Staying in vs timing the market, a look at 2008

On staying all in versus trying to time the market. And what really happened in 2008.

I really like this quote from tamhas:

There were a bunch of people who came through the great recession just fine by doing nothing. In many cases, people who were hurt pretty badly were those who sold late, thereby realizing losses, and then bought back in late because they were spooked. To be sure, there are those who were hurt, even if they kept what they had, because the companies were ones which either didn’t recover or took a long time to recover because they were particularly impacted or even a part of the problem.

For my part I don’t know anyone who stayed out when the market was dropping in 2008 and then bought in at or near the bottom and made a killing that way. I say I don’t know anyone who did it, I actually have never even heard of anyone who did it. I’ve never even heard of anyone who claimed to have done it. It sounds great in principle, but it doesn’t seem to happen.

Why is that? I know that at the actual bottom, in November 2008, it was total panic! Almost everyone who was a source of wisdom was saying, “This is the real crash! Get into cash!” Anyone already in cash was saying, “I’m staying out!” or “I’ll wait and buy at the bottom.” And then when it started up they didn’t believe it. Felt it was a false start. And it moved too fast. Then when it was suddenly up 20% they waited until it would go back down to where it was.

What I had been doing was what I’m doing now. Selling things that were more stable and wouldn’t have much chance of a bounce when it turned around, and buying good companies that were falling without any good reason. Again, I had confidence that it wasn’t company specific because almost everything was falling.

In November 2008 it was so bad that even I was starting to feel panicked, and considered selling. I thought about it and said to my wife, “If even I am thinking of selling, there’s no one left to sell. This has to be the bottom!” It was.

Now some people feel that they will do better by preserving capital and staying largely in cash. I just read, “I will buy back in when the tide turns.” And they believe that people who stay in will have to wait forever to get back to where they were. More power to them. I hope for them that it works for them.

Here’s what ACTUALLY HAPPENED in 2008: What happened in 2008 was that the bottom was on November 20, a Thursday. I was up 5.8% from the bottom the next day! Friday! I was up 21.4% from the bottom by the next Friday, the 28th! This was just four and a half trading days from the bottom, because of Thanksgiving! It happened so fast those people waiting for the bottom didn’t have a chance to “buy back in when the tide turns”, even if they realised it and believed it! I finished the year up 19.8% from my bottom, and in 2009 I was up another 110.7% on top of that - for a total of a combined up 152.4% from my November 20 low.

Now go back and reread those two paragraphs! Several times!

And consider that that was with an actual breakdown of the economic system, with companies like Lehmann Bros and General Motors going bust, and other big banks having to get bailed out. We don’t have that kind of a situation now. China may or may not be seeing their growth slow, but our economy is growing slow and steady, with rising employment, falling unemployment, and low interest rates.

I’ll close with a small quote from that wonderfully thoughtful Howard Marks article that someone posted a few posts back:

So what about the likelihood of another 2008-style crash? The bottom line for me is that a rerun of the Global Financial Crisis isn’t in the cards:

• • We haven’t had a boom (either in the economy or in the stock market), so I don’t think we’re fated to have a bust. Because most businesses have been particularly loath to expand their facilities, I don’t think they’ll be slammed if revenues flatten or turn down.

• • The leverage in the private sector has been reduced. This is particularly true of the banks, where leverage has gone from the region of 30+ times equity before the crisis to very low double digits today. And, of course, banks are now barred from investing adventurously for their own account.

• • Finally, the main villain in the crisis was sub-prime mortgage backed securities. The raw material – the underlying mortgages – was unsound and often fraudulent. The structured mortgage vehicles were highly levered and absurdly highly rated. And the risky tranches ended up in banks’ portfolios, causing them to require rescues. Importantly, this time around I see no analog to sub-prime mortgages and MBS in terms of their combination of fragility and magnitude.

I don’t mean to suggest there aren’t a lot of things to worry about: swollen central bank balance sheets; complete ignorance as to how they will be unwound and how interest rates will be moved higher; the seeming inability to generate economic growth and inflation; and the many other macro negatives listed earlier. A hard landing and substantial devaluation in China, the world’s second largest economy, certainly could have far-reaching effects.

