Market Timing

Market timing is an interesting topic. Is it possible? Dan Frishberg, who I listen to quite a bit, not only says you can be successful timing the market, but states you must be. Buy-and-hold is for Investor 1.0, which is no longer a winner.

I myself am quite skeptical, since I have investigated some common mathematical technical tools on broad indexes and found they don't work. To be more specific, they were very good tools up to the mid 1980's more or less, with some models seriously outperforming the market. But those some models always slightly underperformed from that point forward. These inlcude stochastic oscillators, MACD, moving average, etc all of varying time period inputs.

And I think this is how many of these became popular. People over time find a strategy that performs well using past data, but that is no guarantee of future return. Also, I think momentum is easier to bet on when people wait for the monthly reports on their portfolio vs. the real-time quote world of today.

Reading charts isn't all about these mathematical models, but surely certain charts looks would create a certain set of numbers, and I tested pretty much everything.

The other thing is that I find little correlation with the general mood of the market timers I see and listen to and what actually happens afterward. Listening to Dan himself, I swear good money could be made going contrary to his general mood. When he thinks we're in a good run to the upside, sell and do the reverse when he expects a pullback. This is purely an opinion formed based on casual observation.

I'd like to do more research on fundamental analysis and how that predicts future prices, but that exercise requires far more data. Maybe more to come on that.