Market Timing
“There is time to go long, time to go short and time to go fishing.”
- Jesse Lauriston Livermore.
The big funds with Billions of assets always say that you can't market time. One thing I know the big funds can't move, they are too big. They can't but small investor can avoid turbulence and disaster. don't buy into the big houses speech. What is market timing, it's to step aside time to time.
In Mark Spitznagel book he gives this example:
you have a dice game where
if 1 you gain 50%
if 2 you lose 50%
if 3,4,5 or 6 you gain 5%
average is 3,3%, positive
In the Real world , you don't want the average you want the geometric average. (The idea is if you make 50% in the first draw your capital goes from 1 to 1,5, next play you are going to play with 1,5)
if you invest USD 1 and 1 comes, you end up with 1,5 (up 50%) , if 2 is the next number your account goes to 0,75 (lose 50%) , if 3, 0,79, if 4 0,83, then 0,87 and finally when 6 show's up you end up with 0,91
despite a positive arithmetic average the geometric average is negative! you lose 9%!!!
Conclusion: do everything to avoid a big loss, if you are a airline pilot avoid crossing turbulence zone , always avoid turbulence.
If you are an investor and want to know more about this, what to do and what not to do contact me directly.
our corporate email is
geral@lisbonfamilyoffice.pt
If we don't answer promptly is because we got a lot of emails.
IF you want to save some time our idea to solve this problem is this
If you panic, panic fast!
