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Does Market Timing Work?

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Re: Does Market Timing Work?

#211

Post by the_sleaze9 »

zer0tonin wrote: post #84
Aunche wrote: post #70

Earlier quoted context omitted.

It doesn't count as beating the market unless if you're doing so due to skill. It's not particularly unusual to beat the market and come out of a casino positive. On the other hand, bragging about how good you are at slots, is what will get you "weird dogmatism."

Dang, I guess I will go tell my quant friends their knowledge of probabilities doesn't count actually, they should try having "skill".

Exactly. That's why I only play the `Skill Games` at the back of the gas station with my savings.

Re: Does Market Timing Work?

#212

Post by oceanplexian »

warner25 wrote: post #207
rr808 wrote: post #113

The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…

I agree that the American stock market has been an outlier, and most Americans don't realize the extent to which that is true; it's good that you do. But compared to buying and holding a widely diversified and low cost portfolio, what was the better strategy for investors in other markets? What would be the better strategy for Americans over the next 40 years (not knowing if it will be a miserable time or not)? I thi…

People keep talking down the US but the only advanced economy reliably innovating at scale. Especially in the post-COVID era, as China faces growth collapse.

You don't have to look far to see that all the major tech developments of our species are coming out of the US: Generative AI, Reusable Rockets, self-driving cars, mRNA, Genetic Engineering, NIF Fusion, VR, etc. The US could strike it out on any single item and spark another industrial revolution.

Plus we're still king of the hill in so many other categories (World's largest producer of energy, world's largest agriculture producer, world's largest military, etc.) If you're an investor, the idea that you'd bet against the US economy is a hilariously bad take.

Re: Does Market Timing Work?

#213

Post by the_sleaze9 »

HarryHirsch wrote: post #121
andsoitis wrote: post #118

Earlier quoted context omitted.

because you can't know the future

Politically connected people can shape the future. Nancy Pelosi's stockpicking skills are legendary.

Not even close to being a single-party problem. I know it's almost Halloween but you can do better than jumping out from around the corner yelling "Nancy Pelosi!"

> https://www.nytimes.com/interactive/2022/09/13/us/politics/c...

Re: Does Market Timing Work?

#214

Post by overtomanu »

zer0tonin wrote: post #54
lend000 wrote: post #40

Earlier quoted context omitted.

The fact that you're being downvoted for factual contributions kind of explains why it's possible to beat the markets. Most people refuse to believe it. No public strategies are going to beat the market by a huge amount, and having the discipline to execute them manually isn't easy, but it has been clearly shown to be possible.

The dogma that it's impossible to beat the market is frankly weird at this point. If the markets were truly efficient, randomly picking stocks would beat SPX ~50% of the time. Since markets are not super efficient, basic exposure to performance factors (small cap, value, momentum...) puts you at a fairly high likelyhood of beating SPX.

SPX index is also weighted (I think by companies market cap), which means some of the stocks have greater effect on the returns of the index. Also companies are periodically added/removed from the index as per their market cap which I think weeds out low performers without any bias that active fund managers/humans tend to have.

Re: Does Market Timing Work?

#215

Post by blcknight »

PaulDavisThe1st wrote: post #153
jfthoi wrote: post #144

Earlier quoted context omitted.

I'm unsure if you're being facetious so I'll take your comment at face value. Government isn't a static thing - especially one that is elected by the people (for the people). Sooner or later members within said government will also consider retirement. So even if you can elect a government that disagrees with #1, you won't be able to hold it for too long.

"People ought to be able to retire" ... I assume that you mean the idea that people who have worked most of their lives should be able to stop working something in the age range of 60-70, and then enjoy at least a moderately comfortable life until death. If that assumption is correct, this is a relatively new idea, at least in the sense that government has any active responsibility for it. I can absolutely guarantee…

100 years ago it was definitely on the radar the US government should support retirement. Social security started in 1935.

Re: Does Market Timing Work?

