The market makes 3x the progress from Nov. to May than it does
from May to November. Most manager's fiscal year ends
10/31 or 11/30, that way, they can receive bonuses in
December. If you are a manager in late August and are up 30%, you
are taking risk off the table to preserve your upcoming bonus.
If you are down 30%, you are fighting the most important risk
of all, "career risk". If you still have a job in November,
you can now breathe a sigh of relief and look out " long term"
(about 6 months). Better decisions are being made and there
usually a bullish bias. Moral of the story, Don't fight
career risk.
Evil Speculator had some brill data on market seasonality
charted form the 1950s. I can't post the chart, but basically
bullish months/periods are March - April, July, October and October
- January. Even including 87 and 08 crash October is still bullish.
Negative to sideways are February, May - June and August -
September. May and August are especially neutral.
Holds true for Mutual Funds, Not Hedge Funds. Most HF managers
have underperformed and they will likely try and play catch up.. So
the hope for a crash seems unlikely. Do we ping pong or go lower 3
to 5% absolutely. I would look for the outperformers to go long
into years end. Quality of the rally will likely be poor but I
wouldnt bet on a crash.
November to May
Posted by rslph on 3rd of Nov 2011 at 03:02 pm
The market makes 3x the progress from Nov. to May than it does from May to November. Most manager's fiscal year ends 10/31 or 11/30, that way, they can receive bonuses in December. If you are a manager in late August and are up 30%, you are taking risk off the table to preserve your upcoming bonus. If you are down 30%, you are fighting the most important risk of all, "career risk". If you still have a job in November, you can now breathe a sigh of relief and look out " long term" (about 6 months). Better decisions are being made and there usually a bullish bias. Moral of the story, Don't fight career risk.
Evil Speculator had some brill
Posted by Vida on 3rd of Nov 2011 at 03:59 pm
Evil Speculator had some brill data on market seasonality charted form the 1950s. I can't post the chart, but basically bullish months/periods are March - April, July, October and October - January. Even including 87 and 08 crash October is still bullish. Negative to sideways are February, May - June and August - September. May and August are especially neutral.
Holds true for Mutual Funds,
Posted by jdaswani on 3rd of Nov 2011 at 03:06 pm
Holds true for Mutual Funds, Not Hedge Funds. Most HF managers have underperformed and they will likely try and play catch up.. So the hope for a crash seems unlikely. Do we ping pong or go lower 3 to 5% absolutely. I would look for the outperformers to go long into years end. Quality of the rally will likely be poor but I wouldnt bet on a crash.
That's right.. they either perform or No GI JOE Doll with the kung foo grip
Posted by zach06 on 3rd of Nov 2011 at 03:10 pm
Matt posted a chart on that.... Hey Matt.. you still have it handy?
Posted by zach06 on 3rd of Nov 2011 at 03:03 pm