HOW ONE iTuliper IS INVESTED?

[ASH]

Re: HOW ONE iTuliper IS INVESTED?

ASH, I don't think following breadth extremes (advance/decline data, new highs/lows) is much in the way of technical analysis. One can see extremes in these parameters that often coincide with price action of indices. Panic, Fear, Greed and Jubilation I believe have as much to do with market movements in the extremes (peaks and troughs) or more than do serious considerations of fundamentals.

Thanks for the insight. I didn't understand what you were doing all that well.

Do you trade these high-volatility extremes? I think I read too much into your comments. Making note of the breadth extremes -- and making some speculative statements about the immediate future -- are different from actually making trades based upon such observations.

For my part, I don't think day-to-day movements -- whether at the extremes or otherwise -- can be predicted based upon fundamentals. I avoid short-term trading for this reason. I was just suggesting that the magnitude of the panic, fear, greed, and jubilation which do drive day-to-day fluctuations was likely subject to influence by large changes in the fundamentals.

You have been watching the markets a lot longer than I, and your perception of what drives the motion is helpful. Thanks.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Thanks for the insight. I didn't understand what you were doing all that well.

Do you trade these high-volatility extremes? I think I read too much into your comments. Making note of the breadth extremes -- and making some speculative statements about the immediate future -- are different from actually making trades based upon such observations.

For my part, I don't think day-to-day movements -- whether at the extremes or otherwise -- can be predicted based upon fundamentals. I avoid short-term trading for this reason. I was just suggesting that the magnitude of the panic, fear, greed, and jubilation which do drive day-to-day fluctuations was likely subject to influence by large changes in the fundamentals.

You have been watching the markets a lot longer than I, and your perception of what drives the motion is helpful. Thanks.

If I could go back to the lows of Thursday 9/18 and go long a bunch of +200 index ETF's, I sure as shootin' would, but I'm not that sharp, but probably some people did just that. I do not day trade. I attempt to pick trends and get on them for a while. I do not always succeed.

[BrianL]

Re: HOW ONE iTuliper IS INVESTED?

Interesting. I'm still in the beginning stages of your path despite starting earlier. I didn't invest in the education you did early in your investing career.

I'm 28. I got started invested (roth ira and later a 401k) in 2001 as I started my first job. At that point, there were strong trends (REITs had been running strong, etc). I stuck with the basics - an index fund, a reit to ride the times, etc. Most of my picks were based on the frequency of recommendations over the previous two years. I heavily bought into 'buy and hold'. I was also 100% stock, mostly US at the time. That was my biggest error - buy and hold because an excuse to not educate myself about the big picture.

Over the next few years, I diversified to some non-US holdings and bonds as I realized my position was too focused in a narrow segment. I jumped of the international investments recently as they were poor choices (developing nations, etc type foreign funds).

I've (very recently) become interested in macro economics and have been trying to educate myself rapidly. My timing is less than ideal; I found itulip and started to understand more just as everything started to crash. I was too conservative to make rapid changes. As such, I'm not positioned well to deal with our current situation.

My other challenge is a lack of funds to diversify as well as I'd like. To put my cards on the table, I have about 95k in investments. Some positions i wanted, such as energy, were only offered through Vanguard with a minimum investment of 25k. I foolishly went for it - ignoring the diversification - when VGENX dropped to 64 a share.

To be blunt, I'm not prepared. This is what I look like right now:

47% Cash (US)
25% Energy fund (VGENX, mostly integrated oil)
16% Stocks via mutual funds, mostly custom Fidelity funds or indicies)
10% Inflation protected bonds

- I'm cash heavy. I have ~6 months in living expenses plus money set aside plus for house repair, etc. I'm relatively conservative here at the moment due to a recent house purchase (first house, 3x my current income, 15% downpayment, 6.3% mortgage rate). I hope to pay down the mortgage by an additional 5% by the end of the year as I don't see myself making more than 6.3% on the market.
- 50% of the holdings are in a roth IRA, other 50% are in a 401k.
- I don't care for my stock holdings. They custom funds through my company 401k aimed at people looking at broad categories. I'm looking into a brokerage link account with them so I can push some of that into PM. I fear I am too late for this though. I've also considered buying gold with with the cash.

