Education Ashley Ormond (aka Owen) newsletters

Discussion in 'Share Investing Strategies, Theories & Education' started by Intrigued_again, 13th Jun, 2019.

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  1. Intrigued_again

    Intrigued_again Well-Known Member

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    As @dunno suggested attached is a few old newsletters called the Fear and Greed Report written by Ashley Ormond (Owen).
    He has written several books on investing, but his free newsletter made for some fascinating reading and during the GFC had a calming effect when others were screaming that its different this time certainly saved us making major errors.
    Unfortunately, I don’t have all the newsletters due to HDD fault, this is what was able to be saved.
    So, if anyone knows of anyone with the original reports please post them up here.

    I hope you enjoy.
     

    Attached Files:

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  2. Nodrog

    Nodrog Well-Known Member

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    For longer term more passive investors who are interested in varying their level of accumulation using the Fear & Greed Index this is the one of the most relevant paragraphs from memory:
     
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  3. Snowball

    Snowball Well-Known Member

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    The second part is dangerous with many people in my view, but mainly new investors.

    They assume because the market has been going up for a while, it must be overvalued and better to wait for a pullback.

    Market proceeds to go up 30% then pullback 10%. Because it kept going up they then start to think the pullback is bound to be a big one. And a bigger correction is needed to justify them coming back to the market, having sat on the sidelines for some time.

    The longer this goes on the harder it gets to start investing again.
     
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  4. Burgs

    Burgs Active Member

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    In support of investing regularly, is to view investing as you would with your super.
    With your super, you have a certain amount taken out of your pay packet each week, fortnight or monthly and it gets invested, nice and simple.
    No market timing and just let compounding do its magic.
     
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  5. Nodrog

    Nodrog Well-Known Member

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    I agree especially when it comes to new cash to invest as it becomes available. Any strategy I used call it market timing if you will is with the use of leverage. Leverage due to the risk involved is reserved for those times when “fear” is high, when risk / reward ratio is significantly greater and margin of safety higher.

    I’ve never used Ashley Ormond / Owens Fear & Greed Index personally but just posted his suggestion in relation to more passive type investors to add to the conversation.

    Additionally now retired I no longer use leverage for anything. But have in the past made good use of leverage during the likes of the GFC and the bear market that followed subsequent to the initial false recovery.

    Our much higher cash holdings at this time has little to do with trying to time the next major market fall but is simply a result of the investing stage of life we are at ie SORR etc.

    Got off track a bit but if I was to use something like the Fear & Greed Index it’s only really the “fear” aspect of interest. As an accumulator that could be a signal to take advantage of some leverage. For a retiree in the SORR zone that could be a signal to invest some of the Cash being held to protect against such an event now that it has occured. Otherwise new Cash simply gets invested as soon as it becomes available. Simply plain old fashioned Dollar Cost Averaging.
     
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  6. dunno

    dunno Well-Known Member

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    An updated replication of the Fear & Greed index for the XAO
    upload_2019-6-14_11-8-54.png

    And for the US Market. (using same moving average offset and Std Dev as XAO chart)

    upload_2019-6-14_11-9-46.png

    Using MA offset and St Dev more relevant for US Market.
    upload_2019-6-14_11-10-57.png
     
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  7. dunno

    dunno Well-Known Member

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    The US market is currently at a +1 St Deviation on the Fear & Growth index.

    This chart shows the actual 10 year (capital only, excludes dividends) returns if you had invested in the US Market when the Standard Deviation was +1 or above (covers periods 1875 – up to 2009 which is the latest period we can calculate a forward 10 year return)

    upload_2019-6-14_11-32-50.png
    Minimum capital return 10yr CAGR -9.1%
    Maximum capital return 10yr CAGR 16%
    Average capital return 10yr CAGR 5%

    Its also worth noting that the GFC started from approx the fair value line
    In the US, not from an overvalued zone.

    The strength of the F&G is in understanding where we are in the big picture, not for explicit timing.
     
    Last edited: 14th Jun, 2019
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  8. oracle

    oracle Well-Known Member

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    The power of regularly investing is shown in below two tables.

    Portfolio 1= IJR (US Small cap - US Version)
    Portfolio 2= IVV (S&P 500 index - US Version)
    Portfolio 3= EWA (iShares MSCI Australia ETF - US Version)

    Timeframe is invest $100K from 2000 to 2010. Lost decade for US markets. Large cap in particular.


    08359C8A-ED8F-4929-A5EE-670B8CB57AF6.jpeg

    As you can see S&P500 portfolio 2 returned only 1.45%. But now let’s look at dollar cost averaging scenario where you invest $1000 per month in addition to initial $100k.

    DDC82DB6-F51D-4B74-B8E8-0B5468E6C24C.jpeg


    Much better return


    Cheers
    Oracle
     
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