www.TIMERTRAC.com

Figure 1: the home page of timertrac.com

Investment newsletter writers have Mark Hulbert and his digest; the followers of market folklore, arcana, and shibboleths have Yale Hirsch and his almanac, and now, the world of market timers has TimerTrac.com.

What is Timer Trac? Quite simply, Timer Trac provides an amazing cross-section of data on some of the country's most savvy and often under-the-radar market timers, traders, and money managers whose job it is to be in the market when it's moving up and out of the market-or short-when the market is moving down.

And whether you're looking for the skinny on some big-talkin' market timer or just want to show off your own talents in that regard, Timer Trac may be for you.

Timer Trac verifies claims about performance by market timers, and displays this information in text, tabular, and graphic form. This is perhaps what makes Timer Trac so special: not only does the service provide invaluable performance information on a number of talented though often obscure market timers, but it also provides the information in such a way that would-be subscribers can make comparisons between trading styles or strategies between market timers as well as within a market timing organization.

For example, a given market timing firm might have three or four different timing strategies representing opportunities in various markets or involving various trading instruments or time frames. Those using Timer Trac can determine which of the market timer's strategies outperformed during a given period, and how that outperformance compares with the performance of other market timers using similar strategies.

"Real ‘apples to apples' comparisons," is how Dave Garrett, principal at Timer Trac, describes the service.

How does Timer Trac get its data from the various market timers who want Timer Trac's seal of authenticity, if not approval? The same way the subscribers to those various market timer services do, which tends to mean by email these days. This, it should be underscored, is important, as far as Timer Trac is concerned. "We want to be just like a real subscriber using the service," Garrett explains.

In other words, just generating trading signals is not enough. Those signals need to be delivered swiftly and accurately to subscribers so they have enough time to place their trades or adjust their positions. By getting the signals from the market timers the same way that subscribers do, Timer Trac's accounting of performance reflects exactly the performance an investor, speculator, or trader should achieve if he or she followed the signals regularly.

"We don't track account value," Garrett observes. "We track the actual buy and sell signals."

Timer Trac creates a history of a given market timer's performance, something concrete and objective that can be measured against previous performance, index performance, or the performance of other market timers. Each market timer tracked by Timer Trac will have a "medallion" button on his or her website. Visitors to the website can then just click on the medallion and get an instant pop-up record, courtesy of Timer Trac, of that market timer's performance data.

Timer Trac tracks more than 500 different strategies, representing between 150 and 200 individual firms and money management market timing professionals. The website exclusively tracks instruments that can be priced at the open or close. This means mostly exchange- traded funds and mutual funds and, as such, the service is definitely geared toward end-of-day traders. "Some people work and need fewer signals during the year or after the workday is done," explains Garrett. "Some people just want somebody to handle it all."

In addition to the text, tabular, and graphic data on market timers, Timer Trac features a service called "Timer Trac Broadcast." Timer Trac Broadcast used to be restricted to subscribers to Timer Trac. Now, however, it will be offered as a free service that anyone can subscribe to. Timer Trac Broadcast is essentially a forum for market timers to discuss and update their analysis, methods, and outlooks, and while Timer Trac will edit the content for brevity, completeness, and clarity, Timer Trac Broadcast will remain in most respects the same, "behind the scenes" coverage of market timers at work.

Another special feature at the Timer Trac website allows traders to create a composite portfolio that can be tracked. For example, a portfolio weighted between precious metals, stocks, and bonds in a 30-30-40 ratio could be tracked with an equity line to see just how such a portfolio would perform. Garrett is especially pleased with this feature, and not just because of what it does for traders and speculators looking for the right combination of assets, but for what it reveals about the effectiveness of market timing.

"The market timing removes risk," he explains, adding that with the composite you can "more clearly see the effect of market timing" on the chart.

Timer Trac will be adding many commonly used statistical measures (drawdowns, correlation coefficients, comparing equity lines of different market timers, Sharpe ratios, and so forth) over the next few months. And while much of this will please the bean-counters and number-crunchers, Garrett believes that what Timer Trac already provides by way of comparative data is more than enough for most speculators and investors looking for an edge in the markets. "To see a graph, a visual view, to make decisions about which timer's strategy or strategies are best" is a great advantage, Garrett says.

TIMING AND TRACKING

Asked why more people don't take advantage of market timing, Garrett points to publicity-and perhaps some not so inadvertent propaganda - from the competition. "Some institutions have worked very hard to paint market timing as a bad thing," Garrett says. "If I say ‘market timing doesn't work,' you automatically pick up on that phrase. Everybody's heard it."

Like "hedge fund," the term "market timing" has taken a beating among some in the media. Most notably, the mutual fund scandals, which involved shenanigans more reminiscent of Paul Newman's and Robert Redford's in The Sting than true "market-timing," were nevertheless labeled by an ignorant press as "market timing."

It might be even worse than that. Adds Garrett, this kind of anti-market timing propaganda actually "calms down a mutual fund investor" who might be impatient with the performance of a mutual fund and looking to market-timing for something better.

The problem with mutual funds, observes Garrett, is that young people have the time, but not the money. Old people have the money, but not the time.

Market timing, on the other hand, splits the difference perfectly-helping younger investors make the most of their money by keeping losses low and their capital "in the game," and helping older investors make the most of their time by avoiding the sort of drawdowns that tend to take outsized returns (and twice as much time) to recoup. Besides, as Garrett points out, just about any form of buying low and selling high is market timing. "It's much broader than most people apply the term."

What would get people interested in market timing again? Says Garrett without hesitation: "A sideways market." He adds that 90% of the market timers out there would likely underperform a bull market, during which buy and hold investing-and often with the most speculative vehicles available-is hard to beat.

The market environment does more to determine what investors will do than anything a market timer or mutual fund manager says or does, Garrett explains, recalling the infamous Newsweek headline "Death of Equities" from the early 1980s. When times are difficult, people retreat from risk-taking activity-including the complacency of an investment strategy that says, to steal a line from the land of infomercials, "Set it and forget it."

Instead, what seems risky-as in market-timing-as a bull market rages becomes more attractive when confidence wanes, markets move in nauseating, nowhere-fast zigzags, and investors and speculators are as willing to be out of the market as in. Adds Garrett: "The saying about the market used to be: ‘Don't invest anything in the market that you can't afford to lose.' Of course, recently, people have been investing their kids' college funds in equity funds."

So are market timing services the "hedge funds for the regular guy"? While hedge funds engage in a variety of activities-from debt swaps to arbitrage-the average person thinks of a hedge fund as an opportunity for rich people to exploit both rising and falling markets. And if this is all a retail investor longs for when he or she wishes to run with the bulls and the bears, then signing on with a market timer may be just what that retail investor is looking for.

And TimerTrac.com? is without a doubt the best place to find them.
 

-David Penn, Technical Writer

-See Editorial Resource Index


Originally published in the August 2005 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2005, Technical Analysis, Inc.
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