I've got a few itulip suggested books (Harry Browne, etc) on the way from Amazon but feel like it could be too late (and the market to volatile) to get solid footing at this point. The old hands here should do much better weathering the storm.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Interesting. I'm still in the beginning stages of your path despite starting earlier. I didn't invest in the education you did early in your investing career.

I really think I recall the first day of dental school, a professor told us had we spent the time we did in college, but rather learning plumbing from day one of getting out of high, and spent the dollars we would spend getting a dental education to invest in our plumbing business, over the longer term we would probably have more money. That might have been true.

I'm 28. I got started invested (roth ira and later a 401k) in 2001 as I started my first job. At that point, there were strong trends (REITs had been running strong, etc). I stuck with the basics - an index fund, a reit to ride the times, etc. Most of my picks were based on the frequency of recommendations over the previous two years. I heavily bought into 'buy and hold'. I was also 100% stock, mostly US at the time. That was my biggest error - buy and hold because an excuse to not educate myself about the big picture.

At 28 you are way ahead of where I was. I had perhaps 2K of savings in 1969, no house, and absolutely NO knowledge about investing in anything.

Over the next few years, I diversified to some non-US holdings and bonds as I realized my position was too focused in a narrow segment. I jumped of the international investments recently as they were poor choices (developing nations, etc type foreign funds).

I've (very recently) become interested in macro economics and have been trying to educate myself rapidly. My timing is less than ideal; I found itulip and started to understand more just as everything started to crash. I was too conservative to make rapid changes. As such, I'm not positioned well to deal with our current situation.

Idealism is a frustrating goal, and perhaps most often unattainable; nevertheless, people should aim for 100% realizing that most likely it will not be obtained, but the higher the goals, the more one may well achieve. At your age time is still well on your side. We make errors, and hopefully learn from them (at least eventually). It's the price we pay.

My other challenge is a lack of funds to diversify as well as I'd like. To put my cards on the table, I have about 95k in investments. Some positions i wanted, such as energy, were only offered through Vanguard with a minimum investment of 25k. I foolishly went for it - ignoring the diversification - when VGENX dropped to 64 a share.

To be blunt, I'm not prepared. This is what I look like right now:

47% Cash (US)
25% Energy fund (VGENX, mostly integrated oil)
16% Stocks via mutual funds, mostly custom Fidelity funds or indicies)
10% Inflation protected bonds

- I'm cash heavy. I have ~6 months in living expenses plus money set aside plus for house repair, etc. I'm relatively conservative here at the moment due to a recent house purchase (first house, 3x my current income, 15% downpayment, 6.3% mortgage rate). I hope to pay down the mortgage by an additional 5% by the end of the year as I don't see myself making more than 6.3% on the market.

- 50% of the holdings are in a roth IRA, other 50% are in a 401k.
- I don't care for my stock holdings. They custom funds through my company 401k aimed at people looking at broad categories. I'm looking into a brokerage link account with them so I can push some of that into PM. I fear I am too late for this though. I've also considered buying gold with with the cash.

I've got a few itulip suggested books (Harry Browne, etc) on the way from Amazon but feel like it could be too late (and the market to volatile) to get solid footing at this point. The old hands here should do much better weathering the storm.

There will always be ups and down in markets (or at least that has been the case up until the past few days). If you are saving any money, I think you are ahead of many Americans. Look around and you should have no trouble finding people managing other people's money who are doing worse than you--they probably do have much more investing knowledge than you and I, but it is hard to make money in investing, and even these dudes whose job it is to be smart and make money don't always succeed.