It’s important that investors (as well as economists) avoid using words like “always,” “never,” “will,” “won’t,” “has to” and “can’t,” and I try to do just that. But it’s my view that the Global Financial Crisis and its preconditions were highly unusual, and I don’t think we’re heading for an encore. Remember, however, that I’m not a seer, and Oaktree and I never bet heavily on opinions regarding the future – mine or anyone else’s. My conclusions are the result of my reasoning, applied with the benefit of my experience (and collaboration with my Oaktree colleagues), but I never consider them 100% likely to be correct, or even 80%. I think they’re right, of course, but I always make my recommendations with trepidation.

It’s absolutely the same with my opinions. They are just my opinions.

Saul

For Knowledgebase for this board
please go to Post #15056.

A link to the Knowledgebase is also at the top of the Announcements column
on the right side of every page on this board

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Saul, I think some of your ideas/opinions are brilliant. I have learned a lot from your knowledge base. Selling stable companies and buying back into good companies that have fallen more is something I never would have considered before. I now find myself seriously considering it.
Scott

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Saul, I think some of your ideas/opinions are brilliant.

Thanks Scott, flattery will get you everywhere!

:wink:

Saul

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Saul,

Your 2008 experience seems to lend credibility to the theory that one must remain invested at all times. I don’t have a problem with your numbers. There is one thing, however, you are glossing over and it is critical. We are talking about humans here. It takes an incredible psychological strength to take a 50% loss and stay the course. It appears that you may be one of those rare individuals but don’t make the mistake to assume that this is common. Most people will not do that. They will talk a good game about “buy and hold” and then panic and run when the market loses 30% and their life-savings threaten to evaporate right in front of them.

Your system works, but most people cannot execute it. They are better off using a technical indicator to get them in and out. Back in 2008, several technical indicators would have taken you out in Sep 2008 and got you back in in April 2009.

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Around 2000 I had been investing into the “tech bubble”

I got my ideas from TMF. I did not know anything about investing but
Thought I was sooo smart because I had all the money from the sale of my own successful Corp.

I made a bunch of quick money from high flying tech stocks. Everybody
was talkin tech stocks and the markets were going crazy up.

When the bubble burst and the stocks started dropping, there was a giant
selling panic. everything was precipitously falling.

I thought the best thing to do was hold, because the drop would be short lived. But it was not short lived. And when I began to realize that it was not going to turn around, I panicked, sold and started buying the S&P 500 index.

But the downward spiral continued relentlessly.

I sold out and locked some very large losses.

Fast forward to 2011, May. I returned to TMF and bought around 20 companies that were RB and SA recs. Soon after came a somewhat scary
wrinkle downwards in the market. Once again my stocks were dropping.

This time I did nothing and the market bounced back, my stocks rose and we have since enjoyed a relatively long period of market/stock price prosperity.

This time around if indeed this time the market does not bounce back.
I will be doing what Saul did during the 2008 recession. He was fully invested and he stayed fully invested. Eventually he was generously rewarded for this excellent strategy.

I have some cash, but I will not be looking for the impossibly illusive
bottom to invest this cash. I will however be reviewing my current holdings and exploring some new ideas.

Frank

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Around 2000 I had been investing into the “tech bubble”… This time around if indeed this time the market does not bounce back.
I will be doing what Saul did during the 2008 recession. He was fully invested and he stayed fully invested.

I agree Frank, and I should have mentioned 2000. What was different then was the internet bubble stocks had no earnings for the most part and were selling at 200 times REVENUE, and analysts were saying they were bargains because “comparables” were at 400 times revenues. And some of them had NO revenue. I hope no one on this board is investing in any stocks like that.

Saul

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The problem with following technical indicators is that I have seem many cases where they would make bad decisions. In particular, if an indicator has a short time base, it gets you in and out too often. A longer time base might seem safer, but has the same problem. The issue is that the market often has sudden movements. If there is a sudden movement down, then one may easily be in long after much of the value has been lost. If there is a sudden movement up, one may stay out until the price is above the point where one exited, thus losing money compared to staying in. This happens with both long and short time bases, just more “twitchy” with a short time base. I, along with lots of other people, would love to find an indicator which didn’t have these issues, but every one I have examined has this flaw.

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I have cash.
I’m sure an argument can be made that shows my portfolio would be higher if I was fully invested.
I’ve only been investing since 2012.
I would like the opportunity to buy quality stocks on the cheap.
Lastly, I’m not sure whether I will use the cash well, but my odds increase in a downturn.

There are arguments to be made about being fully invested, and arguments to be made for being partially invested.

Since I can’t be as nimble due to daily work responsibilities, I like the flexibility cash gives me.

I haven’t invested any of my cash lately. With commodities spiraling downward, intuition tells me there will be more pain in the market.

