What if you gave a party and no one came?

[Jim Nickerson]

And add to that irony, what if you yourself did not come to your party?

What if you made a "market call" with regard to subsequent market direction (I don't guess there are any other kinds of calls) and no one heard it, or no one followed it, and to add to the irony, what if you yourself did not follow it?

If there is any value to making a "market call," then in the very least the person making it should act upon it; otherwise, the "call" is hollow and without conviction.

Whether one speaks, writes, publishes or in anyway communicates a "call," every time an individual buys or sells a postion that person has made a "call." Importantly, the "call" was an action. In my opinion it is action that is important, and time will tell whether or not that "call" was in any way appropriate.

Our inestimable host, EJ, on 12/27/07 wrote and posted at 11:11AM CT in the thread "Time, at last, to short the market"

Takes patience to wait out the funds that control more than 50% of the money in the markets today. Now at last I am taking a few speculative short positions before end of year, Monday Dec 31. I will share my analysis and conclusions on this thread and invite members to participate and comment.

Then FRED, whoever that is, posted at at 8:48PM on 12/27/07

This is the analysis. When it's done by Saturday PM, the positions will be reflected in Top Investors and here.

Then jimmygu3 posted at 12:12AM on 12/31/07

Thanks, EJ! Am I the only one who can't find your allocations here or in Top Investors as of the wee hours of Monday a.m.? I'm assuming they are still being hammered out.

FWIW, I just increased my shorts exposure via inverse funds in my retirement account (can't buy ETFs inside my 401k). Included are shorts of the S&P500, NASDAQ100, Russell2000, and Real Estate.

I closed out of my small but profitable position in an India fund. I left my long positions in PM funds alone for now. EJ et al, what are your thoughts on mining stocks? Commodities?

Now if one believes jimmygu3, and I have no reasons not to believe him, here is an investor that acted.

Then I posted at 1:46PM 1/2/08

If "spooky" means "exquisitely timed," then I agree with you, BUT a "call" is meaningless unless one acts upon it--which I didn't.

Then bart posted at 3:06PM on 1/2/08

For what its worth, I went short the S&P today just above 1460 basis cash/spot... and so far, so good. I think we're headed down at least until March or so...

Then BiscayneSunrise posted at 6:21AM on 1/3/08

Excellent point about Jim Rogers not making verbal predictions but just telling you where his money is. With that in mind, I am now long in PM and energy (deep water drillers). I will likely begin shorting the overall markets through the use of short ETF's here soon.

Then RickBishop wrote at 5:05PM 1/3/08

I am short stocks, have PM'S and AAA bonds non US. Almost feel i could make a living on SRS

Then on 1/8/08 at 11:34AM sleumiss posted

I'm curious to see the positions also, can we still expect them?

Then after 13 days or so, EJ is back at 5:42PM on 1/8/08 and posted

This is my first official start of a bear market call since April 2000. This is the start of the long awaited Debt Deflation Bear Market.
.
.
.
Stay tuned. We will refine our Debt Deflation Bear Market short strategy over the next few weeks.

and perhaps, finally FRED, whoever that is, at 10:46PM on 1/8/08 posts

All in good time, my good man!

"All in good time." How much "good time" has passed since the most recent market tops, and how much have the markets dropped since their tops and since the close 12/26/07--the day before EJ's "call."

Assuming no errors, the answers are in the table below.

1/8/2008	SPX	DJI	NASDAQ	NDX	RUT	$XVG
DATE OF RECENT HIGH	10/9/07	10/9/07	10/31/07	10/31/07	7/13/07	7/13/07
CLOSING HIGH	1565.15	14164.53	2859.12	2238.98	855.77	508.42
DAYS SINCE TO 1/08/08	91	91	69	69	179	179
MARKET DAYS	62	62	46	46	123	123
CLOSING 1/8/08	1390.19	12589.07	2440.51	1910.33	704.86	405.50
POINTS OFF HIGH	-174.96	-1575.46	-418.61	-328.65	-150.91	-102.92
% LOSS	-11.18%	-11.12%	-14.64%	-14.68%	-17.63%	-20.24%
CLOSING 12/26/07	1497.66	13551.69	2724.41	2136.84	797.03	452.13
POINTS OFF 12/26 CLOSE	-107.47	-962.62	-283.90	-226.51	-92.17	-46.63
% LOSS	-7.18%	-7.10%	-10.42%	-10.60%	-11.56%	-10.31%

EJ's "call" picked up 64% of the SPX's loss so far, 64% of DJI, 71% of Nasdaq, 72% of NDX, 66% of RUT, and 51% of Value Line Geometric (and I know of no way to "play" this to the short side). These percentages are approximations.

