[quote=dude]

 Blindly putting your money in the market is a "timing" decision, albeit one that believes in the merits of the efficient market (generally speaking) and that the time is always NOW.  This is a timing philosophy that believes there is no value to be created by making decisions based on the markets ebbs and flows.  [/quote]

So it's "timing" to put your money into the market w/o consideration to "timing" because you believe (very rationally) that there's no effective way to "time" the market?  It's not that the "time" is always now, it's that "timers" have yet to ever, I say again, ever provide convincing evidence that they add value.

You've spent too much time talking with timers that use any thin reed to try to support their agenda.

I'm not saying that your timing decisions are based on speculation about global events, but they are based on speculation about other charateristics like "asset classes maintaining relationships similar to the past" or "dollar cost averaging"  like I said MikeB

Passive timing

Active timing

both you and I fall into the "passive timing" camp, probably because of our convictions that we can't add value doing it. 

Mike B wrote:

So it's "timing" to put your money into the market w/o consideration to "timing" because you believe (very rationally) that there's no effective way to "time" the market?  It's not that the "time" is always now, it's that "timers" have yet to ever, I say again, ever provide convincing evidence that they add value.

You've spent too much time talking with timers that use any thin reed to try to support their agenda.

Reply:

Do you believe that the George Soros' and Warren Buffets of the world are just "lucky" guys.  Both used differing attitudes based on market timing:

Warren: Timing directed by waiting for extremely undervalued companies, selling when they become overvalued

George: Timing based on macro trends and a wierd "pain in his back"  (I know it sounds weird, but it made him a billionaire so who am I to criticize)

Wall Street proprietary trading desks (remember mike these are major profit centers) engage in heavy market timing.

I think this is a matter of interpretation of the meaning of "timing". 

Just because you haven't seen anyone successful at it doesn't mean it doesn't exist. 

MikeB wrote:

Alarmist screed never do paint pretty pcitures. BTW, fear not. The same "experts" told us we'd run out of food and oil in the 1970s....

Reply:

Funny thing MikeB is that the guy who wrote the book did acurately predict peak oil from the North sea wells when all the big Oil companies were blowing smoke up the "believers" (i.e. MikeB) a*sses in addition to Peak Natural Gas in the U.S. in 99 or 2000. 

Note*Peak Oil doesn't = running out of oil, it means when the growth rate of demand exceeds the growth rate of supply.  Learn a little about the subjects you choose to debate on eh?

And yes, Mike, it will have a serious impact on the world, a world that does not have a very robust alternative energy infrastructure. 

You sound like the guys who rejected the doom and gloomers talking out against the technology bubble. 

It's idiotic to think that we have an unlimited supply of oil or any natural resource (including clean air and water).  Whether it happens in 5, 10 or 20 years, oil production growth will slow. 

These times are different since we have so many new entrants into the "developing world"  China and India's appetite for resources alone are enough to put a huge strain on the worlds' resources and with growth rates in excess of 9% annually, populations that far exceed ours, well do the math. You can't compare today with the 70's; very different conditions.

BTW, I'm not an alarmist, just someone who believes that these issues will SOMEHOW affect the world and therefore investments.

MikeB said:

Currently grain alcohol operates at an energy loss (requires more energy to produce than it provides) and is not a viable option.

"Energy loss" is not a reason to pursue a method. There's often a trade-off of "loss" here for "gain" there that's perfectly ratiuonal.

Reply:

MikeB, you do not sound educated on this issue.  Energy loss means that it has what is termed a "negative energy gain"; ie. inefficient, unworthwhile, less sustainable than using oil at any price point.  It requires more energy to make than it produces for our use.  Using grain alcohol will only result in a more rapidly declining energy base.

Currently, even hydrogen is innefficient, it requires oil or coal to work.  (we can't produce enough energy from dams, solar, wind and waves yet to make it truly oil independent).

Oil is viable because it has a very positive energy gain, meaning that it produces far more energy than what is required to extract, package and ship it.  we're not talking economic costs here, but energy costs. 

In fact, oil is a miracle resource, it contains enormous embodied energy.  Nothing we take for granted today is possible without oil, our current way of life is not possible without oil. 

Guess what MikeB, there's almost 3 billion people in China and India who want to have a lifestyle like ours, in fact the average annual migration of people in China from villages to the city is over 200 million since 1999!!!  Do you think these people want a taste of our wealth mikeb?  Do you think it might have an impact on competition for world resources? 

Is it doom and gloom, I don't know.  Will it affect the world in dramatic ways, OBVIOUSLY. 

When Benjamin Graham was an active investor, the world was a different

place. MikeB is applying the equivalent of taking a doctor from the 1940’s

and sending him to a Mayo Clinic to practice medicine today.



