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Market Timing

dorkfish said: "It seems that this is always a topic of conversation when talking with those investors who buy and sell INDIVIDUAL STOCKS. I capitalized individual stocks because it's important to know exactly what I'm talking about here. Those of us who have in the past and still do own shares of UPS will find this post interesting indeed. The normal mentality of a UPS stock owner is to buy and hold......forever. This is in all practical applications a terrible waist of some great returns. But you know, it's hard to be critical of a success story like UPS the company. In the early days the company grew very fast. Then there was a few periods of slower growth. Then there were a few periods of faster growth. The problem I have with the buy and hold method of owning UPS is that over the last seven years, that method has been a disaster to say the least. Sure, if you were given shares for your services that is a good thing, but what about your shares that you have already owned? Since going public in 1999, the shares have not gone up a bit. The day the shares started trading on the open market it went to $76.00 a share. Do you know where the shares closed yesterday? October 26th, 2006? They closed at $74.87. That's just ...............grrrrr. Throw in the averaged out 1% divivend and you can see this has not been a great stock to hold. Infact, it's been just bad. So what to do? If you look at a 5 year chart of this stock you will notice several swings in the price of $10.00 or more, what does that mean? What it means is that if you would have sold shares at $83.00 a couple of years ago, and then bought them back in the low 60s, you would be a happy owner of UPS shares. Timing the market has been called many bad names. The problem as I see it isn't trying to time the market, it's the companies you are trying to time it with. If you time the market with a small cap company with little history, guess what, you lose most of the time. If you do market timing with the likes of UPS, FDX, INTC and list of other blue chippers, you will have a better chance of success in investing. So you buy too high, you hang on to the stock. If you buy good companies, you can time the market in a slow motion way. My only recommendation is that you do this with only the best of the best. And if you can't lose the money you are doing this with, then you need to buy a good mutual fund and leave the investing to the experts. Just my opinion!"

JohnL said: "I think all of us here are pretty much market timers. Lot of daytraders and short-term holders here. However, you can't discount the greatest individual returns come from buy-and-hold. People who invested in Walgreens, Microsoft, HPQ, Merill Lynch, etc. - these are people with truly gargantuan returns, especially with dividends reinvested. The style just isn't for me though. I resolved to hold EuroZinc for the long term (5 or so years) and then ended up selling out when I felt it was overvalued. I can't stand holding overvalued stocks, knowing they will "correct.""

duck_oil said: "I bought UPS at $68 after the big drop in July/August, can't really remember. It's provided a nice 10% return. I would like to hold it back up to $83 but we'll see."

Rickster said: "So....What time is it?"

Mr. Gekko said: "[QUOTE=Rickster]So....What time is it?[/QUOTE] lol! Smart A$$! Seriously though, I find it timing hard unless I've watched a particular stock for at least a few months. Maybe it's my inexperience though."

neurotrader said: "[QUOTE=JohnL]I think all of us here are pretty much market timers. Lot of daytraders and short-term holders here. However, you can't discount the greatest individual returns come from buy-and-hold. People who invested in Walgreens, Microsoft, HPQ, Merill Lynch, etc. - these are people with truly gargantuan returns, especially with dividends reinvested. The style just isn't for me though. I resolved to hold EuroZinc for the long term (5 or so years) and then ended up selling out when I felt it was overvalued. I can't stand holding overvalued stocks, knowing they will "correct."[/QUOTE] I for one make my living timing markets. Many of those great individuals that are long term holders have underperformed over the last few years. In my 20+ trading years, I can make a nice living timing entry and exits. :)"

Lagg-Alot said: "I have been timing FMCN for a few months now, but only to the down side. The market in general is pretty high, it could go higher but will most likely go lower. Time to short."