How many so called experts really know what they're doing?

[bowman]

Sometimes you just have to shake your head in disbelief and laugh.

Like this Wall Street Journal piece by Evan Newmark.

In what is basically an anti trading / timing the market article, Evan says, just don't do it.

"practically no one can be a consistently great market-timer"

So how did Evan come to this conclusion?

Maybe his views were coloured by the fact that - "in October 2008, I managed to lose half my (trading) money with a trade in the Financial Select Sector SPDR, symbol XLF, in a month’s time"

But that's OK, Evan has most of his money in solid long term, buy and hold investments.

And how's he doing there?

" I’m down just about 1% annually over five years, outperforming the S&P 500 by about one percentage point. "

Good luck with your retirement strategy Evan.

http://blogs.wsj.com/deals/2009/05/05/mean-street-how-to-time-the-stock-market-dont-do-it/

 

[Temjin]

"practically no one can be a consistently great market-timer"

So how did Evan come to this conclusion?

He is actually right on that one. No one can ever be 100% right in market timing.

The problem with him is that he seem to believe the market is perfectly efficient and it's pointless to "trade" (time it) the market for consistent profits. (though he still trades it with a small portion of his money...)

I.e. He never found an edge in his trading/investment strategies.

 

[bowman]

I would define consistent as 'frequent'.

I am frequently correct in my market timing and I use tight stops for the times that I am wrong.

It's not a difficult concept - and one that I would imagine is used by many.

Some Wall St. journos apparently believe it can't be done.

That's why they have -1% returns over five years.

But hey, they're beating the index!!!!

 

[nomore4s]

That's why they have -1% returns over five years.
But hey, they're beating the index!!!!

lol, happy to lose money as long as you beat the index.

 

[Mr J]

He's not wrong. He never states that it nobody is doing it and that it can't be done. He states that very few are doing it, and that people may as well not try (as very few can do it). The article is misleading as there are more people that can do it than what it suggests, as well as there being varying levels of success (you don't have to be great).

 

[metric]

yes, the experts do know what they are doing....THEY ARE SELLING!!


Insider selling climbing on the DJIA•May 7, 2009

http://www.bloomberg.com/apps/news?p...ifg&refer=home

April 24 (Bloomberg) ”” Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.

“They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”

That’s the fastest rate of selling since October 2007, when U.S. stocks peaked and the 17-month bear market that wiped out more than half the market value of U.S. companies began. The $42.5 million in insider purchases through April 20 would represent the smallest amount for a full month since July 1992, data going back more than 20 years show. That drop preceded a 2.4 percent slide in the S&P 500 in August 1992.

 

[ROE]

he's has a point not one can consistently time the market

hell even value investors get burn sometimes too by buying crab stocks
thinking its a good stock.

the point is over the long run you make sure you make more money than you lose

but what puzzle me is if people think the market is efficient I don't know why
they just don't buy the damn index and save themselves a lot of time and energy...they preach you about efficient market but they suck your fee dry with active investment it's just define logic and those 2 contradict one other

 

[Trevor_S]

but what puzzle me is if people think the market is efficient I don't know why they just don't buy the

I'd be a bum on the street with a tin cup if the markets were always efficient - Warren Buffett

 

[Mr J]

he's has a point not one can consistently time the market

That would depend on one's definition of "consistent" and how we apply it to trading/investing. Your view seems to be results-oriented, that meaning you consider a failed prediction as proof of inconsistency. I would not agree, as a single failure does not necessarily mean inconsistency in my opinion, as I would need to consider a sample.

 

[nunthewiser]

i been taking note of your posts metric, ive looked......

cheers

 

[Jack Payback]

The problem with a lot of journo's is that their opinion seems to be more important than the facts.

Quite often they base their articles on what they think and experience only, it's faster than going through a thorough fact check before the deadline.