Conference nyoss1::market_investing

    There is an article about "market timers" on the front page of the
    third section of today's WSJ.
    
    It says that no one knows of anybody that got "filthy rich" practicing
    market timing.
    

    re: .0
    
    Did you also do market timing in '91 and '93? If so, what were your
    scores for those two years?

>    Did you also do market timing in '91 and '93? If so, what were your

    .0 shows you where to go for '93 results (namely, note 689).
    
    I did not do this in '91.
    
    Glad to hear nobody thinks it's worth their time.
    
      John

> Glad to hear nobody thinks it's worth their time.

	not everyone said it wasn't worth their time.  i certainly
	believe that market timing can beat buy&hold, but i'm still
	dealing with learning to sell at the right time ......

Martin Zwieg makes many compelling arguments (in his book from a while back)
for being in and not-in the markets at the right time.  Although his formulae
are apparently rather complicated and involved, he discloses a number of
key indicators that are worth tracking -- most notable of which for 1994
is the Fed discount rate.

With 7 adjustments upwards in the discount rate in 1994, the Zwieg indicator
has been pretty negative (be _out_ of the market) since last summer, and
continues strongly negative.  The indicator is like a BIG dial/meter on the
economy.

Sounds like John's system has much finer granularity.  Time to take a trip
over to ABACUS:TRADING.  Nonetheless, like John, Zwieg shows time and again
how applying some sort of rigorous methodology around these indicators can
result in much better total return than buy-and-hold...

... BUT you have to be totally rigorous to apply it.  If the system says to 
sell your MSFT, you sell, even if it seems the company is flying high and
no end is in sight.  You have to be a trader, as opposed to an investor.
Lynch makes compelling arguments that this activity is not in the best 
long-term interest of the market.

But it certainly may be in yours.

re:        <<< Note 820.0 by EVMS::HALLYB "Fish have no concept of fire" >>>

>	My gross capital gain:	     6.5%
>	My capital gain after taxes: 4.2%
>	My dividends:		     2.0%
>	My dividend after taxes:     1.3%
>*	My total return:	     5.5%

>This 5.5% profit, net of all fund expenses and taxes owed, is substantially 
>greater than the S&P 500 buy'n'hold return of 0.4%. It was achieved with only 
>93 market days invested, approximately 36% of the market year. The rest of 
>the time the account funds were safely parked in a money market fund.

And the return from the money market fund - is that included in the
'dividends'?

> And the return from the money market fund - is that included in the
> 'dividends'?

    Yes.

    
    fwiw, Zwieg may own a yacht, but investors in the Zwieg funds probably 
    don't.  Marty has made some great calls and I like him, but I've grown
    weary of his (usually) rather vague time horizons.
    
    I once read an analysis of managers' ability that showed that it is very 
    difficult or impossible to prove that results are not due to luck.  The 
    CGM Capital Management case comes to mind, for example.  It takes a
    lifetime of trading to determine whether someone has genuine ability,
    but by then the managers' career is over and you don't have the
    opportunity to invest with him any more.  Not to mix religion with the
    stock market (heaven forbid), but some faith seems to be required.
    
    In John's case, the strongest evidence for the power of his system is
    not that he beat the S&P 500 once or twice (imo), but is instead in
    the statistics that underlie his predictions.  Nevertheless, real
    results are important, too, since there are many trading strategies
    that look good on paper but that can and do fail in practice.
    
    /jim
    

    In this weeks FORBES Hulbert again does his annaul review of Investment
    Newsletters. Zweig is #3 or #4. The Chartest is #1, Value Line is #2 or
    3, I forget...Well anyways, Zweig is one of the all time best

    Hi,
    
    We are new to mutual funds, and there is so much to learn.. I was
    looking for a note with exactly this discussion:  whether you can
    switch your $'s between funds, in the same family.. We are in a
    couple of aggresive growth funds, and they are doing very well,
    but at some point I have to believe they will head down.. I realize
    I'm no genius at picking the right time, but I can also pre-set the
    goals I'm looking for, and then cut and run.. For instance, if I
    invested $1K, and it goes to say $1.5K in value, maybe I'd like to
    move 1/2 into a more conversative fund to protect it, and leave the
    rest in the aggresive fund..
    