Try not to be foolish, allocate, continue to try to understand all you can, don't get greedy, pay no attention to what's promoted as a "sure thing," and decide how much you are willing to lose on a single bet, and try to adhere to stopping losses. Subscribe to some newsletters, sorry I can't tell you which one is best. Actually, the one I have used the most is The Chartist. Information not bad, technique of momentum investing not my style but it is The Chartist's. Most important, Sullivan the editor, if you believe him, puts his money where he tells his readers to put their's. My attraction is that fact, and overall his signals have been rewarding--though his last buy was right at the tops last fall, and he got his ass kicked.

Good luck.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Since Sept. 17, 2008 I have been (at current market prices) 74% in cash, 3.94% in PM's, 3.46% in energy (refiners), and 18.57% in HSGFX.

I've mentioned before I figured a method of following my sales to see how badly I may "blow" things when I trade out of a position. This to me is interesting--though time spent to follow it definitely does not make any new money.

I sold seven positions for $401K on 9/17 and of that $55.9K was a profit: DXD, SDS, QID, TWM, SKF, SRS and DRR.

Since then the column below "Change p (after) being sold" shows how much of my 55.9K profit would have been retained by the close of each trading day (I didn't collect the data for 9/18/08 which would have shown about a $35K retention of the $55.9K my actual profits). I missed by two days seeing my $55.9K dwindle to a $6.3K loss on 9/19/08.

I've also mentioned I got out of these positions because of the volatility we have been experiencing. An agile and lucky day-trader could make a lot of money on this volatility, or, if unlucky, lose a whole lot.

	ACTUAL	CHANGE P	RETAINED
	PROFITS	BEING SOLD	PROFITS
9/30/08	55,874.36	-35,136.85	20,737.51
9/29/08	55,874.36	-2,987.54	52,886.82
9/26/08	55,874.36	-52,673.68	3,200.68
9/25/08	55,874.36	-47,805.70	8,068.66
9/24/08	55,874.36	-38,618.68	17,255.68
9/23/08	55,874.36	-31,557.09	24,317.27
9/22/08	55,874.36	-41,142.04	14,732.32
9/19/08	55,874.36	-62,222.04	-6,347.68

Hang loose.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Since Sept. 17, 2008 I have been (at current market prices) 74% in cash, 3.94% in PM's, 3.46% in energy (refiners), and 18.57% in HSGFX.

I've mentioned before I figured a method of following my sales to see how badly I may "blow" things when I trade out of a position. This to me is interesting--though time spent to follow it definitely does not make any new money.

I sold seven positions for $401K on 9/17 and of that $55.9K was a profit: DXD, SDS, QID, TWM, SKF, SRS and DRR.

Since then the column below "Change p (after) being sold" shows how much of my 55.9K profit would have been retained by the close of each trading day (I didn't collect the data for 9/18/08 which would have shown about a $35K retention of the $55.9K my actual profits). I missed by two days seeing my $55.9K dwindle to a $6.3K loss on 9/19/08.

I've also mentioned I got out of these positions because of the volatility we have been experiencing. An agile and lucky day-trader could make a lot of money on this volatility, or, if unlucky, lose a whole lot.

	ACTUAL	CHANGE P	RETAINED
	PROFITS	BEING SOLD	PROFITS
9/30/08	55,874.36	-35,136.85	20,737.51
9/29/08	55,874.36	-2,987.54	52,886.82
9/26/08	55,874.36	-52,673.68	3,200.68
9/25/08	55,874.36	-47,805.70	8,068.66
9/24/08	55,874.36	-38,618.68	17,255.68
9/23/08	55,874.36	-31,557.09	24,317.27
9/22/08	55,874.36	-41,142.04	14,732.32
9/19/08	55,874.36	-62,222.04	-6,347.68

Hang loose.

Through Friday 10/3/08, had I ridden out the volatility of the recent days and held those position above that I closed, I could have picked up another $18.7K in profits, but who's perfect when it comes to being thick-skinned, having brass cojones, and given to "perfect" timing? Certainly not I.

What happens next and how are people positioning themselves?

