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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19983  
Subject: Ramble Date: 2/19/2013 6:02 PM
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By way of explanation. How I approach things, investing included, is perhaps somewhat different from how a lot of people do. By way of illustration once, years ago, a colleague, as she was leaving to take another job elsewhere, said that she'd always remember that "thing" I'd said to her. Oh, oh —panic on my part; what "thing?" Obviously, I can't remember verbatim, but this was the gist of the "thing." Apparently, what I'd said to her was something along these lines: I'm basically lazy, so I find the easiest and most efficient way to do things so that I don't have to expend more energy, or do more work, than I need to. It's just as much (or more) about knowing what you don't need to do, or know, as it is about what you do.

So, my questions for Matthew were in the vein of tying to figure, for myself, first, the essence of his methodology (A fog tends to descend when I see calculations and fractions that almost exclusively involve acronyms.) Second, I was trying to figure if what he is going on about was going to end up in the "need to know" box or the "don't need to know box." Obviously, aiming for efficiency and simplicity I like to keep my "need to know box" as small and tidy as possible. Sometimes things find a place in the box, sometimes they don't, and sometimes things get thrown out but later get thrown back in in a modified form.

Somewhat of a meander: I've just counted the number of buttons on the remotes I have to have to operate my TV, cable box, and DVD player: 144. (The TV remote has 43 buttons, the cable remote has 60, and the DVD remote has 41). This is insane. I neither know, nor care, what most of them are for, but I do know that some do much the same as others. This is a bit like investing, in as much as the complexity—with the nuancing and massaging and fiddling with numbers and metrics—can be mind-numbing. So I suppose when someone writes a complex tome on what they've discovered about this little button over here, or better still, this little button that they've just invented my first reaction is "Oh sh*t!

In investing, the signal-to-noise ratio is, in my opinion, well, just let's say there's a lot of static.

I did not read nor follow all of that long ten rec post Mr. [X], but have a rec as your work deserves a lot of respect.

This, kind of behavior, in my opinion, is part of the problem (sorry Dave number 11). There's been numerous times when I've read a long and convoluted post replete with calculations and tables and I've scratched my head, and then I see that the post has 30+ recs., and I scratch my head again. Did 30+ people really thoroughly understand that, let alone agree with it? I ask myself. More likely a lot of those recs came from people thinking "that looks like a lot of work, very impressive; not that I understand it, or have even read it all." 'Reminds me of Alan Greenspan talking to Congress and them nodding their heads, not because they agreed, or even understood what he had been saying, but because they didn't want to look stupid. Hey, even he didn't understand what he was saying.

So, my unsolicited advice is to ask questions of posters, dig a bit, think whether what they are presenting is worth your time and inclusion in your "need to know box."

kelbon
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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13660 of 19983
Subject: Re: Ramble Date: 2/19/2013 7:43 PM
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I like to keep my "need to know box" as small and tidy as possible. Sometimes things find a place in the box, sometimes they don't, and sometimes things get thrown out but later get thrown back in in a modified form.

Hi Kelbon,

It's none of my business but I'm dying to know. Did you keep your remote button data? :<)

B

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13662 of 19983
Subject: Re: Ramble Date: 2/19/2013 9:56 PM
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I've just counted the number of buttons on the remotes I have to have to operate my TV, cable box, and DVD player: 144. (The TV remote has 43 buttons, the cable remote has 60, and the DVD remote has 41). This is insane.

We all hope that one day Apple will solve this problem. Certainly Steve Job would not tolerate such messiness.

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Author: Garranova Three stars, 500 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13663 of 19983
Subject: Re: Ramble Date: 2/19/2013 10:18 PM
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Yes, I can't wait til Apple makes everything in my life simpler:

http://www.youtube.com/watch?v=9BnLbv6QYcA

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Author: TMFHockeypop Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13664 of 19983
Subject: Re: Ramble Date: 2/19/2013 10:45 PM
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I keep hitting the rec key but I DON'T HAVE A WHEEL!!!!! So good!

bob

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Author: putnid Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13665 of 19983
Subject: Re: Ramble Date: 2/19/2013 10:57 PM
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Brilliant!