    It sounds like, from .0, that only certain funds allow you to do this, 
    but maybe I mis-understood.. In any case, can folks answer a couple of 
    questions?
    
    1/ Do all fund families let you switch your $'s between their funds, or
       just certain families let you do this?
    2/ Is there any charge/expense to do this?
    3/ Does this tick off the fund people?  (I read an article last night
       about a fund that has black-listed certain investors, because they
       kept jumping in and out and causing the fund to have to pay them
       off too often)
    4/ If you were in an aggresive growth fund, and decided the timing
       was good to get into something more conservative, to which "kind"
       of fund would you suggest?  I realize everyone's choice is a personal
       thing, but I'd like to hear the "why" behind peoples ideas..
    5/ If not all fund families allow multiple switches during a year, is
       there any easy way to find out the families that do allow this?
       (We get buried in all the literature everytime we request a
        prospectus and it takes so much time to re-read it all.. I suppose
        I should take notes on each, to save re-reading time..)
    6/ I saw an article with the PRO's and CON's of trying to time the
       market in mutual funds... The CON person said that over time people
       who invest and stay in usually do about 3X as well as people who
       try to time their investments, but usually do it poorly.. On the
       other hand, the PRO person said that since at least ~ 1/2 of the
       time the value is going down, a lot more can be made by getting
       out when you have had an increase in value, and avoiding the loss
       period and getting in when things are rising.. Obviously there was
       no single conclusion, but I'd like to hear people's thoughts and
       .0 showed the potential and explained things well..
    
    Thanks,
    
    Bob

    Oh, one more question I forget to ask:
    
    If the minimum investment in a fund is say $1K, can you transfer money
    to a different fund (same $1K in total, with the family), and go below
    the minimum for that fund?  For example, if you had $1K in fund A,
    and it went to $1.5K, can you put $750 into fund B and leave $750 in
    fund A?  Or is this not allowed?
    
    Are there any related restrictions?  I'd like to hear your comments,
    I really don't have the time to read the fine print in all the
    literature/prospectuses/etc...
    
    BTW, I don't intend to try to time the market with all of our money,
    but I am considering watching/managing one special account, and see
    if I can get it to do better than just invest-and-forget it...
    
    Thanks,
    
    Bob

re: .10,.11

A few thoughts to get you started...

>>    I really don't have the time to read the fine print in all the
>>    literature/prospectuses/etc...

Sorry, that's the only way to be certain what a particular fund family's
rules are.  Study and enjoy it!

>> ...at least ~ 1/2 of the time the value is going down...

Do you really believe this?  Do you really think this takes the amount
of the move into account?  To me, this reasoning is a little shallow.
I'm not a fan of the in-and-out strategy -- that's not what mut funds
are intended for.

One strategy that I would suggest as an alternative is to direct your
gains from your aggressive fund into another fund of the same family.
That way, when the fund is paying a lot, you are effectively taking
money out without engaging in a "sale".  The purchase made from
dividends are typically exempt from sales charges (if any apply).
Happy reading!

-Austin

re: .10, .11

I'm no expert, but here's my $.02 worth:

>    1/ Do all fund families let you switch your $'s between their funds, or
>       just certain families let you do this?

	Most do, call the fund.

>    2/ Is there any charge/expense to do this?

	Most funds allow some number of free exchanges before 
	charging.  Call the fund.

>    3/ Does this tick off the fund people?  

	Funds don't like frequent round-trip (in, then out) 
	exchanges.  I personally think that paperwork overhead is 
	the major reason.

>    4/ If you were in an aggresive growth fund, and decided the timing
>       was good to get into something more conservative, to which "kind"
>       of fund would you suggest?  I realize everyone's choice is a personal
>       thing, but I'd like to hear the "why" behind peoples ideas..

	As you say, this is a personal thing, as was your 
	original selection of an aggressive growth fund.

>    5/ If not all fund families allow multiple switches during a year, is
>       there any easy way to find out the families that do allow this?

	Call the fund.

