Comments on Fund My Mutual Fund: AP: Heating Oil Sticker Shock to Hit New England

I guess the point I was trying to make is that it ...

2008-06-02T13:54:00.000-04:00

I guess the point I was trying to make is that it pays to know TA well as a supplement to fundamentals. It's true that TA can conflict just like it's true that companies with terrible fundamentals can, for longer than you think, perform very well.

It's all about making the trading/investing arsenal as thorough and flexible as possible while never forgetting to Keep It Simple Stupid (KISS). That's my entire point. If you don't agree with it that's fine... We all of course must chart our own path and do what works well for us. Even when good we can always get better.

No mas... I have to get back to work...

Best,
Jon

ya it seems more investors these days are using a ...

2008-06-01T22:56:00.000-04:00

ya it seems more investors these days are using a hybrid of fundamentals and technicals to make decisions. personally, i use the technicals for entry/exits for investments or for some shorter term trades. traders rely much more heavily on technicals obviously. and, after all, mark is running a mutual fund. i think he is using technicals more often now just due to the type of market we are in . and this type of market requires more activity/trading until it picks one direction or the other. if he focused too much on technicals, then he'd be a trader and would have a much higher level of turnover

Don't think US multinationals would be considered ...

2008-06-01T21:29:00.000-04:00

Don't think US multinationals would be considered a new trend. That's been the main trend the past year +.

Raging inflation has a good chance to cause global recession; you have to ask at what price do some of these foreign entities, namely China, stop subsidizing everything and bending. It's already happening in smaller Asian countries. The best thing for the "global growth" story to continue would be crude dropping back to $100-$110 and staying there. The longer it stays up here, and or higher it goes - the more risk to the entire growth story. You are shouldering more and more simply on the back of China and asking them to subsidize just about every bull market. So far it's been working, but at some price point in oil they will have to falter.

Right now they have an entire province pissed off like hell that all their kids died because the schools in poorer parts of the province (or even within the same cities) collapsed under shoddy material, building whereas the richer kids school stood. So social unrest is something they have to deal with as well, so its a flammable situation.

Unfortunately right now, much of the world's growth is either China or high energy prices allowing said dictatorial countries (and Brazil) to continue to prosper. We'll see how it goes, too many moving parts to simplify things to "oil up = good" or "oil down = good". I don't think the credit crisis is near to being over either - we have a whole slew of Alt A and prime mortgages going default the next 12 months, along with credit card debt, personal loan debt and the like. It's just been pushed to the backburner.

So what's the next trend? With inflation raging in...

2008-06-01T21:23:00.000-04:00

So what's the next trend? With inflation raging in other parts of the world (this has been under reported)the US equity market looks cheap. Not all but some equity areas. Multinationals would appear to be the biggest beneficiaries. Because of the tremendous transfer of wealth to dictatorial countries the inflation rate may not be that important to those governments. Hence mining and metals companies would appear to be winners also. Your thoughts?

That's a point. But another point is many fund ma...

2008-06-01T20:55:00.000-04:00

That's a point. But another point is many fund managers don't follow TA at all. I doubt Heebner does for example. (I could be wrong) So it is all incremental. Having some TA is more than none. And some TA contradicts other TA - you will also see that - the more indicators you use, the more 1 comes into conflict with another. So which do you use?

It's all an "art" not a science. I concur on the SMA vs EMA on this pullback but it does not explain the mid April pullback - where both were broken but the market broken. So all TA failed on that one. Nothing works fully in the market - you just try to get as many forces working in your direction at the same time. Key #1 for me is owning the best companies - even if your TA stinks you will do well if you identify the big trends earlier than the pack.

TM,I just wanted to post a comment regarding a pre...

2008-06-01T18:21:00.000-04:00

TM,

I just wanted to post a comment regarding a previous post on the SMA vs. EMA. I really have enjoyed reading your blog and I think that you are a very bright guy. I am not full time trader nor an economist and in fact have a background in chemistry from UCLA. I got into the markets primarily by following science companies I understood and looking at fundamentals.

In this market however I realized that technicals are also very very important. If you are serious about becoming a mutual fund manager (and it seems like you are) it may really pay to shore up the technicals as well so that you really know them cold. I have been getting my hands on the best texts I could find and they are very informative. Chart the SPX on stockcharts with the 50 and 200 day SMA and you will see how it almost "perfectly" bounced off of these two recently. Does this mean that EMAs are invalid? Not at all. Victor Sperandeo (one of the more successful traders of all time and a consultant to Soros and others) writes that different indicators work differently in different stocks and different markets. That is to say in this case the EMA works until it doesn't, then other indicators need to be tried to see if the big boys (and computer trading as well) are using something else. In the case of the SPX it seems that right now at least the SMAs are the way to play...

Just my thoughts. I really do wish you well and I appreciate the insight you have provided on this blog.

Best to you Mark,
J