Just freeze on the frames that illustrate Apple's "Predictive Sentence Technology". Priceless.

Thanks.

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13666 of 19983
Subject: Re: Ramble Date: 2/19/2013 11:01 PM
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It's none of my business but I'm dying to know. Did you keep your remote button data? :<)

No I didn't keep it.

But, I gave Charlie Babbit a call and he said if I ever needed it again… 144. The TV remote has 43 buttons, the cable remote has 60, and the DVD remote has 41. He has an EXCELLENT memory.

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13668 of 19983
Subject: Re: Ramble Date: 2/20/2013 12:34 AM
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So, my unsolicited advice is to ask questions of posters, dig a bit, think whether what they are presenting is worth your time and inclusion in your "need to know box."

kelbon

Kelbon,

I kind of got the jist of what Mr. Tompkins was saying. I dont think the math applies to any two stock all that well at one time or another. In fact at different times the math would be different. Even if the formulas are the same. The numbers plug in for each stock and at each different point in time differently. If they dont you have a lousy product on your hands.

In simpler terms stocks and indexes are moving targets.

So I dont care what the math is. I care if the indexes are over priced and too a large extent why they are over priced. Currently the rich are loving this economy. Who would not love this economy if you have money. And the middle class, the obliterated middle class is rightfully crying foul.

They passed the American Taxpayer Relief Act with both sides of the aisle voting yes. This relief act ups taxes on just about everyone.

So I see that as tightening. Plus it gets rich people with millions to hundreds of millions in assets to shift their monies from investments in hedge funds and LBOs to guess what, their own businesses. Those folks with large assets are generally good business folks.

So longer term there will be more investing in the small to mid cap business world. For now I put an article on the METAR board some days ago on how LBO funds were drying up and the fall out would be 4/5s of the LBOs disappearing in the next couple of years. Then someone a day later put up a similar story on how hedge funds were seeing less funding by a larger factor as well. My find or story was off of the Bloomberg.

I hear the FED saying they will stop buying bonds in the middle of this year possibly and the long end of the yield curve is rising now.

Gasoline prices are high, what more can I say?

The economy shrank in the 4Q12 and we clearly see tightening.

So we need to reach a conclusion. Not just a bunch of numbers. Not just a methodology. Not just a post that can be hashed about for fun. And you are totally right the recs are not the measure of the post.

What is the conclusion? Out with it Dave......

The market is over priced and that not only wont last, but the tightening process we are seeing will knock about 23 to 25% off of the market in the next year and a half or less.

And if I am wrong, so what nothing lost. And if I am right, then buying after the bottom is all that need be done.

Then comes the interesting math.

I will ask this board first before I give my rubbishy opinion, what sort of return would one get from 2015 through 2030 that would make an investor happy, be a lazy way of getting it, and be within reason?

If I see my answer in your'en I will happily let you know. If not after a bunch of good answers we will get to my ideas.

Y'all are investors right? So if you invest you have a time horizon. You should have the answers for what you intend to do over a large time horizon. That is the real math.

Dave

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Author: vv234 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13670 of 19983
Subject: Re: Ramble Date: 2/20/2013 2:00 AM
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I rec'd your post because I am pretty sure I understood it this time :-)

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13671 of 19983
Subject: Re: Ramble Date: 2/20/2013 2:17 AM
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I kind of got the jist of what Mr. Tompkins was saying. I dont think the math applies to any two stock all that well at one time or another. In fact at different times the math would be different. Even if the formulas are the same. The numbers plug in for each stock and at each different point in time differently. If they dont you have a lousy product on your hands.

In simpler terms stocks and indexes are moving targets.

