[Zetice]

EMH being settled isn't of issue here, and I did not claim the markets followed a random walk. It's the name of a book, not a theory pushed by the book itself. The fact that you haven't even heard of the book speaks volumes as to your education in personal finance.

The basics of investing are settled for individuals, and you are not operating at a level of sophistication to rise into the areas of finance that are debated.

These aren't "my" methods, they're the methods. You either do these basic things as a retail/individual, or you lose money. Period.

[fantasticshower]

I'll admit I haven't read the book completely or in a long time but is it not about how the EMH is true and so anything other than B&H low-cost index funds is a fruitless pursuit? Doesn't he back that up with the random walk theory of asset prices?

Instead of me assuming I know what you mean by the methods, would you mind stating what they are?

I think we could agree that some of them are:

* Have a sound plan (I'm sure we could debate what makes a plan sound)

* Stick to the plan

[Zetice]

If your plan is "throw my money into a pit" that is not a good strategy, even if you stick to it. So no, we would not agree.

You ignore Nejat Seyhun's 1994 paper "Stock Market Extremes and Portfolio Performance" [0] which says:

> For the 1963-1993 time frame, the findings were similar. The index gained at an average annual rate of 11.83%, for a cumulative return on $1.00 of $23.30 over 31 years. If the best 90 trading days, or 1.2% of the 7,802 trading days, are set aside, the annual return tumbles to 3.28% and the cumulative gain falls to $1.10.

And from ARWDWS [1]:

> The past history of stock prices cannot be used to predict the future in any meaningful way. Technical strategies are usually amusing, often comforting, but of no real value.

Further:

> Using technical analysis for market timing is especially dangerous. Because there is a long-term uptrend in the stock market, it can be very risky to be in cash. An investor who frequently caries a large cash position to avoid periods of market decline is very likely to be out of the market during some periods where it rallies smartly.

[0] https://www.stayingrich.net/wp-content/uploads/2016/05/Towne...

[1] https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/03933...

[fantasticshower]

A lot of people would be better off it they just took a $100 a month and put it under their mattress, i.e. throwing money into a pit. There are obviously many better ideas than that.

Thank for for that paper, I'll give it a read.

The next line in Seyhun's paper is more interesting to me and the focus of my research and strategy:

> If the 10 worst days are eliminated, the annual return jumps to 14.06%, and the cumulative return increases to $44.80. With the 90 worst days out, the annual return rises to 21.72% and the cumulative gain to $325.40.

I believe this paper describes a strategy that accomplishes that goal relatively well: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4346906

[Zetice]

The point is you cannot know which days are the worst days ahead of time.

Also uncited and unpublished papers aren’t worth the ink they’re printed on.

[fantasticshower]

If you're open-minded, give the paper a read. They suggest a method, that you can verify yourself, for figuring out which months are likely to be worse.

The paper you shared defines "in the market" as long equities and "out of the market" as long T-bills. The paper I linked looks at other assets you could rotate into besides T-bills. How could that one change (they offer several other ideas) impact the results of your paper?

If that's not interesting to you, skip the paper I linked.

Personally, I believe that type of research is still valuable. I don't structure my life just based on things in published and cited articles.

[Zetice]

As with literally everything else of this nature, it's overfit for the past, and in future applications inevitably fails.

This isn't about interest, it's about value. What you're proposing is flat out wrong, and has been shown to be so in hundreds of different ways.

[fantasticshower]

You may just ignore this (dear thread-reader may not!) since it's on a blog but how do you fit this into your mental model of market phenomena?

https://allocatesmartly.com/diving-deeper-does-the-day-of-th...

[Zetice]

If you can't smell the salesmanship taking place on this link, there is a whole lot more wrong with your filtering abilities than I had initially thought.

So based on this, I think you have a filter problem; you seem to be unable to accurately evaluate sources for their credibility, and take in any/all arguments without understanding how easy it is to be manipulated by un-credible sources into believing hard-to-disprove ideas that are nonetheless actively harmful to you and your ability to grow your investments.

This leaves you susceptible to charlatans and snake-oil salespeople, which fully explains your desire to believe proven-wrong ideas on investing. When you lose out on these market timing attempts, you apparently do so in a way that allows others to profit directly off of you, and you further advocate for others to follow suit.

You're a great mark, I'll give you that.

[fantasticshower]

I'm not sure why I feel the need to convince you. I think your confidence in the face of contradictory evidence that I've seen triggers something on an emotional level for me. I also feel confident I am correct but you disagree.

Hopefully you, someone reading this thread, or I get something beneficial out of this, though! I hope you are successful with your investments and they give you peace of mind.

[Zetice]

You haven't presented contradictory evidence, you've presented garbage con-man scribblings dressed up as contradictory evidence.

The fact that I'm capable of seeing that and you aren't is what folks ought to glean from this conversation.