to this rally lasting a lot longer than people had thought it could.

Based pretty much on "Animal" Spirits"... given that Consumer Confidence is the highest since 2001 and the National Federation of Independent Business (NFIB) poll is at the highest since Feb. 2004. We are talking about the latter being in the 10th decile and the former in the 9th decile. The Atlanta FED puts out a GDP Now forecast which has Q-1 GDP running at only a 1.2% rate. However, it will take some time before the "Animal Spirits" actually translate into higher economic growth.

Also interesting to note, when the NFIB and Consumer Confidence is in the top deciles, the Energy Sector has historically been the best sector in the S&P 500. This, has obviously not been the case as it has been the weakest sector year to date. Another potential problem given that many companies in the energy patch have financed their growth via high-yield bonds. The HY sector has been hit lately by a double-whammy.... rising rates, and lower crude prices. Declines in the HY bond sector usually leads equities, but the timing of this can be rather challenging to pin-point.

Since 1900, post-Presidential election years have seen stocks down from 2/28 to the trough in H-1, 27 out of 29 times and 66% of the time the decline exceeds 5%.

For the first time this year, inflows into Equities have surpassed those into Bonds ($82 Billion vs $80 Billion).
I take this as yet another "contrary" type indicator that is reflective of this rally becoming long in the tooth and very much "believed" in.

Insider selling is the highest in roughly a decade and short-selling has all but disappeared..... reflecting complacency.

The NYSE A/D line (breadth) looks as though it might have peaked on March 1st, the trading day after Trump's "State of the Union Address". That week, also saw Investor's Intelligence Bullish Sentiment peak at 63.1% Bulls and only 16.5% Bears, for a Bull/Bear ratio of 3.82. We have since backed off a bit down to 3.05 as of March 14th, given that Bulls have pulled back down to 53.4% and the Correction Camp is now back up to 29.1% from an extremely low 20.4% at end of February.

Technically speaking, the S&P sold off from its recent high of March 1st (when it rallied sharply after Trump's "State of the Union Address") for 6 straight days and penetrated the 10 day moving average. When it does this, it heads straight for the 21 day moving average; which it did. Support was found at the 21 day MA and another rally emerged. Any close BELOW the 21 day MA (currently around 2370) would most likely confirm a trend change ... especially if accompanied by a penetration of the previous week's low in the S&P.

The majority of market index gains occur between November and April (90%), with Nov, Dec, and Jan. being particularly strong.
You can literally sit out the other 7 months of the year.... and especially the Summer and not miss a thing.
Hence, we are entering a seasonal "Danger Zone" with the market's valuation really stretched.
It's time to really scale back one's risk.

Shorter-term, markets have a historical tendency to sell off after a major options/futures expiration day like today.
For traders, next week should be most telling.

Happy St. Patrick's Day!

---

As someone who has never actually taken money out of the stock market (just moving money from underperforming companies to superior performing company at most quarterly), this type of technical analysis always fascinated me. It is not particularly useful for the way I invest since I am by habit just a long-term investor, but I do see some merit in this type of analysis for short term investors. I would just question how you would have significant advantage over other short-term investors, however. I would assume for people who are adept at statistical analysis (which I am not),there will be even more data mining and data analysis and predictive analysis would become even more automatic and readily available. There would seem to be even less method of having an advantage over other short-term investors.

For me, I am still old school, having been trained as a corporate finance and M&A lawyer. I love reading and assessing financial statements and MD&A probably in the same way that you love statistics, and I am more worried about missing out in companies that I know are great than I am about making sure I squeeze every single penny from going in and out of the stock market. However, I think both analysis are important (macroeconomic as well as individual company analysis). Although I won't take money out of equities as a whole for those reasons, I am currently less excited about putting more money in with the valuations and with the high level of enthusiasm. When everyone from my retired aunt to my gardener is giving me stock advice, I know that the market is overbought. And I love buying when people are pessimistic and afraid, but I have never tried to time the market by selling, just by buying less or buying more. The main problem for me is that it is getting harder and harder to find value investments. My real estate holdings seem to be overvalued (both commercial and residential), and no one has recently proposed any real estate investments that seem like no-brainers to me. And I hate keeping money in cash beyond what I need for two years. Bond market is not looking good with interest rate to go up even faster. No investment for me that is clearly better in the long run than the stock market even at these levels.

Unit2Sucks;842821061 said:

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I just want to point out that the choice wasn't Hillary vs Trump. The choice initially was Trump vs Kasich, Bush, Rubio and a bunch of crazy people and/or idiots.

You (meaning "conservatives") don't get a pass for the republicans choosing Trump as their candidate with overwhelming support.