#216

Post by CamperBob2 »

ghaff wrote: post #194
dannyw wrote: post #175

Earlier quoted context omitted.

I’m genuinely a little bit more productive with ChatGPT. A lot of tasks I do take 30 mins or a hours less, several times per week.

So a basically trivial improvement in other words.

With the first generation of tools.

If there's a sure-fire early way to make money from AI, it's going to involve betting against people who blow it off.

Re: Does Market Timing Work?

#217

Post by achrono »

codethief wrote: post #93
achrono wrote: post #80

Earlier quoted context omitted.

FWIW ever since Kahneman, Ariely and similar company have had some of their theories get discredited (Ariely's taint is worse because it's to do with fabricating research!) I have gone back to simply resorting to common sense and quotidian skepticism.

> ever since Kahneman […] have had some of their theories get discredited Could you elaborate?

[1] below goes into detail on one of the topics, [2] is a less technical / more journalistic take.

Essentially Kahneman ended up being super confident ("disbelief is not an option" he said) about the findings he cited, some of which have been shown to suffer from lack of rigor.

If you're wondering "well, just some of them right?" I will ask you to ponder for a minute over the fact that this is not supposed to be some impulse aisle magazine article but a book applied epistemology ("behavioural economics" is to me just what gave this and related books some sales wheels).

[1] https://replicationindex.com/2020/12/30/a-meta-scientific-pe...

[2] https://slate.com/technology/2016/12/kahneman-and-tversky-re....

Re: Does Market Timing Work?

#218

Post by galaxyLogic »

danans wrote: post #189
Findeton wrote: post #185

Earlier quoted context omitted.

Absolutely no chance that AI is able to do that. Investing decisions are too subjective for the current state of AI. A good value investor knows this… and also knows that you don’t need a bull market to make decent returns.

> Investing decisions are too subjective for the current state of AI I think they are talking about AI driving growth in the broader economy, not making investment decisions. Even still, it's not clear that AI will drive that kind of growth.

It is not clear exactly how, but kind of makes common sense.

Productivity is about producing the same things faster. If AI can do part of our work for us it means we can accomplish more with the time saved.

Re: Does Market Timing Work?

#219

Post by ghaff »

CamperBob2 wrote: post #216
ghaff wrote: post #194

Earlier quoted context omitted.

So a basically trivial improvement in other words.

With the first generation of tools. If there's a sure-fire early way to make money from AI, it's going to involve betting against people who blow it off.

I don't blow off the future. But I do think there's a lot of excess hype currently.

Re: Does Market Timing Work?

#220

Post by AnthonyMouse »

LapsangGuzzler wrote: post #187
bumby wrote: post #182

Earlier quoted context omitted.

While I agree that most of society should be the beneficiary of productivity gains, I’m not sure retirement is still a net positive. It seems like a lot of health and well-being is related to being a valuable member of society and fortunately or unfortunately, for many, work provides that function.

> and fortunately or unfortunately, for many, work provides that function. I agree with this, but the problem is that there is no guarantee of work being available to everyone. With the rise of AI and hyper-specialization of work, that problem is only going to get worse.

> I agree with this, but the problem is that there is no guarantee of work being available to everyone. With the rise of AI and hyper-specialization of work, that problem is only going to get worse.

The key here is to make sure that automation and cost efficiencies make it through to the production of necessities, and we don't prop up artificial scarcity.

There are an effectively unlimited number of jobs that employers would pay someone $0.01/hour to do. Not as many that employers would pay $100/hour to do. So if you need to make $100/hour to afford housing and medicine, that's a problem. But if we reduce the artificial scarcity and regulatory overhead in these industries, so you only have to make $5/hour to afford them, we're in a much better place. And all the better if lower costs allow someone to make a living at $2/hour.

AI and automation can help to reduce those costs. As long as they're in the right places (i.e. production of necessities) and we don't have regulatory capture preventing it from happening there.

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