Here's what smart money is apparently doing.

[glenn_herwig]

U.S. hedge funds bearish on FAANG stocks in second-quarter: SEC filings - Reuters
https://apple.news/ASZ6Fb31FRKi_Tpss3ZPYHA

We are very overvalued. I'm not calling for any sort of big correction. But these guys definitely don't get it wrong.

[Andad]

I'm just taking some profits G.

[dberman3]

I've been in this business for 25 years and everybody gets it wrong sometimes. Just like the best hitters in baseball striking out...It's all part of the game. If there was someone who got it right all of the time, they'd run all of the money.


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[crew]

Originally Posted by dberman3

I've been in this business for 25 years and everybody gets it wrong sometimes. Just like the best hitters in baseball striking out...It's all part of the game. If there was someone who got it right all of the time, they'd run all of the money.


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Well said.

[ejvette]

Originally Posted by dberman3

I've been in this business for 25 years and everybody gets it wrong sometimes. Just like the best hitters in baseball striking out...It's all part of the game. If there was someone who got it right all of the time, they'd run all of the money.


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Didn't Madoff get it right all the time... That's what his investors thought

[Hairdude1]

Originally Posted by ejvette

Didn't Madoff get it right all the time... That's what his investors thought

That's what who I thought of and then... well

[brandrea]

Originally Posted by dberman3

I've been in this business for 25 years and everybody gets it wrong sometimes. Just like the best hitters in baseball striking out...It's all part of the game. If there was someone who got it right all of the time, they'd run all of the money.


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I guess that's what makes a market

[rr-nyc]

Originally Posted by dberman3

I've been in this business for 25 years and everybody gets it wrong sometimes. Just like the best hitters in baseball striking out...It's all part of the game. If there was someone who got it right all of the time, they'd run all of the money.


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This is true to an extent - nobody is right all the time - but fund managers are far more right than wrong and if their batting average was anywhere near the best baseball players (Ty Cobb's .366), he's be out of a job and that firm would probably run out of investors. Those are stock broker averages, not fund managers.

A very good friend runs the largest funds for a well known and respected firm. Despite record numbers on Wall Street (and a record bonus for him), he hasn't put new money into the market in over a year.

The signs are everywhere and the people with the most money are sitting pretty quiet on the sidelines and compared to years past, they aren't even spending it either.

[dberman3]

Originally Posted by rr-nyc

This is true to an extent - nobody is right all the time - but fund managers are far more right than wrong and if their batting average was anywhere near the best baseball players (Ty Cobb's .366), he's be out of a job and that firm would probably run out of investors. Those are stock broker averages, not fund managers.

A very good friend runs the largest funds for a well known and respected firm. Despite record numbers on Wall Street (and a record bonus for him), he hasn't put new money into the market in over a year.

The signs are everywhere and the people with the most money are sitting pretty quiet on the sidelines and compared to years past, they aren't even spending it either.

Please don't take my comments as a market call. That was not my intention. Your first sentence summarizes my point. Nobody is right all of the time...


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[rr-nyc]

Originally Posted by dberman3

Please don't take my comments as a market call. That was not my intention. Your first sentence summarizes my point. Nobody is right all of the time...





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Fair enough. It wasn't my intention

[jhilly8982]

Originally Posted by rr-nyc

This is true to an extent - nobody is right all the time - but fund managers are far more right than wrong and if their batting average was anywhere near the best baseball players (Ty Cobb's .366), he's be out of a job and that firm would probably run out of investors. Those are stock broker averages, not fund managers..

First, a .366 batting average is 36%

The Hedge Fund Return Index (HFRI) is at 10% over the last 20 years.

[dberman3]

Originally Posted by jhilly8982

First, a .366 batting average is 36%



The Hedge Fund Return Index (HFRI) is at 10% over the last 20 years.

To be fair, those numbers, although related are different. A batting average of 36% simply means they called roughly one third of their positions correctly. Longs went up and shorts went down (assuming they had short positions). How much they went up or down and how much damage their "bad bets" detracted, leaves them with their results. I've seen managers or traders make money consistently, by being right only 1/3 of the time, but they have to sell their losers quickly and hold on to their winners, which is much easier said than done. 5 or 6 out of 10 can provide great returns over time, but again, it takes a lot of discipline. People who say they haven't had a loser in.... (fill in the time frame,) are trying to sell something.


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[jhilly8982]

Originally Posted by dberman3

To be fair, those numbers, although related are different. A batting average of 36% simply means they called roughly one third of their positions correctly. Longs went up and shorts went down (assuming they had short positions). How much they went up or down and how much damage their "bad bets" detracted, leaves them with their results. I've seen managers or traders make money consistently, by being right only 1/3 of the time, but they have to sell their losers quickly and hold on to their winners, which is much easier said than done. 5 or 6 out of 10 can provide great returns over time, but again, it takes a lot of discipline. People who say they haven't had a loser in.... (fill in the time frame,) are trying to sell something.


