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> Buy low and sell high. After selling keep the cash around until things go down again and it's time to buy. And what do you do when things never go down (belo

> Buy low and sell high. After selling keep the cash around until things go down again and it's time to buy. And what do you do when things never go down (below your selling price)? Stay in cash for the rest of your life? The S&P in 2013 was at an all-time high. If I sold then, I would have missed out on a tremendous amount of growth. Today the index is about double the 2013 level (which was itself an all-time high). So now that I've missed all this growth, what should I consider "buying low"?

hinkley 7y ago
Up until about the time of Jobs' death there was a very clear market timing window on AAPL at every major product announcement. The stock would always run up in the day before the event. If the announcement was good, it would run up more after the event, but either way things would calm down after a few more days, because there was no way that price was sustainable. So every year you could make an extra 5% above the normal trend line for the stock by profit taking and buying back in immediately. The short term capital gains taxes would have eaten into that pretty hard.
- galaxyLogic 7y ago
  Right. I was thinking about something like that. If you were doing that trading within your IRA, no tax consequences.
- navigatesol 7y ago
  >Up until about the time of Jobs' death there was a very clear market timing window on AAPL at every major product announcement. Jobs leaving Apple was an even better window. It's easy to point to stuff in history and say it was an obvious opportunity. Let's hear your predictions: what are you buying? Selling?
  - hinkley 7y ago
    Yes but the discussion was about how some things work in retirement accounts that don’t work elsewhere. Having to pay short term capital gains taxes every time you want to take profits in a stock that sawtoothing upward is an example of that. Possibly the example. To answer your question, I haven’t had anything that good since. I’ve fallen back to passive pretty much.
galaxyLogic 7y ago
> If I sold then, I would have missed out on a tremendous amount of growth But that was a singular point in time. It would be like the reverse of a jackpot, IF you sold EVERYTHING just at that singular point in time. But if you did a little bit of trading without tax-consequences continually, maybe you could win on average? I agree the system is probably rigged with all the high-frequency trading and such. But I wonder if the best strategy is always to stay put in index funds. And banks make money by trading don't they?
- function_seven 7y ago
  > But that was a singular point in time. It would be like the reverse of a jackpot, IF you sold EVERYTHING just at that singular point in time. All decisions to buy or sell happen in singular points in time. If you were sitting in front of your IRA account in 2013, it definitely looks like a high point, right? How much of your IRA equities do you decide to sell? And whatever that amount, when do you change your mind and jump back in the market? When the stocks are at a new high in 2014? or 2015? or 2016? (All higher levels than the previous). > But if you did a little bit of trading without tax-consequences continually, maybe you could win on average? Maybe. But probably not. The only information you have is hindsight. You can never know if you're selling on a high or buying on a low. The price can always go higher (after you sell), and the price can also always go lower (after you buy) > And banks make money by trading don't they? The article we're discussing here shows that they make their money in a lot of ways. Beating the market isn't one of them, though. And to the extent that banks do profit on stock speculation, they also have a different risk tolerance than you or me. They're not going to retire one day, and if they do lose everything, the government will bail them out. >

hinkley 7y ago

Up until about the time of Jobs' death there was a very clear market timing window on AAPL at every major product announcement. The stock would always run up in the day before the event. If the announcement was good, it would run up more after the event, but either way things would calm down after a few more days, because there was no way that price was sustainable. So every year you could make an extra 5% above the normal trend line for the stock by profit taking and buying back in immediately. The short term capital gains taxes would have eaten into that pretty hard.

galaxyLogic 7y ago
Right. I was thinking about something like that. If you were doing that trading within your IRA, no tax consequences.
navigatesol 7y ago
>Up until about the time of Jobs' death there was a very clear market timing window on AAPL at every major product announcement. Jobs leaving Apple was an even better window. It's easy to point to stuff in history and say it was an obvious opportunity. Let's hear your predictions: what are you buying? Selling?
- hinkley 7y ago
  Yes but the discussion was about how some things work in retirement accounts that don’t work elsewhere. Having to pay short term capital gains taxes every time you want to take profits in a stock that sawtoothing upward is an example of that. Possibly the example. To answer your question, I haven’t had anything that good since. I’ve fallen back to passive pretty much.

galaxyLogic 7y ago

> If I sold then, I would have missed out on a tremendous amount of growth But that was a singular point in time. It would be like the reverse of a jackpot, IF you sold EVERYTHING just at that singular point in time. But if you did a little bit of trading without tax-consequences continually, maybe you could win on average? I agree the system is probably rigged with all the high-frequency trading and such. But I wonder if the best strategy is always to stay put in index funds. And banks make money by trading don't they?

function_seven 7y ago
> But that was a singular point in time. It would be like the reverse of a jackpot, IF you sold EVERYTHING just at that singular point in time. All decisions to buy or sell happen in singular points in time. If you were sitting in front of your IRA account in 2013, it definitely looks like a high point, right? How much of your IRA equities do you decide to sell? And whatever that amount, when do you change your mind and jump back in the market? When the stocks are at a new high in 2014? or 2015? or 2016? (All higher levels than the previous). > But if you did a little bit of trading without tax-consequences continually, maybe you could win on average? Maybe. But probably not. The only information you have is hindsight. You can never know if you're selling on a high or buying on a low. The price can always go higher (after you sell), and the price can also always go lower (after you buy) > And banks make money by trading don't they? The article we're discussing here shows that they make their money in a lot of ways. Beating the market isn't one of them, though. And to the extent that banks do profit on stock speculation, they also have a different risk tolerance than you or me. They're not going to retire one day, and if they do lose everything, the government will bail them out. >