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Support Charts and/or text comments for the
U.S. Stock Markets...in general
YEAR END RESULTS FOR 2005
SUMMARY 12/31/05:
FOR the year 2005...ending on 12/31/05
U.S. Markets returned "about":
The Dow was "down" -.6% as it ended 2004 @ 10,783 and 2005 @
10,717
The SPX was up 3% as it ended 2004 @ 1211 and 2005 @1248
The CMPX was up 1.3% as it ended 2004 @ 2175 and 2005 @ 2205
For 2005, PTR's profolios returned:
C1
and C2 "conservative accounts": Both made 3.8% as they were only
in the market between 1/25/05 and 3/16/05.
A1 "moderately aggressive" account:
was up 8.4%
A2 "aggressive" account: up 10.6%
A3 "very aggressive" account--MSAR 100% long
or short: was up 24.4%. for all of 2005. Note that PTR actually
made a 31.4% return but for our trading we use the DAILY MSAR signal in
conjunction with the WEEKLY signal...at "expected" CITs. For 2005,
this combination of daily+weekly beat just the weekly model, but that has
not always been the case...especially back when broker fees "were" a lot
higher per trade.
A3 has also returned "about" 751% since 5/3/1997...as based on actual
trading from 2/2002 and then "backtesting" from 12/31/01 to that date.
It has also returned an actual 164% since we "called" the major
"Cyclical Low" on 10/31/2002, eventhough, we continue to view Nasdaq as
being inside a "Secular Bear Market" until 2010 or 2014.
While it could be said that this model has "averaged" a return of >100%
a year for seven years, and that would be correct...as a minimum, the actual
way to define the results is by using the CAGR, Compounded Annual Growth
Rate, since this trading period was not a one time event but a sting of
trades, where the capital and retained earnings accumulated in the trading
account where reinvested.
NOTE that by using CAGR, this places it on the same footing to be compared
with the annual return for Bonds, Real Estate, and other types of
investments.
THE CAGR for the Weekly MSAR model, CMPX signal and trading QQQQ's, is
"about" 25.5% over the period of 5/1997 to the end of 2005. In comparison,
from 5/1997 to 12/31/05 the SPX is has an CAGR of about 5.1%, the DOW has
a CAGR of about 5.2%, and Nasdaq a CAGR of about
6.1%. Also note, that the long term growth rates, CAGR, for SPX
is about 6.1% from 1926 to 2005, and DOW's is about 5.5% from 1896-1900
to 2005.
As of 12/31/05, the Nasdaq CMPX has a CAGR of 9.4% from 1971 to date.
NOTE that this return assumes a one time setup deposit into a trading
account and THEN no further addition of outside funds...ever! In
addition, also note that it is based on actual trades from 2/2002 to 12/2005,
but on "backtesting" for the years 1997-2001.
BY the way, for those "Nay-Sayers" who say they have "something that
will beat it," I say that this model detects nearly every major CIT within
2-4%, and I, for one, seriously doubt "anything can beat it, without leverage,
when trading the OVERALL MARKET...like an index or proxy.
Needless to say, trading individual stocks has the potential to generate
returns far in excess of any index trade, but, of course, then you
have little to no diversification and can be easily swallowed up by the
lack of true liquidity and massive outright manipulation. Like does
anyone, in their right mind anyway, actually NOT expect INTEL to
become the next GE? No way!
BUT, it is now being "manipulated" into a long BUYING OPPORTUNITY, and
I highly suspect that once the Herd refreshes themselves at the HOG TROUGH
"the good news" will pour out like water over Niagara Falls.
OF course, "the key question" here, and now, in late 2005, is how low
does the Herd let it go before they have loaded their boat, and my estimate
is still sometime way out between 2010 and 2014. WHY? The "discovery"
of the next generation of uProcessor's is not even on the Radar Screen
yet, and as long as this huge unknown is still "unknown" then I doubt many
institutions will want INTEL for their dividends...YET!
Please read the comments on the
graphic itself, then those in the text box below it, if any exist.
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COMMENTS (IF ANY):
BY the way, one subscriber
ask if this model could break down and stop working, and my answer was "Yes,"
but not likley!
AS a matter of fact, IF this model was to "stop working" THEN the period
that I would be "most worried" about that happening is NOW! WHY?
This model, like any and all MODELS, need "volatility" in order to work.
That is to say, they NEED a stock or index that is making significant changes,
up and/or down, over time, AND THE MORE THE better. Can you deduce
WHY?
SIMPLE, take a stock or index that trades "around" 100, as an example,
BUT which has consolidate at that 100 line for years, say by never changing
more than +/- 2 points during a quarter (98-102 maximum range). DO
you see how difficult it would be for this model, or any model, to make serious
gains if the index or stock is only "drifting" sideways in a "low value range"?
NOW do you get it? I suspect so!
IN addition, when I say I would be "most worried" about this model
failing to work "now," that is because most indexes jumped up about 50%-60%
from their 2002 lows to a upper high "range" by 1/2004, and since
then to now, 12/31/05, they have been doing "mostly" some sideways action.
Should this continue then it will become difficult, or even impossible,
for the
MSAR, or any other model
or live trader, to make "serious" money going forward.
By the way, that is WHY we backtest the model on the CMPX index on a quarterly
basis, and as of 12/31/05 it is "still working," even if only by a hair...so
to speak! Well, 24% CAGR in 2005 is still a good hair!
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For The Price-Time Review
Andrew J. Quiggly
Editor
All content is copyright(2005)
PriceTime LLC
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