Democrats have to live with the fact that Hillary was the best option we made available but that doesn't absolve Republicans for going out of their way to choose Trump as their nominee.

---

Fair point. As an Independent I actually nominated neither but as a former Republican I spoke with many who had the opportunity to vote. I literally only had 1 person speak openly about voting for him. All the others hated Trump. Hated. The truth is I really don't know how he won it; it is a semi-fascinating topic.

The irony of the hyperbolic nature of the debate between CB93 and me is that we aren't that far apart. Both corporate transactional attorneys, both Cal grads. I consider myself center right as I would assume he does for himself. I think the government is full of crooks and I distrust almost all politicians. I would like to see a smaller government and far less government waste.

There are of course differences at the margins and with our discursive style but the substance isn't so different.

Unit2Sucks;842821286 said:

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The irony of the hyperbolic nature of the debate between CB93 and me is that we aren't that far apart. Both corporate transactional attorneys, both Cal grads. I consider myself center right as I would assume he does for himself. I think the government is full of crooks and I distrust almost all politicians. I would like to see a smaller government and far less government waste.

There are of course differences at the margins and with our discursive style but the substance isn't so different.

---

You're both lawyering too much

GB54;842821306 said:

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You're both lawyering too much

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I charge my clients by the word ...

Unit2Sucks;842821308 said:

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I charge my clients by the word ...

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See, you just could've said, "Ok"

tequila4kapp;842821283 said:

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Fair point. As an Independent I actually nominated neither but as a former Republican I spoke with many who had the opportunity to vote. I literally only had 1 person speak openly about voting for him. All the others hated Trump. Hated. The truth is I really don't know how he won it; it is a semi-fascinating topic.

---

I am with you. I really questioned registering as an independent when Trump became the nominee. Not that I was even remotely a fan of Cruz, but even that divisive politician seem like a saint compared to Trump. And Kasich got almost no coverage or love. Even on the election day, I felt like Lloyd from Dumb and Dumber as I was watching the news and it became more and more likely that Trump would win - I kept think ... but there is still chance than he won't win, right? It is amazing that our country is so divided and we are no longer Americans but commie liberals or racist conservatives. I also am sensing that even moderates who are really the only group to force politicians to compromise and seek sanity are being driven into silence or extremes because of the hostility on both sides. WH press briefings, name calling from both sides, and just grouping and dividing with no willingness to concede a single point are really just flat out depressing.

burritos;842821238 said:

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In other words, you are selling and are recommending others to do the same?

---

I'm saying that (for a number of reasons) both fundamental and technical, this is a very high risk zone for the US equity market.... especially with bond yields rising.

I'm not the only one that shares this view.
Goldman Sachs does as well...

http://www.valuewalk.com/2017/02/goldmans-kostin/

https://www.bloomberg.com/news/articles/2017-03-15/goldman-turns-cautious-on-stocks-as-fed-threatens-to-upset-calm

Wags;842821329 said:

---

I'm saying that (for a number of reasons) both fundamental and technical, this is a very high risk zone for the US equity market.

---

Where would you put your money? I am having a bear of a time finding attractive investments, so I keep putting money in companies that are performing well and taking market shares as long as I trust the management, even at these valuation levels. I also keep putting new money in low-fee mutual funds that won't make me take a big tax hit with their high turn-over and taxable paper gains. Looking long-term, I know my tactics won't change, but I am feeling a bit gun shy about aggressive infusion even with companies I really like.

Goobear;842821244 said:

---

Wow disappointing Cal people use technical analysis....I personally tested hundreds of thousands technical model relationships empirically with a CFA friend and very few were actually of statistically significant predictive value...

---

I'm in my late 50's and have been trading the markets since my undergrad days at Cal.
Was a former floor trader in #4 WTC and have been through a lot of market history, interest rate cycles, etc.

T/A works, because there is an awful lot of money that is managed off of momentum. That having been said, there is an awful lot of "noise" that one has to be able to sift thru in order to find a handful of things that consistently work in T/A. Certain internal indicators work well based off of divergences. I won't go into them here because there just isn't enough time. On more of the fundamental side, I also look at sector rotation, leaders, laggards, intermarket relationships, etc.

I've been bullish since the Fall of 2014, but the market is clearly in a high risk zone by just about any kind of fundamental metric you can use. Markets can move "irrationally" for quite some time... diverging from underlying fundamentals due to the relative level of interest rates, FOMC policy, etc. and even "animal" spirits. I find that T/A allows you to figure out when that "divergence" actually will cause a change in trend.

calbear93;842821333 said:

---

Where would you put your money? I am having a bear of a time finding attractive investments, so I keep putting money in companies that are performing well and taking market shares as long as I trust the management, even at these valuation levels. I also keep putting new money in low-fee mutual funds that won't make me take a big tax hit with their high turn-over and taxable paper gains. Looking long-term, I know my tactics won't change, but I am feeling a bit gun shy about aggressive infusion even with companies I really like.

