Help needed!!

[ER59]

I did not know what forum my post would belong to, so I am placing it here.
I am one of those hapless investors, who managed to keep long positions thru all the down days, sell them the day before any bounces up, and then buy again just to sit thru another 10-15% downturn.
To make the story short – I’ve been ‘buy and hold’ since mid 90, and as of today I am 50% down. Finally, after selling all yesterday, just to see a 6% bounce today, I came to the conclusion, that I can not take it anymore, and more importantly - I don’t want to do it.
So here is my question: Can any one recommend a good financial adviser who subscribes to iTulip thesis?
Any reply would be greatly appreciated.

[Mn_Mark]

I sympathize with you. These are difficult times for an average person to hold on to what they've saved over the years, much less to try to grow it.

I don't have much faith in financial advisors, myself, since I think that in general the principles of wise investing are as accessible to a normal, intelligent person as they are to a "financial advisor", and that you just end up paying them fees for performance that will not be much better than what you could get yourself. If you are down 50% then I think you are right around the median, which means that probably most people with financial advisors are doing about the same as you are.

I think the basis of investing is the ability to evaluate an asset class's fundamentals and decide whether it is currently cheap or expensive. I'm not sure this is that complicated, either. The basic idea is to determine whether the cash flow generated by an asset class is a bargain compared to the flow generated by other asset classes. Sometimes none of them are a bargain, as is the case right now. In those times, the best "investment" is plain old cash, or even better, real money (precious metals). It's been said ad nauseum, but at certain times return OF capital is more important than return ON capital, and this is one of those times.

For myself, I've been out of the stock market for some years based on looking at charts of historical P/E ratios and seeing that even after the 2000 crash, stock P/Es have been way too high to make them a bargain. When real estate prices went up to four or more times the average income instead of the historical average of 3 times, it was clear that RE was no bargain. With bonds paying such small yields for the risks involved, they seem to be no bargain (though I am fairly ignorant when it comes to evaluating bonds). And with regard to FRNs (U.S. cash) it seemed clear to me that any asset that can be generated in unlimited quantities by people not personally responsible for the consequences was a bad bet. So that has, in my opinion, left only precious metals and (until recently) commodities as possible good bets. And commodity prices had reached a bubble level by historic norms too.

So I wouldn't be too hard on yourself or discouraged. No one out there has this figured out. Everyone who seems brilliant looks like a fool five years later (except iTulip of course :)).

My personal plan is to keep an eye on the gold/Dow ratio and the P/Es of the stock market indexes, and when the gold/Dow ratio is back towards 1 (historically the end of gold bulls and beginning of stock bulls) and the P/Es are down in the 5-8 range, I will begin moving out of PMs and cash and back into broad stock indexes, reinvesting the divendends. That could be several years from now, but I'm content to wait for those long-term reliable signals to come along. Meanwhile I'll watch the carnage in the market from the sidelines and be content with the little bit of interest I can earn on my Treasuries.

If you really want an iTulip-style financial investor, I suppose you could subscribe to their Premium service and follow their investment advice yourself.

[*T*]

I did not know what forum my post would belong to, so I am placing it here.
I am one of those hapless investors, who managed to keep long positions thru all the down days, sell them the day before any bounces up, and then buy again just to sit thru another 10-15% downturn.
To make the story short – I’ve been ‘buy and hold’ since mid 90, and as of today I am 50% down. Finally, after selling all yesterday, just to see a 6% bounce today, I came to the conclusion, that I can not take it anymore, and more importantly - I don’t want to do it.
So here is my question: Can any one recommend a good financial adviser who subscribes to iTulip thesis?
Any reply would be greatly appreciated.


Someone said round here that it's like exercise - you can't really pay someone to do it for you, unfortunately. I doubt you could find someone to pay who cares about your cash more than you, ergo, you will do a better job of looking after it.

[hoodoo]

Hi,

I've struggled with the very same issue. I find that the do it yourself mantra, while appealing has some shortcomings. Would anyone here feel comfortable performing minor surgery after reading several (or even several dozen) anatomy books? The problem is that many of the fine points of financial management and investing require years of investigation and learning to execute properly.

Another point, iTulip doesn't offer specific investment advice. You will mostly get macro calls from EJ and then find a very active and organic set of discussions amongst members that seek to invest on those calls. My problem, time and again, is a lack of depth of my understanding to assess the discussions and strategies and then successfully implement them.

However, on the macro calls, I've done well and these are easier to execute. The advice has largely been to exit stocks, hold cash, short term treasuries, and a small measure of precious metal. Following this advice is tantamount to following the doctors orders to "take two aspirin and call me in the morning" . This I can do... More than that - I've not been too successful thus far.

Hoo

[friendly_jacek]

Can any one recommend a good financial adviser who subscribes to iTulip thesis?
Any reply would be greatly appreciated.

I doubt if you will find any.

