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sws1967

sws1967
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  • Is Chevron A 'Forever Hold'? [View article]
    You may want to avoid emotionally-charged, pointless statements like this in the future. It adds nothing to the discussion and just lowers any credibility you may have had.
    Nov 5, 2014. 11:21 AM | Likes Like |Link to Comment
  • Is Chevron A 'Forever Hold'? [View article]
    So, in full disclosure, while I personally disagree that timing the market will increase returns over the long run - I'm allowing my financial advisor to do exactly that right now. Selling about 10% of my stock and half my remaining bonds to reach 20% in cash.

    The problem I have is the probability that you will pick the right 10 days to miss - BEFORE THEY HAPPEN - is pretty much nil. There are plenty of studies that prove (see AAII and Morningstar) buying and holding outperform this method of selling a little at the top and trying to buy back in at the bottom - IFF one can actually ride out the volatility while fully invested (and that's a much bigger IFF than most folks think).

    So to keep clients comfortable and keep them from panicking and changing their minds during a big drawdown, a FA will "lighten up" after a good stock run and then the investor feels more "aggressive" when the market pulls back. YES, you can avoid losses this way, but on average you sacrifice returns because it's nearly impossible to get back in and catch the full move upward (this is per the research in the articles - I don't have time to dig up the reference but it was either AAII or Morningstar).

    So why would I follow a strategy that I think will actually lead to lower returns than staying full invested? Because I'm more concerned about making a mistake and losing money than I am about capturing that extra couple points on the upside....for now.

    In addition, right after we sold those stocks a month ago the market continued downward and my FA looked very smart....until it bounced back up exactly per my concern.

    So the moral of the story is...while you can sell before the market drops and maybe buy back in lower, you can't do this consistently and it makes it very hard to compare against any standard to see if you really are achieving superior returns. It may feel good, but do you really have more money in your account?

    For all of my effort and my FA's and the good calls we've made, and some bad ones - example, selling PPG after a 100% gain seemed like a really good idea, until it continued up another 50% and stayed there - had I simply bought the SPY back in 2010 and done absolutely NOTHING in terms of watching the market or worrying about individual stocks - I would have more wealth today. (Many assumptions are baked in here, no mistakes or panics along the way, staying the course, etc. Choice of 2010 is because it's the period when I made big changes and 4-5 years is a good time frame to consider IMO).

    It's not a bad thing to sell a little "at the top and buy back lower" if it keeps you in the market and keeps you from making bigger mistakes, but do not expect to achieve superior returns in doing so. That's the lesson I've learned (the hard way) and there is plenty of research to support it.

    For the effort it takes to follow the market, pick individual stocks, stress these decisions, etc., I'd expect significant outperformance vs. the index which I can buy and forget....otherwise why bother and why take the risk?

    Anyway, hope some find this helpful...there is a component of luck involved too, we all get lucky from time to time.
    Nov 5, 2014. 11:09 AM | 1 Like Like |Link to Comment
  • Is Chevron A 'Forever Hold'? [View article]
    And in trading in this style, what return are you achieving?

    I have yet to see any system of trading that can consistently outperform investing, so I'm curious why you would try to time the market.

    ...history repeats...until it doesn't.
    Nov 2, 2014. 11:40 AM | 1 Like Like |Link to Comment
  • What Do You Do If Share Prices Drop 20%? [View article]
    Another major consideration is how big your position in that particular security is. Look at the pullback in oil lately....it's a great opportunity, unless you already own more than enough, in which case it just kinda sucks or you go to the beach and wait it out.

    BUT...it's really easy to sit back and say, "yeah I'll buy when it drops 20%" but most people start to buy into the fear in the media, that's it's going even lower, and hey at only $10 a trade, why not sell a little more and just buy back lower tomorrow? It has "momentum" and my "indicators" are turning bearish - OH, there goes the 200-day moving average, look out the sky IS falling...sell, sell, sell!

    And that's how you get wiped out. NEVER sell, just add opportunistically, a bit of luck also helps, and you'll do great.
    Oct 22, 2014. 11:45 AM | Likes Like |Link to Comment
  • Stay In The Market: 10 Days Out Can Cost You 40% Of Your Return [View article]
    The important point is the 9%, if you believe that figure, for doing nothing. No worry, no fuss, just letting it ride while others try and game each other.

    Take a look at how many people are able to do better than 9% over long stretches. Do you think you can generate 11%+ annual returns by selling near the top and re-buying low? (for the risk of missing out, you better have upside above that average.)

    If I can get 9% ave every year it will be more than enough (yes this assumes past performance repeats, but lacking a crystal ball, what tells you it won't?).

    Meanwhile, contrary to my own advice, my financial advisor thinks he can sell a bit near the top and buy lower...looks good so far, but the harder part is buying back in. I'm guessing I'll be buying him a new car from the commissions, but won't really receive greater returns. It's hard to track what you've missed.

    Never selling would be my preference...just add when stocks are cheap with the cash that builds up via earnings, dividends, etc.
    Oct 16, 2014. 09:50 AM | Likes Like |Link to Comment
  • To Buy High-Yielding McDonald's Or Not To Buy? [View article]
    I'm curious about your statement "taking my IRA back from my financial advisor who has managed to not make as much money as the market" - is this over a period of years, or just recent lack of performance?

