Saturday February 13, 2010
Sy Harding authored Riding the Bear - How to Prosper in the Coming Bear Market! Released March, 1999, the Dow topped out just 9 months later on January 14, 2000.
He called the Nasdaq top and advised selling it short in early March 2000 as it passed 5,000 predicting it was about to plunge 35% to 3,300. (Confirmed by an article in Barron's March 6, 2000 issue). The Nasdaq topped out just four days later, on March 10, ending its great 1990s bull market, and has recovered less than half of its losses even 8 years later.
Sy Harding gave a buy signal for a "significant bear market rally" April 2, 2001! The market bottomed just two days later, on April 4. Eight weeks later the S&P 500 was up 19%, the Nasdaq up 41%.Harding eveloped the Seasonal Timing Strategy© in 1998, which had a compounded total return over the last 9 years (from 1999-2007) of more than triple the total return of the S&P 500 (when 85% of professional money-managers and mutual fund managers fail to even match the S&P 500 over the long term). Further it did so with 50% of market risk and just two trades a year.
He authored the 2007-08 book Beat the Market the Easy Way - Seasonal Timing Strategies That Double the Market! which introduces a remarkable Presidential - Cycle Strategy.
From Sy Harding ...
We have been called "the unknown advisory service that beats the big names! We've been quietly outperforming them for 21 years. The reason is that while the 'big names' spend most of their time out on the interview and seminar circuits promoting themselves, we keep our nose to the grindstone, working on what our subscribers pay us to work on - constant analysis and research of the markets.
We have been consistently ranked in the Top 10 Market Timers in the U.S. by Timer Digest since 1990.
1990: # 2 Stock Market Timer in the U.S.
We are now in our 22nd year (2009) of providing market research to professionals and serious investors. Our research is available as The Street Smart Report Online.
It includes our commentaries and analysis of the economy and markets; charts, analysis, buy and sell signals, on the market indexes, sectors, ETFs, stocks, short-sales, bonds, gold, etc.: and three specific portfolios.
Both of our strategies (our Seasonal Timing Strategy, and Market-Timing via Technical Analysis) recognize that in both bull and bear markets, stocks rally and decline, then rally again.
Our strategy incorporates technical analysis where the goal is to buy as near as possible to the correction lows and sell as near as possible to the rally tops, keeping our profits from the rallies, and then making some of the gains all over again in the next rally, as well as sometimes making additional gains in market corrections through short sales and mutual funds designed to make gains only in down markets.
Of course no one can get the exact tops or bottoms, but any degree of success at all will obviously beat buy and hold, and with less risk, as one should be out when the market is most likely to have its problems.
On Buy & Hold investing
The fact is that buy & hold investing doesn't work in the long run. It only becomes popular after long bull markets have eliminated investors’ normal understanding of market risk.
For instance, buy and hold investing was out of favor for the entire 17 years from 1965 to 1982. And again from 2001 to 2005. And for good reason!
From 1962 to 1982, the market had numerous rallies and corrections of 25% to 45% for market timers to take advantage of. But for buy & hold investors the Dow gained just 43 points (5%) in 20 years. Yes, that’s only 0.25% per year. See chart at left.
With such little upside, yet hit by numerous 25% to 45% declines, virtually all buy & hold investors gave up on the strategy, usually with large losses at one of the correction lows.
Market timers, however, thrived. Those 25% to 45% corrections and rallies provided wonderful opportunities from both up and down markets. Buy & hold was ridiculed. Market timing was king.
Buy & hold investing was also out of favor for the first 12 years of the recent long bull market. Again for good reason; Serious corrections in 1981, 1983, a crash in 1987, and a bear market in 1990.
However, thanks to the unusually one-sided bull market from 1995 through 1999, Wall Street was again able to convince investors that a buy & hold strategy is a viable strategy.
As usual, it was not, particularly for the Nasdaq, which in 3 years plunged 77%. How long will it take buy & hold investors to get back to even? 10 years? 15 years? It's already been 8 years!
The market always comes back?
Brokerage firms say "the market always comes back", without pointing out that they don’t always come back within an investor's lifetime. It took 26 years after the 1929 crash, until 1955, for the market to come back. Ten years later, in 1965, the Dow hit 1000 for the first time. It then declined 35%, and it was 16 years, in 1981, before it came back to 1000 and began to exceed that level.
After the market top in 2000, it took 7 years for the Dow and S&P 500 to return to their levels of 2000. (As shown above the Nasdaq still has not). That's a total of 49 years out of the last 77 years that buy and hold investors would have been waiting for the market to 'come back'. No wonder buy & hold is ridiculed by experienced investors.
By the way, it isn't even the same stocks that come back. Many leading stocks in one bull market are nowhere to be found in the next. That's because the Dow and S&P 500, which supposedly prove that the market always comes back, are constantly undergoing changes that make that claim absolutely silly.
As stocks within the indexes falter, they are replaced with newer, stronger stocks that more accurately represent the economy at the time. For instance, 43% of the stocks that were in the Dow 10 years ago no longer are in that index today.
In the meantime, since 1900 there have been 29 bear markets, or one on average of every 3.4 years, with declines that averaged 31.2%. The 9 worst averaged declines of 49.1%, (one of those monsters on average of every 10 years). By definition a buy & hold investor is guaranteed to suffer every one of them.
Our goal is to help you be street smart! You'll never buy low and sell high listening to brokerage firm and mutual fund spokesmen, and the media that kowtows to them!