There are a few that are contrarian such as Hussman, Heebner, Bill Cara, Marc Faber.

You can google for those names and see if they can manage your money.

[ER59]

Unfortunately, for the last 2 months my net worth decreased to such a level that none of those guys will even speak with me :)

[Jim Nickerson]

I did not know what forum my post would belong to, so I am placing it here.
I am one of those hapless investors, who managed to keep long positions thru all the down days, sell them the day before any bounces up, and then buy again just to sit thru another 10-15% downturn.
To make the story short – I’ve been ‘buy and hold’ since mid 90, and as of today I am 50% down. Finally, after selling all yesterday, just to see a 6% bounce today, I came to the conclusion, that I can not take it anymore, and more importantly - I don’t want to do it.
So here is my question: Can any one recommend a good financial adviser who subscribes to iTulip thesis?
Any reply would be greatly appreciated.

ER, only time will tell whether or not your personal capitulation Thursday was a good or bad move.

Life would be a lots easier if one didn't have to consider the future and the possibilities of reaching something called "old-age," but unless one has a known fatal disease now that prevents consideration of one's long term financial state, a responsible person must do something with regard to the possibility one will reach some aspect of old-age. Actually, middle life starts at 28 years and old-age at 56.

I have never used a financial planner, so I can't recommend one. Someone wrote above, and I have written it more than once on these pages, NO one is as truly interested in how your money grows than you should be. If you find a financial planner with a good record who is willing not to charge you anything when his/her recommendations are not resulting in your wealth growing, then latch on to him/her and give them a shot at management (and come back here and tell us you found such an advisor); otherwise, my opinion is I think you are better off managing your own monies.

One newsletter with which I have a long association is The Chartist, last I looked cost about $250/year and Dan Sullivan, the writer, has both a stock and mutual fund letter. There are two things that have attracted me to this letter: first and foremost is he contends that he invests his money in his Actual Cash Account in the exact things he recommends to subscribers--whether or not that is actually true, I take his word for it. Secondly, in the ~20 years I have mostly subscribed to his letter, I think his strongest points have been that he has been pretty good with his timing and cautious when re-entering the markets after a bear market, and he has been willing to go to 100% cash at times and is generally very disciplined about selling losing positions and riding those that are going up.

In his stock letter, only once have I bought the actual stocks he recommended because he is a momentum investor: buy high and sell higher, which though a valid method, it has just not been my cup of tea.

I have not subscribed to his mutual fund letter, but for some people it might be a better choice, in that there would be greater diversification probably in whatever he recommends. The Chartist is on the web.

A second letter, to which I have not subscribed is one by Sy Harding; however, I think it is worthy of consideration. Harding is someone who really does not agree with "buying and hold" strategies. He has a "system" of seasonal trading that he maintains has been quite successful. He also has written a book, which I have not read, that I believe outlines his philosophy and season trading system. I believe he too is quite willing to be totally out of the market at times. I looked once at his subscription rate and I think it was $345/year.

Harding posts a comment each Friday, which unfailingly I find interesting, at http://decisionpoint.com/TAC/TopAdvisors.html and here is yesterday's http://decisionpoint.com/TAC/HARDING.html and there are links in my last link that will take you to Harding's site.

What follows is not directly related to this thread you started, but I will put it up anyway. ER, if you find the following is pertinent and you are looking for direction, Harding's letter might be the better of the two I mentioned, because I think Sullivan is probably months away from issuing any sort of a buy signal, but of course do not know that as fact. I think Harding is already on a buy since early November, but that is my conjecture from following his comments at decisionpoint.com.

The copied image below is from http://decisionpoint.com/TAC/PAULENOFF.html and Paulenoff's comments there explain the picture.


http://www.mptrader.com/images/charts/http_3rcNWk.gif


To me there is little doubt that the US equity indices are very oversold, and my opinion has been exactly that (the markets are very oversold) for at least 4 to 6 weeks during which my opinion ain't been worth spit. Below is a chart I worked up back to 1980 just to show the RSI levels now compared to the bear market lows in 1982, 1987, and 2002. I don't think there are arguments that negate the observation that "the US equity indices are very oversold." If there are, I invite anyone to put them forth.

Follow comments below chart.

http://www.itulip.com/forums/attachment.php?attachmentid=827&stc=1&d=1227412832

Below is basically the same chart, but truncated at 9/22/08. If you note the RSI, just two months ago it had not reached even the low level it had in 2002. Incidentally, I do not know what parameters went into construction of Paulenoff's RSI, but I am sure it was a bit different than the ones on these stockcharts.com charts I am putting up; however, I don't think that invalidates my observations.

http://www.itulip.com/forums/attachment.php?attachmentid=828&stc=1&d=1227413582

Now below here is again the same chart but truncated at 10/21/08. Note that just a month ago, here the RSI had reached its lowest level seen over the entire span of time in the chart; however, in the last four weeks it has gone to even a newer low level (go back and look at first stockcharts.com chart I put up). Who knows how much lower it is possible for it to reach, but it must be closer to a bottom that at anytime so far.