BUT, it only picked up those gains (assuming short positions against the first five indices) if one took action and established the positions.

From what I can tell (see Top Investors) about real "calls" established by actions is EJ is long the inverse funds SDS since 8/6/07, SRPIX since 8/6/07, and seriously long SRS since 8/14/07. These to me are meaningful calls, though I cannot recall if they were discussed anywhere.

FRED, whoever that is, is long GLD and SHY since 8/5/07.

I take it that no one at iTulip actually acted upon EJ's "call" of 12/27/07.

I didn't act on the last "call" because I had already established my positions.

For what its worth, the most timely "call" I have encountered is one made by Mike Burk on 10/1/07 and 10/6/07

As of Friday's close everything is in place to indicate a market cycle high. If this scenario is correct there could be another move to modestly higher highs before a decline into a cycle low begins. If the R2K makes a new high this interpretation is wrong.

In an attempt to determine what effect EJ's "call" may have had, there is a poll attached. Because of the general bashfulness around here, it is an anonymous poll.

[metalman]

Re: What if you gave a party and no one came?

wow. that was a lot of work. well done!

ej didn't say "buy this sell that" on dec. 27. my take is, as the site says, it ain't investment advice but an opinion. he's not charging $10,000 a year to give that kind of advice and take on the liability. for $100 you get a good "view" on the future but you have to interpret it for yourself.

as an ayn rander, taking personal responsibility and all, are you happy with the input you get here from ej and the rest of us to make your own decisions?

[jk]

Re: What if you gave a party and no one came?

i was already as short as i wanted to be at the time. [of course i wish i'd gotten shorter in retrospect.] my delighted surprise has been that so far pm's haven't sold off with everything else. i still think there's a deflation scare in our future, when the recession is really digging in, when pm's will sell off for a while, along with oil. the real key to pm's future, i think, will be when gold decouples from oil.

[dbarberic]

Re: What if you gave a party and no one came?

I really enjoy EJ's analysis of the market, but I find myself becoming to short term focused and trading in and out of positions when I follow it. I'd rather play long term secular trends, buy-and-hold until the trend has run its course.

Trying to follow EJ's short term trends gives me to much heartburn.

[Jim Nickerson]

Re: What if you gave a party and no one came?

wow. that was a lot of work. well done!

ej didn't say "buy this sell that" on dec. 27. my take is, as the site says, it ain't investment advice but an opinion. he's not charging $10,000 a year to give that kind of advice and take on the liability. for $100 you get a good "view" on the future but you have to interpret it for yourself.

as an ayn rander, taking personal responsibility and all, are you happy with the input you get here from ej and the rest of us to make your own decisions?

metalman, I show up every day, and most of what I read starts here.

Edit: I personally doubt anyone reads anything on iTulip purely and solely in order to attain greater knowledge for the value of the knowledge itself. If I am wrong about that, anyone step up and identify yourself. I think all of us are out to preserve and gain wealth, and if those are concerns, and if one is going to have a conversation or dialogue along those lines, then not to discuss specific investments amongst members to me approaches a lot of the BS one gets in the financial media or sees all over the web. So iTulip as an institution can and should opine about what it believes to whatever degree it chooses, but for me most meaningful things I cross is when members step up and choose to express what and why they are doing as they may do.

[Jim Nickerson]

Re: What if you gave a party and no one came?

I really enjoy EJ's analysis of the market, but I find myself becoming to short term focused and trading in and out of positions when I follow it. I'd rather play long term secular trends, buy-and-hold until the trend has run its course.

Trying to follow EJ's short term trends gives me to much heartburn.

Just to which of "EJ's short term" recommendations are you referring?