Thursday night based on the degree of the markets being oversold and the patterns as I interpreted them in the major equity indices. I went long on the opening with DDM SSO QLD UWM any UYG with a total allocation of ~23%. That did well for several hours and then turned to shit, ending with a one day loss of 5.72% on the positions.

I also opened positions in EEM EFA EWG EJ EWS EWZ GXC and VWO with a total allocation of ~9%. That ended the day with a loss of 1.34% on the positions.

I also added ~1% to an existing postion in UNG.

I also opened positions in GDX, and PMPIX bringing my precious metals exposure to 3.6%. I had to liquidate some GTU, because I placed a trade in the wrong account, thus creating a margin loan which I didn't wish to carry (you know debt is bad).

The week was not good for me, and certainly not good for the equity indices in general. The week's losses reflected in the table below are so great that it has made me question the accuracy of one of my spreadsheets (which I have had to do over because of something screwy occurring that was crashing it with unbelievable frequency--perhaps it could not handle the volatility in the calculations).

10/03/08
1937.84	COMP.Q	-11.24%
10325.38	DJI	-7.34%
11107.87	NIKKEI	-7.92%
1460.81	NDX	-12.63%
619.43	RUT	-12.12%
1097.74	SPX	-9.53%
41.23	TYX	-5.37%

EDIT:10/5/08 THERE ARE SOME MINOR ERRORS IN THE TABLE ABOVE DUE TO MY NEW SPREADSHEET AND UNCORRECTED ERRORS. BUT THE IDEA TRANSMITTED IS VALID.

At any rate, I lost -2.65% for the week, which pales in comparison to the -15.11% I lost on the weekending 9/21/2001; however, a loss -2.65% I find distasteful.

There are all sorts of indicators that reflect overbought and oversold conditions. I follow a good number of things which I guess I am prone to assess on more a subjective than objective basis. Two data that I follow are the average percentage that the SPX DJI RUT and VGY ($XVG) prices are off their 50-day moving averages. As of Friday, these indices are -13.69% below their 50-day moving averages. That is the lowest number in my data going back to 10/1/02, and I cannot discount that it was a lower number back in July of that year as it may well have been. This average got down to -12.30% on 10/4/2002 and -12.38% on 10/9/02, the latter date marking the 2000-2002 bear market bottom. Another indicator based on a 19-day exponential moving average, which Dan Sullivan, The Chartist, uses as an oversold/overbought indicator, closed Friday at
-16.24%, which back to 10/1/02 was only exceeded to the downside by a reading of -16.94% on 10/9/2002.

These indications do not dictate that any sort of rally is at hand, but to me they clearly demonstrate numbers rarely seen and that occur at or very near bottoms.


These are my current allocations and they are a bit off from reality because of another error in my new spreadsheet that I just recognized but am too tired at the moment to correct.

21.24%: +200% DDM SSO QLD UWM UYG
8.63% INTERNATIONALS: EEM EFA EWG EWJ EWS EWZ GXC VWO
1.98% ENERGY: FTO, TSO, VLO
2.46% COMMODITIES: UNG
18.97% Hedged equity: HSGFX
43% CASH

It is clear to me in playing these +/-200% ETF's that one has to be correct in the trend when entering them, because moves against one add up quite quickly, and I take that observation as being apparent to some others here who have expressed worry over these sort of things going against them.

[friendly_jacek]

Re: HOW ONE iTuliper IS INVESTED?

Hi Jim,
My take is similar and I expect a strong bear rally at this point. However, I started buying early (in retrospect only as mid day lows 9/18 did seem like great opportunities at that time). Hope we don't go much lower at this points as I got a margin call on Thursday (my miners suffered a lot). I can only imagine the margin call hedge funds are getting. This could explain some of the heavy selling of the rallies.
Good luck!

