IRENE

So it's been 45 hours without power and bge now says no later than Friday with some not getting power until Saturday . Does this seem ridiculous to anyone else? The next time there's a hurricane I'm heading to Salisbury .or ocean city . They didn't lose there power at all. Where is our egomaniac governor or our midget county executive asking what the freaking problem is . They say trees , than what the he'll do they do when there isn't a hurricane? What's s art is this was a category 1!!! what happens when it's a category 2 or 3? We better learn how to rub rocks together to get fire with bge as our provider .I'm pretty sure omalley and ulman are trying to figure out how to tax those of us that are using generators. I'm pretty sure their pissed about that. So the market had a pretty good day today. I read where some are worried that volume was light. Whatever!
It was a good day and I'm pleased to be 20% invested .
We'll see what happens from here .

trend following-read and you might learn something

If you have any interest in trend following this article will be of real interest.

If you want to just go on doing what you've been doing than don't bother reading this

http://pragcap.com/on-the-importance-of-understanding-trend-following

Is the Bull back?Some are full of BULL

I have no clue if the bull is back or not-One of the guys i follow that runs a hedge fund and is FULL of BULL-the guy is on fast money real money and loves to take your money makes some kind of prediction every day-

If you read whats going on with this rally most of the comments I have read is that the volumn is to light -its a dead cat bounce etc etc etc.

I am 25% invested-the rally gave all of my accounts a nice little bounce-Is this the beginning of a big rally? I don't make predictions I follow the trend-The main chart I follow is the relative strength of the s&p 500 vs. money market and that chart is still favoring money market--My early warning system chart is the s&p 500 chart--That chart is showing a bounce off the "bottom" a pullback and than a higher low-which is good--we'll see where it goes from here

If anyone is telling you the bull is back you might want to tell them that their full of "BULL" at least until the market reveals itself.

This is another chance for those of you that never got out to lightnen up some--CAPITAL PRESERVATION is the name of the game

How I operate and what I believe

I didn't write this but this is exactly how I operate and what I believe

1) I believe the market is healthy 2 to 3 times a year. I will always do my
best to expose your portfolio to the strongest stocks I can find during
market uptrends. When I see warning signs, my number one goal is to play
defense and protect your portfolio.

2) When the market is in a downtrend, I go to cash for one simple reason: 4
out of 5 stocks follow the general direction of the market. In other words,
I don’t care how good the company is, when the market is under selling
pressure, the majority of stocks get hit.

3) I realize there are many different investment styles, but for your
actively managed trading account, I find this philosophy to work best in
order to preserve capital and achieve strong compounded returns over time. I
try my best to keep your account near its highs because a -10% decline takes
an +11% gain to recover the losses. That scenario is at least manageable,
however, if we were to ride stocks down -25%, it would take a +33% gain to
recoup the losses, a much more difficult task.

4) Currently, I’m not sure how long this correction will last…NO ONE KNOWS!
The average Bull Market lasts 16-24 months, and we just had one from March
2009-June 2011. The average Bear Market can last 3-9 months. I’m guessing we
could have a strong rally sometime in the 4th quarter, especially since 9 of
the last 11 4th quarters have seen strong uptrends. I’m not too worried
about predictions because they’re all useless in my opinion. Instead, I will
focus on the day-to-day price action of the market and slowly expose your
portfolio as conditions improve.

5) I will occasionally take small positions when I see potential trading
opportunities. For now, I plan to keep us mostly in cash.

6) Another reason I go to cash is to protect confidence. Too many times in
the past, I would do well during market uptrends, only to give back a
majority of my gains during corrective markets (such as the one we are in
now). By protecting capital AND confidence, I will be ready to take
advantage of the new uptrend when I see healthier signs.

7) I used to get discouraged during market downtrends, but now I embrace
them. Why? Because when the correction is over, I am confident that we will
identify the new “leading” stocks that have potential to increase rapidly in
price. Until then, patience is very important.

Market thought

My thought on the market as it now stands:

"Better to be outside wishing you were in, than inside wishing you were out."

You can always get back in--when your in and it's down it's much harder to get out

For those keeping score

Another great week for those of us sitting on cash. The s&p is down 4.7% for the week.

When the trend eventually changes back to positive while those that are of the buy and hold ilk will be praying to get back to even.

