Comment by 01100011 | Hacker News Reader

Comment by 01100011 | Hacker News Reader

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IDK what OP believes, but to me, the "Boglehead" strategy is great, with giant caveats.

Most devotees I talk to get visibly frustrated when I suggest that you can look at larger macroeconomic forces, like COVID, supply chain issues, Fed manipulations(both positive and negative) and make educated predictions on the direction of stocks. My guess is that these are folks who just don't want the frustration of learning about these things, and I get that. It is a significant cognitive load to maintain an understanding and awareness of market influencing factors.

I use a family member as an example who was told by their money manager to move to cash at the beginning of the year. That wasn't just dumb luck. Was it a sure bet? Nothing is in this world. Do you bring a winter coat to a July outdoor event in Phoenix? I mean, it could be cold, right? But yet the writing was on the wall for the direction equities and bonds would take this year.

Can you perfectly time the bottom? No. It's also important not to be too conservative. The majority of gains in a stock market cycle are made in the first sprint out of the gate when everyone is still fearful. But you can know when things are peaking and GTFO before the slide. You don't need to be Michael Burry to spot these things either. You just need to not watch CNBC and Cramer or any of the other paid shills.

Well so some stocks are obviously bad, it's not an strong-form efficient stock market for eg Nikola because turns out shorting small stocks can go terribly wrong. It's up to the people who actually own shares to sell them, or forfeit them, like this is worth nothing I'll put it on the exchange for a cent. And in fact on the other hand that is what naked shorting is, only without actually owning a share, identical to casting a ballot you didn't receive, like same as an immigrant or tourist voting without legitimacy, or a dead man's vote.

Obviously you can look at those factors and predict market movements based on them, the question is can you do that BETTER than everyone else in the market, including institutional investors?

Based on the last 9 months of performance, yes.

The problem with timing the market is you have to be right twice - you have to choose when to sell and when to buy back in.

On the other hand, DCA'ing you way through a market decline and recovery will always leave you in a better position than one where the crash never happened.

> problem with timing the market is you have to be right twice

And times like this when macro forces dominate it's not hard to predict. If you're talking about timing entry/exit over the past decade, sure, but now is not then, and it's bogleheads refusal to see that which is most frustrating.

But I'll say again, you don't need to nail it. Don't try to time the exact top and bottom, but don't pretend you can't get close.

I guess the lesson on macro now is when the Fed says it wants to cool inflation, market be damned, believe them. But in general I claim you cannot get close to top bottoms consistently- because so much of the movement happens so fast now, you can get 10% in days or weeks and if you are out of position all your effort was for nothing. I’ve been trying for decades but would have been better taking the advice to put it in the SP500.

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