Dead Cat Bounce, and timing the Stock Market

A few commentator's are calling Friday a Dead cat bounce, could be!

It would be great if we could say the market is at the top,  its time to sell, or its at the bottom,  we need to buy.

You could buy the Bear ETF at the top, and buy the Gear ETF at the bottom.
Problem solved!

With Materials and Oil at multiyear lows, you could probably buy the sectors at the moment, if you take a medium to long term view.

But timing in general I have found to be hard work, you can buy plenty of software that claims to do it for you, and some of it seems to work,
All you have to do is pay your money, work out your 35 day moving averages,  compared to 65 day moving averages, throw in some Bollinger bands, a few head and shoulders and look out for the hanging dojis, and you've got the job skun!

Buy the time you do that you have probably missed the top or the bottom, and even if you nail it you have the brokerage costs, and the tax consequence's, your accountant will get pretty excited about your activities, and be able to justify his fee, but is it all worth it, I doubt it.

Occasionally you can get the odd stock timing right, but the market, good luck with that!

And even timing a stock Is probably a fallacy, I looked at Blackmore's a couple of year ago, it looked good, but I couldn't work out why people would pay $50 a bottle for vitamins that doctors tell us we don't really need.
But they did and still do, in droves, so I missed out on a great stock waiting for a pullback that never really came.
And the Chinese might soon start buying vitamins, so $100 might be cheap!

 



But our market has a lot of jitters at the moment, so we need to get our shopping list in order, I think if there is a time to time the market, it might be now, and I mean buy.

My thoughts now are don't get too concerned with timing, if you find growth companies like Blackmores, what else do you need, half a dozen of them in different sectors to give you some diversity, and you would find life a lot less stressful than trying to time everything.

Philip Fishers Book "Common Stocks and uncommon profits" , I've mentioned before, Fisher talks about this.
A great read.

Fisher preferred companies that withheld dividends and used the money to grow the business.
He only ever held a few stocks, preferring growth stocks.

Which is a bit of a concern when our markets is so dividend focused.

But he found companies like IBM and Texas Instruments early on, that became great disruptors, that changed the world, pretty insightful for the 1930s.

And he just held them, and watched them grow.

That's what I think we need to be looking for.