Kelbon,

Here is yet another way of seeing the same.

You have two rockets on earth. They are launched from very different points one in Russia and the other in the US. They have differing weights, pay loads and amounts of fuel. They have different circumference sizes etc.

But the math is made up of the same formuli for both trajectories.

We launch the Russian rocket in November and the American rocket in April.

Do you see any problems in making comparisons in May alone?

The math of course for one rocket matters. We need to know where it lands. And the math is the same for the next rocket. The comparison happens if you know you get a safe landing afterwards. While you might want to know you have a clear launch pad, you really dont care in November how the American launch pad is.

We were given ideas on formulas by Mr. Tompkins. We were not given much by way of timing or conclusions as to where we would be later when the stock had gone up supposedly.

If we bought a growth stock in tech <I do know this is a value board> then we see the rocket possibly fall into the sea with the pay load. That is why I am watching value stocks. If we choose a value stock in a vastly over priced market we might not get off the launch pad even with all the mathematical formulas saying otherwise.

Dave

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13672 of 19983
Subject: Re: Ramble Date: 2/20/2013 2:33 AM
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I did not read nor follow all of that long ten rec post Mr. [X], but have a rec as your work deserves a lot of respect. Me

This, kind of behavior, in my opinion, is part of the problem (sorry Dave number 11). There's been numerous times when I've read a long and convoluted post replete with calculations and tables and I've scratched my head, and then I see that the post has 30+ recs., and I scratch my head again. Did 30+ people really thoroughly understand that, let alone agree with it? I ask myself. More likely a lot of those recs came from people thinking "that looks like a lot of work, very impressive; not that I understand it, or have even read it all. Kelbon

We seem to be on the same page.

never mind,

Dave

PS, I travel a good number of board and get a bit punch drunk with my own humor on different thing posted. After a while I dont fully mean every last word of what I post. I just loosen up and go along for the ride. It is easier than proving my professional prowess moment by moment.

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13675 of 19983
Subject: Re: Ramble Date: 2/20/2013 8:08 AM
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The market is over priced and that not only wont last, but the tightening process we are seeing will knock about 23 to 25% off of the market in the next year and a half or less.

To the "don't need to know" box you go.

Not that it might not happen, but given I can find this type of prediction on any given day, I see no sense in taking up space in my "need to know" box.

B (Doesn't pretend to know)

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13676 of 19983
Subject: Re: Ramble Date: 2/20/2013 8:13 AM
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Oops I forgot....

And if I am wrong, so what nothing lost.

What happened to the part about taxes going up and gasoline prices being high?

If stuff is moving and you aren't you might as well be moving (backwards) no?

B

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Author: TMFHelical Big gold star, 5000 posts Old School Fool Coverage Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13681 of 19983
Subject: Re: Ramble Date: 2/20/2013 9:56 AM
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There's been numerous times when I've read a long and convoluted post replete with calculations and tables and I've scratched my head, and then I see that the post has 30+ recs., and I scratch my head again. Did 30+ people really thoroughly understand that, let alone agree with it?

Possibly not. But they could have, and the effort was made. I find agreement in investing a farcical goal. I've been around TMF for a decade plus, and I don't know anybody that is investing similar to me (and my own style is hardly done evolving). No issue, lots of ways can work. I continue to learn from others and hopefully pass on some seeds that encourage people to think as well (conclusions are up to them). I would rec any post that shows an effort to consider or reconsider ones own strategy and looks for feedback. Thoughtful discussion is what these boards are for.

Ralph
Helical Investor

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13684 of 19983
Subject: Re: Ramble Date: 2/20/2013 11:09 AM
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I would rec any post that shows an effort to consider or reconsider ones own strategy and looks for feedback. Thoughtful discussion is what these boards are for.

The most important three words in these two sentences, for me, are: looks for feedback.

Honestly, I don't think some people are looking for feedback in a broad sense, they are looking for agreement. Obviously, any response is feedback and one aspect is agreeing with, or lauding, something someone writes.