[Guest]

Re: What if you gave a party and no one came?

metalman, I show up every day, and most of what I read starts here..

You should take maybe just a few complete breaks a few times a year - check in on "other realities" maybe without permanently referencing all outlooks exclusively back to iTulip? Too much of any one source produces too fixed a viewpoint.

Edit: I personally doubt anyone reads anything on iTulip purely and solely in order to attain greater knowledge for the value of the knowledge itself. If I am wrong about that, anyone step up and identify yourself.

Me. I don't come here for stock tips or investment advice. I come and read here purely and solely to "attain greater knowledge for the value of the knowledge itself" as you put it - although I might describe it in more prosaic terms, the substance of it is indeed very robust.

If you have the overall knowledge, the same investment classes discussed on iTulip are perfectly adequately covered in dozens of sources who's investment writing is much more limited (can also be read as "specialized stock tips") to stocks and other directly actionable investment groups - iTulip's purpose in my view is another (much wider) one.

I find large quantities of excellent investment advice from a dozen different sources. If anything, the sheer volume of perfectly good specific ationable investments recommended from these many sources become "too much noise", leading one to create excessively diversified and increasingly complex "anxiety producing" portfolios, with excessive churning, which eventually takes over one's life with constant agonizing about timing and position tweaking.

[zoog]

Re: What if you gave a party and no one came?

I really enjoy EJ's analysis of the market, but I find myself becoming to short term focused and trading in and out of positions when I follow it. I'd rather play long term secular trends, buy-and-hold until the trend has run its course.

Trying to follow EJ's short term trends gives me to much heartburn.

This is essentially why I did not jump in. I decided that short-term trading with small amounts of money in a taxable account is not very wise. The commissions, other fees, and taxes really eat into the returns. The drop in the market would have to be considerable to make this worth doing for me. Sure, that may happen, but I wasn't confident enough to go for it just in case. My loss, I guess... :rolleyes:

However, as Metalman said:

ej didn't say "buy this sell that" on dec. 27. my take is, as the site says, it ain't investment advice but an opinion. he's not charging $10,000 a year to give that kind of advice and take on the liability. for $100 you get a good "view" on the future but you have to interpret it for yourself.

Given the right situation, some people can/will probably do very well shorting the market based on EJ's call. Given my risk profile and other factors, I won't be one of those people. C'est la vie.

[jimmygu3]

Re: What if you gave a party and no one came?

You should take maybe just a few complete breaks a few times a year - check in on "other realities" maybe without permanently referencing all outlooks exclusively back to iTulip? Too much of any one source produces too fixed a viewpoint.

Good advice, Lukester. I need to read a larger variety of sources but, like Jim N, I start out on iTulip most every day. Could you please suggest some alternate sources of opinion? Note that asking for such competitive recommendations in an open forum would not be allowed on many other sites. iTulip, in my estimation, would say "If you truly love a subscriber, set them free..."

OK, now it's bragging time. I took EJ's advice, as I have been deliberating what to do with about 10% of my portfolio I was holding in bonars. He makes very few calls, so I knew he gave it lots of thought and that I would kick myself if I didn't act. I also bought a new short Real Estate fund that I discovered while researching the short stock funds. The YTD results are pretty amazing:

UCPIX ULTRA SHORT SMALL CAP PRO FDS-INVST CL +17.72%
RYTPX RYDEX INVERSE S&P 500 2X STRATEGY CL H +11.55%
SRPIX PRO FUNDS SHORT REAL ESTATE INVESTOR CL +10.94%

I already had about 10% in short funds, one of which was down in '07, the other flat. I plan to close those out when this year's market drop gets to 15%.

Jimmy

[Jim Nickerson]

Re: What if you gave a party and no one came?

Good advice, Lukester. I need to read a larger variety of sources but, like Jim N, I start out on iTulip most every day. Could you please suggest some alternate sources of opinion? Note that asking for such competitive recommendations in an open forum would not be allowed on many other sites. iTulip, in my estimation, would say "If you truly love a subscriber, set them free..."

