Can the markets be timed?
March 21, 2005
Conventional wisdom suggests market timing can not be done, and
their argument is quite convincing, because the market either
goes up, or down, therefore, a flip of a coin has a 50/50 chance.
Someone important once said, " In all of my years in the
business, I have yet to meet a rich technician." Well, that
is not true. The two most successful investors in modern times
are market timers, although they do not like to be labeled as
Market timing using fundamental analysis
The two most successful investors in the modern era have my upmost
respect, Mr Warren Buffett and Sir John Templeton. Neither of
them are known as market timers, but they are. No, they are not
day traders of course, they are not even traders. They are value
investors. Mr Buffett's famous quote,
"buy when everyone
is afraid and sell when everyone is brave."
Sir Templeton has recently
"I do think it's interesting
that in all my 92 years, I've never seen a time when it was so
hard to find a bargain."
The fact that these two legendary
investors believe only in buying low and selling high, makes
them market timers whether they like the label or not. They base
their timing on fundamental analysis.
Market timing using technical analysis
If a great deal of profits can be made by buying low and selling
high, can technical analysis be an aid to identify what is low
and what is high? The answer is yes.
There are many different approaches, techniques, and methods
in technical analysis. For the untrained eyes, TA could be quite
intimidating, because the majority of technical analysis are
indeed very complicated with many variables. Yes, a coin toss
may be simpler and more effective. However, it doesn't have to
be complicated. The most popular comment from our subscribers
is how simple and effective our model is, see for yourself...
This is our proprietary (fancy
word for homemade) gold model.
When both price line and moving
average are up, the cycle is up.
When both price line and moving average are down, cycle is down.
When the cycle turns up, investors rotate their funds into a
gold ETF or mutual fund.
When the cycle turns down, we take profits.
Current cycle turned up on
This is our energy model.
Current cycle turned down on
Yes, the markets can be timed. Not on a day-to-day basis.
Our goal is to build wealth over time, and there are times when
we should be in the market, and there are times when we should
be out. Once we are positioned in the market according to the
model, we go fishing. And once we are out of the market, we do