Intro from “Master Class II-Timing Gold”: Many seasoned advisers scoff at the notion that market timing even exists, let alone that it is possible. I call this and similar views, the “Columbus Doctrine”. This doctrine states that “If I don’t know how to do it; it can’t be done”. Columbus sparked the most historic moment in the doctrine’s long history when he actually sailed off the edge of the world (it was widely believed to be flat in 1452) and miraculously returned to Spain. His reward was riches, fame and honor. Though not the first to reach the Americas from Europe, that being Leif Ericson, Christopher Columbus is remembered on Columbus Day whilst poor old Leif languishes as a footnote in history. Even 7 centuries ago, a good PR agent was paramount!
Our theme picture today is the magnificent Sistine Chapel (1508-12) painting of the Prophet Daniel by Michelangelo. Daniel gave us the earliest documented solutions for the problems of universal “Time”. And I don’t mean hours and minutes!!
Market timing is one of those areas of market lore that attracts vehement and opposite responses. Some find it strangely seductive, whilst others loathe and dismiss the idea in its entirety.
So we have dedicated market timers on one side of the argument, and these folks believe that markets can be timed to the day, and we have the sceptics on the other side who find no use for market timing, plus of course all those whose ideas fall somewhere in the twain. Strangely, both groups are right, but not in the way they think, and today I will show you the real and valid benefits of market timing which I expect will be quite a foreign concept to most of you.
There are timing cycles in all markets. Many of them. Some inordinately long and of interest only to witchdoctors (economists), who will not live long enough to see the cycles repeated. Kondratieff Winters, Kuznets etc, are of no value to practical traders, even if the theory was true, which it’s not, and some so short that they amount to not much more than wiggly lines which in truth require a hefty dose of booze or other substance abuse to glean any insight.