Who's cashed up waiting for bottom to fall out in 2018?

[Smurf1976]

It says he made his money by developing a gambling system? The money didn't come from sales of the system did it?

Developed a system and used it is what he did to my understanding.

 

[So_Cynical]

Not sure if I should be on here or at the Race track now

Sometimes Knowledge comes from funny places, i like to think that my 10 years of gambling (horses mostly) set me up beautifully for my later incarnation as a contrarian investor, i learned that i dont like losing and that investing money into the outcome of an event that plays out over a short fixed period of time is a mugs game.

I did some googling about David Walsh a while back as i was fascinated, he worked the system with a team for many years, from memory the system identifies anomalies in pay out versus mathematical risk, the team used that small edge to their advantage.

 

[basilio]

Developed a system and used it is what he did to my understanding.

I understood he worked out a method of arriving at "true odds" for horses in a race. If he found that bookies were offering better odds than what he saw as "true odds" he backed the horses on the basis of value.

I remember many years ago one newspaper was running a section which also offered such advice. Essentially it was a computer program which highlighted the alleged "true odds" for horses. It didn't last that long. According to friends who were playing the ponies it was working too well for the health of the bookies.

 

[basilio]

This story offeres an insight into how on line sports betting can be gamed..
https://cosmosmagazine.com/mathematics/researchers-work-out-how-to-break-the-bookmakers

 

[galumay]

Successful gamblers certainly do exist.

I wonder if they actually do, the people that have taken money from the games consitently are probably not gamblers in the normal sense of the word. I would suggest they are investors who worked out from maths, places where they could take advantage of small asymmetries in favour of the 'bettor' - ordinary gamblers dont operate that way at all.

 

[JuniorR]

A lot of people try to go in on the dips and lighten up later on. I've got a mate that does...and as far as I know, it's paid off for him (but you never know for sure).

Personally, I'm 100% invested, 100% of the time...so it's not something I look to do.

I seen this post and would like to ask you all on ASF a question as I am yet to buy into the stock markets. I've just been doing a lot of research and youtube videos.

Has it paid off for you being in 100% of the time?
I noticed your friend looks for the dips and its paid off for him.
Trying to follow the 4 seasons of the economic system, Is said to be difficult as I have read. How difficult though?
I seen a picture on google when i typed "Seasons of an economical cycle" and it also shows what to look for on periods of time.

There is long periods of time before you can get to a big high when you sell off or was it the right time to sell off who knows, so knowing where you are in the season or how high its going to be hard but if you were to follow the diagram in the picture and follow when interest rates move from low to high and ect you would only be out by a few days if you follow the news when to buy in.

I'm starting to work on my plan and I'm a little stuck because some websites say not to wait for dips but others say they wait for dips so obvious people have different opinions and now I need to weigh up my options and decide to have my own opinion but I would like to hear what method some of you guys chose and why?

Saving for dips requires gathering more info and more time is required, but you get a bang for your buck. How much time do you spend per night following the news if you still have a full time job, what resources do you use to save time looking for news? Do you have any apps or websites you check daily to keep up to date with the market?

Being invested 100% of the time seems a slower process but of course you still get out in front.

 

[Mr ABC]

Psssh. I've been following the markets and investing since the late 90s. Every year there are people, groups and governments predicting this year will see the big crash. Some years it gets a little noisier.

For example, in 2016, Robert Kiyosaki (of "Rich Dad" fame) was adamant of the big crash. He had all these great reasons. It never happened, of course. In 2017, he still said it was going to happen. It didn't.

https://www.marketwatch.com/story/r...lapse-he-foresaw-in-2002-is-coming-2016-03-23
https://www.marketwatch.com/story/r...up-on-his-dismal-market-prediction-2017-02-28

Very few people foresaw the GFC, and of those that did, very few made money on it. Some people just got the timing wrong.

So every year, new sites pop up predicting this is the year. It's all "run to gold!"... "sell all your property!"... etc. Even during the GFC they were certain it's only going to get a lot worse. It didn't.

But one year, they're going to be right. Just which one?

And that’s the best reason why we shouldn’t time the market. The other being rebound in the banks if the royal commission isn’t as heavy handed as thought. The market could rise.

 

[Mr ABC]

I seen this post and would like to ask you all on ASF a question as I am yet to buy into the stock markets. I've just been doing a lot of research and youtube videos.

