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pelcmarek's picture
Please, tell me what you think !


First here are ETF symbols that are valid on finance.yahoo.com:
 
XIC.TO – tracks the S&P/TSX Composite Total Return Index
XIU.TO – tracks the S&P/TSX 60 Total Return Index
XMD.TO – tracks the S&P/TSX MidCap Index
XCS.TO – tracks the S&P/TSX SmallCap Index


Now here are Year To Date results of Eric Sprott funds according to his website:


Sprott Canadian 
Equity Fund (1997) Series A                 -41.70%

Sprott Gold and
Precious Minerals
Fund (2001)
Series A                                              -57.35%

Sprott Energy
Fund (2004)
Series A                                              -50.30%

Sprott Growth
Fund (2006)
Series A                                              -61.88%

Sprott Small
Cap Equity Fund (2007)
Series A                                               -42.02%
...................................................................................
Sprott Opportunities
Hedge Fund LP* (2004)
Series A                                          +0.85%


I like Eric Sprott and his team. So, why I'm posting it?

This question came to my mind: What would be Warren Buffett's results if he was fully invested from 1969-1974 and couldn't add to his positions?

This will sound obvious,but is not.There are 2 weapons you can use: you can be long or you can be fully in cash. If you check long only brilliant value portfolio managers (FAIRX) you will see that during downturn their portfolio don't move down so much (people love great businesses) and during uptrend their portfolios move same as index,but less than growth high flyers,at the end their results are much better than that of index.

To show you how this advantage works imagine that one day Eric Sprott funds will come back to black (roughly 100% up) and then they will start moving again.The people that invested in hedge fund will be up 100% already !!! Recently Buffett announced he was fully in cash and now started moving to stocks.It means he is using his cash weapon quite effectively. Especially when indexes are coming to their historic low P/E=9 from their historic high P/E=30. 

I have last question: if indexes drop another 20% will investors in long only funds recover sooner than in 12 years (1.11^12=3.4)?  
By pelcmarek at 2008-10-21 19:00 | Stocks | pelcmarek's blog


pelcmarek,>  you will see

pelcmarek,

>  you will see that during downturn their portfolio don't move down so
>  much (people love great businesses) and during uptrend their portfolios
>  move same as index,but less than growth high flyers,at the end their
>  results are much better than that of index.

All you gotta do is follow The Vooch....LOL

Keep up the good work!  Stop by my AVT website sometime.  I'd like for you to join.

Best Regards,
- Vooch
By Vooch at Tue, 2008-10-21 22:37 | login or register to post comments

Don't understand question.

What I get from it, is it wise to have some cash.   But, in U.S. cash you will lose 5% a year due to inflation.  If you think it is overvalued why be in the market.  If the market is dropping you can buy shorts.  If it is rising call options.  If you wanted to, 50 percent of your portfolio could be good stocks and 50% shorts in bad stocks.  That way you should be moving up in all markets.
By buybackking at Thu, 2008-10-23 13:06 | login or register to post comments

Bruno - you looking at getting long again?

hammer candlestick, lower volume successful re-test, Investor Intelligence bull to bear ratio at lowest since 1988, less than 1% of S&P stocks trading above 50-day moving average.  Don't you think it's good enough for an intermediate term bounce?
By biscosc at Thu, 2008-10-23 16:34 | login or register to post comments

Re: Bruno - you looking at getting long again?

Do I look like a good market timer? Unfortunately I started to go long again too early on my real personal account and on my virtual one at Marketocracy. Still, 3.89% p.a. ahead of the S&P 500 since inception (net of 2% management fee) is not bad considering I've been more than 90% invested for most of this year.

brunom's Mutual Fund

I kind of agree with John Hussman and Jeremy Grantham. U.S. stocks are not expensive if you have a long-term perspective and are probably the cheapest they have been in 20 years. But the market may overshoot to the downside as it has in the past weeks. All oversold indicators stopped working this year, I never imagined I would see the VIX at 85% or the down volume in NYSE equal to almost 30x the up volume.
By Bruno at Fri, 2008-10-24 11:33 | login or register to post comments

Re: Bruno - you looking at getting long again?

Do I look like a good market timer? - Based on your selling everything and only recently re-entering I thought maybe you were. :)

I kind of agree with John Hussman and Jeremy Grantham. U.S. stocks are not expensive if you have a long-term perspective and are probably the cheapest they have been in 20 years. - It's interesting that most of the perma-bears including the two you mention as well as Barry Ritholtz, Byron Wein, etc are getting very bullish while the perma-bulls are giving up.

But the market may overshoot to the downside as it has in the past weeks. - There is certainly always that chance.  I think the overshoot is probably very close to over.  I'd say 1078 on the S&P was reasonable but everything we've had past that has been an overshoot.  80% of NYSE stocks at 52-week lows was just crazy a few weeks ago.

I never imagined I would see the VIX at 85% or the down volume in NYSE equal to almost 30x the up volume. - That makes two of us.  I'm just looking at the probabilities here and I think they favor the bulls heavily.  However, I'd expect another re-test of the lows and maybe lower lows early next year after the extreme over-sold conditions get worked off.
By biscosc at Mon, 2008-10-27 09:12 | login or register to post comments