Dump it Here

[ducati916]

Timing the markets versus time in the markets
It's often said that timing the market rarely works, however trading this way can be profitable. There is also an alternative that can be just as profitable "over time". I'm saying, having a combination of both can smooth out your returns. Staying invested instead of trying to time the market, particularly for those looking for long-term returns is a proven & effective option to grow your wealth. The biggest benefit of staying fully invested alleviates the pressure to consistently time the market. Timing the markets during difficult times is a big ask & nearly impossible to do all the time.

Staying invested is less stressful
Historically, over time the markets tend to rise, generating better than shabby returns. Being always invested means you can ride out the downward volatility of market corrections as quality companies tend to shine after periods like those at present. I’m not saying that you can take your eye off the ball but rather you can enjoy capital appreciation without worrying about every gyration the market throws at you to shake you out.

Traders sell when investors hold
Investors may be tempted to sell stocks during downward volatility where traders generally do, which in the long run may not be in a trader's best interest. While selling during downward volatility can reduce stress & hopefully avoid deeper losses, could mean locking in losses & missing the market’s inevitable rebound. Whether you elect to invest or elect to trade is one of those personal decisions. Personally, I tend to do both.

Skate.

@Skate

The eternal question. Because my response was lengthy, I made it a blog post: https://mrromulus789137764.wordpress.com/2022/06/25/caught-my-eye/

For brevity however: if 'time in' the market, selection of class or classes is important. If 'timing' this selection should be part of the process, but would require (if mechanical) scanning all markets (if stocks are considered 1 market) so that you don't miss the bull and get caught in the bear.

jog on
duc

 

[Skate]

If 'time in' the market, selection of class or classes is important.

Also for brevity
I've cherry-picked from @ducati916 article making it "Duc's Quote of the Day"



Skate.

 

[Skate]

There are some youtube videos worth watching
I'm sure most will know Jeremy Grantham or if they don't, they should. In the video, Jeremy compares 2022 with similarities of 2008, 2000, 1929, & more. The short video covers much more than that as it's thought-provoking at the very least. As I've found it interesting it's worthy of a post.



Skate.

 

[Skate]

If you found the last video interesting
You will absolutely love Ray Dalio's video on how to prepare for what's coming next with the financial markets. Ray explains the economics at a philosophical level that's easy to understand. There is also a catchphrase that Ray uses "Cash is Trash" a topic @ducati916 bangs on about with the declining value of fiat currencies.

The quote that resonated with me when it comes to trading
"If you learn to play the game well, it pays well"



Skate.

 

[ducati916]

And.....



Was a problem in 1998 for LTCM.

jog on
duc

 

[Skate]

Whatever you do in life has to have meaning & it's the same when it comes to trading
Doing something without meaning tends to be unproductive that adds no real value to your life or to the life of others. If you take that philosophy & attitude of doing the best for others as a guiding principle of behaviour the favour will ultimately be returned to you in spades. Doing the best for others is really doing the best for yourself. Showing kindness & having an attitude of gratitude never goes astray.

Also, you should never forget the kindness of others
@bigdog & @barney are such two members who kindly post information on a daily basis that's not only useful to me but I'm sure useful to others. I'm just saying, these two members post every day not for themselves but for the benefit of others. So, I want to take this opportunity to say publicly "thank you" to both of them.

Skate.

 

[qldfrog]

Whatever you do in life has to have meaning & it's the same when it comes to trading
Doing something without meaning tends to be unproductive that adds no real value to your life or to the life of others. If you take that philosophy & attitude of doing the best for others as a guiding principle of behaviour the favour will ultimately be returned to you in spades. Doing the best for others is really doing the best for yourself. Showing kindness & having an attitude of gratitude never goes astray.

There is a certain irony as i am currently in a dispute where i was closing a business relationship and invoicing less than half of the contractually signed due amount ..and it seems to have been seen as a sign of weakness and the invoice remains unpaid..so my post about debt collection...
Among proper people, @Skate words are wisdom.. among rotten one, it is just one more way to be exploited.
Luckily, we are among mostly good people here?

 

[barney]

@bigdog & @barney are such two members who kindly post information on a daily basis that's not only useful to me but I'm sure useful to others. I'm just saying, these two members post every day not for themselves but for the benefit of others. So, I want to take this opportunity to say publicly "thank you" to both of them. Skate.