Dude, you are incredibly astute. I really enjoy reading your posts. BTW, read

Twilight in the Desert, I highly recommend it. Also look at Petroleum

Intelligence Weekly for additional perspective. Isn’t it ironic that most of the

world’s oil reserves are in the most politically unstable countries?

I will reiterate that 200 MILLION chinese migrate to the city per year!!!      

Do you get the magnitude of that MikeB?

Oil and Water, that's what I'm keeping my eyes on over the next 10 years.  If the world doesn't end in 2012 like many ancient religions claim.

Skeedaddy wrote:

Isn't it ironic that most of the
world's oil reserves are in the most politically unstable countries?

Reply:

Well, what do you expect when those countries were split up after WorldWar 1 according to the colonial powers' desires?  In addition you have the most coveted and influential resource on earth in the hands of people who have fundamental (based on religious doctrines, which I admit that I'm a little ignorant of) beliefs that resist many of the trappings of "progress".

What about bio diesel? 

[quote=dude]

I'm not saying that your timing decisions are based on speculation about global events, but they are based on speculation about other charateristics like "asset classes maintaining relationships similar to the past" or "dollar cost averaging"  like I said MikeB [/quote]

You've now redefined "market timing" to include strategies specifically designed to avoid the speculation involved in genuine market timing .<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

It’s one thing to design a portfolio with various asset categories that are expected to maintain historic relationships over realistic timeframes and set it to work, knowing that exogenesis events will impact it, but not defeat it. It’s another completely to believe that a top down supposition about world possible events that guides decisions to move in and out of the market or even large swathes of it provides a positive effect to returns.

[quote=dude] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Funny thing MikeB is that the guy who wrote the book did acurately predict peak oil from the North sea wells when all the big Oil companies were blowing smoke up the "believers" (i.e. MikeB) a*sses in addition to Peak Natural Gas in the U.S. in 99 or 2000. 

[/quote]

Says Jean Dixon, er, the guy who wrote the book. Who definitively says we've reached "peak oil" in those fields? What we've done is come close to what current methods can draw in an economically viable manner. That’s akin to saying the world reached “peak oil” in 1913 because at that time, with that technology, we could draw only a tiny fraction of what we can today. BTW, spare me the inferences of evvvillllll “big oil”, OK?

[quote=dude]

Note*Peak Oil doesn't = running out of oil, it means when the growth rate of demand exceeds the growth rate of supply.  Learn a little about the subjects you choose to debate on eh?

[/quote]

Gee, feel free to assume you can read minds and know what I’m aware of. I don’t do it to you, please don’t do it to me. While supporters of the theory like to draw the line at “we don’t mean we’ll run out of oil”, the logical extension of projected demand (and remember, they assume NO new field discoveries and NO advancement in technology, which is a complete non-starter in my book) exceeding supply IS massive shortages and eventually, depletion.

[quote=dude]

And yes, Mike, it will have a serious impact on the world, a world that does not have a very robust alternative energy infrastructure. 

[/quote]

Explain to me what “infrastructure” you’d expect to see just sitting around, collecting dust, waiting for the day it’s economically viable? It’s enough to have the ability, producing it long before it makes sense to use it is silly. Think of the gearing up of the American economy to meet the demands of war production. We didn’t have battleships just sitting around in the numbers needed once the war began, we produced them when needed.

[quote=dude]

You sound like the guys who rejected the doom and gloomers talking out against the technology bubble. 

[/quote]

And you sound like the gold hoarders and the “global freeze” and “we’re running out of food and energy” guys of the 1970s. 

[quote=dude]

It's idiotic to think that we have an unlimited supply of oil or any natural resource (including clean air and water).  Whether it happens in 5, 10 or 20 years, oil production growth will slow. 

[/quote]

No one says we have unlimited oil. What IS said is that the doom and gloomers refuse to accept that technological advances in; alternative energy, production methods of current energy, conservation methods of current energy uses, will keep the world from dipping into economic chaos and $200/brl oil. Witness the destruction of demand, in real terms, when oil reached $74. The doom/gloomers simply don’t think that rising prices will; change user behavior, make alternatives economically viable, shift usage patterns. It’s as if they don’t understand markets at all.

[quote=dude]

These times are different ..

[/quote]

The most dangerous and universally wrong term ever invented by man.

[quote=dude] …since we have so many new entrants into the "developing world"  China and India's appetite for resources alone…..You can't compare today with the 70's; very different conditions.

[/quote]

If you’d heard the panic contingent of the 1970s they made the very same “this time it’s different” claims and relied on <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />China and India as prime examples.