For those of us with cash,we'll be looking to increase our 401k's value, our IRA's value and our overall net worth.

Now I'm not wishing the market goes down but it is what it is and i'm sorry,anybody that is just sitting there with a buy and hold mentality or i'm in it for the long term mentality or a follow my plan mentality gets what they get.

Remember its all about CAPITAL PRESERVATION.

If you'd like to discuss you know where I am.

surviving a crash

http://www.thereformedbroker.com/2011/08/19/downtowns-rules-for-surviving-a-crash/

I particularly like this one:

4. Ignore the asset-gatherers and the brokerage firm strategists, their job is to calm markets and soothe investors. Let's say Morgan Stanley runs $1 trillion in stock market wealth for investors. And then let's say they felt there was serious trouble ahead. Do you really think they would ever make the sell call? Can Morgan Stanley really say "Sell 20% of your equities"? No. Because that would be $200 billion in supply hitting the stock market at once - they would crash it all by themselves! Too Big To Keep It Real has always been the problem with the wirehouse advice model.

Avoid declining markets -and market timing and risk mgmt is possible

This new paper from Mebane Faber of Cambria Investment Management takes on one of the myths of buy and hold investing:

"we examine market outliers in financial markets. How much effect do these outliers have on long term performance? Can the investor prepare for these anomalies, or are they truly 'black swans' that cannot be managed? In this issue we examine numerous global financial markets on daily and monthly time frames. We find that these rare outliers have a massive impact on returns. However, these outliers tend to cluster and the majority of both good and bad outliers occur once markets have already begun declining. We critique the "missing the 10-best-days" argument proffered by advocates of buy and hold investing, demonstrating that a significant majority of the 10 best days and 10 worst days occur in declining markets. We continue to advocate that investors attempt to avoid declining markets where most of the volatility lies, and conclude that market timing and risk management is indeed possible, and beneficial to the investor."

http://www.businessinsider.com/interesting-paper-on-market-volatility-2011-8?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+businessinsider+%28Business+Insider%29

Market down 330 points and not one call from a client

When you have a plan that makes sense you can sit back and relax.

When your only 25% invested because the market has been trending down the phone never rings.

If your calling your financial advisor right now to ask him what you should do than you should be calling someone like me instead to ask what you should have done weeks ago.

I can tell you what your salesman--i mean financial advisor is going to tell you-and you know what he's going to say as well."stick with the plan"--ask him if the plan had you losing 15% or more

Shipping Wine Into Maryland

Since I'm sitting with approximately 75% cash here is something that should be of interest to all wine drinkers in the state of Maryland

This great democratic state has finally let its citizens ship wine into the state.

Here is a list of wineries both within and outside of the state that , after paying the state all kinds of fees, are allowed to ship wine

This is a perfect example of the freaking government having its nose in our business for no reason.

Can you imagine how much time and money was wasted while these morons debated something as ridiculous as allowing us to have wine shipped to us.

http://www.bizjournals.com/baltimore/news/2011/08/11/which-wineries-are-shipping-to-maryland.html?ana=twt

Timing the market vs Following the trend

Market timing vs following the trend

I think it's very important that you understand the difference.
Market timing is in my opinion trying to guess what the market is going to do. It's actually what analysts do.
When they say a stock is a buy at $25 because based on their analysis it is worth $50 they are timing the stock. If it drops to $15 their timing was obviously wrong. When a brokerage firm says the s&p will be up 12% for the year they are timing the market.
On the other hand someone that follows the trend doesn't time the market or an individual stock. He watches the movement and when it's going up he follows the trend higher. When the movement reverses he gets out of the way because the trend has turned down.
Doesn't that make more sense than just sitting there and watching your money disappear because some analyst made a prediction that is wrong?

Are you getting screwed by your mutual fund and or advisor?

http://mobile.nytimes.com/article?a=828281&single=1&f=126

Are you going to keep losing money?

Ok, here is a very simple example of why you have to stop doing what you've been doing.