    What I find interesting is you are looking at slow-growing, dividend stocks that yield over 3% and I assume by "the market" you meant the S&P500 which yields ~2%. You won't outperform the S&P500 over shorter time-frames during bull-runs like 2013 with a more conservative strategy, in general. I'm wondering why you expected the FA to do better than the market (if my assumptions are correct)?

    I'm in a similar situation, where my portfolio did much better than "the market" until 2013, and now lags.....this may change, however, if the current pullback continues.
    Oct 14, 2014. 01:30 AM | Likes Like |Link to Comment
  • Why Apple Has To Take Bendgate Seriously [View article]
    Why the hell would you put a big phone in your back pocket?

    Pants shouldn't even have back pockets....I'm shorting Macy's until they stop this nonsense!
    Sep 26, 2014. 11:29 AM | 1 Like Like |Link to Comment
  • Apple iWatch: Buy The Rumor And Buy The News [View article]
    The next generation knows nothing of a "tablet" or "phone" they all know "iPad" and "iPhone" and how to operate the gadgets by intuition.

    If I buy puts, the stock will drop, but recover before options trade again. If I don't buy puts, the stock will sell like usual and look like a no-brainer;). If I want to gamble, probably do it in Vegas - meanwhile holding my long shares (as part of a diversified portfolio;). Equal parts AAPL and GOOG actually.
    Sep 8, 2014. 02:23 PM | Likes Like |Link to Comment
  • Not Selling Apple On September 9th Makes More Sense [View article]
    Doc,
    As you say...."under your stop price.." is exactly the problem with the sell-stop order. He didn't say whether it was market or limit, but it's not the strategy I would use to protect profits.

    Yeah, maybe buying puts and sell calls to finance them will work, but this will drag on your returns over time. Just look at how well funds using "options" perform - badly.

    Hey, options are fun to trade, they make you feel really smart when you make some money with them, but the vast majority of people trying to work these events lose money.

    I'm just holding my shares....going mountain biking instead of sweating the chart.
    Aug 27, 2014. 03:12 PM | 2 Likes Like |Link to Comment
  • Not Selling Apple On September 9th Makes More Sense [View article]
    I have yet to see ANY proof that ANY day trader can obtain returns better than an investor (investor defined as someone buying into the business).

    I've done it myself and I see great potential for showing all of my good, positive moves (only) while neglecting to mention the overall return over 5+ years.

    Even day trading books typically tell you up front not to expect great returns. Is there any PROOF that it's possible? (Note: not interested in opinions or antidotes, I want real proof.)
    Aug 26, 2014. 09:05 PM | Likes Like |Link to Comment
  • Not Selling Apple On September 9th Makes More Sense [View article]
    Is the trailing stop because you want to sell while it's still "high enough" and then get back in once it is "low enough"?

    It is an interesting point that previous launches have been met with selling, but the past repeats until it doesn't, so in current market conditions there's no way to tell if the event will follow the "average"....though I'll bet it goes DOWN and then UP and then Down/Up as millions try to time it. Good luck slipping that bid in.

    You could sell calls to limit your upside, or puts to provide insurance for others at your expense....or just hold the shares, add if you get enough weakness, sit back and make a lot of money over the next 10 years.
    Aug 26, 2014. 08:58 PM | 4 Likes Like |Link to Comment
  • Apple Is Heading Lower [View article]
    So what are your returns on AAPL from May 2011 until May 2014 - including losses - by following these "signals" and trading AAPL?

    Note: The longs who have simply held shares have done considerably better than "treading water" so for a fair comparison, let's see the numbers?
    May 9, 2014. 08:57 PM | 2 Likes Like |Link to Comment
  • Ethical Investing And Philip Morris [View article]
    Note that technically "hooch" refers to alcohol....very important to be technically accurate with drug lingo;)

    I am concerned with the recent performance of PM and MO....with the market falling these should be safe havens, but they've gotten crushed after never really running up to begin with in 2013! Here we are set back two years with zero capital gains and the market only 8% down from all-time highs.....so how to get high again?
    Feb 5, 2014. 11:17 AM | Likes Like |Link to Comment
  • Memo To Apple Bears: Give Up For Now [View article]
    AAPL is either going to go up or down. I could say it in a more clever manner, such as "AAPL will rally hard due to expected holiday sales, but there could be a minor pullback due to x, y, z..." and sound really smart, but what the hell have I?

    Nice to see the shares I bought last fall regain their profit - Dan Nathan's call BF for Nov worked out quite well with a 100% profit also. Time to sell some BuPS?

    When all the bears are gone, who will be left to convert and buy shares?
    Dec 2, 2013. 11:20 AM | Likes Like |Link to Comment
  • Munster forecasts strong iPad Air sales, Apple matches Wal-mart's price cut [View news story]
    Great! But I'm not replacing my kid's iPads to get that.
    Nov 1, 2013. 03:45 PM | Likes Like |Link to Comment
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