1) Pointing fingers is not the right way to show one's guts, just put your money where your word is. I am not selling my holdings this coming month. That says all. If the future will simply follow the same pattern, why would anyone not following it? If everyone is following it, there isn't any money to be made.

2) An economist should not be concerned with the stock market at all, otherwise he is a fake one. Economy and finance are very different subjects. I still remember the fund that hired two Nobel Price winners (economics) that blew up (betting on the wrong side of Lira). The Nobel winners were not so noble after all. They were after the money and the those who lost their investment were after these two guys.

3) I am not sure if "they" will give me a sh!t. But you already did. I cannot blame you, since you are full of it.

Just to add something. If you have ever learned communication you would
know that the amount of information is -log(p) where p is the
probablity of the event of interest. If the event follows a common
pattern (you die if you jump off the top of 100-meter building) that
everyone recognize. Then the amount of info, or value of the info, is
very low---in other words, no money to be made). If the event has an
unusual outcome, say, the person did not die, then you can surprise
everyone and earn big.

Back to "sell in May". Everyone heard
about it. Many indeed follows. It happens that some would choose to
sell just a little bit earlier, say, at the end of April, just to be
safe. If the entire market notices this trend, the fall sell off comes
earlier. But how early can it be? Probably dampens some potential rise
early in the year. Thus, the usual decline will be a minor one.
However, if this year is different---the less probable, but still
possible outcome, then the rise could potentially be very large due to
the rarity.

[此贴子已经被作者于2007-5-12 1:13:41编辑过]

Yes, there are many smart a$$ out there. Thus making the market very (although not perfectly) efficient, voiding any chance of making money from well known patterns from the perspective of an amauteur investor.

To prove something right, no amount of data can be enough. You need to go through all the logic. However, to prove something wrong, one data point is enough.

The summer-dip pattern of the stock market can be described as a dice (1~6). Say, the market will go up only if 6 is the result. From past experiences, that's a 1/6 chance. And you think you can earn money by betting on 1~5 and not 6? Not really. Since everyone knows about that, the wagers on each of the numbers are not the same, and betting on 6 isn't necessarily a worse decision compared to any other number.

BTW, the US stock market isn't high at all. On the one hand, dow is at all time high, but on the other hand, the USD is very low now. In terms of EURO, dow was flat for the past 4 years. Yes, no gain at all. Indicating that the US economy stagnated and the companies more or less kept their value during the big fall of USD.

Without a high leverage, their yeild might not be better than the discount rate. They thought they invented something new. But really, their model's risk/reward ratio is not better than any other. It works most of the time, but falls like a rock when it doesn't. Very similar to selling insurance.

I do agree with the risk associated with cheap credit. However, I don't see much correlation with the seasonal change. It comes when it comes. Possibly the end of this May. But it can also be at the end of this December.

Lastly, according to LZ, the return for the summer season is still on the positive side. It's not negative. If you take all the dividends into account, it probably beats the discount rate. So, it good to stay in a highly bullish market, while it isn't exactly bad to stay in a mildly positive market (and that's using your prediction, which I don't fully agree).