Lets say that in your IRA or your 401k you had accumulated $100,000 on 1/1/2008 the s&p was at 1468.36

On 1/1/2009 the s&p was at 931.80 down 36%-so your $100,000 was now only $64,080

On 1/1/2010 the s&p had climbed back to 1115.10 a gain of 20% so your original $1oo,ooo was now worth $76,800

On 1/1/2011 the s&p continued to climb and was now at 1257.64 up 13% so your original $100,000 is back to $86,784 your only down 13% in 3 years

But look at the numbers you were down 36% than up for 2 years 20% and 13% a total of 33% over those 2 years but your still down 13%

As of friday the s&p closed at 1178.81 down 6% so far this year so your original $100,000 is now worth $81,577--so in 3 1/2 years your down 18%

The sad part is that some of you are going to do the same old thing. this doesn't even take in to consideration the dot com years back in the 2001 area.

And when you look at your 401k don't be fooled in thinking your not doing as bad as these numbers, take into consideration your contributions over all these years..

If you'd like a 2nd opinion on what you should be doing you know where to find me

Stock market backup plan

http://bucks.blogs.nytimes.com/2011/08/08/your-neglected-stock-market-backup-plan/

This is the same thing I harp on continuously-You have to have a plan

When the market is chugging along everybody gets complacent but thats the time you definitely need to have a plan of what to do when things turn down

If you can't do it you need someone like me

You know where to find me

5 reasons your financial advisor sucks

https://www.wealthfront.com/blog/10-signs-bad-investment-advisor/

I learned # 1 on this list a long time ago thats why i only manage money

I was a CFP but i discovered that financial planning was save as much as you can

earn as much as you can on what you save and above all CAPITAL PRESERVATION

If the guy thats selling you insurance is managing your money --what can i say?

who does this sound like?

yesterday when the market was down over 400 this person said i wish i would have sold some when it was up 400 the day before.Today that same person is saying -wow its up over 400 i'm sure glad i didn't sell yesterday

If this person is YOU wouldn't it make some sense to sell part of your holdings,especially in your ira or move part of your 401k to cash?

I moved 20% of my clients holdings into the market yesterday but thats it-I'm still holding a ton of cash and I feel real good about it.

If you'd like to discuss you know where I am

Looking for yield and growth???

I don't know about you but getting .92% on a 5 year govt bond just doesn't do it for me

I guess I could buy a 10 year and get 2.17% but again seems pretty risky

I can buy ibm stock right now and get a yield of 1.8%

Mcdonalds is yielding 2.8%

coke 2.8%

proctor and gamble 3.5%

kellogg 3.3%

boeing 2.7%

dow chemical 3.4%

This is obviously not for eveyone there is risk thaq the stock price will go down but I'm hopeful that it will far outperform a 10 year govt bond that is yielding 2.17% as I write this

Are you one of this guys clients?

Jim Rohrbach writes:


Have you noticed that there are some “experts” on TV who say they knew what the market would do what it did on Monday and Tuesday? I was watching CNBC on Tuesday evening and there was a guy on there who said that he knew on Sunday what the market would do on Monday and Tuesday. He said, “I predicted that the market would be down 2%.” I bet this guy can also pick the winners in every horse race after he receives the next day’s newspaper. This guy manages money for clients. They asked him what he was advising his clients to do right now. Want to guess what his answer was? You guessed it. He said he would tell them that he was in for the long haul and that they should relax and stay with their positions because everything was going to be okay. They told that same story in 2008 while their clients saw their portfolios drop 50%. I think it’s time for these birds to come up with a new and better tune. They can’t tell people to time the market because we all know that it can’t be done. So we will just tell them to remain fully invested at all times. Then they can collect their commissions, smoke their pipes, and drink their beer. After all, it’s not their money that is being lost.

This is how you make money

If anyone took my advice and got out of the market your now sitting with a pile of cash--Feels real good doesn't it?

Well with the market down 400 I am going to start edging back in--as much as maybe 20%--If the charts start firming up I'll put a little more in over the next few days or weeks

If the charts start breaking down again it'll be easy to get out with a small position

Once the relative strength of the s&p 500 turns positive against moneymarket I'll be fully invested.

If you'd like a 2nd opinion on how your money is being managed you know where I am

fun,fun,fun till...

ok so we had a big rally in the last 1/2 hour yesterday and the market was up 400-not unexpected since it was down 600 the day before-so if your feeling good about that rally your only down 200 points from 2 days ago.

The fed yesterday said they probably won't raise rates for 2 years--2 years!!!!!!!!

what that tells me is the economy is in big trouble-people are buying 5 year treasury bonds and getting less than 1%--i'd rather put that money in my desk drawer.

