Tuesday, March 15, 2011

Time Out on a Tuesday

Today I take a break from the investment lessons to write about how Krypto Fund is and will react to event unfolding events in and arising out of the aftermath of the huge earthquake in Japan.

Market participants who read books will likely be reminded of the scenes in that great trading book, Reminiscences of a Stock Operator, when lead character, "Larry Livingston", gets a 'feeling' to short stocks just before the San Francisco earthquake of 1906. When the telegraph stories of the quake appeared, he piled on the shorts, seeing that the reaction of most people would be slow and the true extent of the devastation would take days to come out. Lary Livingston was based on Jesse Livermore, of course, and his prescient shorting before the 1906 quake was legendary.

Krypto did not short, and did not pile on shorts on Friday. She really doesn't trade and doesn't pay that close attention. After, Krypto is a dog, albeit a beautiful and smart dog. But NOW, her model is making noises. This morning it's giving a moderately strong buy signal for Pacific stocks and a moderate sell signal for gold+silver.

Stock futures across the board are plunging, down around 2-3%; Tokyo is down 10% overnight, meaning some prices in the model are rather stale. That moderate buy signal is probably a strong one now. Real estate and fixed income is strong.

I choose to wait until the dust settles. I don't trust the prices and big drops often last three days. Waiting will let me move with the correct, full signal amounts from Krypto Fund.

BUT this is a perfect example of why we sell on the way up .... when all looks rosy. Who knows what the future may bring? Krypto was selling bits of stocks, Pacific included, for months. She has lots of cash, and seems soon to get some good prices for redeployment of that cash.

In today's markets, declines often occur so fast, only a short term trader can act in time and sell; an investor will miss a chance to sell near the top. By the time an investor with a normal life & job reacts, the top is ... a lot closer to the bottom. Those rapid market moves resemble a one way, nonstop elevator ride down.

Word of the Day

"Tropism" - noun [$10]
Tropism means the responsive growth or movement of an organism toward or away from an external stimulus.
Sentence: Although it's a mere computer model, Krypto Fund exhibits dual tropisms, perhaps reflecting the brain behind the model: she leans towards the cheap asset classes and away from the expensive ones.

16 comments:

Spin-em said...

it's rather axiomatic that Bunks doing the ol Johnny Carson tea for 2 soft shoe about his "model" today...I cant blame him...it's for bull markets....with no get outta Dodge
A pinch here...a dash there...give it a lil thyme...you know what he's talkin about here right?....Hope
Hope...the market acts like he wants....
Hope...the market turns back up...Hope the sea is as blue as he thought

Let me tell you something my friends... Hope can be a wonderful thing....maybe the best of things..but, Hope is a dangerous thing. Hope can drive a man insane...and its got no place in investing your family's $$.

Like it or not ladies and gentlemen....Bunk belches his distain towards traders but..it's all about momentum(confidence)...if people think the markets are going up...everybody in the pool...If its going down...ya get the hell out....
Welllll how do I know when to buy,getout,get in?? whatdo I do??...STOP UR CRYIN!!...lol
There are good markets...and there are bad markets....and you arent going to make any money in bad markets,,,so why are you going to invest in a bad market??...Why are you going to provide others the use of your finite $$ to get out when they want??
When DIA,SPY,QQQQ(all 3) close below the lowest close in the last 15 days...it's a sick market..ya get out
When the DIA,SPY,QQQQ(ALL 3)close higher than the last 8 trading days...ya get in...This will keep you in good markets and get you outta bad...2008 crash???what crash?..you'd be out... March bottom???...you'd be in...Who knows what today or tomorrow brings...but at least that's a plan you the common man can use...

Bunkerman said...

lol "it's rather axiomatic that Bunks doing the ol Johnny Carson tea for 2 soft shoe about his "model" today"

axiomatic :) a fine word.

Krypto will be buying tomorrow once she can figure out how much to buy off today's closing prices.

Spin-em said...

loool...thought you'd like that one...cheers bunk... go get em Krypto!!

Spin-em said...

Sunni's.....Shiites.....what side you taking Bunk...cuz thats what its coming to..

Spin-em said...

I don't trust the prices and big drops often last three days

trust is an emotion...isnt the model cut and dry...I only ask for the confused nonposters

Spin-em said...

and a moderate sell signal for gold+silver

sell at 135 krypto instead of 140
got it..thanks

Spin-em said...

this 7 part model portfolio has more moving parts than the chinlee plate spinners on the ol Ed Sullivan show...Big Al you got it all??...you need more pens and paper for graphs,instructions ...dont forget the 2 year stay away program...(you think Bunkstays away for 2 years???...ur gd right he wouldnt..lool...K I S S my azzzz....lool

Bunkerman said...

Sunni's.....Shiites.....what side you taking Bunk...cuz thats what its coming to..

lol, not either of those sides.

make them glass.

:)

Bunkerman said...

I don't trust the prices and big drops often last three days


Oh c'mon - how much do I buy when the futures are down big & the model wants a closing price.

And I KNOW the prices on the Pacific Fund don't include the overnight drop in Tokyo.

gotta wait for the number.

Bunkerman said...

I almost always wait for a strong signal on gold & silver.

Bunkerman said...

this 7 part model portfolio has more moving parts than the chinlee plate spinners on the ol Ed Sullivan show

that's why they makes tools, spin, like a computer spreadsheeet ...

don't you have or use a tool one in a while ?

;)

Bunkerman said...

... hehe ... I wonder if spin will get that one?

:)))

Spin-em said...

this model portfolio has more loopholes in it than a Jap Nuke Plant roof(too soon?).....handshake bunk..Im backin off...lol

Spin-em said...

don't you have or use a tool one in a while ?

loool no I dont know where thats from..but if its from a movie...and uve only seen 3..Ill say ur bs of a film Hudsucker Proxy??..lol

Bunkerman said...

lol ... I made that one up myself

:)

Spin-em said...

looool.....ahhh Bunks way of bustin my chops.....fair enough...lol