Has it paid off for you being in 100% of the time?
I noticed your friend looks for the dips and its paid off for him.
Trying to follow the 4 seasons of the economic system, Is said to be difficult as I have read. How difficult though?
I seen a picture on google when i typed "Seasons of an economical cycle" and it also shows what to look for on periods of time.

There is long periods of time before you can get to a big high when you sell off or was it the right time to sell off who knows, so knowing where you are in the season or how high its going to be hard but if you were to follow the diagram in the picture and follow when interest rates move from low to high and ect you would only be out by a few days if you follow the news when to buy in.

I'm starting to work on my plan and I'm a little stuck because some websites say not to wait for dips but others say they wait for dips so obvious people have different opinions and now I need to weigh up my options and decide to have my own opinion but I would like to hear what method some of you guys chose and why?

Saving for dips requires gathering more info and more time is required, but you get a bang for your buck. How much time do you spend per night following the news if you still have a full time job, what resources do you use to save time looking for news? Do you have any apps or websites you check daily to keep up to date with the market?

Being invested 100% of the time seems a slower process but of course you still get out in front.

Best advice I could suggest is split you money in half. Put half in an ASX200 EFT and attempt to time the markets with the other half. See which one is the bigger half of the portfolio after 5 years.

Financial news is mostly bull**** written by journalists who don’t have much skin in the game. Still good to read tho.

 

[systematic]

Hi JuniorR. Good on you for thinking about this.

I can only share my opinion...which I will. But first I need to mention something. I probably shouldn't have said, 'buy the dips' as that may have been the wrong terminology.

The original poster simply asked how many members are all cashed up and waiting to buy in at the next crash? This question is directed at those who are already out of the market (for whatever reason...oer perhaps haven't commenced investing in equities yet) and rather than invest today (or invest in lumps over the next period of time), they are choosing to wait for a market 'crash'. Which, however you measure it, means a big old gigantic dip down - and they have been fairly rare (depending on your definition).

I did mention a mate of mine that did that. From memory it went something like...he'd lost some money in the market in the (I'm guessing here) early 2000's (maybe late 90's to very early noughties). He was investing, but not enthusiastically during the bull of 2003 to 2007, and was pretty sore about his earlier losses (and not winning as much as he should have during the bull). He ended up sitting on a lot of cash...deliberately waiting for...a 'crash'. Look at a chart if you weren't around then...lo and behold...a mother of a crash was about to come. The rest of the story, as best I know it...he was pretty patient about getting back in, did well over the next few years, and retired.

I then mentioned (to the original poster) that that's not my plan. With equities, I am invested all of the time...not waiting for a crash. I wouldn't recommend anyone to go waiting for a crash. My friend was lucky. A sour taste in his mouth abut the markets, good savings and the wisdom of years along with the good fortune of a massive crash...and then pulling the trigger...yep, seemed to work out.

Is that a plan to recommend? How could anyone? If you do stuff like buy on 10% draw downs and then hold for 12 months (remembering you have to have a time to go to cash), you don't come out ahead. If you wait for 'the-world-has-come-to-an-end' crashes, well...you might go an investing lifetime without seeing one. Your cash is still in the bank!

If someone is determined to look into 'market timing' I'd suggest that they look at the various trend following methods (which will have you essentially going in as the market is rising and out as it is falling). But even then, I'd suggest you look into why you would want to do that, and whether it aligns with your goals. I've mentioned in a post long ago that I would maybe adopt a trend following overlay...if I wanted to reduce some volatility later on in life. Maybe. Of course, there's other ways as well. Hold enough cash overall that you can still tolerate the volatility. But for now my time horizon is such that - at least for the way I invest - it doesn't make sense. JuniorR your profile says you are 25yo, I don't even know why you'd do any kind of trend following, volatility reduction or even hold a cent in cash (in your retirement investing at least)...but then, you need to figure out your own plan. But still, I'd encourage someone interested to go looking at that stuff rather than buying on dips or crashes.

 

[JuniorR]

I'm going to put some money over next week then by the weekend, I'm going have a go at trading the S&P ASX 200. I think CMC are bringing over some popular US stocks, so I might look at that and set up a portfolio over the next few weeks.

