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10/12/09 2:13 PM

#3948 RE: mrnatural #3946

mrnatural,

you wrote "As you mentioned it may only be useful during strong trends".

You narrowed too much what I wrote. I wrote that it may have only worked because of the very severe nature of the financial crisis which took down the credit system in addition to the stock market.

I have to modify my original view regarding the crisis. My original view suggested that the LQD:TLT system could have worked during the stock market decline as well as during the recovery because of the market's special, very rare, characteristics. It didn't happen that way. It actually performed very badly during the decline. Look at most of January and early February, for instance, and that was some of the strongest trend you will ever encounter -- it was totally backwards most of the time.