Timing the market

It would be more helpful to create a chart for this and map it to STI index. Earnings can fluctuate fast QoQ though depending on economy.

But yes it's a good indicator, buffet also had a similar one measuring market cap to GDP ratio which has been quite accurate also.

For Opmi, if u spend enough time looking at companies earnings u will tend to get an Idea of how expensive companies are getting and also which sectors are getting overvalued and which are very undervalued.

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Timing the Market or Time in the Market?

1. https://www.investopedia.com/articles/st...esting.asp

2. http://www.chesler.us/resources/academia...timing.pdf

Quote:In the process of switching from stocks to cash and back, you may miss the best years of the market. In his article on market timing in 1975, Bill Sharpe suggested that unless you can tell a good year from a bad year 7 times out of 10, you should not try market timing. This result is confirmed by Chua, Woodward and To, who use Monte Carlo simulations on the Canadian market and confirm you have to be right 70-80% of the time to break even from market timing. 

Holding more cash now because I sell when counter exceed my valuation. Now >60% cash on cash/(stock+investable cash) basis. But I am trying hard not to sell out of fear. One reason is I know I cant keep cash position when everyones making money and market keep climbing the wall of worry. I will then, probably buy again at a higher price out of greed, right before the crash!



I am now both fearful and greedy, and many ppl are the same too. 

A lot of psychology at play. Haw par went up 4+% and still going up after I sold them and I am very tempted to get them back, questioning my previous valuation etc. 

I will visit valuebuddies more frequently. Just to remind myself bout value investing, where we buy/sell based on valuation. Whether Graham or Fisher or Buffet. Also come here to see the Graham quote despite knowing it. Ok, my rather "spiritual" post for vb.

Talk about cyclical stocks coupled with market timing. Does anyone find an industry now resembling the O&G sector when they were booming and valuations are set at sky highs?

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(29-01-2018, 04:00 PM)Life is a game Wrote: Talk about cyclical stocks coupled with market timing. Does anyone find an industry now resembling the O&G sector when they were booming and valuations are set at sky highs?

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Possibly Aerospace (Boeing at 30+ P/E, Airbus 60+ P/E). That said I know next to nothing about the Aerospace Industry. Some part of it (space launches) is under pressure due to SpaceX's dominance in the recent years.

Semicon/electronics industry now booming and rich valuations on some stocks in that sector

If you are talking US based stocks then I would say look at the S&P 500 (thats a lot of booming sectors and company) I would say at the moment is more like most industry is cyclical high and overvalued there.

(29-01-2018, 05:29 PM)BlueKelah Wrote: Semicon/electronics industry now booming and rich valuations on some stocks in that sector

If you are talking US based stocks then I would say look at the S&P 500 (thats a lot of booming sectors and company) I would say at the moment is more like most industry is cyclical high and overvalued there.

Semiconductor is interesting because it is both in cyclical high and secular growth (lot's of opportunity such as IOT, Machine Learning, Blockchain, Mobile etc.). That said, yes, there are spots (AMD etc.) that seems quite richly valued.

The US stock market is ridiculously overvalued. At least in Singapore, valuation are backed by earnings growth. SG investors will sell off when there is disappointing earnings. In the US, companies barely have any growth and are yet priced like growth stock (look at the old giants - Boeing, Macdonalds in the Dow Jones). It is a broad-based overvaluation across almost all sectors. A lot of people invested in the US market are going to get hurt when there is a correction. Most people are dismissing the business cycle.

Oh yes, and semicon, electronics, automobiles is booming right now as well. In sgx, there is Micro-Mechanics, UMS, AEM, Hi-P, Venture, Valuetronics.. But I wouldn't say sgx stocks are sky high compared to the US or China or other overseas markets. One of the few comforts I find in this very illiquid market.