By my calculation the 99-Day Rule triggers next Wednesday. We’re at 92 days as of yesterday. The markets will have to rise 20% in the next week to avoid triggering the rule.
Mungo has just called a short term bottom, so the question is will the predicted rally lead us out of this bearish trend and back into the bull? Or will this be a head fake with another leg down to follow?
I’m itching to buy, but nothing is screaming at me right now. QQQE maybe?
I’m itching to buy, but nothing is screaming at me right now.
Because everything is “Mute”.
Seriously what is the likely economic and market outlook?
GD_
I don’t know but some that might look good:
AMD - the big drop in price has the financials on this one looking good
PFL - good dividend ETF and the price has remained stable
GOF - another good dividend etf same as above
GLO - same as above
I am buying these or already have these at this time. Back to lurking…doc
I’ve been buying FDX, SAM, and GOOGL lately. I’m thinking about TROW and BLK. Berkshire under $300 gets interesting. There are lots of ideas peculating, but none that are screaming buys.
Was it Warren Buffet who said be greedy when others are fearful?
The fear index is flashing extreme fear!
Technicals are way oversold.
Valuations are very attractive.
Is their blood in the streets for the confirming indicator?
Embrace the fear lol…doc
FEAR: False Evidence Appearing Real
now back to lurking
Was it Warren Buffet who said be greedy when others are fearful?
The fear index is flashing extreme fear!
I am greedy. But is it fear what happened on Thursday and is happening right now? Even “extreme” fear? Maybe I just am too cheap.
Was it Warren Buffet who said be greedy when others are fearful?
The fear index is flashing extreme fear!
-----------------------------------
I am greedy. But is it fear what happened on Thursday and is happening right now? Even “extreme” fear? Maybe I just am too cheap.
The Buffet quote is always misleading or at least mis-applied. The Fear can last a long time. You don’t want to knee jerk buy just because there appears to be “fear” in the marketplace. In fact that’s when you really need to stand aside. You’ll be buying on the way down and little better off than those who bought at or near the top. You have to wait till the fear is close to subsiding and the resignation sets in. That’s the bottom. The fear part is the long slide down. And how will you buy during The Fear? Lump the minute you sense fear? Then watch it fall another 20-40%? Or DCA all the way down? That would mean you already know (somehow) where the bottom is. Or maybe you’re just rolling the dice? That’s not a plan.
Track the fear, it’s a useful indicator. But don’t spend all your money in one place, or at one time. There might be more fear over the horizon.
I think the other half of that statement is being fearful when others are greedy. Well, we know how long that can go and man, you’d be missing a lot of profits if you sold early. Like real early.
QQQE maybe?
Based on what people have said, I understood that QQQ-Equal-Weight is better than QQQ (cap weight). But since QQEW inception (June 2006) it has had worse performance than QQQ.
Lower CAGR, higher STDEV, lower Sharpe and Sortino ratios.
https://www.portfoliovisualizer.com/backtest-portfolio?s=y&a…
I accept an EW portfolio having lower return, because it should also have lower risk. But QQEW and QQQE don’t.
When it comes down to it, SPY vs. RSP has the same problem in the same period (Jun 2006 to present), just not as strong Although longer term (Jun 1999 to now), RSP is better than SPY.
Based on what people have said, I understood that QQQ-Equal-Weight is better than QQQ (cap
weight). But since QQEW inception (June 2006) it has had worse performance than QQQ.
Lower CAGR, higher STDEV, lower Sharpe and Sortino ratios…
I accept an EW portfolio having lower return, because it should also have lower risk. But QQEW and QQQE don’t.
When it comes down to it, SPY vs. RSP has the same problem in the same period (Jun 2006 to present), just not as strong Although longer term (Jun 1999 to now), RSP is better than SPY.
The advantage that I perceive for QQQE is not that the historical performance better or worse, it’s that it’s more diversified and predictable.
(and in any case I expect long run returns to be very very similar…good numbers ending now sometimes just mean something is currently expensive)
QQQ is totally dominated by a few firms. The top 2 names account for 21-22% of the fund, top four names are 37-38%.
If you can predict the futures of those few firms, buy them, don’t buy QQQ.
If you can’t predict those few that dominate it, don’t buy QQQ.
So who is it appropriate for? Nobody, as far as I can tell.
QQQE, by contrast, has its biggest allocation at 1%.
So it has vastly lower risk, since most true risk comes from company specific news.
(and even if you looked at a meaningless metric of risk based on price variability, QQQ has a
higher standard deviation of short term price returns–day, week, month etc–because of the concentration)
And the diversification means that it is not unreasonable to expect some modest degree of mean reversion in things like average real earnings, or valuation multiples.
That’s what makes it more predictable. One can make a guess as to what it might be worth, and what the forward returns might be.
(my estimate is that, at average valuations since about 2005 and on-trend earnings, it would be trading at about $59-64 right now…which it is, give or take.
And that value might be expected to rise at about inflation + 8%/year on trend.
So, my stab in the dark is that it’s reasonable expect four year returns of around inflation + 5.0%/year from the current price of $67: ~4.5% real price increase and ~0.5% dividends.
Looking out seven years, I’d pencil in inflation + 7.0%. The current very modest “high” valuation is less of an issue spread out over time.
There are lots of waffly assumptions in those metrics, but there is no equivalent estimate you could even attempt for QQQ.
The biggest case against QQQE, as far as I can tell, is that there are 4 Chinese/VIE tickers included.
So, for 4% of the allocation you don’t have such luxuries as ownership rights or audits.
Oh, and that FB is one of the holdings. Ick : )
Jim
There are lots of ideas peculating, but none that are screaming buys.
Moderna is trading at a P/E of 5 and has $10 billion in cash, which seems like a steal.
DB2
peculate: embezzle or steal
The top 2 names account for 21-22% of the fund [QQQ], top four names are 37-38%.
If you can predict the futures of those few firms, buy them, don’t buy QQQ.
If you can’t predict those few that dominate it, don’t buy QQQ.
I can’t predict anything about those top 4.
What I can think of is to buy the top 4 in equal weight and recast/rebalance once a year. Maybe 75% in QQQE and 25% in the top 4. Haven’t had the guts to do that, though.
Or maybe the top 6, which is 46% of the holdings and neatly avoids FB which is #7. Maybe I need to, as Shakespeare said, screw [my] courage to the sticking place.
What I can think of is to buy the top 4 in equal weight and recast/rebalance once a year.
Here’s an idea for creative tuning:
Size those positions neither as cap weighted nor equally weighted, but rather in proportion to their forward earnings yields.
Current earnings or one year forward if you’re conservative, but preferably two or three years forward if you like growth stories more and can estimate them.
This might not make that much of a difference to the portfolio over time, but it would protect you from the pain of unwinding bubbles.
Microsoft, for example, seems to have alternating decades of being very much in and out of fashion, even thought he earnings progress has been pretty steady by comparison.
It’s not fun to have a big position during the “going out of fashion” phase.
Jim
7 more days to go.
7 more days to go.
No need to get too fussy about the particular date of the signal.
The likely forward returns fall off very gently based on how long it has been since a fresh recent high, so it’s more of a time-out.
This post has an interesting table of average forward returns based on days since high.
https://discussion.fool.com/a-new-sampp-high-so-the-99-day-indic…
Note that this particular table is six month forward returns.
That’s interesting because few things are predictive on the 6-12 month time scale…most good signals are either faster (market turns) or slower (valuation, market cycle).
Jim