Forum Topics "Santa Rally"
Seymourbutts
3 years ago

If I had a dollar for every time I heard "Santa Rally" on some of the podcasts I listen to, I'd probably have about $38.

Anyway, what is everyone's thoughts on this? Whilst I acknowledge that the vast majority of us are here for long-term investing and compound growth, does anyone try to add some "alpha" (yes another buzz-word) to their portfolio's over the short-term? In particular over the Christmas/Holiday period?

By no means am I trying to condone short-term investing or outlooks, or day trading for that matter (definitely not), however we are entering a cyclical period and it can be assumed that some stocks will do better than others in some cyclical periods.

For those who want to play along at home, I'm going to purchase some Endeavour (EDV) shares this week on my SM portfolio. Again I'd like to stress, by no means am I suddenly a short-sighted investor or trader, I'm merely going to use this as an experience to test a (short-term) thesis.

That thesis being, with the Endeavour split from Woolies, I believe EDV is entering a cyclical period due to holidays and Christmas, along with everyone's thirst to get out more over the summer months. Yes it's simple, yes it's high level and very qualitative, however it's only a small parcel and thus I'm acknowledging it's a risky "bet/punt".

I know Claude isn't shy to have some short-term outlooks and investing theses more notably with ACL, so I figured I'd expand my experience and give this a go.

Tune in February to see how it went - and let me know if I should post this as a Straw on EDV so we can see how it goes.

Or feel free to let me know some counter-arguments to the above.

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Alpha18
3 years ago

I don’t worry about it. I find things like these always work…until they don’t. Having said that I’d be reluctant to sell a cyclical business before its busiest period. I own three retailers IRL and plan to be a long term holder in them, if I was looking to sell though, I’m not doing it before Christmas.

I hear about the Santa Rally a lot as well, same thing every year. If enough people believe it though it probably becomes a self fulfilling prophecy. I’d always welcome a nice rally to end the year but I won’t be betting on it personally.

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reddogaustin
3 years ago

@Seymourbutts

Not one for me, as I think it is just market noise for a long term holder, but I most definitely would not let the opinion of a stranger stop you from testing your thesis and learning what ever it is you want to gain from the experience! Enjoy your thesis test!

I think some of these traditional psychological monthly theme's mattered in a pre-internet era when stock investing was a mystical art controlled by brokers, and the masses were making all their decisions individually on the advice of their mystic-brokers, and the data released by government agencies was only recieved by said mystic brokers and fundie's. Now days information and ideas spread so quickly that I think these moments have less value - note though, those mystics are still the old men in charge....

@slymeat

"If you don't plan to sell, what does it matter anyway?"

This. This is the best bit of advice I provide to any and all whom ask! During the first covid crash, a friend ask me "my life savings have halved, should I sell?", I said "do you need the money for something?", "no" they replied, so I said "then who cares, leave the paper loss alone, and let it do its thing until you need some of money".

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