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I'm speaking of batting average in terms of pure returns, not attempts average.

But in terms of a manager only being right 36% of the time on his trades, It all depends on the capital at risk per trade. All it takes is one trade to make or break you. I traded over 1 million options contracts last year, and I would guess 10-20% were winners and I still made money.

[rr-nyc]

Originally Posted by jhilly8982

First, a .366 batting average is 36%



The Hedge Fund Return Index (HFRI) is at 10% over the last 20 years.

I wasn't equating batting average to a percent of returns. The post I was responding to, at least from what I gathered, was merely looking at it from a hit/miss ratio. Good choices vs bad choices for fund managers

[beshannon]

Exactly what I want to see before I increase my positions

[SpeakWithMichael]

Originally Posted by beshannon

Exactly what I want to see before I increase my positions

Precisely.

[jhilly8982]

Originally Posted by glenn_herwig

U.S. hedge funds bearish on FAANG stocks in second-quarter: SEC filings - Reuters
https://apple.news/ASZ6Fb31FRKi_Tpss3ZPYHA

We are very overvalued. I'm not calling for any sort of big correction. But these guys definitely don't get it wrong.

Haha, I wouldn't consider all hedge funds smart money.

Third Point is good, but just going through some of the funds listed in the article, Tiger was down 14% in 2016 and Omega has experienced a loss in 64% of it's capital. Meaning it performs so bad, people want their money back. I think in general, the 2 and 20 industry is dying but a few giants will continue to perform well.

Also, if it's in the news already, it's in the price.

[AK797]

In the past I have rode bull markets to the end and prepared for the crash/correction with decisive action at the time, getting out too early would have cost me far more money. These days I would look to short or hedge.

[GB-man]

Lol the smart money being wrong has been a running joke the last year or two. The market is well beyond any sort of reality.

[hugs]

Originally Posted by AK797

In the past I have rode bull markets to the end and prepared for the crash/correction with decisive action at the time, getting out too early would have cost me far more money. These days I would look to short or hedge.

What's the difference between shorting stocks you already own as a hedge and just selling some of your holding? Are there tax advantages or something?

[AK797]

Originally Posted by hugs

What's the difference between shorting stocks you already own as a hedge and just selling some of your holding? Are there tax advantages or something?

There's hedging your portfolio, and then there's placing new down bets. And yes there is also no tax on spread betting. I try not to be a predictor, which is in essence gambling, and being more of a reactor, and let price action dictate.

[beshannon]

Originally Posted by hugs

What's the difference between shorting stocks you already own as a hedge and just selling some of your holding? Are there tax advantages or something?

Selling Short Against the Box. A short sale against the box of a stock is where the seller actually owns the stock, but does not want to close out the position. SEC and the Financial Industry Regulatory Authority (FINRA) rules place restrictions on when you can sell short.Aug 15, 2007

Depending on the time of year you can lock in gains but shif tth tax to the next year. It also allows you to retain your position and possibly close the short by buying the stock back at a lower price.

[breitlings]

i wouldn't bet against amazon.

[locutus49]

I'm not selling my long term stocks, but I'm not buying either. I'm hoarding cash for the next crash. You have to be patient to be a long-term stock investor. When Cramer on CNBC says to sell your stocks (like he did in 2009), that is the time to buy.

[hugs]

"This story is not avalable in your region." Wow pretty sad. I didn't think even Apple would be this controlling.

[PJ S]

Originally Posted by hugs

"This story is not avalable in your region." Wow pretty sad. I didn't think even Apple would be this controlling.

No problem seeing it – it simply re-directs to Reuters. Check your Ad blocker(s).
http://www.reuters.com/article/us-in...-idUSKCN1AU235

[BNA/LION]

Good time to have Ca$h in hand. Market PE's are at a high rate and the bull mkt has been hanging around for awhile now. What goes up Must come down.

locutus49- John, I'm with you and I also have a strictly speculative account too. So, I feel like I've got the market cornered!

[dysondiver]

in the land of the blind ,,, the one eyed man is king.

[lapince]

Again I am waiting for the bubble to pop, even if my real estate, commercial or private, go down, I don't care, I bought so low and can wait it out that I have nothing to worry about, the real estate here hasn't recovered since the crisis, maybe rents will go down, they will go back up, for those who want to invest, OP that's you, be very careful, you are 20, wait,
Observe and learn

[Wesley Crusher]

No investment is safe except for bitcoins.