I see a lot of the market heads in the same direction as oil on a daily basis. Oil may have a long recovery.

I’ll be happy to miss a bottom if the market turn sharply higher. If it continues to tank, I’ll be happy to put some cash to use.

…and hopefully I put the cash to use well
…we’ll see

Just my two cents…

A.J.

In 2008, I had a 2 year old and a newborn, I had no time or interest do do anything with the stock market.

Karen
Ticker Guide: AMTD • See my holdings here: http://my.fool.com/profile/CMF_KBecks/info.aspx

On staying all in versus trying to time the market. And what really happened in 2008.

What really happened in 2008 is that the government stepped in with very large programs to deal with the crisis. Full stop.

Should there be another “crash”, there is no guarantee that will happen again, since it has happened only once out of the two times we have had such a crash, and there are loud - some say dominant - voices demanding that the government not engage in such programs and “let the market take its course.”

Of course in 1929 there were such voices too, including Andrew Mellon who advised " “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.” You can hear echoes of that today, people decrying the “bailout of the banks” and the program for “Government Motors” and such.

(I can point you to esteemed posters even on the Berkshire board who are counseling the same thing NOW.) You cannot tell people "everything will be OK, and the only course is to “stay invested” - because every situation is different. If you followed that advice in 1929, you had major losses for the next 15 years. Pretend you were somewhere near retirement: could you wait until you were 80 just to break even? In Japan the market peaked at ¥40,000 twenty-five years ago. Today it is at ¥17,000. Understand that! For a full generation the market is less than half its peak!

In the late 1980’s we had what is now called “The S&L crisis.” It was pretty much the same thing as 2008, except on a smaller scale. A bunch of banks - 35% of all Saving & Loan banks - went bankrupt all at once. (Again, government stepped in with a program to dissolve them in orderly fashion: the Resolution Trust Corporation and the FSLIC wound it down and the economy barely noticed.)

In 2000, as the tech sector crashed, the government did nothing. (This was probably the correct response; I am not advocating intervention in every situation.) But that was in part due to Alan Greenspan’s libertarian proclivities. It worked well then, but was a disaster just a few years later when the deregulation fervor led to the entire banking/investment banking industry to engorge itself on real estate and related products - and without quick and decisive action the entire economy could have collapsed. (It almost did.) I note that there were loud calls for “austerity”, and that advice was heeded in several countries (particularly Europe and later Japan) and with uniformly disastrous results, from which they are all trying to recover.

“Don’t do anything, no matter what” is possibly the worst advice I have seen on these boards, and I see it again and again. If you think the market in general or your investments in particular are overvalued and you see a train approaching, do not be afraid to jump off the tracks and let the train go by. Even if you think your stocks are decently priced, remember that when elephants dance the mice get trampled. (ie, when the entire market is collapsing, your issues will too, even if you think they shouldn’t.)

This is easiest to do in an IRA or otherwise advantaged account, obviously, since you do not face the tax consequences. But even in a taxable account, did you really want to hold on to AOL and Lucent and Microsoft and @Home and Pets.com in 1999 rathe from a full-on massacre?

Your future may seriously depend on who is in the positions of power in government at the time of a debacle - which, I point out - happen fairly regularly. (1970, 1989, 1999, 2008, and perhaps coming soon to a theater near you.) You were lucky that 2008 bounced back as it did. Some people would rather have let the banking sector crash and stay crashed, and your market would still be at $5,000 rather than $17,000. This is real history, ignore it at your own peril.

I am going to stay away from political messaging here, mostly because both sides are guilty. The Right says “let the market decide” and the Left says “Punish the banks and bankers, let them go down.” Both are a little bit right and a lot wrong. When the banking sector goes down the entire economy crashes - hard. And yes, there was malfeasance and incompetence in the banking (and related) sectors, and that should be rooted out and appropriate regulation enacted (or at least enforced). In the meantime, when the economy truly crashes it can take a generation or more to rebuild, as we saw in the 1930’s, as Japan has seen for two decades, as Southern Europe is seeing today. Be careful out there. Pay attention. And eschew such simplistic slogans as “Stay invested! It will all be OK because it always is!” It isn’t. It never has been.

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I think that some comments I made about risk management methods to reduce drawdowns have been interpreted as an an endorsement for market timing to improve returns. That was not the case. Really what I am saying is quite similar to Saul’s strategy, which he is quite good at, of Selling things that were more stable and wouldn’t have much chance of a bounce when it turned around, and buying good companies that were falling without any good reason.