However, asking a poster to help you understand better what he/she has written; to clarify it, to clearly explain its rationale and logic; to constructively disagree and explain why… All of this is sometimes seen by posters as "push back" or criticism or just plain rude and aggressive. This is the problem.

Thoughtful discussion has several flavors. You can thoughtfully agree, or you can thoughtfully disagree, to a lesser or greater extent.

kelbon

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13687 of 19983
Subject: Re: Ramble Date: 2/20/2013 11:50 AM
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If stuff is moving and you aren't you might as well be moving (backwards) no?

B

B,

take a page for Bogle. You dont need impulsiveness in your investing. That is moving backwards. If we all believe for good reason that the market is over priced and will come down eventually why be investing?

Backwards is investing at the top of the market or close to it.

Can you override your impulsiveness and not invest?

That is hard.

WEB does it all the time. He always has cash. Do you have cash as a large part of your port in relative terms?

My family and I are in the main on the sidelines for a couple of years now. Not totally on the sidelines, but waiting for a bigger opportunity.

Dave

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13691 of 19983
Subject: Re: Ramble Date: 2/20/2013 12:52 PM
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WEB does it all the time. He always has cash. Do you have cash as a large part of your port in relative terms?

Yes and I have stated this repeatedly. Heck in that regard I even beat out WEB. :<)

Did some selling just yesterday matter of fact, although the way the day is going so far for me, I kinda wish it was more. :<(

That's not the same as thinking I can predict a major correction however. It's more like listening to my stomach (intuition) on occasion because at times it seems to have more investing ability than my brain does. :<)

My family and I are in the main on the sidelines for a couple of years now. Not totally on the sidelines, but waiting for a bigger opportunity.

You do realize that using the averages your "23 to 25% off of the market in the next year and a half or less" pullback would only give you the "opportunity" to get back in at prices at where you went to the "sidelines"and that assumes no further appreciation before your correction comes.

Might as well be moving backwards no?


B

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13692 of 19983
Subject: Re: Ramble Date: 2/20/2013 1:19 PM
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You do realize that using the averages your "23 to 25% off of the market in the next year and a half or less" pullback would only give you the "opportunity" to get back in at prices at where you went to the "sidelines"and that assumes no further appreciation before your correction comes.

Might as well be moving backwards no?

B,

Like most folks we are slow learners. The only difference is we have learned. There are usually three bottoms in a bear market cycle. We are banking only on the next one which would be the third one.

I did not say I am perfect. There is a big difference between working the future and being perfect.

Dave

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Author: BFatConservative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13694 of 19983
Subject: Re: Ramble Date: 2/20/2013 1:50 PM
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"There are usually three bottoms in a bear market cycle. We are banking only on the next one which would be the third one." - Rubberthinking

---

Prove me to this "thesis" of three bottoms to a bear market. You won't be able to. Why? Because you are attempting to define the market to an oversimplified constraint.

We have spoken to simplification in our investment approach in this thread, but I fear (know) you have oversimplified. You are playing the classic game of "define all the variables" in the stock market, which as any mathematician would tell you, it is impossible.

I fear when we think about investing so often in these boards, we mettle, overplay, attempt to snipe superior earnings. In the end if we were to play the long-term returns - we might just be better off.

The simple calculation resounds still today. Take 20% of your comp, put it in a low fee index fund, compound the interest for 30 years, and you have a nest egg. Sure we can get more specific than that by picking specific equities, which I subscribe to.

What I don't subscribe to is urban myths such as "There are usually three bottoms in a bear market cycle. We are banking only on the next one which would be the third one."

No disrespect intentionally directed to you, I just call it as I see it.

MjH

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13695 of 19983
Subject: Re: Ramble Date: 2/20/2013 2:00 PM
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MjH,

We are in a bear market. We are currently seeing a large bull move.

