Seeking Alpha

You're Kidding » Comments » AGG

  • Pierced Hopes for Stock Bottoms [View article]
    Good luck with this.

    Remember, though, that it took almost 3 yrs for the 1929 crash to get to the bottom, and there were 5 or so false rallies back up along the way. The first one was especially mean because the market went back up almost 50% over the course of a few months, before turning south from there. I'm sure just before that point most everyone was convinced the bottom was behind them. Unfortunately, they were very wrong.

    People buy and sell stocks every day the market is open. The person buying thinks they are getting the best deal. And likewise, the person selling thinks they are getting the best deal. They both can't be right. This behavior cannot be accurately modeled with mathematics because unpredictable emotions are what cause people to do what they do.

    When you believe that the market is headed up or headed down, what you are really saying is the sum total of all human behavior as represented by the sale of billions of shares of stock, will either be up or down for a given time period. Anyone who thinks they can predict this kind of thing is obviously dreaming, but in the long run they will actually be correct about 50% of the time, just by chance alone! And then when certain people have streaks of winning guesses, we call them *Market Gurus.* That's like saying a coin toss that gives 5 or 6 heads in a row, actually means something, when in fact it means nothing, and simply happens by mere chance.

    There is, unfortunately, no method to this madness. We like to think there is, because we want so much to understand things and be able to predict them. But we delude ourselves. All *analysis* ends when we *feel* it is time to move. Then we make our bet, either up or down. We are right half the time.

    Right now, my analysis says we are some time from a bottom. I'll be going in long when I *feel* that *it is time.* I've got a 50-50 shot of being correct. In the meantime, I am short the market with 7% of my money. It *feels* like the right thing to do from my *analysis.*

    LOL
    Nov 20 07:23 am |Rating: +1 0 |Link to Comment
More on AGG by You're Kidding
Comments by Ticker
You're Kidding's
Comments Stats
87 comments
Rating: 6 (193 - 187 )