I’d rather take a portion of a position out when the trend is beginning to change and reallocate it when I see fit then deal with the declines and attempt to reallocate a fully invested portfolio. It is an area where I haven’t been happy with performance lately and am adjusting strategies to better fit how I think and what I see.

Perhaps that means I am thinking more of a trader than an investor or whatever, but I don’t really care about those distinctions. Yes, public markets allow you to invest in companies, but you can’t really do anything to effect how the company is performing as a retail investor. People like Buffet or Icahn or Soros can possibly do that, or private investors in non-public companies can do that (think Shark Tank). But as a retail investor in public markets, you can only buy or sell the tickers at the price they are quoted and you are basically along for the ride of what the market says the value is now. So yes, you’re investing in the company, but it’s more of a hybrid.

More and more I find there is no one right way of investing, or even for trading if you do that. And the main determinant for success is finding a plan that matches your own personality, temperament, and individual style… and how that plan best fits into your personal situation.
I start the conversation mainly as thinking out loud as I refine my own style. There’s is a lot of good info on the board here and my goal is to add to it, as I think risk management is important… and for me risk management needs to be more that just how good I think the company’s prospects are.

The difficulty now is that the market is in a bad place to need to make that decision. It was astounding to me how many broad market metrics are currently at extreme and record levels. It is an inflection point where things will either be on their way back up from here or where things are much worse than people think and will turn this correction into a crash. I don’t know either way, but it’s a bad spot to need to make the decision to move money to the sidelines or not.
My main goal at improving risk management is to make the decision to avoid or increase exposure before getting to those inflection point spots. Not a market timing idea, just smarter limit on risk for capital allocation.

Some interesting links i found recently that are to similar points

http://poseidon01.ssrn.com/delivery.php?ID=17012411910500302…

http://www.newtraderu.com/2016/01/11/get-back-401k/

https://www.youtube.com/watch?v=n7WgRtLbx4k

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Letting the markets be free vs government intervention…

Hmmm…let me think…

Naw, give me free market capitalism every time.

Every time.

Jim

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“I am going to stay away from political messaging here,”

and then proceed to do it.

I would like to mention that the policy of saving the banks and not punishing banking executives started with Paulson. Who literally got down on his knees to beg Pelosi .(Good for him, I might have let the banks fail before doing that). The basic policy was continued under the Dems so it was bi-partisan. Money for campaigns flows from Wall Street so the policy of letting bank executives keep their gains was equally bi partisan

Plus there was x post facto problem with bankers

The golden rule- He who has the gold makes the rules
.
Saving the banks was a good idea, in fact absolutely necessary.

We have yet to see the full adverse consequences of subsequent actions of the Fed . Because both non meddling and meddling have undesired, often unanticipated consequences. Greenspan gave prosperity for years while setting up the crash. The present Federal Reserve is likely doing the same. Maybe not, tome will tell.

So I am able to make a big rec for this post , ignoring the smallish (for you) political messaging. While adding some of my own.

It is very good advice.
eschew such simplistic slogans as “Stay invested! It will all be OK because it always is!” It isn’t. It never has been

To believe that Buy and Hold always works is to ignore history. It has worked so far, in the US, in a limited time span .
Most Americans save for retirement. A near retiree age 64 investing everything in 1927 eventually got his money back ,. But he would have been in poverty for years and possibly dead by the time he would have broken even.

There is the old story of investing a penny at the time of Christ and getting 5% on it, holding for 2000 years No family has done it, none came even close.

https://books.google.com/books?id=lEfAmWYk5qcC&pg=PT207&…

Market timing does work

Even simpleminded plans like a 10 month simple moving average of the SP500 will keep you out of the worst of bear markets and get you reinvested in time to capture 80% or so of the following bull. With todays low broker fees you don’t lose much in friction following occasional false signals.

Even when not providing much better returns, timing gives less draw down “risk” Saying that "I will just hold " gets hard when you have lost half your retirement and know that losing more means poverty . Especially when everybody else is in a panic mode. And you have no guide. Which is why I use statistically based timing methods. I want to be the House rather than the Player, no warranty of success but over time the odds are way on my side.

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OT Politics

There is not inherently anything wrong with government intervention

The problem comes because the “government” is actually a small group of elitist individuals.

Who like the rest of us often are wrong , don’t know what they are doing,and especially with politicians ,always put their own interests first.

Most of the time the market is smarter than regulators and politicians. But sometimes can’t solve crises without creating much pain for 90+% of us. So there is a role for government too.