In the next four or five years the bear might be over and the market could move into a bull market cycle.

So the thinking in my camp is why play with fire? why not keep the monies safe and see what happens? If the market goes down significantly it is a gift. If the market goes next to nowhere for the next three to four years it barely matters. If the market goes up and down for much of the next four years the GDP growth in the years after 2017 will more than likely be healthier we can wait.

Truly we are really only waiting for a safer entry.

a lower market

and/or a better economy and economic growth by definition

Again seeing the future and being perfect are not the same things at all.

Dave

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13699 of 19983
Subject: Re: Ramble Date: 2/20/2013 4:59 PM
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There are usually three bottoms in a bear market cycle. We are banking only on the next one which would be the third one.

This observation stems from man's insatiable need to find meaningful patterns.

The argument that we're in a cyclical bear market —one that trades sideways with significant peeks and valleys along the way is based on history: the market behavior of the last decade. Can't argue with that. It's water under the bridge. However, having confidence that there will be another significant pullback can only be a guess, and it's a guess based on looking back to previous cyclical bear markets.

If you are compelled to play this guessing game then it would be logical to guess, based only on history, that if there is another pullback to come it's likely to be less severe than the previous two. However, I think the odds of you being right are about the same as a coin toss.

kelbon

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13702 of 19983
Subject: Re: Ramble Date: 2/21/2013 12:28 AM
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If you are compelled to play this guessing game then it would be logical to guess, based only on history, that if there is another pullback to come it's likely to be less severe than the previous two. However, I think the odds of you being right are about the same as a coin toss.

kelbon

I can be right and make a lot of money or I can be wrong and lose no money just time.

If y'all are mainly long you can lose money or make money. So the coin toss is more centric to your own position than mine.

The future will never be perfect. Traders start with an idea of how to beat the market and almost none do so over time. Those that do have a different wiring than I do. I wont attempt it. Those that time the markets for long term advantage need a different wiring also. What if I have that wiring? What if most of you will not sit on the sidelines and wait because you need to play? The coin toss is that the market goes up or down with your money.

I just want an entry that makes more sense. That is not a coin toss.

Dave

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13704 of 19983
Subject: Re: Ramble Date: 2/21/2013 1:01 AM
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Dave,

There have been at least a couple of pullbacks over the last couple of years (whilst you were sitting on the sidelines) when some very good companies could have been had for relatively modest valuations.

The trouble with waiting for a pull back is that the longer you wait only a drastic swoon in the markets is going to satisfy you and then you have to be able to recognize it when it comes and pull the trigger. All easier said than done.

kelbon

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13705 of 19983
Subject: Re: Ramble Date: 2/21/2013 1:02 AM
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The trouble with waiting for a pull back is that the longer you wait only a drastic swoon in the markets is going to satisfy you and then you have to be able to recognize it when it comes and pull the trigger. All easier said than done.

kelbon

yes.

Dave

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Author: BFatConservative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13706 of 19983
Subject: Re: Ramble Date: 2/21/2013 7:10 AM
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"I just want an entry that makes more sense. That is not a coin toss."

Good luck finding that. Certainty is nothing in the stock market, and you sir seem to be overflowing with certainty. Actually, you remind me of some people that were so certain about specific market movements that they bet the farm:

http://boards.fool.com/the-way-back-machine-blowing-up-with-......

MjH

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Author: BFatConservative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13707 of 19983
Subject: Re: Ramble Date: 2/21/2013 7:11 AM
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(fixed link)

http://boards.fool.com/the-way-back-machine-blowing-up-with-...

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13715 of 19983
Subject: Re: Ramble Date: 2/21/2013 12:29 PM
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How apropos.

This just landed in my email inbox. From TMF.

http://www.fool.com/fool/free-report/18/sa-voiceaudio-so-280...