Looks like a down opening at this time 9:04am--

If your still 100% invested you might want to take off some--this is way to volatile for the average investor .there will be plent of time to get back in when things calm down

2nd chance or 3rd or...

Well as I write the s&p is up over 30 points,the down up over 200

If you've been nervous about the marke this is a chance for you to lightnen up.

The fed is meeting and there will be some kind of announcement at 2:15-Have no clue what the market reaction will be and neither does anybody else.

The market could zoom or it could turn around and fall like a rock.

The only thing I know right now is the trend is down--If yesterday was the bottom than I will be prepared to redeploy some of my cash when I see that the trend has reversed. In the meantime I'm sitting this rally out.

Repeat after me- CAPITAL PRESERVATION CAPITAL PRESERVATION CAPITAL PRESERVATION

Down another 600-Don't make this worse than it already is

The market could zoom tomorrow or it could be down another 600 points-You don't know,I don't know no one knows.But what I do know is the trend right now is down.

From May 2 (the yearly high)until today, the s&p is down about 18%-Thats not good but right now you would need a 22% rally to get back to even.

If you wait until your down 25% your going to need a 33% rally

Can you afford to take that chance.

I know I know your financial guy told you to sit tight your a long term investor you have a financial plan, you need to stick with it. And what i'll tell you IS GOOD LUCK. How did that work for you back in 2008,oh yeah it only took you until 2011 to get back to even, maybe even be up a little bit-So do you want to go through that drill again?

o

If you'd like a 2nd opinion of where you stand or what you should do You know where to find me

roller coaster or cut and bail?

Over the last few years I said there were basically 2 kinds of investors. There were those that just ride the market up and down really with no kind of plan of what to do so they just sit tight and hope when they need the money the market is on an upswing. Since the market turned up in 2009 they have been feeling pretty good having recouped all their money and more.I hope their not planning on retiring in the next year.

Then there are those that got the crap scared out of them and never got back in the market from 2008.These types also have no kind of plan of when to get back in or of when to get out so they do nothing.

Since th market turned up and the trend became one that favored stocks they were looking pretty bad since they missed all the gain.

Well folks here we are again-The s&p has given back approximately 15% from its May 2011 highs.

So once again we're at a crossroad-Will the roller coaster people be right and the market will go back up(I know it always does--eventually) before it goes down 20-30%. Or will the people that bailed and never got back in be vindicated.

The truth is that both of these groups have a chance to benefit here. The ones that are in should have or should now lighten up and wait and see what happens. A 15% loss from the highs is not that bad,but if it turns into a 20-30-40% loss than their like a rat on a treadmill-running fast but getting nowhere.

The ones that got out need to be ready to start edging back in when the trend starts to turn up.

The problem for both groups is they really have no plan of what to do.

Are we having fun yet?

So that was quite a week in the market and now with the usa credit rating being lowered we get to have more fun next week

I hope there is at least one person out there that heeded my advice and reduced their exposure to the market. If you did you now have some cash and the next test will be when to get back in.

This is why the average financial advisor tells you to just follow "their" plan,no one can time the market,if you get out now you won't get back in so on and so forth.

I agree that no one can call a top or a bottom but i's not that hard to know when you should be cautious and whn you should start testing the water again.

My plan as of right now is to start getting back in slowly when the s&p hits 1185.What that means is I will redeploy some money at that level,not all of it.This is subject to change if we go down further before turning up.

I keep harping on it but CAPITAL PRESERVATION should be your main concern.

If you think a bottom is in think again

http://www.marketwatch.com/story/bottoms-rarely-look-like-thursdays-rout-2011-08-05?siteid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20marketwatch%2FnewslettersAndresearch%20(MarketWatch.com%20-%20Newsletters%20%26%20Research)

If your getting this kind of advise you are in serious trouble

This is the kind of crap that is being peddaled to clients out there-this is taken from some financial planners website:

"Based on the number of calls I am receiving from worried clients, I am guessing most of you are feeling some concern regarding the steep slide in the market. The stock market has now corrected over 10% from its recent high. This happened because of today’s 500 point drop.

Market crashes are normal. Volatility in markets is normal. Markets are irrational.

Volatility is the price a market investor pays for the possibility of a return greater than the 1% return a safe and secure savings account will earn. Nothing fundamental with the companies you own has changed from two weeks ago when the markets were higher. What has changed is that people are feeling fear and trying to calm the anxiety they are feeling by “getting out.” It’s predictably irrational.

