Stocks recouped some of Monday's losses today, and the Dow Jones Industrial Average ($INDU) and the Standard & Poor's 500 Index ($INX) finished March with their largest gains since October 2002.
Oh, perhaps if somebody had said to get into the market in mid-to-late February...ahem.
MSNBC:
Oh, the big March rally in global equities wasn't enough to make up for the miserable returns of January and February -- at least not in my model portfolio of exchange-traded funds. But the rally has confirmed the optimistic bent of my portfolio, and I'm going to stay this course. I expect it to blossom with the spring.
I see. So, your investing strategy, Mr. Smartpants, is to get into the market after a rally? You, sir, are a fucking moron.
PS. These puff pieces make me nervous. I'll need to find out what a majority of Americans are thinking about the market right now. If they think it is going up, then sell. Another drop will come in before the actual bottom of the market.
Anyway, you should listen to ol' FLG. He predicted $2 gas when everybody thought it was going to $5 and now he called the bottom of the market two weeks early. That's right, biyatches.
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In 1998, I talked to a gentleman who was bragging about his portfolio performance. I mentioned the risks in tech stocks and he insisted that Amazon.com would never go down. I remarked that this was rather optimistic considering that Amazon had not yet made a profit for a single year. It turns out that he didn't even know this and I immediately recalled the "shoeshine rule." Nevertheless, the NASDAQ hit its historic high on March 10, 2000, nearly two years later. Even if the "shoeshine rule" is a useful general guideline (and I'm not convinced it is), it cannot make the kind of fine predictions you are currently asking of it.
By the way, the MSNBC guy you linked to is already in his optimistic portfolio. He's saying he's going to stay the course, not sink in money after sitting on the sidelines. The gentleman might be a moron, I have no idea, but certainly not for the reasons you gave in this post.
Andrew:
An interesting nuance of my version of the shoeshine rule is that it can predict the bottom better than the top. Reason is that nobody wants to take the punch bowl away from the party, and so it continues longer than the shoeshine rule would predict. But I start to get out then -- gradually. I almost never go short. Too unpredictible.
Also, re: the moron, he wrote an article on short selling earlier this month. All the usual caveats and all, but he wrote an article on short selling during the biggest growth month in years. So, my analysis was based on that, unfortunately unsaid, difference.
Ah, good. I thought you had just completely misunderstood him. However, reading that article, it appears that he was explaining how to short sell, not recommending it. E.g. he says, "But if you think we ain't seen nothing yet, you stand to make a killing while the rest of us are sucked into poverty. You can make a buck -- or two or three -- for every dollar the guy on the long side loses." I do not get the impression, from the article, that he personally was planning to short sell.
Yeah, but according to the polls I was using for the shoeshine rule prediction over 60% of the population did in fact think "we ain't seen nothing yet, you stand to make a killing while the rest of us are sucked into poverty. You can make a buck -- or two or three -- for every dollar the guy on the long side loses" So, he is kinda advocating it.
Yes, but only so he could point and laugh at them after they lost their shirts.
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