---

Sometimes CASH is KING.
There is nothing wrong with taking profits (paying taxes) and ringing the register and being defensive.

As I had shared on the forum before in some other thread, I began investing in junior high school. Fundamentals, which I still believe everyone should learn and appreciate, is what I learned at an early age. Fundamental analysis is generally contrasted with technical analysis. Knowing the fundamental allows one to evaluate a security to ascertain some type of value. Understanding the financials is paramount to a fundamentalist.

I had all sorts of filters to screen-out the 5k or so publicly traded stocks on the major exchanges, to whittle them down to 20 to 50 of what were generally, by most to all accounts great companies. We all know about PE ratios. That was a filter. Debt to equity and probably 6 to 8 more filters were applied. As I recall, I also had a couple volume / liquidity requirements, as well as a minimum mkt cap, etc. There are plenty of good stock screeners out there. The bottom line is that I, once a quarter, would run all stocks in the major indices through my screen to yield Cal89’s universe of stocks to monitor and invest.

I tweaked the screens or filters along the way, which is a good thing to revisit periodically with market feedback. As an example, it was obvious that the market can excuse a high PE ratio, and very high one even, if there’s corresponding growth. So, I incorporated growth, which later became the PEG ratio or PE + G.

All while doing this I began seeing my pop, who taught me much of this stuff, charting stocks on a drafting table. This was in the early to mid 80s, so on large sheets of paper, no computers mind you. Actually, I did have an Apple IIe+ or something like that though. I think the space bar proudly displayed – “64K”, lol. Wow. My dad charted every night, adding the day’s movements to his stocks. It was a labor of love, that he now performs at the push of button though. I began educating myself on technical analysis, and I have continued to do so to this day, and at the expense of the fundamentals – by choice.

A chart and all is various measures and indicators that can be gleaned from it incorporate the fundamentals. It’s there, baked-in. Just looking at the fundamentals only, the reciprocal is not true. I will be teaching my two little ones the fundamentals, as it’s common core in my book, foundational. They however already see Daddy charting with Keltner Channels (think Bollinger Bands, but uses an ATR as opposed to standard deviation), “crazy Fibs” or Fibnocacci extrapolations, drawing support and resistance lines and other “cool stuff”!

I first began applying tech analysis to my screened stocks, as described above, with fantastic results, read improvement. I gradually weened-off the preliminary fundamental screens as it became apparent that I was also filtering-out opportunities. At some point while at Cal I became 100% technical. My college roommate, who I introduced to stock investing / trading, retired from real estate and has been trading full-time for a few years now. For those willing to put-in the time, I feel that learning the technicals to be very worthwhile.

I had posted on this before, so I won’t do so much again now, but the interest really ratchets-up when one can backtest their strategies. Essentially asking something like – Show me all of the transactions I would entered during a provided date range for ticker symbol ABCD, or any S&P 500 stock when the following criteria are met - maybe something like RSI below X, Keltner Channel breach and some moving average cross-over. The results can then be refined to yield better entries, avoid the not so good ones, etc. Super fun and rewarding to see ideas materialize into solid strategies. Exits (target and ooops I want out) are of course needed too, and backtesting can help a ton there as well.

I generally no longer invest in individual company stock, minus AAPL, for which I’ve been investing for a long time, and know quite well. The vagarities of a particular company, dang good ones even by fundamental measures, now have me in the SPY and QQQ and a couple other ETFs. I wanted to minimize the waking-up to “accounting irregularities” news for my stock, or getting hammered in an oil stock for a Gulf incident 7 years ago. I’ll take the diversification of the SPY and QQQ, along with the dividends. Not quite the same upside bang, but with the corresponding option plays, plenty good return to go along with the added downside protection.

Happy St. Patrick's Day and Friday everyone!

Cal89;842821366 said:

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As I had shared on the forum before in some other thread, I began investing in junior high school. Fundamentals, which I still believe everyone should learn and appreciate, is what I learned at an early age. Fundamental analysis is generally contrasted with technical analysis. Knowing the fundamental allows one to evaluate a security to ascertain some type of value. Understanding the financials is paramount to a fundamentalist.


I first began applying tech analysis to my screened stocks, as described above, with fantastic results, read improvement. I gradually weened-off the preliminary fundamental screens as it became apparent that I was also filtering-out opportunities. At some point while at Cal I became 100% technical. My college roommate, who I introduced to stock investing / trading, retired from real estate and has been trading full-time for a few years now. For those willing to put-in the time, I feel that learning the technicals to be very worthwhile.