About 80% of our clients weathered the crash of 2008 – 2009 without making a change in their portfolios and were rewarded for their patience. They’ve seen positive returns over the past three years in excess of those they would have seen had they gone to cash in 2008. The 20% that sold some stocks at what turned out to be the bottom of the market in 2009 now painfully understand how selling at the wrong time can negatively impact your returns.

Historically, summer is a bad time for the market while winter is generally favorable. I’ve told clients since April to expect their great returns of the first four months of 2011 to look a lot worse by September. The market hasn’t disappointed.

So, my advise is boorish and predictable. If you are going to do anything, INCREASE your exposure to equities right now, rather than decrease. Stocks are on sale. They may be even more on sale by October. No one knows. What you don’t want to do is make the big mistake and sell out during a market correction or crash."

What he's telling his clients is he has no freaking clue what he's doing and shouldn't be offering advise to anyone.
He's saying those clients that didn't do anything back in 2008 finally got back to even 2 1/2 years later. And he's basically telling them to do the same thing again because the market according to him is going down thru october. so what am i missing here,if he actually thought that wouldn't he smart advise be to get out of the market until oct? Why sit and take a 20-30% hit and than fight to get back to even over the next 2 years and do it over and over.

This kind of crap irks me to no end.

I've been warning since july 11 to take some defensive action

please tell me why every financial planner,cfp whatever that I run into on twitter,linkedin or in the real world is preaching that you can't time the market, you have to stay with your plan,i don't know hat the hell i"m doing(i just through that last part in ,they would never admit that.

Look folks this is not rocket science.But if you just look at the technicals,the charts you can get a feel for where the trend is going.

what possible harm could have occurred if you would have moved some part of your money from your IRA's and/or 401k into cash for a period of time. The worse that could have happened is the market kept going up and you didn't get the full monty. the best thing that could have happened is that you now have cash to buy at lowere levels.

Of course these financial planners will tell you "no one knows when to get back in-or my favorite "you can't time the markets.That is a total bunch of crap. You don't have to time the market,all you need to do is watch the trend,its not that difficult.

I have an open invitation to meet with anyone that has the slightest interest in finding out what I do. I am not a guy thats going to pressure you. I want to work with people that are interested in growing their assets.

Why me?

What separates me from most people that manage your money.
Most financial advisors make assumptions about what's going on in the world, how the economy is doing etc and stick to those assumptions. For example, they or the firm their working for predict the s&p will be 1600 by year end. Then when the market is going down they tell you to stay the course, it's just a correction, you can't time the market. If you get out you won't know when to get back in.
I on the other hand rely on what is. I understand a normal correction and I also understand when you need to take action to preserve capital.
Now is one of those times to be cautious. If the market reverses I know what to do.
There are going to be rallies, big rallies in all likelihood. But for right now the trend is clearly down. I'd much rather be safe than sorry.
You can always get back in when the time is right, when there is more clarity that the market is going up.
If your wrong you lost a little of the upside but you have all your capital.
Why take a chance that you could lose 20% or more of your capital in a downward biased market

Read this only if you are concerned about your 401k or any other investment

Today there was a change in relative strength of rsp versus monymarket-rsp is the equalweighted s&p 500 etf.

This is the 1st time moneymarket is favored over rsp since 7/25/2010.

What that means to me is you better think about protecting your money.If you have a 401k its time to move into more cash,ira's the same thing.

This is the time to think about preservation of capital.There will be a time to get back in if you follow the trend and pay attention to relative strength

This is my opinion only and for my clients only. You need to make your own decesions and hopefully have a financial person that knows what to do.

Good Luck

Dow flirting with 12000 and 30 year bond yielding 4%

So they just passed the debt ceiling extension and the market is down 130 points-The dow is flirting with 12000 again and 30 year bonds are now yielding less than 4%.
Are you willing to put your money in a 30 year bond to get less than 4%?
More importantly are you willing to watch our money go down the drain again?
Have you discussed with your financial person what your going to do if the market keeps going down?
Have they called you?
You can't just sit there with your head in the sand,no one knows whats going to happen but you have to have some kind of plan as far as when to get out and preserve your capital its just the prudent thing to do

If you'd like to discuss you know where to find me