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Tuesday, March 16, 2010

Famous Market Timing Quotes

It is a mark of prudence never to place our complete trust in those who have deceived us even once.
__ Descartes’ first meditation
Note: This is another guest article by Kirk Lindstrom

The above is wise advice, especially for anyone who pays for investment information.

I like to collect quotes about Market Timing from people in the investment world. If you have any to add or know the original date and source of any of these quotes, then please post this in the comments section.
"I never have the faintest idea what the stock market is going to do in the next six months, or the next year, or the next two." Warren Buffet

"If I have noticed anything over these 60 years on Wall Street, is that people do not succeed in forecasting that’s going to happen to the stock market." Benjamin Graham

"Market-timing is bunk." Pat Dorsey, Director of M* Fund Analysis.

"The market timer’s Hall of Fame is an empty room." Jane Bryant Quinn, Author, Columnist

"Market Timing is a poor substitute for a long-term investment plan." Jonathan Clements, Wall Street Journal

"No, I don’t believe in market timing. I’ve been around this business darn near a half-century, and I know I can’t do it successfully.– In fact, I don’t even know anyone who knows anyone who has ever successfully timed the market over the long term." Jack Bogle

"Market timing is an ineffective strategy for mutual Fund Investors." CDA/Wiesenberger

"Nobody but nobody, has consistently guessed the direction of the bond or stock market over any meaningful length of time." John Markese, President, AAII Journal

"I’ve learned that market timing can ruin you." Elaine Garzarelli

"Among the 160 or so newsletters the HFD monitors, the market timing recommendations of only 10 have beaten the stock market over the last decade on a risk-adjusted basis." Mark Hulbert 1-18-01

"As you can probably sense, we’re not keen on market-timing. It just doesn’t work." Morningstar’s Course 106

"Over a 12.5 year period, 224 of 237 market timing newsletters went out of business."

"I’m a strong advocate of buying and holding." Charles Schwab

"Buy and hold is a very dull strategy. It lacks pizzazz and doesn’t inspire much admiration at cocktail parties. It has only one little advantage: It works, very profitably and very consistently." Frank Armstrong, Author

"For most investors the odds favor a buy-and-hold strategy." Carol Gould, New York Times

"There is absolutely no evidence that anyone can time the market." Bill Bernstein

"Some people in the popular press talk about ‘getting into’ a bull market and ‘getting out of’ a bear market, but it is all marketing hype." Rick Ferri, Author

"Only liars manage to always be ‘out’ during bad times and ‘in’ during good times." Bernard Baruch

"There is an overwhelming body of evidence to support the view that believing in the ability of market timers is the equivalent of believing astrologers can predict the future." Larry Swedroe, author

"Don’t trade in and out of funds. Stay invested.– Not only does buy-and-hold investing offer better returns, but it’s also less work." Eric Tyson, author Mutual Funds for Dummies

"Timing the market is for losers. Time IN the market will get you to the winner’s circle, and you’ll sleep better at night." Michael Leboeuf, author, "The Millionaire in You"

The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.
[John C. Bogle in Common Sense on Mutual Funds: , pg 20]
Bob Brinker still takes calls complimenting him on his advice to "get out of the market" in 2000 yet this quote shows he did not "get out" but lowered his asset allocation to equities then shortly thereafter, told his PAYING subscribers to put up to half it back into the NASDAQ which is still down about 50% as of today.
"The Marketimer stock market timing model has turned unfavorable… We recommend raising a 60% cash reserves at this time."
Robert Brinker - January 2000 issue of “Marketimer
My all time favorite:
"We recommend subscribers with aggressive investment objectives invest 30% to 50% of existing CASH RESERVES in the QQQ shares in order to take advantage of this opportunity".
"We recommend subscribers with conservative investment objectives invest 20% to 30% of existing CASH RESERVES in the QQQ shares in order to take advantage of this opportunity".
Bob Brinker - 10/16/2000 “Marketimer” Subscriber Bulletin when QQQ was at $82 just before falling to a low of $20 in the next two years. CASH RESERVES were 65% of his recommended total portfolio at the time and he never issued a sell as it lost 75%!
Brinker's advice to buy QQQ in 2000 was terrible but his recommending it in his newsletter while not adding it to the model portfolios two weeks after the advice was given while urging subscribers to buy, buy, buy was brilliant in a Madoff sort of way. If the markets soared 20% as he kept predicting, the he could take credit for participating. If the markets continued lower, as they did, then his model portfolios were mostly safe with 65% of the equity portion earning good interest in money funds.
Bob Brinker's
=> Asset Allocation History
=> Bob Brinker's QQQ Advice
=> Effect of QQQ advice on reported results
Do you have a favorite market timing quote? If you have any to add or know the original date and source of any of these quotes, then please post this in the comments section.

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