I generally no longer invest in individual company stock, minus AAPL, for which I’ve been investing for a long time, and know quite well. The vagarities of a particular company, dang good ones even by fundamental measures, now have me in the SPY and QQQ and a couple other ETFs. I wanted to minimize the waking-up to “accounting irregularities” news for my stock, or getting hammered in an oil stock for a Gulf incident 7 years ago. I’ll take the diversification of the SPY and QQQ, along with the dividends. Not quite the same upside bang, but with the corresponding option plays, plenty good return to go along with the added downside protection.

Happy St. Patrick's Day and Friday everyone!

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I am sure both are useful, and I don't necessarily treat one as being more important. For me, as a long-term investor who doesn't have the expertise to time markets, I rely on fundamentals (also because financial statement is what I learned when preparing registration statements and offering memoranda and when working with corp development teams on M&A valuations). Like you mentioned, I would admit I just don't have the time to learn technical analysis enough for it to be useful. However, when I do meet with private equity folks, they tell me that data mining and data intelligence and predictive analysis is where technology and innovation is (no longer cloud or internet). As such, just understanding statistical and data analysis (what you are doing with technical analysis) seems to be a highly valued experience.

Having said all that, I think it is awesome that financial knowledge is passed on to your kids like it was from your father to you. So many people just don't have even the basic knowledge to manage financials and are often susceptible to exploitation. Your kids will be way ahead of the curve.

calbear93;842821388 said:

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Having said all that, I think it is awesome that financial knowledge is passed on to your kids like it was from your father to you. So many people just don't have even the basic knowledge to manage financials and are often susceptible to exploitation. Your kids will be way ahead of the curve.

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+1

If it wasn't for my growing up in a middle class family in which my Dad got me interested in the stock market, it might never have happened!

I started out trading some penny mining stocks in 1980/1981 and quickly progressed to stock options with a small joint-account with my Dad.

Spent every vacation day from Cal camped out in my Dad's broker's office pouring over the chart book (William O'Neils "Daily Graphs") and staring intently at the blinking lights on my broker's quote machine.... the Quotron.

Wags;842821337 said:

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Sometimes CASH is KING.
There is nothing wrong with taking profits (paying taxes) and ringing the register and being defensive.

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Sounds like you know what you are doing. Philosophically, I bet on collective pursuit and drive for profit. So I buy and hold broadly diversified mutual funds. Too young for the 1987 crash, though I white knuckled it through both the internet bubble burst and the great recession. Were you able to dodge those two. I presume the technical warning lights were blinking red too prior to their plunges also.

Wags;842821334 said:

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I'm in my late 50's and have been trading the markets since my undergrad days at Cal.
Was a former floor trader in #4 WTC and have been through a lot of market history, interest rate cycles, etc.

T/A works, because there is an awful lot of money that is managed off of momentum. That having been said, there is an awful lot of "noise" that one has to be able to sift thru in order to find a handful of things that consistently work in T/A. Certain internal indicators work well based off of divergences. I won't go into them here because there just isn't enough time. On more of the fundamental side, I also look at sector rotation, leaders, laggards, intermarket relationships, etc.

I've been bullish since the Fall of 2014, but the market is clearly in a high risk zone by just about any kind of fundamental metric you can use. Markets can move "irrationally" for quite some time... diverging from underlying fundamentals due to the relative level of interest rates, FOMC policy, etc. and even "animal" spirits. I find that T/A allows you to figure out when that "divergence" actually will cause a change in trend.

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Well Wags I respect your viewpoint and experience. The CFA I work with has predicted most melt downs and post meltdown rally's. Yes he is in his fifties as well. Everything used is empirically relevant or it is not considered. Most technical analysis are zigs and zags by people without a sound repeatable methodology. If you have one I am sure we can test it empirically.....

The models he uses are based on self tested and designed behavioral finance since the 80-ies. And yes we are deep in industry rotation as well. Markets get out of wack and then revert back to the mean...Closer to danger zone now but still statistically better to be in 70% than out. Long bonds obviously will be a disaster at some point...Go Bears

Curious CB93 since we have a very similar professional background - how much time do you spend evaluating a compay's '33 and '34 act materials before you choose to invest and how much time do you spend monitoring these during the course of the year? I've found it to be too time-consuming to do to my level of satisfaction (which would also require me to review competitor SEC filings) so I just invest in index funds these days (primarily VTI). As I mature (which I use as a euphemism for aging) my investing has become much more boring because it takes time away from my family, and most of my experimentation comes in the form of private investing. Even there I'm primarily invested as an LP in a PE fund of funds and in a VC angel fund so I'm not making individual investment decisions.