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

My allocation is as follows:

51% Cash
49% Commodities (virtually all PMs)

In more details:

51% Cash @ 3.4% and 4.0% (non-taxed IRA or RRSP)
36% Gold
6% Platinum
5% Silver
1% Palladium
1% Natural Gas

My plan: Reduce my cash to 33% and buy some selected Chinese stocks, Crude Oil ETF (2x leverage) if crude goes below $80/barrel and agriculture ETF (2x leverage). Can you tell that I met Jim Rogers last week?

Awaiting suggestions / Comments.

PS: Can someone explain me how to copy paste a MS Excel graph or sheet on iTulip?

[hellstan]

Re: HOW ONE iTuliper IS INVESTED?

I'm in Europe and not invested in US vehicles.
I'm about :
1/ 60 % in bonds (life-insurance)
2/ 30 % in gold (25 % physical and 5 % paper)
3/ 10 % in new energy funds.

Needless to say I'm worrying more and more :mad: about 2/ and 3/.
Even if my investment horizon is around 10 years, I don't like
the bashing of gold mines (5% of my gold / paper position)
and of my new energy funds.

Needless to say I'm worried also about gold, even if I am
about 25 % in positive territory as for today.
When I read that gold could easily retrace it's 2002 levels
(as stocks should do now), with a DOW around 7200,
I'm not as comfortable with gold as I was 1 year ago.
Yet, I'm reluctant to sell — being on the long term.

Facing a certain amount of cash coming my way probably
by the end of the year (around 200 000 $), I intend to
seize that opportunity to invest it mostly in bonds
— and maybe in some carefully selected stocks
(I think of solar energy, mostly) and, more speculatively,
pick some bear vehicles to play the fall of main indexes.

To be fully honest, I should add we don't own real estate
(even if there is some in the family) and my wife has her own
portfolio, taking a bashing. Mostly large energy, luxury
and food stocks, plus a few gold positions. She's much cooler
than me, always repeating it's ridiculous to sell when it's going
south and it's ridiculous to sell when it's going north. So she
never moves anything. Maybe she's right — but she missed half
of the great bull market.

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

I'm in Europe and not invested in US vehicles.
I'm about :
1/ 60 % in bonds (life-insurance)
2/ 30 % in gold (25 % physical and 5 % paper)
3/ 10 % in new energy funds.

Needless to say I'm worrying more and more :mad: about 2/ and 3/.
Even if my investment horizon is around 10 years, I don't like
the bashing of gold mines (5% of my gold / paper position)
and of my new energy funds.

Needless to say I'm worried also about gold, even if I am
about 25 % in positive territory as for today.
When I read that gold could easily retrace it's 2002 levels
(as stocks should do now), with a DOW around 7200,
I'm not as comfortable with gold as I was 1 year ago.
Yet, I'm reluctant to sell — being on the long term.

Facing a certain amount of cash coming my way probably
by the end of the year (around 200 000 $), I intend to
seize that opportunity to invest it mostly in bonds
— and maybe in some carefully selected stocks
(I think of solar energy, mostly) and, more speculatively,
pick some bear vehicles to play the fall of main indexes.

To be fully honest, I should add we don't own real estate
(even if there is some in the family) and my wife has her own
portfolio, taking a bashing. Mostly large energy, luxury
and food stocks, plus a few gold positions. She's much cooler
than me, always repeating it's ridiculous to sell when it's going
south and it's ridiculous to sell when it's going north. So she
never moves anything. Maybe she's right — but she missed half
of the great bull market.

hellstan, what kind of bonds do you have? 60% is quite a chunk and is also quite risky given that in 2-3 years time we may have high-inflation...

hopefully these are short-term gov. bonds...

[hellstan]

Re: HOW ONE iTuliper IS INVESTED?

hellstan, what kind of bonds do you have? 60% is quite a chunk and is also quite risky given that in 2-3 years time we may have high-inflation...

hopefully these are short-term gov. bonds...

These are short terms bonds, maturity 2009 and 2010,
and, being inside life-insurance contracts, I always have the option to trade them
for market funds (energy, gold, US or Chinese stocks anything). I'm just tied
until 2010 for 1/5 of it.
Funnily, you're more worried about these than I am
about gold positions ?