It is an argument over degree.
Those who think more government is always better should move to North Korea.
Those who think no government is always better should move to Somalia.

I am not sure which is better maybe Somalia because there is hope there

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Hmmm…let me think…
Naw, give me free market capitalism every time.
Every time.

And that is a great philosophy is what you want is more recessions, more frequent recessions, steeper recessions, and longer lasting recessions, with concurrent underperformance by the stock market during all those periods.

http://discussion.fool.com/as-for-the-next-recession-i-can-safel…

https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit…

History matters.

 
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For my part I don’t know anyone who stayed out when the market was dropping in 2008 and then bought in at or near the bottom and made a killing that way. I say I don’t know anyone who did it, I actually have never even heard of anyone who did it. I’ve never even heard of anyone who claimed to have done it. It sounds great in principle, but it doesn’t seem to happen.

Saul, I just came across this a while ago, don’t know that you can get to it

CMFanurag claims

http://boards.fool.com/1048/david-even-with-my-massive-paper…

Here it is…

Personally, I am welcoming the collapse. Last time, it shaved off 10 years of my financial goals when I loaded up with credit card debt to invest in stock market in late 2008. It will take another 30% of broad market collapse for me to do so again but I will for sure. For now, I am buying into my favorite stocks at every 25-30% dip. There are only so many 30% dips one can have before a company risks total collapse. I am not adding to TGH, KMI or NSAM anymore but others that are falling in 30% range. I will return back to these 3 after some more fall and after I have had my fill from the rest. Collapses are the times when market pricing mechanism demolishes as hedge funds fold up. These are rare time windows when retail investors can get dream pricing…

Then in a response to a question about that statement…
My credit card interests ranged from 0%-2% with my pristine credit score of 90 percentile. I have a fetish for credit cards. Now I have 40 credit cards. I never carry any balance. No credit card offer is ever rejected at my home. Today I have at least 10 card with 0% offer. The only difference between 2008 era and today is that they now charge a fixed balance transfer fee of 3% whereas I truly got 0% in 2008 in the heart of credit crisis. I got to see a lot of fun things:

* Discover actually gave me $20K credit with 0% interest for life provided I make 2 transactions every month. Of course the new transactions with 25% APR and all payments would apply to those first. I emptied out the cash and then made 2 transactions every month of 10 cents each every month at a gas station in < 30 seconds. It drove them nuts. They eventually sent me a letter saying I don’t have to do it anymore. I took 6 years to pay it off. LOL… If anyone here got screwed by some credit card company consider having been avenged.

* When I maxed out nearly half a dozen credit cards on cash at 6 figures, man my credit score saw 600. My auto insurance company sends me a letter saying that I have suddenly become high risk and next renewal will be at much higher rates. So this is what happens to unfortunate souls with poor credit. Double whammy!

Eventually, all that money spend in the bottom of crash more than tripled in a hurry - interest free - allowing me to pay off credit card, my both cars, my high interest loan on prime real estate purchases abroad and build for the first time a cash cushion worth more than 2 months of living expenses. 10 years shaved off to achieve my financial goals. I fully recognize that 1 more year of severe recession coupled with a job loss, I would be writing a horror story here. So I attribute my success to luck (80%), Motley Fool for stock selection and TMF1000 whose house I visited in fall of 2008 and his actions allowed me to carry through my decidedly dangerous scheme.

I came close to total financial annihilation had I lost my job with < 2 month of living expenses and no relatives but my fresh baby and unemployed wife in this foreign country. I resolved to never repeat the folly again. Today I have 2 years of living expenses, high 20 year term life insurances, low deductible out of state earthquake insurance (live in bay area) and a high value disability insurance. This time when I go into credit card debt it will be with that level of preparation but I am prepared to go for it. And before I get into cc debt I have a high 7 figure line of credit at super low interest from IB account to burn through first. My logic is simple - once every 10 years, we are almost guaranteed a deep crash. One should save and plan for that one. That is one event we get to buy a lottery ticket with near guaranteed pay off. I prepared for it this time. Everyone can do so too and should!

