Back To “Normal”

Ulli Uncategorized 7 Comments



After the modest sell-off last week, M&A; was yesterday’s buzzword, and the markets rallied higher in “normal” fashion. These days, that can be interpreted that a slight pullback is always followed by a rally sufficient to make up the small losses; that is until it no longer works and the trend ends.

Some readers have commented that they exited the market as weakness surfaced last week. Again, my mode of operation is not to make emotional decisions but let the market tell me when it’s time to get out.

There is no harm in taking profits early, and your comfort level should determine if you have reached this point. There is no sense in following any strategy if you don’t have the stomach for it.

As a point of reference, last week’s drop pulled some of our holdings only 2.5% off their highs. In other words, more downside action is needed before our trailing sell stops kick in.

We’ll sit tight and let the stops be our guide as to when to exit knowing that a trend reversal appears to be likely at that time.

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Comments 7

  1. Two of my "too many" holdings were off 10% last week and I sold them. Of course they are up now but so are most things I didn't sell. One sold at a loss, and one at a gain. One was still well above a 50 and 200 day moving average which tempted me to hold longer – but I'm trying to stick to my pre-defined exit strategy.

  2. Ulli,
    As usual very good advice! You have made a real believer out of me, and I will never again invest in the Stock Market without first having an exit strategy in place.

    I highly recommend that your readers check out the program I now use to track my investments "XLQCOMPANION". This little gem does all the work for you, it even keeps track of the "Trailing Stop percentages" for you.

    Here's some good advice, as a former client of Ulli's. If you don't have time to take Ulli's advice, then hire him to watch your money for you, I did, and I have no regrets.

  3. Ulli,

    Some of us out here are curious as to what a client of yours can expect to earn on a compounded annual percentage based on say the last 10 years, don't need details just a ball park figure. I have heard around 9% is that about right? I know I have checked your signal dates with my favorite mutual funds and I got about 9.5% long during buy signals, but tried using RYURX and RYURX during your sell signals and that was a disaster. Could you please shed some light on this. Lots of people talk about how good they are, but the readers never really know what they did in the past. Many letter writers and advisors publish their performance record if it is any good. I realize their are different types of clients out there, but I am asking about and average type of client with moderate risk tolerance.

    Thanks

  4. Ulli,

    I belive Charles may have meant to say RYURX (inverse SP500) and RYAIX (inverse NAS100). I too would like to know performance record. It all sounds good in your weekly free letter and the comments that you make on the web, but what is it really?

    Thanks

  5. Charles,

    Your numbers are very close. Over the past 19 years we've had an annual compounded growth rate of 9.4%. Before last years crash, it was around 10.5%, but then we sidestepped the drop, which ate up time, but did not add much to our return.

    Ulli…

  6. Ulli,

    Thank you so much for posted your performance record, which beats the heck out of CDs. You are a real gentleman.

    Thanks again.

  7. Ulli,

    Thanks for posting some info. about what some clients might have received from your service on average per year over the last 10 years. I did a little back-test just for fun and the following stats are the results.

    I took and average portfolio of moderate risk using equal amounts to be invested in the following 3 mutual funds and 2 ETFs. From 09-29-99 until 09-29-09 AMAGX up 94.60%, AMANX up 62.99%, FDGRX up 11.53%, QQQQ down 27.51%, SPY down 6.47%. The average gain was 27.028%, which means $10,000 invested 10 years ago would now be worth $12,702.80, which works out to be an annualized compounded growth rate of 2.42% per year. Your 9% or little better certainly beat the buy and hold crowd and you did it with long investments during bull signals and cash during sell signals. I am sure many buy and holders out there will would love to have had 9% or more per year instead of their huge losses they encountered in 2008 and early 2009. Congrats!!!

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