Thanks for the kind words @Skate

My reason for posting a small amount of information that I hope may be helpful, is simply because;

a) There were ASF punters who helped me many years ago when I was in a bad way from some very poor trading (I use that term lightly, because it certainly wasn't trading what I was doing, lol)

b) At this point in time, I often don't have the time to post like I used to (wish I did), so I find by throwing up a little daily info that may be useful, I am hoping that I might still be adding to the site, even if my input is minimal.

On the flip side to your kind words, there is no doubt that the input/information/help you have provided to any who spend a little time "digesting" what you offer, is potentially "worth its weight in gold"

So therefore, my small contribution is of minimal importance, but I do sincerely appreciate your sentiment

 

[investtrader]

. In 2014, Grantham provided this two-year outlook:

And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.

 

[Skate]

@investtrader I couldn't open the hyperlink to GMO First Quartly Letter for 2014 for a full read, do you have another link to the PDF?

I often look back to see if predictions come true & admittedly most are widely off the mark even when they made perfect sense at the time.

Never mind
I found a copy here: https://documents.pub/document/gmo-qtlyletter-1q14-fullversion.html?page=2

A general comment from the article (true then & true today)
"In truth, there is nothing much that we can do about this problem. Value investors must, as always, invest exclusively
on long-term values and long-term risks. We must always build our portfolios from the best mix of these two
characteristics. Therefore there is simply no alternative to standing our ground and taking it on the chin when crazy
markets get even crazier".

Skate.

 

[Skate]

. In 2014, Grantham provided this two-year outlook: And then around the election or soon after, the market bubble will burst, as bubbles always do, and will revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed can dig up.

I often look back to see if predictions come true & admittedly most are widely off the mark even when they made perfect sense at the time.

For those interested
@investtrader made a post referencing Jeremy Grantham's two-year prediction in GMO First Quartly Letter for 2014 that I found interesting. Predictions are guesses disguised as fact when they come from someone within the industry. Whether they are right or wrong doesn't really matter as no one knows what the future holds but they are worth thinking about. It's very rare predictions are always 100% correct but at least they give rise to current thinking at the time. Let's revisit Jeremy Grantham's two-year prediction to see if he was correct. The graph below is a representation of how successful he was.

Looking for Bubbles: A Statistical Approach by Jeremy Grantham
My Best Guesses for the "Next Two Years" with the repeated caveat that prudent investors should invest exclusively or nearly exclusively on a multi-year value forecast, my guesses are:

1) That this year should continue to be difficult with the February 1 to October 1 period being just as likely
to be down as up, perhaps a little more so.

2) But after October 1, the market is likely to be strong, especially through April and by then or in the
following 18 months up to the next election (or, horrible possibility, even longer) will have rallied past
2,250, perhaps by a decent margin.

3) And then around the election or soon after, the market bubble will burst, as bubbles always do, and will
revert to its trend value, around half of its peak or worse, depending on what new ammunition the Fed
can dig up.




Skate.

 

[Skate]

Our belief forms our identity
@Dona Ferentes recently posted a snapshot from the Australian Census about the generational shift in religious affiliation in Australia. Keeping with tradition I prefer to keep my views & opinions in this thread.

All Australians have come from somewhere
Our Australian society is as diverse as it is culturally different that represents particular values & beliefs, which enable a sense of identity & meaning.

Let's take our first people, as an example
The Aboriginal & Torres Strait Islanders have their values & beliefs based on an understanding of the world that integrates the spiritual with the material & emphasises the individual’s relationship with their elders & their community.

Diversity is a good thing
Having lots of different beliefs in our society is a good thing, as a diverse range of beliefs whether they have a religious slant or not is something to feel good about. Different cultures benefit us all & should be respected, upsetting someone is the last thing that we should do. Having a different opinion from others should also be respected.

After reading the statistics on religious beliefs
It’s important to realise that this doesn’t mean everyone acts/thinks/believes the same thing. Just as not everyone you know has identical beliefs. Some groups may have different ideas about religion or faith simply because of their upbringing being taught different stories from our own.

Summary
IMHO, having religious beliefs or not doesn't determine if you are a good person or not. In saying this, what you believe forms how you will interact with others which is so important. If you demonstrate respect & tolerance towards each other is the measure of how you should be judged.

Skate.

