Had dinner with some dude who changed jobs this March and rolled his 401K over to an IRA and liquidated all his holdings. He is a non-finance guy so he didn’t realize he was sitting in cash and missed the 60% market rally until about 2 weeks ago. He reinvested his assets on Thursday, right after the market rallied huge and right before it went down the sh!tter on Friday. He quite possibly could’ve sold on the very bottom tick and bought back in on the very top tick.
You should keep track of this guys investments and not interfere. Could be a great time to practice the “do the opposite” strategy.
He is the spawn of Fidelity during it’s crazy teenage years. Fidelity birthed him to use as a negative indicator.
The Anti-Stock
iheartiheartmath Wrote: ------------------------------------------------------- > Had dinner with some dude who changed jobs this > March and rolled his 401K over to an IRA and > liquidated all his holdings. He is a non-finance > guy so he didn’t realize he was sitting in cash > and missed the 60% market rally until about 2 > weeks ago. He reinvested his assets on Thursday, > right after the market rallied huge and right > before it went down the sh!tter on Friday. He > quite possibly could’ve sold on the very bottom > tick and bought back in on the very top tick. Technically, the high of the rally was a few weeks ago. The Dow was over 10100 and S&P close to 1100. Maybe that could make him feel better.
thats pretty bad but I may be able to win #2 place on this one. I was at BSC and one MD was about to retire after 30 plus years with the firm. He had 2 kids in ivy league schools and loving telling people how much he did not mind paying for it. Very nice guy and worked his tail off. He was set to retire in early to mid 2009… everyone knows what happen in March 2008… he more or less loss everything. He is still working
My mother (and her husband) retired in 2007 on very nice pensions. With the equity in their respective homes, they bought a $1 million house in cash in the summer of 2006. Its 2009 assessment was $495,000.
I got one. Friend of a friend in college, had rich parents. Market was doing well in 2007, so he decided to use his parents’ tuition payment and put it all in the market, instead of using it for tuition like it was supposed to. He said he’d keep any gains and pay the tuition before the Spring Semester. Spring rolls by…he asks his parents for tuition money. “We already gave it to you a couple of months ago” “They raised the price of tuition”
I don’t think it’s as bad a story as that, but I still get a little ticked off that I bought a bunch of TIP at $111 and change back in Feb 2008. I must have caught almost the top tick right there. Fortunately I did not sell at the bottom, and am net positive now at least in terms of total return because of the interest/dividend stream.
in the beginning of the crisis I put all of my cash into a gannie mae only bond fund after the fed slashed short term rates looking for yield. After the 800bil bailout I bet that there would be an inflation problem and started buying TIPS funds. Well deflation happened and TIPS got hammered while gannie mae securities benefited from the bail out of fannie/freddie and flight to quality. I missed out on +11% returns.
I have always wonder if it is a comliance issue if I do the opposite of what clients do.
ws Wrote: ------------------------------------------------------- > I have always wonder if it is a comliance issue if > I do the opposite of what clients do. If you’ve advised the clients to do XYZ and given them ample time to implement, I’d say you’re allowed to do XYZ, even if they’re doing the exact opposite.
I know someone who did the exact opposite- she changed jobs and rolled her substantial 401k in the winter of 2007. She never got around to investing it and everyone was giving her a hard time for being in cash. seems like she was right and everyone was wrong 
dlpicket Wrote: ------------------------------------------------------- > ws Wrote: > -------------------------------------------------- > ----- > > I have always wonder if it is a comliance issue > if > > I do the opposite of what clients do. > > If you’ve advised the clients to do XYZ and given > them ample time to implement, I’d say you’re > allowed to do XYZ, even if they’re doing the exact > opposite. ^^ My sense is that if you have advised clients to do X and you do the opposite of X, then the burden of proof is on you to show that you are not engaged in “pump and dump” or its variations. There are defenses to this: a) the client’s liquidity needs, risk appetite, or other portfolio characteristics etc. are different from yours and therefore demand different actions. b) the client took a decision other than what you advised and your actions are consistent with (or at least not inconsistent with) your advice. c) market conditions had materially changed and you had given your clients the opportunity to change with them (a defense against front-running).
Just unloaded some more of my retirement holdings into this rally. I’m squarely north of the 50% cash mark right now. Would be happy to finish the year with my current gains.
Your friend might have made the quickest and easiest 5% return of his life. It took him what, 3 weeks?