[quote=dude]

Oil and Water, that's what I'm keeping my eyes on over the next 10 years. 

[/quote]

Can you translate that into an actionable investment idea?

BTW, are you familar with Harry Dent?

[quote=mikebutler222][quote=dude]

Oil and Water, that's what I'm keeping my eyes on over the next 10 years. 

[/quote]

Can you translate that into an actionable investment idea?

BTW, are you familar with Harry Dent?

[/quote]

Yup, Dent, what a waste.....

[quote=joedabrkr][quote=mikebutler222][quote=dude]

Oil and Water, that's what I'm keeping my eyes on over the next 10 years. 

[/quote]

Can you translate that into an actionable investment idea?

BTW, are you familar with Harry Dent?

[/quote]

Yup, Dent, what a waste.....

[/quote]

Agreed. His investment results have been horrible. To me the only interesting part of the saga is that he based them on "can't fail" demographic trends.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 Here we are guessing what oil and water will do (and therefore the markets) based on pretty rational sounding supposition of future trends, but Harry showed what trying to turn even more solid demographic trends (“baby boomers, the pig in the python that drives the US economy”) will do to your investment returns.

To me he’s the perfect cautionary tale when the subject of investing based on top-down speculation comes up.

[quote=mikebutler222][quote=joedabrkr][quote=mikebutler222][quote=dude]

Oil and Water, that's what I'm keeping my eyes on over the next 10 years. 

[/quote]

Can you translate that into an actionable investment idea?

BTW, are you familar with Harry Dent?

[/quote]

Yup, Dent, what a waste.....

[/quote]

Agreed. His investment results have been horrible. To me the only interesting part of the saga is that he based them on "can't fail" demographic trends.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 Here we are guessing what oil and water will do (and therefore the markets) based on pretty rational sounding supposition of future trends, but Harry showed what trying to turn even more solid demographic trends (“baby boomers, the pig in the python that drives the US economy”) will do to your investment returns.

To me he’s the perfect cautionary tale when the subject of investing based on top-down speculation comes up.

[/quote]

Harry could well be right eventually, and earn his followers some nice returns.  Problem is that he's working off of macro "long cycle" trends, and clients aren't necessarily willing to wait that long.  Too...there are many other market phenomena that can happen in the back drop while those trends play out.  As I recall his adherents-especially those using AIM products-were really clocked by the growth and technology bear market....hurt so bad that it takes years of positive returns to recover.

The stuff we're talking about could logically play out in the next 12 months-especially the war, oil, and gold stuff.  A prudent bet made on the right stocks or sectors could pay off in a big way, yet if you manage your risk properly(position sizing and stop losses) and keep the rest of your assets well-diversified, it won't hurt too bad.

That's where my head is at.

<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 

[quote=joedabrkr][quote=mikebutler222][quote=joedabrkr][quote=mikebutler222][quote=dude]

Oil and Water, that's what I'm keeping my eyes on over the next 10 years. 

[/quote]

Can you translate that into an actionable investment idea?

BTW, are you familar with Harry Dent?

[/quote]

Yup, Dent, what a waste.....

[/quote]

Agreed. His investment results have been horrible. To me the only interesting part of the saga is that he based them on "can't fail" demographic trends.

 Here we are guessing what oil and water will do (and therefore the markets) based on pretty rational sounding supposition of future trends, but Harry showed what trying to turn even more solid demographic trends (“baby boomers, the pig in the python that drives the US economy”) will do to your investment returns.

To me he’s the perfect cautionary tale when the subject of investing based on top-down speculation comes up.

[/quote]

Harry could well be right eventually, and earn his followers some nice returns.  Problem is that he's working off of macro "long cycle" trends, and clients aren't necessarily willing to wait that long. 

[/quote]

I disagree. Harry says, for example, drug companies should benefit NOW,  greatly from the baby boomers that are, as we speak, using life saving and quality of life improving drugs at a  historically large  rate. The problem is while that’s absolutely true, it hasn’t translated into the investment returns he’d imagined because increased usage isn’t the only input to profitability. His top down direction missed that, a bottom up review of specific companies caught it.

 The same goes for housing. Harry says boomers are NOW selling larger homes and buying smaller. However, builders will tell you that their largest increases and largest profits are coming from their largest homes. Something has interceded to make Harry’s perfectly logical hypothesis an investment nothing.

My point is Harry has seen miserable results and he’s not guessing when this event or that event might occur, what political and/or military events might come to pass,  he’s basing it on far more solid, identifiable and verifiable work. Making similar top down investments based on even less solid grounds doesn’t sound like a winner to me.

