View Full Version : Post deleted by Mat Sklansky

12-07-2004, 09:49 PM

12-07-2004, 11:33 PM
Read the Stock Trader's Almanac. The market has historically performed better from oct/nov to apr/may. I forgot the exact months. The data speaks for itself, but it seems more like a quesiton of the chicken or the egg?

12-08-2004, 09:20 AM
this will show how much i know, but isn't that illegal? wasn't there a big deal about martha stewart and market timing?

i'm so new at this tho, i don't really know much about stocks, just a few symbols like ibm, dell, and xmsr.

12-08-2004, 10:53 AM
Jeez. It's getting old.

It's pretty obvious that coughman and goode are basically the same person or are partners.

PLEASE... can we clean this up.


12-14-2004, 11:34 AM
what are your thoughts on timing the markets?

[/ QUOTE ]

Nutshell answer: I've met rich market timers and old market timers, but I have yet to meet a rich, old market timer.

12-14-2004, 04:33 PM
www.bobbrinker.com (http://www.bobbrinker.com)


12-14-2004, 06:53 PM
Hi goode
Goode, what is your view on the opinion that market timing, i.e. taking advantage of some known cyclical pattern in markets, is of absolutely no use. While these trends undoubtly exist some would say that it is impossible to take advantage of these trends. If it was possible to take advantage of these trends then the cyclical patterns would quickly dissapear due to market efficiency.

Further, I have read with interest your recent posts and would also ask you what your response is to the evidence that technical analysis is an exercise in futility - in terms of predicting market/stock price movements. Compelling academic evidence suggests that the past price movements of a market/stock have no influence on their future directions (weak form of efficient market hypothesis). Thus how can technical analysis be of any use?

coughman- martha stewart recieved information from her broker that Imclone (which she held a modest stock holding in) would not recieve FDA approval for erbitux - an EGFR monoclonal antibody and cancer therapy - before the FDA actually released its official verdict. Thus stewart acted on inside information, not market timing.



12-14-2004, 07:40 PM

12-14-2004, 08:13 PM
Hi goode,
I must apologise to you if you perceived my questioning as confrontational, this was not my intended purpose, nor am I interested in your specific methods/rules you use (again this statement is not meant in a derogatory nature). Your initial response only serves to further highlight my initial question. Strong academic evidence published over the last 30 years by numerous investigators has shown that all forms of technical analysis subjected to testing have shown to offer no better returns on investment than a simple buy and hold approach. As I understand it, TA is based on analysing past market/stock movements, yet it has been convincingly shown that past market prices DO NOT influence future price movements (the so called random walk effect). As the weak form of the efficient market hypothesis states – past price movements of a stock do not offer any predictive value over future price movements.

You state that you use a variety of data sources in making your decisions – “Market Timing, Various Tech indicators, trendlines, news, futures, candle patterns, personal knowledge of the stock, history of the stock”. The semi-string version of the EMH states that no publicly available info is of use when attempting to ‘beat the market’. This is because all publicly available info is immediately incorporated into the stocks/markets price (the so-called efficiency of the market). Thus, basing your buy/sell decisions on the info you say you use would offer no advantage over a simple buy and hold strategy, i.e. capitalising on the known long-term upward trend in stock market prices and the dividend returns offered by these stocks.

Of course all this does not mean that in the short term one cant beat the market averages by a goodly sum. But over the long term, just like in poker, the results of any method employed will regress to the mean, and for the techniques you say you use, academic evidence would suggest that the mean is below the result obtainable by a simple buy and hold strategy.

Once again, my intended purpose is only to stimulate debate, not to criticise.



12-15-2004, 04:42 AM
I agree with you. They often seem to go along fine for awhile. They are even able to handle the excessive transaction costs. But, if they do it long enough, the time will come when they are on the wrong side of some shock to the market and give most, if not all and then some, of it back.

crazy canuck
12-16-2004, 06:13 PM
Strong academic evidence published over the last 30 years by numerous investigators has shown that all forms of technical analysis subjected to testing have shown to offer no better returns on investment than a simple buy and hold approach.

I'd just like to point out that there are numerous papers that have showns TA to be useful. Especially, in the currency markets. The reasoning is that there are many banks present in the currency markets whose primary purpose is not profit making. Also, very few currency traders use TA only (I read 10% only in a paper by profs from Camebridge), usually it is used in combination with some fundamental info.

Another example is the January effect in the commodity markets. Again I read this in a paper published by academics a few years ago (might have been eliminated since then tho).

So it is not universally accepted that TA is bogus.

Having said this, I believe tho if you're trying to use the simple TA (like MA crossover, stochastics etc), then you will have no edge whatsoever IMHO...I remember reading that some of these became so overused that in fact the reverse signal has an edge in some markets.

So if you're trying to use cyclical patterns that are well known then you can't time the market. However, if you discover something that is not well observed then it might have an edge.