>    6/ I saw an article with the PRO's and CON's of trying to time the
>       market in mutual funds...     

	It's interesting to hear about HALLYB's success.  I don't 
	have the time/interest to *follow* the market very
	closely, much less *time* it.  I sometimes wish I did.

>    If the minimum investment in a fund is say $1K, can you transfer money
>    to a different fund (same $1K in total, with the family), and go below
>    the minimum for that fund?

	I don't think many funds let you do this.  It's usually 
	OK if the value falls due to market activity, but not
	because of an exchange or redemption.  Call the fund.
    
>    I really don't have the time to read the fine print in all the
>    literature/prospectuses/etc...
    
	You had better read the fine print, at least for the
	funds that get your money. 

re: .14

>One strategy that I would suggest as an alternative is to direct your
>gains from your aggressive fund into another fund of the same family.
>That way, when the fund is paying a lot, you are effectively taking
>money out without engaging in a "sale".  The purchase made from
>dividends are typically exempt from sales charges (if any apply).

This works for distributions (income, realized capital gains), 
but you need to sell shares to realize the gains from increased
NAV.  I think this is what the author of .10 wants to do.

Wes

I read an article in the T.Rowe Price Report (Summer 1995 edition)
that talk about market timing.  It is quite interesting, and I
would just quote a couple of data points here:

For the 1963-93 period, assume you can decide to either stay in
the market or out of the market each day.
a) If you follow "buy-and-hold", i.e. stay in the market for
   the entire duration, then $1 invested returned $24.30.
b) If you missed the 90 best days of the market, then your $1
   would have returned you only $2.10.
c) On the other hand, if you manage to avoid the 90 worst days,
   then your $1 would have returned you $326.40.

Note:
- 90 days is about 1.2% of the 30 years duration
- the return is based on some capitalization-weighted composite
  of stocks on all the major exchanges.

Moral?  If you don't know what you are doing, you may miss most
of the market gains by staying a small number of days off the
market.  But if you figure out how to avoid down-turns, you
can make a lot more money.

    Re: But if you figure out how to avoid down-turns, you can make a lot
    more money.
    
    Darn, why didn't I think of that.
    

    re .10
    
    >switching between funds
    
    Some funds allow this, as said before check the fund.  You may want
    to strongly consider a fund who limits the number of switches.  Moving
    money around is an expense.  If the fund allows unlimited exchanges
    then the fund investors are paying for this service one way or
    another, which will affect your yield.
    
    >moving from aggressive to conservative
    
    You must decide on your goals, ie if your young and your goal is
    to build wealth, then most experts recommend staying in stocks,
    or in mutual funds staying in growth or value funds.  If you do
    want to play with market timing, you can hedge growth/value funds
    with a mixture of international funds (as US interest rates drop
    investors may start looking more closely at emerging markets, also
    Latin America & Japan have taken a beating, could be a turning
    point (but you never know for sure), asset managed funds are a
    mixture of equities, bonds and money market instruments - more
    conservative as the bond content can help preserve principle,
    or bond funds - intermediate term say 2-10 year maturities might
    be interesting if you think interest rates may continue to go
    down.  Then there is always money market accounts.
    
    
    >reading the fine print
    
    Do it.  Especially look at r squared - the comparison of the fund
    against other indexes such as similar funds or the S&P 500.  Also
    look at the beta, which is a measure of the risk of the portfolio.
    1.00 beta means the fund matches the aggregate market, less than
    1 is lower risk, above 1 is higher risk).  Historical information
    is interesting but sometimes useless and misleading.  If you look at
    historical info,look at the funds yield before expenses to get an
    accurate picture of the funds actual performance.
    
    
    Jeff

    re: .17 & .18
    
    The realy question is just like Dirty Harry says in the movies...
    
    "... Well, do you feel lucky, punk?"	:-)

    Thanks to all who replied.. Since I posted my questions I have been
    doing a lot of reading, including re-reading a lot of prospectuses,
    and think I understand things much better now, but don't claim to
    know what to do/when..
    
    Re: .17:  I may have read the same article, which provoked me to ask
    my questions.. It would be nice to avoid those bad days, I'm not
    thinking I have the brains or time to watch everything and just jump 
    in for the good days..
    
