Why do People Think the Market can be Effectively Timed?

We don't see the losers of stock pickers.
That's so true. I'd love to see a tv show about day traders. I believe day traders all lose their money eventually. You can't beat the high-frequency-trading computers.
Since my primary objective is to not lose my money I hedge low beta issues against the S&P. While I make decent money doing this the main attraction is the huge margin of safety. When asked what I do in the market pretty much everyone assumes I day trade despite my explaining that I am doing the exact opposite. Here's how it works:

I write enough out of the money puts on low beta ETFs to pay for the lowest cost straddle in the XSP with no more than 8% APR in free cash flow over costs in case the straddle expires worthless because the market stayed within channel.

If the market goes up I have structural leverage out the wazoo.

If the market goes down I have 2 to 1 leverage working in my favor.

What I do not understand is who is on the other side of my trades committing financial suicide.
 
I don't trust any type of paper, nor the machinations of same, the changes in regulations, enforcement thereof, the deliberately hidden bs, etc. If I couldn't immediately get paying tenants, weekly rates, and get into the property with VA loans (ie, no down payment, no closing costs) I would not be in real estate, either.
 
What I do not understand is who is on the other side of my trades committing financial suicide.
I still don't really understand what you're doing, writing puts I think. But, I'd be worried if I didn't understand how I'm making money. Most of the trading is done by smart, full-time computer-assisted BSD's (that's big swinging dicks), and I don't think punks like me are going to beat them.
 
Actually I'm in a totally different competition from the investment banks involving the gaps in the huge diseconomies of scale of large funds. Buffett and Lynch for example have huge libraries of interviews, letters to investors and so on to explain the difficulties of handling large sums. Buffett for example has not on average met his own metrics since 1998 and Lynch retired due to the pressure.

A 10 billion top out strategy is not a material source of revenue to any investment bank in fact I discussed this very fact this week. My wife wants me to switch to a broker with an in-town office and based on the principle happy wife, happy life I went to an office where she can get to to bitch about the tax consequences of my positions. The broker was acquainted with the strategy and except for the fact that it is boring it is a conservative and generally high revenue strategy. The big constraint is that there is a 5% legal limit to percentage of options that one is permitted to own and unless the major moves hit within one month of expiration that is a very tight constraint. so I don't worry about the BSDs because we are not in the same playground.
 
Elliot Wave theory anyone?

No change to the longer term count, as we are still expecting this correction to be Intermediate wave ii with an Intermediate wave iii uptrend to follow. Short term support is at SPX 2040 and the 2019, with resistance at the 2070 and 2085 pivots.
MEDIUM TERM: downtrend resumes

LONG TERM: bull market
 
if you expose yourself to all the bs that goes on in the markets, you're a fool. Stick to what you can have some control over. Because I make just the minimum payments on the houses that I buy (VA loans ,no down payments, no closing costs) I can bail out at any time. If local govt wants to pull some bs, like really increasing their taxes on my property/biz I'll just walk away from that buiding and the mortgage thereon, and put my money someplace else. The interest rates I pay are LESS than the (real) average annual inflation rate (5% per year) So i'd be CRAZY to build any so called 'equity". Buildings are highly noticabe and non-portable. :) Gold coins, now, if buried at night in scattered places, those are safe, but they earn no income. What the DO accomplish, tho, (long term) is save you the 5% per year loss to inflation and they dont pay taxes to the enemy. They can be grabbed up and moved with you at any time. They can be concealed inside of other things and shipped anywhere, including overseas.
 

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