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What is 'making a market call'? I find Buffett’s story stunning because the two people who most certainly knew Buffett was one great swimmer (investor) discouraged him from entering the water because they were concerned about the current (market). Even Ben Graham succumbed to the seduction of making a market call, which illustrates just how difficult it is to focus on identifying great swimmers instead of predicting the current.
Sep 26, 2018 2:08 PM
Answers · 6
Making a market call means deciding that market conditions have changed: a bull market will start to rise or a bear market will start to fall. If you gamble in the markets, this is an occasion to sell or buy. Warren Buffet advises against making market calls: he buys investments to keep for a long time.
September 26, 2018
"To make a call" can mean "to render an authoritative opinion," "to make an official judgement." In US professional baseball, the umpire "calls the balls and strikes." That means he watches where the pitched ball goes and makes the decision whether the ball went inside or outside the strike zone. When a tennis referee ruled that a tennis ball had hit outside the court lines, and later a video reply showed that it had hit inside, it was said that he had "made a bad call."
September 26, 2018
Here are some examples of "market calls" that were posted by participants in the "Bogleheads" investing forum. I'm not going to judge whether these were "good calls" or "bad calls" (i.e. whether they were accurate prediction), I just want to illustrate language and context. These are online postings written in casual, informal English. (January 15, 2016) "I'm calling an Emerging Markets bottom this year. Not sure what month/day per se but sometime in 2016. This reminds me of the shoe shine boy in 1999 who is giving his customers stock tips. Twice in the past week I've heard people who are uninterested in investing talking about how Emerging Markets are going down the tubes and to avoid them. EVERYBODY now knows this. Hence the bottom is in sight. Buy buy buy. (December 7th, 2017) "Call the top! - Bitcoin. Using winkdex.com price, guess the peak bitcoin price between now and Dec 31 2018. Guesses have to be in by Dec 31 2017 or 1 day “before the peak/crash”, whichever is earlier. I’ll guess 20,432 (but only on this forum, I’m not guessing with one penny of real money). If it crashes well before The end of 2018, we’ll identify a “tentative winner”. The prize? Honor and glory." (September 17th, 2009) "Cramer calls top in 10, 30 year Treasuries. FWIW, Jim Cramer just called a top in 10 and 30 year US Treasuries. He advised his viewers to Sell, Sell, Sell them and put the money in FDIC-insured 18-month CDs. He also advised taking your cash out of money market accounts since the government guarantee is about to expire and put that money in CDs too." (Notes: "Emerging markets" means the stock markets of less developed countries. Germany, Singapore, and Japan are examples of "developed markets." Brazil, Russia, and India are examples of "emerging markets." Jim Cramer is a popular TV personality with an investing show on the CNBC cable network. "Treasuries" are the sovereign bonds of the United States of America. The FDIC insures bank deposits in the United States.)
September 26, 2018
Jimmy is right. You cannot forecast the moment when the market will change direction, but you can buy a good company, at an attractive price, and keep it for a few years, even if the market has a (long ?) downturn.
September 26, 2018
Hi
September 26, 2018
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