OK, now it's bragging time. I took EJ's advice, as I have been deliberating what to do with about 10% of my portfolio I was holding in bonars. He makes very few calls, so I knew he gave it lots of thought and that I would kick myself if I didn't act. I also bought a new short Real Estate fund that I discovered while researching the short stock funds. The YTD results are pretty amazing:

UCPIX ULTRA SHORT SMALL CAP PRO FDS-INVST CL +17.72%
RYTPX RYDEX INVERSE S&P 500 2X STRATEGY CL H +11.55%
SRPIX PRO FUNDS SHORT REAL ESTATE INVESTOR CL +10.94%

I already had about 10% in short funds, one of which was down in '07, the other flat. I plan to close those out when this year's market drop gets to 15%.

Jimmy

Good, Jimmy.

I'm not going to look it up, laziness on my part, but John Hussman in his weekly comments has recently noted once at least that by the time a recession sets in the "markets" are down about 20% and then may fall another 20%. I hope I got that correct.

He also has noted several times, and perhaps last in his note from Monday, that after a steady fall as this market has been experiencing, there may be a "clearing rally" I believe he called it such as there might be something on the order of a 400 point gain--I think that must refer to the DJI, only then for the market to crash. Here's what he wrote Monday,

The stock market is oversold short-term, which invites the potential for a spectacular “clearing rally” of the typical variety – fast, furious, and prone to failure. While such an upward spike might be embraced as some sort of message that the market has “fully discounted” negative conditions and mark a successful “test” of prior lows, the data suggest that underlying market and economic conditions are rapidly deteriorating. In that context, a spectacular short-term rally (particularly a one-day barn burner) could provide a setup for concerted selling. As usual, I have no intention of encouraging investors to depart from well constructed investment plans, but investors should recognize that a 30% market decline is only a standard run-of-the-mill bear. It's a good idea to evaluate your investment portfolio to ensure you could tolerate that outcome, should it occur, without abandoning your discipline.

The importance of Hussman's caveat is that were the scenario to happen, and if one has the cojones to act, such a "clearing rally" would provide an addtional opportunity to go short or to rid one's portfolio of long positions in equities.

[FRED]

Re: What if you gave a party and no one came?

Good advice, Lukester. I need to read a larger variety of sources but, like Jim N, I start out on iTulip most every day. Could you please suggest some alternate sources of opinion? Note that asking for such competitive recommendations in an open forum would not be allowed on many other sites. iTulip, in my estimation, would say "If you truly love a subscriber, set them free..."

OK, now it's bragging time. I took EJ's advice, as I have been deliberating what to do with about 10% of my portfolio I was holding in bonars. He makes very few calls, so I knew he gave it lots of thought and that I would kick myself if I didn't act. I also bought a new short Real Estate fund that I discovered while researching the short stock funds. The YTD results are pretty amazing:

UCPIX ULTRA SHORT SMALL CAP PRO FDS-INVST CL +17.72%
RYTPX RYDEX INVERSE S&P 500 2X STRATEGY CL H +11.55%
SRPIX PRO FUNDS SHORT REAL ESTATE INVESTOR CL +10.94%

I already had about 10% in short funds, one of which was down in '07, the other flat. I plan to close those out when this year's market drop gets to 15%.

Jimmy

Point of clarification. In compliance with SEC rules, neither EJ nor iTulip offers investment advice. EJ will offer an opinion and will at times reveal what he is doing trading his own account. Readers may choose to do as he is doing or not. It's smart to do as Jim says he does and compare the opinions offered here.

What iTulip does best is 1) provide a framework for understanding what's happening as this reduces the number of surprises although there will always be surprises (e.g., 9/11), 2) provide a place for smart people to argue their perspectives to help gain further insight without a lot of spam and unconstructive noise (no man knows all), and 3) let you know a big event like a recession is coming 1 year in advance, not while it's happening, so that you have time to prepare. Anyone dope can look out the window and report the weather.

[hoodoo]

Re: What if you gave a party and no one came?

Yeah - I wanted to come to the party but frankly I still feel like the kid that just isn't quite cool enough to be invited in but would be tolerated hanging about the edges....

