1. On Market timing From A random Walk down Wallstreet (Malkiel)
A definition:
The strategy of moving money from cash to equities or long term bond funds based on a forecast of fundamental economic conditions
a.k.a.: market timing or asset allocators

2. John Boggle (founder of Vanguard fund)
“In thirty years in this business, I do not know anybody who has done it successfully and consistently…..
Indeed my impression is that trying to do market timing is likely to be counterproductive

3. Some data
Mutual fund managers have been incorrect in their allocation of assets into cash in essential every market cycle during the 70s and 80s
High cash allocations coincides almost perfectly with market troughs during 1970, 74, 83, & 87

4. More data During 80s Market provided a return of 16.7% But
If you missed the best 10 days of the decade (2528 trading days) the return was 12.6%

5. Malkiel’s Conclusion
Obviously, being out of the market during a period of sharp decline…saved you grief and money
But
Unless those timers got back in the market right after lows were hit, they were not more successful than investors who buy and hold (and they had more investment costs!)

6. My conclusion
We are wasting our time trying to predict major moves in the market.
It would be a better use of our time to try to be fully invested
buy and sell to get the best companies in our portfolio
Accept that we will be riding on the back of market trends

7. P.S. Malkiel was and is a stock picker
So,
What do you think?
P.S. Malkiel was and is a stock picker

8. Ten Questions to ask before Selling a Stock
Is the stocks future is fading fast?
Are you being rash, emotional or reactive?
Will the sale effect diversification?
What are the tax ramifications?
Are you selling because of the market--or the industry?
Is the stock overvalued or undervalued?
Are you cutting your flowers and letting the weeds grow?
Are you selling just because the stock’s price has gone up?
Do you have a better use for the money after you sell?
When selling to pay off a member withdrawal, have you considered all the options?
Investment Clubs for Dummies

9. Don’t sell because: The price hasn’t moved A paper loss A paper profit
Temporary bad news
Just to take action
Don’t sell if the market has fallen so far you have little downside risk

10. Deciding to sell First, consider costs (commissions, etc.)
Adverse management change
Declining profit margins
Deteriorating financial condition
Competition is effecting profits
Dependence on a single product
Economic circumstances change
It is a cyclical and the economy has peaked
To maintain balance by company size (or category)