For those worried about this market any cannot invest, my recommendation is simple - “if you have no margin call threat - then pack up your financial laptop and news channels for the next 2-3 years. When you come back you are likely to have more in your account than today. And then really prepare for the next crash to participate. If someone actually has a margin call threat looming, then instead of selling at firesale prices or risk liquidation, consider shoring up the account with credit card money at low interest if one can.”

and

Jon

If you check my profile, you will see my list of 250+ holdings - mostly high quality TMF picks

I rarely sell and just accumulate stocks at significant improving value relative to the price. Typically it ends up being adding to almost every stock that has fallen by 20-30% from my last purchased without the business case going down. I avoid the temptation to add on < 20% price movement. If the business case has started appearing shaky then I don’t add. In case of growth stocks, I add with rising prices as well when business case improved by leaps and bounds but the price does not as much. Admittedly it is more difficult to assign a numeric precision for such cases, so I add to such stocks whenever they figure in the best buys of a TMF newsletter or a new purchase in a portfolio service. This way I have managed to add to AMZN, for example, from $15 to $350 over last 9 years with more than 20 purchases. I have found this discipline works wonders over time and has given me more than 50 multibaggers on an entire position basis over the last 13 years of investing.

His profile says his holdings are here, and there are scores of positions, seemingly every rec ever made!

https://docs.google.com/spreadsheets/d/1Cq6DY3NZCPZ_aFVZJwtt…

Super ballsy if true.

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Hmmm…let me think…
Naw, give me free market capitalism every time.
Every time.

And that is a great philosophy is what you want is more recessions, more frequent recessions, steeper recessions, and longer lasting recessions, with concurrent underperformance by the stock market during all those periods.

http://discussion.fool.com/as-for-the-next-recession-i-can-safel…

https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit…

History matters.

Great points all, but this isn’t the board for it. We can agree, or agree to disagree, but lets keep this board clear for its designed intention: investing discussion. There are other boards available for this.

Take care.

Jeb

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“What I had been doing was what I’m doing now. Selling things that were more stable and wouldn’t have much chance of a bounce when it turned around, and buying good companies that were falling without any good reason. Again, I had confidence that it wasn’t company specific because almost everything was falling.”

Saul:

by more stable do you mean stocks that goes down less in the downturn, and subsequently goes up less upon recovery?
How would you know that they are more ‘stable’? what makes them more ‘stable’? what are you looking at to determine that? and can you give some examples of what you consider more stable?

and what would you be buying in the downturn?

the key question is how would you differentiate a ‘stable’ from one that will go up ‘more’ or like you call them ‘good companies’?

stable companies are not good companies?

tj

What happened in 2008 was that the bottom was on November 20, a Thursday.
That may have been your bottom, but the widely acknowledged bottom was shared by the Dow Jones AND the S&P 500 AND NASDAQ, and that didn’t happen until March 9, 2009 - over 100 days later. (https://en.wikipedia.org/wiki/United_States_bear_market_of_2…)

President Obama almost called it - giving a speech on March 3, 2009 (just 6 days before the actual bottom) in which he said that “buying stocks is a potentially good deal if you’ve got a long-term perspective on it.” (https://en.wikipedia.org/wiki/United_States_bear_market_of_2…)

As for the likelihood of another 2008-style crash? Well, it’s different every time, and while it’s never hard to find a reason for impending doom (China’s shift, instability in the Middle East, rising debt of the US, etc., the problem is timing. Some people have been calling a pullback/crash/recession/whatever for years now. Are they finally right? Well, no, if you sold when they first told you to, you’d probably have less money than if you simply held through today.

And, people have tried setting stops to get out while the getting is good, but what happens is that small/medium declines will stop you out of positions that you later wished you held on to. Here’s an interesting article: http://seekingalpha.com/article/3183016-falling-knives-do-st…

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On staying all in versus trying to time the market. And what really happened in 2008.

What really happened in 2008 is that the government stepped in with very large programs to deal with the crisis.

Hi Goofy,

What I was saying is that your chances, as an individual investor, of getting back in at the bottom are very small, because no one knows where the bottom is, and it never feels like the bottom when you are there.

What you were saying is an impassioned political statement about WHY the market and the economy bounced back.

These are entirely different arguments. I completely agree with you (without the passion) about the value of government intervention in a real crisis, and that we bounced back so quickly and Europe never did because we had government intervention and Europe didn’t, and about what austerity has done to Europe since I live there part of the year. (Forget about a NEW recession, with austerity and lack of government intervention, Europe is still in the 2008 recession, it’s never gotten out of it).

However, a discussion of whether we will be able to sense and get back in the market at the bottom is an investment issue, and the kind of thing this board is for, but political arguments are out of place here, although there are other boards where they would be much more welcome. If you would like to continue this discussion please email me privately rather than on the board.

Thanks for your understanding,

Saul

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