First off - I did take a stab at EJ's recommendations though not until after the most recent action had folks swooning. I took very small positions with the idea that I wanted to get a feel for what might happen. I've tried using hypothetical tools (watch lists, model portfolios) but until you actually watch the money grow (or disappear as the case may be) you just don't learn much about your own psychological tolerances and weaknesses. For this reason, I really like getting a broad brush from the group here rather than picks for trades. The macro ideas seem important to me as the starting point.

In the larger picture, I'm still pretty new and while I'm fascinated to read every last word that is posted here, it is very hard for me to translate any of this into any kind of investment action. It's taken me a year to start accumulating gold and to more recently consider what to do about the long embedded buy-and-hold tune that has been drummed into my head since the mid 90's. For the most part, I'm overwhelmed and due to the income from my wife's rapidly growing business we've got funds that need to be deployed in some fashion but are mostly sitting in cash or low yield funds.


I visit the site everyday hoping that some clarity will come - though I don't expect that it will.

Hoo

[jimmygu3]

Re: What if you gave a party and no one came?

Point of clarification. In compliance with SEC rules, neither EJ nor iTulip offers investment advice. EJ will offer an opinion and will at times reveal what he is doing trading his own account. Readers may choose to do as he is doing or not. It's smart to do as Jim says he does and compare the opinions offered here.

What iTulip does best is 1) provide a framework for understanding what's happening as this reduces the number of surprises although there will always be surprises (e.g., 9/11), 2) provide a place for smart people to argue their perspectives to help gain further insight without a lot of spam and unconstructive noise (no man knows all), and 3) let you know a big event like a recession is coming 1 year in advance, not while it's happening, so that you have time to prepare.

Right. I didn't take EJ's advice. I took action based on his opinion. Sorry. But it has worked out well so far.

Anyone dope can look out the window and report the weather.

I think anyone can look out the window and report the weather. You don't have to be dope, fly or pimpin'. ;)

[Jim Nickerson]

Re: What if you gave a party and no one came?

Yeah - I wanted to come to the party but frankly I still feel like the kid that just isn't quite cool enough to be invited in but would be tolerated hanging about the edges....

First off - I did take a stab at EJ's recommendations though not until after the most recent action had folks swooning. I took very small positions with the idea that I wanted to get a feel for what might happen. I've tried using hypothetical tools (watch lists, model portfolios) but until you actually watch the money grow (or disappear as the case may be) you just don't learn much about your own psychological tolerances and weaknesses. For this reason, I really like getting a broad brush from the group here rather than picks for trades. The macro ideas seem important to me as the starting point.

In the larger picture, I'm still pretty new and while I'm fascinated to read every last word that is posted here, it is very hard for me to translate any of this into any kind of investment action. It's taken me a year to start accumulating gold and to more recently consider what to do about the long embedded buy-and-hold tune that has been drummed into my head since the mid 90's. For the most part, I'm overwhelmed and due to the income from my wife's rapidly growing business we've got funds that need to be deployed in some fashion but are mostly sitting in cash or low yield funds.


I visit the site everyday hoping that some clarity will come - though I don't expect that it will.

Hoo

Nothing I see wrong with cash and low yields when compared to losing capital by being in the wrong places at the wrong times. If you don't think whatever it is you are looking for is here, you should be looking elsewhere. The things that mostly influence my decisions to buy or sell are interpretation of data I track beginning back in 1986. As time has gone on I look at more and more things. What iTulip and its participants on these fora have provided me with is some much greater appreciation for really how big a task it is to even try to invest wisely, and an appreciation for what may be the important asset classes.

I think you are correct to put some money at risk based on your best instincts and experience the burden of seeing it go up and down.

Right now, tonight, I am walking about and thinking about whether or not to liquidate some short positions on the expectation there is going to be a reversal for a while. The market has had a helluva downdraft in a short period of time, and it does not keep going on and on in the same direction without some bumps--the question then becomes worrying about how big are the bumps.

Good judgement come with experience, and experience comes from bad judgement.

I am sure all this did not help resolve your dilemma.

[DemonD]

Re: What if you gave a party and no one came?

I just want to say that i did not change my positions after that call. However, based more on itulip's information than any other, I exited a very large portion of my stock holdings throughout 2007 which, at the time, felt a little early, but looking at what the market is doing now, I feel it was the right decision and sitting tight mostly on the sidelines is the place to be.