    I forget which reply mentioned the "r", which I have heard of, but
    not seen published anywhere.. Where do I find this, for a particular
    fund?  Call the fund, or is it somewhere in the prospectus or ...?
    I've not seen anything that I remember saying/showing the "r" value...
    Below is a report I got from Compuserve.. Is the "r" one of the
    ratings, under a different name maybe?
    
    Thanks all.  -Bob K

From:	US1RMC::"102332.3152@compuserve.com" "Bob Kay" 21-JUN-1995 23:23:13.39
To:	bobkay <delni::rkay>
CC:	
Subj:	JANUS FUND        GR   8.6   9.1   9.1  13.6  15.3   92.7  -12.7

                              JANUS FUND       
                      JANUS CAPITAL CORPORATION   
                             800-525-3713
                            Symbol: JANSX

----------Assets & Yields----------  --------Expenses & Risk---------
Obj:                         Growth  Maximum Load Fee (%):        .00
Total Assets (Mil$):          10109  Annual Expense Rate (%):     .98
Net Asset Value Per Share:    20.41  Redemption Fee:               NO
Asset Allocation - % Cash:     14.1  12b-1 Fee:                    NO
Asset Allocation - % Fixed:     1.6  Beta Coefficient:           .824
Asset Allocation - % Equity:   84.2  Alpha Rating (10-1):           7
Latest 12-Mo Divd Yield (%):    .04  Risk Rating (10-1):            6
SEC482 % Yield - 03/31/95:      N/A  Diversified vs. S&P 500 (%):  82
-------------------------Performance Ratings-------------------------
Overall Rating (10-1):       10    Rating in GR Group (10-1):      10

-------------------------Relative Performance-----------------------
                                                          Bull   Bear
                Curr   Curr ---------Annualized--------  10/90  05/90
As of  4/30/95 Month    YTD    1YR   3YRS   5YRS  10YRS  04/95  10/90
-------------- ----- ------ ------ ------ ------ ------ ------ ------
Fund % Return   1.64   8.68   9.11   9.12  13.66  15.37   92.7  -12.7
Avg. GR Fund     2.8   10.4   11.4   10.4   12.1   13.3   95.6  -17.1
S&P 500          3.0   13.1   17.4   10.5   12.6   14.8   93.3  -14.5
GR Group Rank      4      4      4      5      8      9      5      9
Overall Rank       7      8      8      7      9     10      8      4
---Portfolio By Sector(%)---  -----------Top Stock Holdings----------
                         S&P                          Mkt Value   %  
Sector             Fund  500  Stock Name                ($000)   Port
-----------------  ---- ----  ----------------------- --------- -----
Basic Industries      6    8  WAL MART STORES INC       350,629   4.7
Cap Goods & Tech     19   18  CITICORP                  323,664   4.3
Consumer Cyclical    16   14  WOLTERS KLUWER N V        291,555   3.9
Consumer Stable      20   22  PFIZER INC                273,045   3.6
Energy                1   10  FIRST DATA CORP           250,440   3.3
Finance              26   11  GILLETTE CO               237,012   3.2
Transportation        5    2  HERCULES INC              224,272   3.0
Utilities             2   13  PHILIPS ELECTRS N V       216,802   2.9
Miscellaneous         5    3  BANK NEW YORK INC         198,412   2.6
                              UNUM CORP                 191,793   2.6

--Weighted Avg. P/E Ratio---  ------Weighted Average Cap. (Bil$)------
JANUS FUND              18.8  JANUS FUND                         13.2
S&P 500                 19.2  S&P 500                            22.3


    

    I like to look at Business Week's mutual fund end of year
    review, because they take taxes into account when calculating
    funds' returns.  That can make a considerable difference.  Your
    library probably has Business Week back issues.
    

I'd be curious to know if HALLYB kept up his system in 1995 and, if so, how he
did. I don't see a later base note discussing it. -- Steve

    I owe you an answer, and will make one up this weekend. (Probably.)
    I didn't beat buy-and-hold in 1995.
    
      John