[quote=joedabrkr]The stuff we're talking about could logically play out in the next 12 months-especially the war, oil, and gold stuff

[/quote]

I completely respect your opinion. Here’s how I see it.

Plenty of things could logically play out. There’s nothing there that I see as actionable enough, with enough reliability to make investment decisions on it. Look at what happened to the market during the Gulf War, or even since we went into <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Afghanistan. Just how sharp would your timing knife have to be to have to have profited from timing? How much could you have been hurt if you were wrong by only a tiny fraction? I don’t see the risk/reward benefit. I’d prefer to consider this one of the exogenous things I told the client would affect his account value that we’re better off ignoring, as we knew it would happen somewhere, sometime.

MikeB

Actionable investiment ideas:

Colonial style butter churns

Star Wars memorabilia

Stamps with the profiles of Las Vegas lounge singers

Maybe even porcelain doll heads?

I believe in asset allocation based on the concept of forward looking analysis.

I was not making a reference to Big Oil in the "evil" way, just pointing out that the interests of these companies is not to necessarily be forthcoming about the truths of their reserves, hense the Dutch Royal Shell misstep. 

[quote=dude] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

MikeB

Actionable investiment ideas:

Colonial style butter churns

Star Wars memorabilia

Stamps with the profiles of <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Las Vegas lounge singers

Maybe even porcelain doll heads?

[/quote]

You're losing it, Dude.

[quote=dude]

I believe in asset allocation based on the concept of forward looking analysis.

[/quote]

The issue isn't asset allocation or not. You keep repeating that as if it's the be only thing going on in a balance portfolio. Once those little slices of the pie are divide up, they have to be managed, whether you and I do it as brokers or some outside manager does it.

It’s that specific management I’m talking about (and I do have some accounts I manage in this way) and what our disagreement centers on isn’t whether to use asset allocation or SMAs or funds or anything of the sort. It has to do with a basic disagreement with the value of top-down versus bottom-up stock selection. I’m a bottom-up, show me the profit, show me the balance sheet, show me the company detail guy and you’re making the case for top-down here’s the way the world’s moving, what should I buy based on that guy. See?

Whether I'm doing it myself or hiring someone else to do it, I don't use a top-down method.

[quote=mikebutler222]

[quote=dude] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

MikeB

Actionable investiment ideas:

Colonial style butter churns

Star Wars memorabilia

Stamps with the profiles of <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Las Vegas lounge singers

Maybe even porcelain doll heads?

[/quote]

You're losing it, Dude.

[quote=dude]

I believe in asset allocation based on the concept of forward looking analysis.

[/quote]

The issue isn't asset allocation or not. You keep repeating that as if it's the be only thing going on in a balance portfolio. Once those little slices of the pie are divide up, they have to be managed, whether you and I do it as brokers or some outside manager does it.

It’s that specific management I’m talking about (and I do have some accounts I manage in this way) and what our disagreement centers on isn’t whether to use asset allocation or SMAs or funds or anything of the sort. It has to do with a basic disagreement with the value of top-down versus bottom-up stock selection. I’m a bottom-up, show me the profit, show me the balance sheet, show me the company detail guy and you’re making the case for top-down here’s the way the world’s moving, what should I buy based on that guy. See?

Whether I'm doing it myself or hiring someone else to do it, I don't use a top-down method.

[/quote]

I think we should try the topless method instead of the top-down method.

[quote=joedabrkr][quote=mikebutler222]

[quote=dude] <?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

MikeB

Actionable investiment ideas:

Colonial style butter churns

Star Wars memorabilia

Stamps with the profiles of <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Las Vegas lounge singers

Maybe even porcelain doll heads?

[/quote]

You're losing it, Dude.

[quote=dude]

I believe in asset allocation based on the concept of forward looking analysis.

[/quote]

The issue isn't asset allocation or not. You keep repeating that as if it's the be only thing going on in a balance portfolio. Once those little slices of the pie are divide up, they have to be managed, whether you and I do it as brokers or some outside manager does it.

It’s that specific management I’m talking about (and I do have some accounts I manage in this way) and what our disagreement centers on isn’t whether to use asset allocation or SMAs or funds or anything of the sort. It has to do with a basic disagreement with the value of top-down versus bottom-up stock selection. I’m a bottom-up, show me the profit, show me the balance sheet, show me the company detail guy and you’re making the case for top-down here’s the way the world’s moving, what should I buy based on that guy. See?

Whether I'm doing it myself or hiring someone else to do it, I don't use a top-down method.

[/quote]

I think we should try the topless method instead of the top-down method.

[/quote]

Sounds good, but don't take clienst with you. That'll get you fired  ;)