Tuesday, October 1, 2013

How to detect market plunges



No one including all the Federal Reserve chairmen and all the Nobel-Prize winners (actually many of them drove the economy to the brink of bankruptcy by betting wrongly) in economics can predict market plunges. The chairman gave a speech saying how rosy was the economy and in a few weeks, the housing market crashed. Many predicted correctly market crashes by pure luck and some even get Nobel Prizes and become famous. There is no model and formula to predict market plunges except my simple chart described in this book.  It is so simple that I do not claim credit but the credit in publicizing and tuning it.

It works for the last two market plunges and hopefully it will work to the next market plunge. The chart depends on the falling stock prices, so it will not detect the bottoms and peaks precisely, but it will prevent further losses and reenter the market for larger gains. The chart is very simple to use and there is nothing to buy or subscribe. It WILL predict the next market crash, but it may not give us ample time to prepare to exit and/or how far away from the peak as the last two. It also tells us when to reenter the market for the best time to make money.




How to detect market plunges



 Exit the market when S&P 500 index is below the red line and reenter the market when it is above the red line.
.
Market Plunge
Peak
Bottom
Exit
Reenter
2000
08/28/00
09/20/02
10/01/00
06/01/03
2007
10/12/07
03/06/09
02/01/08
09/01/09



08/01/11
11/01/11

I was shocked by the incredible return by using simple market timing (exit and reenter the market only 3 times from 2000 to 2013).

Summary info:
.
S&P 500
1-2000 to 9-2013
With Market Timing
Without Market Timing
Better
500%

Gain
1,000
167
Gain %
68%
11%
Annualized gained
5%
1%
Days
4,959
4,959

Click here on how I calculated the returns. Actually it is far better than 500% by buying contra ETFs in existing the stock market.

It will not be as effective if many follow the same chart. Order the book before everyone follows the same technique.

Order info.: Gifts keep on gifting for life. Click here or

Profit from 2016 Market Crash (from Amazon.com).

or order the Art of Investing. The Kindle version is over 700 pages covering most topics of investing. It includes my original ideas such as: Pow PE, Pow EY, Adaptive Stock Scoring System, Coconut Theory, reason for secular markets...

Currently, Amazon offers free Kindle version with the printed version.


2 comments:

  1. It sounds like an interesting series. I will check it out

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  2. This article is mind blowing. When I read this article, I enjoyed.


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