 

[Telamelo]

Given where we are in the global central bank rate hiking cycle, Macquarie believes a global recession still won't hit until the first half of calendar 2023.​

Macquarie reveals its 16-stock "recession-proof" defensive portfolio​

• Consumer Staples: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
• Infrastructure: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
• Healthcare: CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
• Gold: Newcrest Mining (ASX:NCM), Northern Star (ASX:NST)
• Food: Graincorp (ASX:GNC), United Malt Group (ASX:UMG), Elders (ASX:ELD), and Costa Group (ASX:CGC)

Macquarie reveals its 16-stock "recession-proof" portfolio

When America sneezes, the world catches a cold. The US is already halfway to a technical recession, with the most recent quarter recording a slight contraction. And while the next read is still a while away, some leading indicators already suggest prospects are not looking bright. Australia is by...

www.livewiremarkets.com

 

[Skate]

Macquarie reveals its 16-stock "recession-proof" defensive portfolio​

• Consumer Staples: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
• Infrastructure: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
• Healthcare: CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
• Gold: Newcrest Mining (ASX:NCM), Northern Star (ASX:NST)
• Food: Graincorp (ASX:GNC), United Malt Group (ASX:UMG), Elders (ASX:ELD), and Costa Group (ASX:CGC)

It pays to read what others think
@Telamelo posted a link to an article where "Macquarie" reveals defensive stock that should be included in a recession-proof portfolio going on to discuss why asset allocation is important.

As a system trader
There are times when I dismiss articles that hold little interest when they express alternative views to mine, reading them IMO would be a sheer waste of time AFAIC. Confirmation bias is a weakness all traders fall into without realising. At the moment two threads are holding my interest for a few reasons that are worth checking out.

SYI - SPDR MSCI Australia Select High Dividend Yield Fund
VAS - Vanguard Australian Shares Index ETF

So how can we take advantage of a portfolio of stock the big boys publish?
The small list of Macquaries' defensive portfolio posted above has 5 sectors with a total of 16 companies. Under normal trading situations, these quality shares lack volatility without the power of percentages due to their price. Admittedly, they are not the positions I'm chasing to achieve better than average returns for those two reasons as well as others. Well, after saying this how can we capitalise on the positions Macquarie suggests?

Skate.

 

[qldfrog]

It pays to read what others think
@Telamelo posted a link to an article where "Macquarie" reveals defensive stock that should be included in a recession-proof portfolio going on to discuss why asset allocation is important.

As a system trader
There are times when I dismiss articles that hold little interest when they express alternative views to mine, reading them IMO would be a sheer waste of time AFAIC. Confirmation bias is a weakness all traders fall into without realising. At the moment two threads are holding my interest for a few reasons that are worth checking out.

SYI - SPDR MSCI Australia Select High Dividend Yield Fund
VAS - Vanguard Australian Shares Index ETF

So how can we take advantage of a portfolio of stock the big boys publish?
The small list of Macquaries' defensive portfolio posted above has 5 sectors with a total of 16 companies. Under normal trading situations, these quality shares lack volatility without the power of percentages due to their price. Admittedly, they are not the positions I'm chasing to achieve better than average returns for those two reasons as well as others. Well, after saying this how can we capitalise on the positions Macquarie suggests?

Skate.

The advantages of these big boys is they might fall by single digits whereas the volatile ones would play double digit or disappear .more a matter of survival than profit

 

[Skate]

Reading alternative views is beneficial to what we learn. As with trading, there are so many variables. How I use an indicator can vary from the way someone else uses it. It's those variables that bring an indicator to life for your application.

Timing the markets versus time in the markets
It appears I have more to say on the topic of "timing the markets" versus "time in the markets". On closer inspection of Macquarie's recession-proof list, I'm at a crossroads on how to capitalise using that list. I could "buy & hold", or trade only their watchlist. But there is an alternative.

It's often said that "timing the market" rarely works
But AFAIC trading this way can be very profitable. System traders spend an enormous amount of time trying to time the market. Getting the entry & exit timing is the hardest part of trading this way but "with effort", it can be done.

The alternative "time in the markets"
Looking back on historical results spanning many years parking your money in the markets & let the magic of "time" can be just as profitable.

Trading by the colour of the bar
I'm just saying, having a combination of both "timing the markets" & "time in the markets" can smooth out your returns. But this is not the point of this series of posts. I would rather talk about something a little bit different of how to trade Macquarie's recession-proof list or any list of a similar ilk. Position rotation by the fund managers is how I believe they achieve the returns they do.

