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Nitpicking Contests

Summary

Shoulda Coulda Woulda. Investors.

Scenarios Galore.

Wild Cards and Monkey Wrenches.

Game of Chairs Dummies Guide.

Mirror, mirror on the wall... who is the fairest of them all?

also the Good, the Bad and the Ugly.

We are in the 9-th year anniversary of 2008/09 Great Deflation aka Great Recession aka Great Financial Crisis aka Financial Crisis of the Century. US markets bottomed out in March 6, 2009 late in the morning.

>> DJ 1940s to 60s: Dow Jones 1940s to 1970s EWA.png
>> Spx 1980s to 90s: snapshot-18099.png

Longest bull run for Dow Jones was 13 years from 1949 to 1962.
Longest for SnP500 = 1990 to 1998 low/high on price charts.

Dow Jones is the only major index in the world that did not suffer a bear market from the March 2009 significant bottom - to date. Hence, the one that is almost 9 years old bull run. SnP500 collapsed -21.53% technical bottom in October 4, 2011 and hence it was a 6 years old bull run as of October 3, 2017.

>> SnP500 Cyclical Rally: snapshot-18098.png

At any rate, for us EW'ers, the more appropriate technical term is that this rally off March 2009 significant bottom is already qualified as a Cycle-Degree Rally of 8+ years. A Cycle-Degree Correction is required in order to terminate the current cyclical rally. For as long as intermediate rallies and corrections keep forming - up to maximum complex 13-waves - then the cyclical rally remains active and in progress.

,

Performances of the major indexes:

- DJ = 311% max (257%) --> 346% w/ DRIP, 18.451% CAGR;
- Spx = 331% max (264%) --> 341% w/ DRIP, 18.285% CAGR;
- Compq = 493%; and
- Russell2000 = 372%.

311% max ROC. 257% using DJ calculator closing prices.
346-257+311 = 400% max total return w/ DRIP - bottom to top.

>> DJ Calculator: Dow Jones Return Calculator, Dividends Reinvested - DQYDJ

QQQ = 0.77%. IWM = 1.23%. Proxy yields for Compq and R2K.

Over the long run say 40+ years, DIA with it's higher dividend yields can win again w/ DRIP vs. brute force price appreciations of the tech index QQQ. From 1974 to 2016 DJ CAGR = 11,000% vs. Compq ROC = 9,280% estimated. No dividends for Compq. Don't know when QQQ started giving dividends.

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1974 to 2000 Secular Rally:

- DJ = 1,961% ROC --> 4,739% w/ DRIP, 16.60% CAGR;
- SnP500 = 2,525%; and
- Compq = 9,253%.

- MSFT 1986 to 2000 = 66,000%. AMZN 1997 to date = 131,000%.

For stock/sector investments, choose which you want.

I selected Financials/XLF = 535%; overweight during Feb/March 2009 bottom fishing 130 stocks and ETFs as core when it collapsed -85%. Biotech/FBT = 797% from March 2009 bottom to most recent ATHs. Started 3xETF investments in February 2016 using LABU along with UWTI GUSH BRZU and RUSL when IBB collapsed -45% and -80% for EWZ and RSX.

Portflio = 618% max ROC March 2009 to Jan 2018 ATH vs. 331%/408% SnP500 = 1.87x/1.51x betas, 2.42x max run rate vs. Spx from Feb 2016 bottom boosted by 3xETFs. Not bad at all, but can be deadly during downturns.

- 3xSPXL = 4,596% (11x beta rate vs. 408% Spx);
- NFLX = 5,813%; AMZN = 2,404% from March 2009 bottoms;
- TSLA/Aug2010 = 2,140; FB/Sept2012 = 1,020% from IPO lows.

Shoulda coulda woulda for stock pickers.

* will post this in 3 to 5 parts like previous instablog.

/posted Feb 18 3:33pmĀ  Part I