Actually, I love everything you have to say, Wild Bill!


My simple advice is buy when the market starts to go up, and sell when the market starts to go down.


Or, to take it a step further as nightOwl suggested, trade for trends when the market has been choppy for long enough to kill trend traders, and you see the naked underlying trends starting to be exposed again. And then stop when it starts to chop up again. Chop trends. Trendiness pops up spontaneously, in one timeframe or another.


Also, I am no number cruncher We all have different skills, and the market is like that elephant in the dark, no? And so far as being an iconoclast, I just go after bad religion.


The stock market churns out religion by the season! Yet, the only religions which are worth Donkey Kong are those which have been around for thousands of years. And nor would I fault you your knowledegable understanding of complex economics! Trend trading has been around longer than value investing (since the stock market grew up on inside, not publicly-reported information).


But the stock market takes in a different kind of sucker. The flashing-lights-spinning-wheels dope is taken in by slots. The big-ego guy with an engineering degree or dominating social skills thinks he can take a poker game. The stock market sucks in a special breed of super-egghead. Beyond buy-and-hold, you have to be particularly smart before you even have a chance to do something particularly dumb! Moreover, the simple assumption that the buy-and-hold idiot is wrong - and you should short into him - also won't get you to first base.


So, there is a lot of pop-culture investment wisdom being propagated out there. As a stock-market expert (smirk), I can tell you the only advice I have come across that works year-in and year-out, and always eventually pops up someplace new - the only thing I have seen everyone from teenagers to hairstylists making money on year after year - is trend trading.


It may not be much, but trend trading gets you that fair positive EV you are due simply for being born - same as everything else. And the trend-trading SD is much smaller than buy-and-hold SD, you don't have to look at a 20-year timeframe to guarantee success, and yet you can still beat T-bills. In trend trading, your returns are serially correlated, and you have numerous of trials over short periods - periods shorter than the evolution cycle - so you know when to stop. (In case you want to say the same thign about buy-and-hold, you would just be making my argument for me!)


The thing about any stock-market advice is, if it becomes too popular, it becomes wrong. And anything that works becomes popular. So you can't always rely on just giving your money to managers with a track record though, in general, I would say that is good advice.


The beauty of trend trading is, with a little practice, you can see how popular it is just by looking at a chart! For comparison, it is awfully hard to sit and scratch your head, and figure out whether some new tech gizmo is fairly priced, or whether it is all just hype. Trend trading is the only form of contrarianism where you don't have to read minds, or say "Hmmm, Jeff Bezos is Time Magazine's man of the year - should I read something into that???"


So far as the Rose Bowl, I am still baffled by 1) how I became so baffled about two highly-televised teams, and 2) how I picked Nebraska, even though I had at one point visualized the game unfolding exactly how it did. So, anyway, I have a few thoughts.


Primarily, I hypothesize the BCS ranking has given people something new to think about, and has changed, slightly, the way they think. In the old days, if you second-guessed one of the two major polls, you were some kind of contrarian, or a free thinker.


But the BCS essentially institutionalized and publicized some of the types of cross-conference factoring many of us were doing in private already, only now they are more useless. In fact, they may have taken it too far in the other direction, where these factors are now contrarian indicators on the spread!


So I figured the matchup right, but the power wrong, or something. It was confidence-shattering, and I am thankful to have a year to hide my face in shame.


leroy