Your Remote Control Is Doomed

But that's good news for your brokerage account! If you act fast…

Great, can I throw all those remotes out now? Perhaps not yet. But, I'm glad to know there's relief in sight.
(144 buttons: the TV remote has 43 buttons, the cable remote has 60, and the DVD remote has 41).

kelbon

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13716 of 19983
Subject: Re: Ramble Date: 2/21/2013 12:32 PM
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MjH,

like looking through the looking glass eh?

I am ultra confident because I am not in this market. I have had a few years to think and observe and not been 'playing in this market'. Try it as it will clear you head and sharpen you views. You can see much more clearly how this market is without money worries cluttering things up.

If I like you were in this market I would possibly have problems sleeping at night and for good reasons.

If I get my entry I will rejoice. And if I dont I will wade into the waters when things are better anyway with GDP growth starting to perk up.

Gamblers are never confident. Currently I am not gambling.

good luck,

Dave

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13717 of 19983
Subject: Re: Ramble Date: 2/21/2013 12:35 PM
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MjH,

I dont get why you would send me to that link? Frankly it is a bit abusive to send someone to a link where they can add this story on how their portfolio went bust. But in this case it is completely ridiculous.

I have been clear that I am waiting for a very low entry. That infers I am not in the market. So how am I betting the farm? Or about to lose money?

What margin? I am too conservative to use margin.

Dave.....knows not to use margin from past experiences mind you.....

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13720 of 19983
Subject: Re: Ramble Date: 2/21/2013 1:04 PM
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So how am I betting the farm? Or about to lose money?

You're not about to lose money, you probably are already losing money.

How? Inflation is nibbling away at your buying power. Unless you have money that is paying you interest that is in-step with inflation you are, if not literally losing money, losing spending power. Interest rates are anemic, and have been for a while, and, they are likely to continue to be for a while.

You are not betting the farm, but don't neglect to water the crops.

kelbon

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Author: BFatConservative One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13721 of 19983
Subject: Re: Ramble Date: 2/21/2013 1:05 PM
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I sincerely don't mean any disrespect, nor did I associate you with margin trading. Last time I heard confidence in terms of predicting the market was when I heard from those very same posters, pre-financial ruin. I'm not telling you to add your story.

At the end of the day your confidence is what is ridiculous. Sorry, but it is true. You are saying that it is a nearly "sure thing". Every time I hear that my alarm goes off.

According to what you have said, you have spent most of the last two years on the sideline awaiting this correction. Inflation tells me your somewhere around 4%-6% in the hole.

As of today, my port that I self manage, which has been fully engaged for the last two years is up around 20%. There is a reason long-term investing works, and I would bet every time on the long-term investor riding up and down trends and staying invested, rather than market timing based on "2 dips and the third one is pure gold!" Good luck with market timing, but I submit unless you have an entire hedge fun staff at your disposal, you will meet mr. market and he will humble you.

MjH

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Author: rubberthinking Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13722 of 19983
Subject: Re: Ramble Date: 2/21/2013 1:14 PM
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I never said it was a sure thing.

I keep saying if it does not materialize then I go in when things are better in the economy. That is all I have said.

4 to 6% are not much....and 20% with the risks you are currently face is not worth it.

You guys are right not to be confident, but it is not me you have lost faith in......

Dave

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13732 of 19983
Subject: Re: Ramble Date: 2/21/2013 9:17 PM
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Just noticed Kelbon snagged the POD, albeit two days after he posted and they changed the subject line. (How's that work?)

Congrats!

B

PS I like ramble better, it's more succinct. :<)

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Author: LeKitKat Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Feste Award Winner! Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13743 of 19983
Subject: Re: Ramble Date: 2/22/2013 12:31 PM
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this thread started with how much information is too much? When you get to the point that the information overwhelms your ability to act on it, you have gone too far. We do tend to make things more complicated than they should be at times. In medicine you learn that it's best to apply a theory known as Occam's Razor to what appears to be a complex situation. It's probably more aptly applied to physics, quantum mechanics and math.