 

[tinhat]

I am more in cash at the moment than I have been for a few years, however, this is partly to do with timing around my needs, partly because I've had the opportunity to take profits (including the hostile take-over of Finders Resources) and partly because I've been over-invested in stocks for too long now and am looking to rebalance.

If you look at the indices, it is banks and mortgage related financials and telecoms that are dragging things down. Small caps, materials, growth oriented industrial, even consumer discretionary appear to be going well.

The main thing to watch is interest rates and bond prices. Yields are low now, and PEs are overall lifted. The dividend game has been milked dry. Time to concentrate on growth, even for a SMSF.

I think it's worth keeping some cash in hand. There may be opportunities arise from future volatility.

 

[Craton]

I'm going to put some money over next week then by the weekend, I'm going have a go at trading the S&P ASX 200. I think CMC are bringing over some popular US stocks, so I might look at that and set up a portfolio over the next few weeks.

Curious to know how'd you go JuniorR?
Also curious as to what which stocks or sectors you laid money on. I'll understand if you don't reply, all good.

 

[gaius]

Forgive me if I'm asking for your secrets but how many people here are lurking all cashed up waiting to swoop in when this market crashes like some are expecting it to?
I thought about it a year or so ago, so lucky I didn't "cash up* back then.

Market crash? That's crazy talk. I'm way over 500% invested. Current market and political structure won't allow that to happen. Market crash is something in the past, the world has changed, the biggest risk nowadays is not invested and missed the boat.

 

[Darc Knight]

Ross Greenwood saying most think we are a few years off a global downturn.
BRB, buying back in.

 

[gaius]

How could there be a crash when everyone is waiting to buy back in? What will happen is everyone try to front run others in buying back in.

 

[luutzu]

How could there be a crash when everyone is waiting to buy back in? What will happen is everyone try to front run others in buying back in.

I'm obviously have no special insight, but it looks like the way the market is set up - with index funds, algo trading, stop losses, short selling etc. etc.... It doesn't take much for a market to crash like it never crashed before.

Just need some trigger big enough and all those factors will kick in, cascading down into a spiral. And if it goes on long enough, a lot of people will get stuffed.

The world will go on, market will eventually recover etc. IF gov't steps in with stimulus big enough.

But yea, don't kid yourself, it will happen.

You can see it in certain stocks that surprises the market. A few that I know of practically drop 30%, 40% in a single day. 50% after a while then either stay there or picks up. Quickly or slowly depends.

You can see it recently in Santos, Sirtex, Sigma etc.

The market is getting very efficient at front running. Once a bad news is heard... bam!


But that's not saying anyone should stay out or stay in because of what the market might do. If you ask me, just look for good businesses and pray to Fortune you didn't pay a few days before it halved.

 

[MarketMatters]

Market crash? That's crazy talk. I'm way over 500% invested. Current market and political structure won't allow that to happen. Market crash is something in the past, the world has changed, the biggest risk nowadays is not invested and missed the boat.

You are foolish to think that markets will never crash again. It is the normal behaviour of how markets operate. Corrections (smaller) and crashes are healthy pressure valves that allows the market to advance. The causes will almost certainly be different every time. Presently we're more likely to see correction(s) (around 10%) before we see a crash (greater than 20%) like GFC. Add to this that fewer than one in five corrections result in a crash/bear market.

As for current market and political structures not allowing this to happen I would suggest you revisit this thought when the next one arrives.

 

[Triple B]

market crash = go short for me

 

[Value Hunter]

I just do not see any signs of a crash in the near horizon. the U.S. economy is growing at break neck speeds, the rest of the world is limping along (aside form emerging markets which are having a mini crises) and global (and even U.S.) interest rates still have a long way to move up before they will be high enough to induce a downturn.

If you look at the GFC rates in the U.S. were already somewhat high and U.S. land prices (and mortgage credit growth rates) had already been declining for over 12 months preceding the crash.

If we see much higher interest rates coupled with an inverted yield curve and U.S. land prices (a leading indicator) that have been declining for a period of time along with softening corporate profits then I would be worried about a crash. I just do not see the conditions for a crash in the near term (6-9 months).

 

[sptrawler]

My thoughts are, the asx isn't back to what it was pretty GFC, which actually had FA to do with us.
Yet we copped a massive correction, while our mining sector was screaming ahead, now we have a larger economy everyone is$hitting themselves. Go figure