Skate.

 

[Skate]

Macquarie reveals its 16-stock "recession-proof" defensive portfolio
Admittedly, they are great companies worthy of an investment but as with all companies, they fluctuate because they are at the mercy of market sentiment that is influenced by so many variables.

• Consumer Staples: Coles Group (ASX:COL), Endeavour Group (ASX:EDV), Metcash (ASX:MTS)
• Infrastructure: Transurban (ASX:TCL), Origin Energy (ASX:ORG), Amcor (ASX:AMC), Orora (ASX:ORA)
• Healthcare: CSL (ASX:CSL), Ramsay Health Care (ASX:RHC), Resmed (ASX:RMD)
• Gold: Newcrest Mining (ASX:NCM), Northern Star (ASX:NST)
• Food: Graincorp (ASX:GNC), United Malt Group (ASX:UMG), Elders (ASX:ELD), and Costa Group (ASX:CGC)

We are all time poor when it comes to trading
We can read too much, we can watch too much & we can even be wrong with the best of advice. But there is a simple way when to buy & sell each & every one of those positions that incorporates just two filters (volatility & volume). As traders, we don't need a fancy strategy to make money. I've explained this system before but for the exercise, I'll relate it to the list of stocks above.

The question I'm struggling with
How can I stand on the shoulders of giants & piggyback off their stock selection? Is there a method where we can try & mimic the timing of these positions in their portfolio? Picking great companies to invest in is not that difficult but with most of us, the question is "when should we buy", when should we sell?

Before I explain
Let's be honest, we have all been guilty of it, "being an expert after the fact". There are simple ways that a System Trader can trade
Macquarie's "recession-proof" list & I'm sure it would be profitable even though limited. Fundamentalists would have an advantage but their timing is the killer to their profitability. So is there a way to garner the "best bang" for your buck?

Skate.

 

[Skate]

Macquarie reveals its 16-stock "recession-proof" defensive portfolio
For the exercise, so there is no cherry-picking I'll use the first stock in each sector to explain the nuances of system trading. Chartists have a unique ability but rarely can they predict where the next bar will go. I'll display two methods one using Guppies Multiple Moving Averages "GMMA" & another where you can enter & exit a position using the colour of the bar.

WTF
What a list. Basically, each of those positions has done very little since the January 2020 COVID flash crash. Other than "Dividends" if you had invested in these companies since you would be disappointed with their capital appreciation. Graincorp (GNC) is the exception.

• Consumer Staples: Coles Group (ASX:COL)
• Infrastructure: Transurban (ASX:TCL)
• Healthcare: CSL (ASX:CSL)
• Gold: Newcrest Mining (ASX:NCM)
• Food: Graincorp (ASX:GNC)

Skate.

 

[Skate]

Is there a way we can profit from these positions is the question?
I think there is. It may not be as you would expect. Trading "GMMA" strategy would struggle to produce better than average returns.

• Consumer Staples: Coles Group (ASX:COL)
• Infrastructure: Transurban (ASX:TCL)
• Healthcare: CSL (ASX:CSL)
• Gold: Newcrest Mining (ASX:NCM)
• Food: Graincorp (ASX:GNC)

"The Ducati Blue Bar Strategy" is my weapon of choice
Why? because it uses (volatility & volume) to colour the bars of the chart. As traders, we don't need a fancy strategy to make money. I've made over 70 posts about the "Ducati Blue Bar Strategy" & if you use the search feature you will find them all. In the next few posts, I'll let you decide if trading just by the colour of bars could work for you.

Skate.

 

[Skate]

Let's view a few charts
Looking at individual charts will allow you to form a mental image but without the advantages of buy & sell signals, it all becomes a little bit confusing.

Let's look at the charts for Coles Group (COL)
One of Macquarie's "recession-proof" stocks is COLES GROUP but all of their suggestions have been a bit lackluster the last few years. I'll post a simple "line" chart & then a "Candle" bar chart, to see if the chart gives a clue when a position should be taken.

A line Chart for Coles Group (COL)
Are there any clues when you should enter? In hindsight, yes, but if you are like me you won't know where the next bar will go?




A "Candle" bar chart, for Coles Group (COL)
Any clues on when you should enter?




Skate.