Occam's (or Ockham's) razor is a principle attributed to the 14th century logician and Franciscan friar William of Ockham. Ockham was the village in the English county of Surrey where he was born.

The principle states that "Entities should not be multiplied unnecessarily." Sometimes it is quoted in one of its original Latin forms to give it an air of authenticity:

Occam's razor is often cited in stronger forms than Occam intended, as in the following statements. . .

"If you have two theories that both explain the observed facts, then you should use the simplest until more evidence comes along"

"The simplest explanation for some phenomenon is more likely to be accurate than more complicated explanations."

"If you have two equally likely solutions to a problem, choose the simplest."

"The explanation requiring the fewest assumptions is most likely to be correct."

. . .or in the only form that takes its own advice. . .
"Keep things simple!"


In medicine when we see a constellation of seemingly unrelated symptoms, instead of giving the patient multiple diagnoses, we try to find one diagnosis that explains them all. So what looks like an effort to simplify on the surface is actually a thorough knowledge of each condition we are considering ruling that out because we know the details and arriving at the right one that can be acted on.

I have always found we are indeed very lazy and that we often look for the simple most common explanation because we do not have sufficient knowledge, time or energy to look for the zebras and take the easy way that settles on the readily available draft horse we use every day because we understand it. I am no more inclined to work hard either. It's frustrating and often produces dry holes that seem to have little value and consume too much time in a world where there are so many demands on that time. This applies to so many parts of our lives including our jobs and our approaches to investing.

What I have found is that investing time in what seems like useless information or even duplication of the information by looking at it from different POVs often ends up being a useful tool that with use gets easier and easier to use.


back MrTompkins as an example.

A few years ago I was struggling through trying to get a better value for ROICs and was looking through two different authors and books. One was by Stewart called the Quest for Value and the other was Copeland et al called Valuation. These are dense books and difficult to incorporate into valuation. MT has been doing that for several years. We spent a fair amount of time going back and forth on financial statements and ways to apply the technique and his attention to detail and getting the numbers to match to the decimal point was amazing and huge amount of work and effort. He has adapted that investment in time and experimenting with the concept into a structure that makes complete sense in his investment framework, but to the rest of us it's dense and overwhelming and difficult to jump into it at this late date in its evolution. So what are we tempted to do? First scan it and try to simplify and get to the bottom line. That's hard and the next thing we want to do is call it too complex to be of any practical use. We all want to simplify --human nature and Occam's Razor tells us it's a noble goal. The temptation is then to make things simpler than they actually are and we fail to incorporate new ideas and techniques and information that make simplification more elegant. The effort to understand the bones of the concept would require hours of catch up for the uninitiated. We then fall back on our own proven work horses and that's OK if they work. But it doesn't mean we should always try to make things as simple as possible without expending the effort to understand the zebras that might some day prove to be a handy tool.

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13746 of 19983
Subject: Re: Ramble Date: 2/22/2013 2:21 PM
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References to zebras…

For those who don't know, a dose of wisdom dispensed to medical students goes something like this: "When you hear the sound of hooves, think horses, not zebras."

Both for medical students, and everyone really, it's generally good advice. I suppose a caveat might be: after you are pretty sure it's a horse take a more careful look just in case it's a zebra with a brown paint job. (Though usually it isn't).

kelbon

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Author: rjf53 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13747 of 19983
Subject: Re: Ramble Date: 2/22/2013 2:28 PM
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For those who don't know, a dose of wisdom dispensed to medical students goes something like this: "When you hear the sound of hooves, think horses, not zebras."

Does this apply equally to medical students located in Africa?

Just saying,

B

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Author: kelbon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 13748 of 19983
Subject: Re: Ramble Date: 2/22/2013 3:35 PM
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Does this apply equally to medical students located in Africa?

What they tell medical students in Africa is this: "When you hear the sound of hooves, run like hell. Ask questions later"

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