http://www.itulip.com/forums/attachment.php?attachmentid=829&stc=1&d=1227414308

I don't know that some sort of intermediate bottom (meaning not a final bottom) could be in place as of Thursday 11/20/2008, but right now almost every sentiment indicator at which I look is at a level consistent with some sort of a bottom. The exception is the ISEE tally of net small investor longs positions in puts and calls http://www.ise.com/WebForm/viewPage.aspx?categoryId=126&header3=true&menu0=true . It still has not reached levels seen even earlier this year when the SPX was 470 points higher in March, and to me that means there is still some signficant number of investors who have not capitulated. Mark Hulbert has also written recent pieces that point out that the net short recommendations of short-term newsletter timers has not recently been as high as it was when the markets were higher earlier this year, so that too suggests a lack of capitulation of supposedly smarter-than-average investors. To say that again, the letter writers were more bearish when the markets were higher, and on a contrarian basis, that is not good support for a notion that the equity markets have put in at least a tradeable low.

Personally, I am positioned long for a bounce, but I am not convinced that it will do anything for me except lose more money.

ER, are you still reading or did I lose you? Uncle Jack (http://www.itulip.com/forums/member.php?u=131) (I hope that link works) is a poster here who also is a fee for service financial planner. I have never taken his posts to be hawking his services, but he is someone whom you might contact (private message) and inquire as to what he offers, how he thinks, and what are his associated fees.

I like people who put up something in their biographies as you have. I note you are home-schooling a daughter, so I surmise that you think her education is important enough that it not be left to others. To my thinking, which is not always correct by any means, looking after one's own wealth approaches the importance nearly equal to trying to insure one's childrens' educations.

Good luck, or whatever they say in Russia.

[ER59]

Jim,
Thanks for the reply.
I was waiting for this elusive bounce since mid october, which cost me another 20%. But the fact that I sold all last Thursday is a sure indicator that the bounce is about to start (or has started friday):)

[ER59]

Jim,
when you say
Personally, I am positioned long for a bounce, but I am not convinced that it will do anything for me except lose more money.

what exactly do you mean?
1.are you keeping your long positions?
when you must be loosing money last couple of weeks
2. are you in cash?
then how do you know when to buy?

[Jim Nickerson]

Jim,
when you say

what exactly do you mean?
1.are you keeping your long positions?
when you must be loosing money last couple of weeks
2. are you in cash?
then how do you know when to buy?

I don't know what any of that shit means; I just see stuff elsewhere that sounds good, then copy it here, ER.:)

"long" means owning a position on which you profit if the asset goes up in value. If you are "long" GM and it goes from $3 to $4, you make money. If you were "short" GM, you would lose money on the $3 to $4 move, but if it went from $3 to $2, you would make money being short. You might look in investopedia.com for an expansion of these definitions and deeper explanation.

There are so-call "inverse" ETF's and mutual funds which by investment in futures (which I don't know jackshit about) advance if the underlying asset or benchmark goes down in value. For example, SDS, appreciates approximately twice whatever the underlying SPX (SP-500) loses, or vice versa. If SPX goes up 1%, then SDS goes down ~2%. In this case, in owning SDS one would be artifically "short" the SPX.

I, personally, have been positioned in things that require them to appreciate in order for me to make a profit, if that is what you asked in the third line.

I am ~50% long stuff, and ~50% in cash.

I don't know when to buy things usually. I think I do when I place an order and more often than not, I am wrong. Occasionally I am correct and make a profit.

For an inexperienced investor, perhaps the best thing is to subscribe to a decent newsletter and consider doing whatever it suggests with some portion of one's investable assets. Reading that person's thought about their recommendations should result in some sort of educational experience.

Ask again, if I haven't answered what you are wishing to know.

[TRake]

Anyone,

I am looking for some tax help so I thought I would post under this thread. My problem is that I have a Traditional Self-Directed IRA that I started in 2008, a Roth IRA, and a Coverdell Education account for my son. I know that some of my contributions to the Trad IRA and the Coverdell should be tax deductible, but I am struggling to find answers. I would be more than happy to read the entire tax code, but I am running out of time this year. Any suggestions or recommendations would be greatly appreciated.

TRake

[ThePythonicCow]

A second letter, to which I have not subscribed is one by Sy HardingI subscribe to and recommend Sy. For the 90% of the time that the market is behaving anything close to sensibly, he's outstanding. Of course, I repeatedly fall victim to the fear that this is the 10% of the time that it's different, and often refuse to follow his advice, usually to my disadvantage.

One serious advantage of "old guy newsletters" such as Sy's is that it gives you better advice and insight, for less money, because they're selling their insight and education, not trying to earn fees off individual account management.

[doom&gloom]

This is something you should get from a CPA, not this board.