Most of the P123 model uses recession market timing and forgot the short time market volatile happening for last 2 years.
Believe, so far no model come up with $VIX > 20 all the stocks looks like danger, even MA, V, MSFT stocks went to 20% correction on Dec 2018,
if objective is gaining money from market; why we can’t step down for few weeks for safe. it is my thinkng…
Please, suggest your personnel investing rule on large cap during last 2 years.
Whether it is wise to stay away in wild market, Just ignoring market for all 2 years.
Whether step away for few weeks during the volatile market, using some short term market timing rules. Here, I am attaching screen shot for reference.
As long term investor; the chart looks ugly and 14 times rollover during last 2 years, the rebalancing is weekly, so better than day trading and very worst than long term investment.
Just stay in the market, ignore short term market volatile as Mr.Warran Buffet, Just stay in the business ignore market noise.
Thank you very much sir for sharing personnel approach for volatile market.
Kumar
I am planning to introduce short term market timing in my dm model.
I am following some experts from HarvardMBA, Standford MBA and Dr.Alexander Elder one more from Chicago MBA.
All of them 70+ years old.
All of these fundamental guys uses short term market timing.
Out of curiosity, do you have pointers as for what you see are usable short term market timers?
Or who are the experts you are referring to? Any useful research papers from those guys?
I am asking because I tried in the past to mix all sorts of “classic” technical indicators (MACD, RSI, etc) with fundamental-based quantitative strategies here on P123 and have never found that useful…
The equity charts you posted seem to indicate a good degree of success so I am curious.
Paste it into a new exposure list and then call the list in your simulation under “Period and Restrictions”.
The simulation goes to cash when out of the market. During the cash periods invest in a bond ETF for additional returns.
Thank you Georg - I will look into it in details in the coming days. I never used the exposure list feature before so it is a good learning opportunity.
BTW, every few months I read your blog with interest. It is great quality work and research.
I already use a couple of “fundamental-based” timers e.g. my version of the hi-lo Beta you created based on Andreas H’s observations.
While not as advanced as the Super-Timer, this saved me last year in Dec (with a live-money drawdown ~-9% vs ~-20% for SPY).
However, when I look at Kumar’s charts above, it strikes me that the on-off switch is much faster (few weeks) which leads me to believe these are technical-based timers. But I have never been able to harmoniously marry technical timers with fundamental stock- / ETF-picking hence my question.
Dr.Alexander Elder has www.spiketrade.com website; their market timing has multiple signals.
new high new low breadth indicator of the industry group, monthly, quarterly and yearly time frame of same signal.
the website is for day trader but if we able to implement the market timing component in p123. We may get benefits.
p123 lean towards fundamentals comparable to mutual funds.
believe 20% draw down should be acceptable as fundamental investors; warren buffet lost 50% 2 or 3 times; he did not close his business.
I should have such kind of mind set if market is 50% down warren buffet invested in Oct 2008, 6 months before market bottom.
Mr.Warren Buffet uses the market timing to invest fresh money. not take money out of the market!!
Umh… I went through a couple of the books from A Elder back in 2011. I was not super impressed in terms of applicability / implementation but maybe it is just me.
concepts are trading for a living. it is for day trader
Still he is not retired; still trading for a living. will watch market every day and every week.
He watch every breadth of market for day trading opportunity and training others in same area only using charts. no fundamental.
looking for tiny profit 1% to 5% with stop loss.
Mr.Warren Buffet,
investor; the investment plan for him for next 10 years, 20 years and life time.
he suggest young investor; to invest 20 times/punches in ones life time.
2 controversies in market timing.
Mr.Warren Buffet says buy when market is in bottom and every one is scared. He did not mention anything to sell.
He has only timing for buy!
Mr.William O’Neil says buy when market is going up and sell when it is turning down.
Most of the 52 weeks are going up after buying it try to do mean reversion, then people following this strategy is loosing money.
Mr.Warrent Buffet advice looks wise for long term investor.
Mr.William O’Neil for few weeks to few months holding as short term trading, Dr.Alexander Elder method is for day trading.
Holding QQQ for last 5 years is better choice than BRK.B (Mr.Warran Buffet company) or CANGX (Mr.William O’Neil Mutual fund).
Believe any dm based on QQQ universe will be interesting.