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

These are short terms bonds, maturity 2009 and 2010.
Funnily, you're more worried about these than I am
about gold positions ?

I love gold until 1 or 2oz buys you the Dow. But that's me. (see my allocation in this thread).

I much much prefer cash than ST bonds. What yield do you get over cash anyway (cash I mean high yield account)? What if CBs decide to print a $5Trillion check before Xmas and one for new year?...boom no more bond market, but you can quickly move cash into something in a few days or less...

my 2 cents.

[hellstan]

Re: HOW ONE iTuliper IS INVESTED?

I love gold until 1 or 2oz buys you the Dow. But that's me. (see my allocation in this thread).

I much much prefer cash than ST bonds. What yield do you get over cash anyway (cash I mean high yield account)? What if CBs decide to print a $5Trillion check before Xmas and one for new year?...boom no more bond market, but you can quickly move cash into something in a few days or less...

my 2 cents.

Largo, I used to love gold, and half of me still buys a few hundred euros of physical gold each week. When the other half watches all these deflationary signs and Tinker Bell tells me : stop ! stop ! Captain Hook's gonna cut your gold in half.
And having no time to follow daily risky investments, I only tell myself I'm a fool not to buy some bearish positions on certificates or something and let it go up (yes, with cut-throat pull-backs also) until the Dow hits 7000.

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

Largo, I used to love gold, and half of me still buys a few hundred euros of physical gold each week. When the other half watches all these deflationary signs and Tinker Bell tells me : stop ! stop ! Captain Hook's gonna cut your gold in half.
And having no time to follow daily risky investments, I only tell myself I'm a fool not to buy some bearish positions on certificates or something and let it go up (yes, with cut-throat pull-backs also) until the Dow hits 7000.

Well put.

Don't get me wrong, I am not saying 30% of someone's assets in gold is not risky. I am simply saying it makes sense to me (in fact I have 36% gold) and if you are prepared to ride a correction to say the 600 / oz level on that 30% then fine. Remember, even bullish gold lovers (like EJ I believe) keep it under 15% (Marc Faber a gold bull has "only" 8% invested in gold).

I think that if you lock yourself in for 2 years on bonds you are making yourself a disservice because:

a) The CBs are awhol
b) Volatility is very high
c) Yield gains of ST bonds over high-yield cash accounts is too small
d) What if you could buy the S&P for at 400 tomorrow? Ok that won't happen but you get the picture.

[hellstan]

Re: HOW ONE iTuliper IS INVESTED?

Well put.

Don't get me wrong, I am not saying 30% of someone's assets in gold is not risky. I am simply saying it makes sense to me (in fact I have 36% gold) and if you are prepared to ride a correction to say the 600 / oz level on that 30% then fine. Remember, even bullish gold lovers (like EJ I believe) keep it under 15% (Marc Faber a gold bull has "only" 8% invested in gold).

I think that if you lock yourself in for 2 years on bonds you are making yourself a disservice because:

a) The CBs are awhol
b) Volatility is very high
c) Yield gains of ST bonds over high-yield cash accounts is too small
d) What if you could buy the S&P for at 400 tomorrow? Ok that won't happen but you get the picture.

I agree, and as said, my bonds positions are easily moveable.
Until now, these only and my physical are above ground.

Regarding the latter, I can even go down to 540. :eek:
The only problem is I continue to buy some, so my average is going up. :rolleyes:
Regarding Faber, it's not exactly 8%. In his august letter (not the last one), he wrote that he had in fact more than 8%, because of some positions he would'nt get into in detail. In fact, I suspect he should be rather around 20%.
I might ask him, because we exchange mails some times, but I'm not sure he'd tell me.
What he did tell me is this :
1/ Fed will cut rate soon (that was 2 weeks ago).
2/ EJ theory on DOW/Gold parity 1:1 is, quote, "quite likely" (that was yesterday).
That's all folks.:cool: