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  1. #2181
    Quote Originally Posted by duke79 View Post
    Some people believe she got lucky with some of her stock picks.
    Unless someone is trouncing the index on a risk-adjusted basis by many % per year, it can take a career's worth of years to demonstrate outperformance that meets a test of statistical significance. And by that point ... you need to find someone else.

    Even thumping the index for several years is not necessarily sufficient. Depends on the degree of the thump, but as I recall when doing the math many years ago, it's often a lot more than you'd think.

    She may have been (or be) skilled - quite skilled. But over a 5-year horizon you can't rule out luck, for her or anyone.

    Note that this is the case for poor performers as well. They could simply be unlucky, not unskilled. In fact, I recall empirical evidence that you're just as likely to get top-quartile performance in period 2 by investing with a manager that was bottom quartile in period 1, as you are investing with a manager that was top quartile in period 1. The 4x4 matrix was 25% +/- 2% in every cell, as I recall. This was some time ago, but was part of a raft of empirical data all pointing in the same direction.

  2. #2182
    Quote Originally Posted by OldPhiKap View Post
    I happened to be in the car at 2:30 and an etf guy was discussing her on Bloomberg radio. His take is that she specializes in unprofitable companies that have potential, and that she is sort of a tertiary venture capitalist. Great when it works, bad when it doesn’t. He also thought that rising interest rates will be a strong headwind going forward.
    Yea, she is invested heavily in companies that have a lot of potential but not a lot of real profits at this time. Very risky strategy. Did very well in 2020. A little like a college basketball coach offering an 8th grader stud basketball player a full basketball scholarship, hoping he'll continue to develop in high school.

  3. #2183
    Quote Originally Posted by cspan37421 View Post
    Unless someone is trouncing the index on a risk-adjusted basis by many % per year, it can take a career's worth of years to demonstrate outperformance that meets a test of statistical significance. And by that point ... you need to find someone else.

    Even thumping the index for several years is not necessarily sufficient. Depends on the degree of the thump, but as I recall when doing the math many years ago, it's often a lot more than you'd think.

    She may have been (or be) skilled - quite skilled. But over a 5-year horizon you can't rule out luck, for her or anyone.

    Note that this is the case for poor performers as well. They could simply be unlucky, not unskilled. In fact, I recall empirical evidence that you're just as likely to get top-quartile performance in period 2 by investing with a manager that was bottom quartile in period 1, as you are investing with a manager that was top quartile in period 1. The 4x4 matrix was 25% +/- 2% in every cell, as I recall. This was some time ago, but was part of a raft of empirical data all pointing in the same direction.
    Mean reversion.

  4. #2184
    Quote Originally Posted by OldPhiKap View Post
    I happened to be in the car at 2:30 and an etf guy was discussing her on Bloomberg radio. His take is that she specializes in unprofitable companies that have potential, and that she is sort of a tertiary venture capitalist. Great when it works, bad when it doesn’t. He also thought that rising interest rates will be a strong headwind going forward.
    Rising rates are a serious problem for her unprofitable/debt funded companies. Her strategy works much better in a zero rate environment.

  5. #2185
    Days like today are great, nice and easy in the morning and then they punch you in the gut near the end of the day. Don't get lured in.

  6. #2186
    Quote Originally Posted by Jeffrey View Post
    Rising rates are a serious problem for her unprofitable/debt funded companies. Her strategy works much better in a zero rate environment.
    But are they debt funded? The IPO market has been open to a lot of schlock the last couple of years.

  7. #2187
    Quote Originally Posted by YmoBeThere View Post
    But are they debt funded? The IPO market has been open to a lot of schlock the last couple of years.
    I’ve recently analyzed a few of ARK’s medical holdings which are unprofitable and have substantial debt. Rising rates are also a major ARK problem because ARK is wagering on enormous future (earnings, dividends, etc.) growth which will be worth far less with a substantially higher discount rate. ARK’s strategy works much better in a zero rate environment!

  8. #2188
    Quote Originally Posted by Jeffrey View Post
    I’ve recently analyzed a few of ARK’s medical holdings which are unprofitable and have substantial debt. Rising rates are also a major ARK problem because ARK is wagering on enormous future (earnings, dividends, etc.) growth which will be worth far less with a substantially higher discount rate. ARK’s strategy works much better in a zero rate environment!
    Wow, they must not have been making a good pitch, Softbank was handing money out like Halloween candy for a long time.

  9. #2189
    Quote Originally Posted by YmoBeThere View Post
    Days like today are great, nice and easy in the morning and then they punch you in the gut near the end of the day. Don't get lured in.
    And they did it again today with a bigger lure and even more of a gut punch. S&P up 1.5% at 11 AM Eastern today and down 1.1% at the close.

  10. #2190
    Quote Originally Posted by YmoBeThere View Post
    The market(S&P 500) since the end of November: (as of 1/20)

    iShares Core S&P U.S. Value ETF (IVOV) price at close 11/30/2021: 71.77
    Dividend disbursement (12/13/2021): 0.383

    Close today: 74.86

    Return during that period: 4.86%

    iShares Core S&P U.S. Growth ETF (IUSG) price at close 11/30/2021: 113.07
    Dividend disbursement (12/13/2021): 0.18

    Close today: 104.44

    Return during that period: -7.49%
    Both dropped but the gap increased from the 18th from 11.88% to 12.35%

  11. #2191
    Quote Originally Posted by YmoBeThere View Post
    I closed out all of my shorts this morning.

    I still hold my BITW position. It is down 12.5% from my initial (and only) buy.
    I regret both these moves though some were moneymaking.

  12. #2192
    Quote Originally Posted by YmoBeThere View Post
    Always an interesting read(IMO):

    Waiting for the Last Dance

    The Hazards of Asset Allocation in a Late-stage Major Bubble
    By Jeremy Grantham

    Executive Summary

    The long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.

    These great bubbles are where fortunes are made and lost – and where investors truly prove their mettle. For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in.

    But this bubble will burst in due time, no matter how hard the Fed tries to support it, with consequent damaging effects on the economy and on portfolios. Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of markets, it is intellectually exciting and terrifying at the same time. It is a privilege to ride through a market like this one more time.

    https://www.gmo.com/americas/researc...he-last-dance/
    I linked to him last year, so thought I would link to his latest...

    https://www.gmo.com/americas/researc...-rumpus-begin/

    LET THE WILD RUMPUS BEGIN*
    (Approaching the End of) The First U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities


    By Jeremy Grantham


    Executive Summary

    All 2-sigma equity bubbles in developed countries have broken back to trend. But before they did, a handful went on to become superbubbles of 3-sigma or greater: in the U.S. in 1929 and 2000 and in Japan in 1989. There were also superbubbles in housing in the U.S. in 2006 and Japan in 1989. All five of these superbubbles corrected all the way back to trend with much greater and longer pain than average.

    Today in the U.S. we are in the fourth superbubble of the last hundred years.

    Previous equity superbubbles had a series of distinct features that individually are rare and collectively are unique to these events. In each case, these shared characteristics have already occurred in this cycle. The checklist for a superbubble running through its phases is now complete and the wild rumpus can begin at any time.

  13. #2193
    Vanguard not too sanguine on returns this decade:

    https://www.startribune.com/vanguard...ome/600138460/

    Vanguard execs: Stock investors will be stepping off the gas for years to come

    In an online forum this month, leaders at the nation's largest mutual fund provider said stock returns will be around 2%-4% annually in the 2020s.

  14. #2194
    Quote Originally Posted by YmoBeThere View Post
    Vanguard not too sanguine on returns this decade:

    https://www.startribune.com/vanguard...ome/600138460/

    Vanguard execs: Stock investors will be stepping off the gas for years to come

    In an online forum this month, leaders at the nation's largest mutual fund provider said stock returns will be around 2%-4% annually in the 2020s.
    They're more bullish on foreign equities, but if you acted on their predictions 10 years ago on US vs international equities, you wouldn't be too happy right now as intentional has trailed considerably. In other words, nobody knows anything, even so called "experts." But from a valuation perspective, certainly equities are not "cheap."

  15. #2195
    Join Date
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    Quote Originally Posted by YmoBeThere View Post
    Vanguard not too sanguine on returns this decade:

    https://www.startribune.com/vanguard...ome/600138460/

    Vanguard execs: Stock investors will be stepping off the gas for years to come

    In an online forum this month, leaders at the nation's largest mutual fund provider said stock returns will be around 2%-4% annually in the 2020s.
    How do they feel about this week? 😂

  16. #2196
    Quote Originally Posted by bundabergdevil View Post
    How do they feel about this week? 😂
    I continue to buy on the dips. Is that smart? No idea, but nothing else to do. Certainly my buys last week aren't looking that great, but I'm a long-term buy and hold investor...I'm putting my new money into the areas that have lagged as my desired asset allocation is slightly off, so it serves as a "re-balance" (I like to rebalance with new money instead of selling/exchanging as don't want capital gains).

  17. #2197
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by Bluedog View Post
    I continue to buy on the dips. Is that smart? No idea, but nothing else to do. Certainly my buys last week aren't looking that great, but I'm a long-term buy and hold investor...I'm putting my new money into the areas that have lagged as my desired asset allocation is slightly off, so it serves as a "re-balance" (I like to rebalance with new money instead of selling/exchanging as don't want capital gains).
    Same. 90% of my investing comes in the form of automated pre- and post-tax purchases in a basket of diversified vehicles on a bi-weekly cadence and I don't plan on changing that. I may alter which assets I purchase but the basic investment strategy is the same.

  18. #2198
    Quote Originally Posted by Bluedog View Post
    I continue to buy on the dips. Is that smart?
    IIRC the empirical evidence suggests that it matters much more how long you're in the market, not timing. In other words you're more likely to lose out trying to time the market by being out of it and waiting for dips. I can dig out the details of the study/studies if you like. It'll likely be older stuff but as best I know they have not been overturned by newer findings.

  19. #2199
    Quote Originally Posted by cspan37421 View Post
    IIRC the empirical evidence suggests that it matters much more how long you're in the market, not timing. In other words you're more likely to lose out trying to time the market by being out of it and waiting for dips. I can dig out the details of the study/studies if you like. It'll likely be older stuff but as best I know they have not been overturned by newer findings.
    Yes, I've seen the studies and understand the probabilities that being in the market for as long as possible certainly is the most important thing and market timing is a fool's errand. Having said that, I have some flexibility on my cash holdings/emergency fund, and am okay doing some small incremental investments on RBDs (really bad days). Perhaps it just makes me feel better. Probably won't affect much in the long-run and maybe having a smaller permanent cash position is better (i.e. don't let cash sit in accounts at all and immediately deploy to equities). People have differing philosophies on "emergency funds" and the like. I used to think it was critical (all those personal finance people say something like 6 months expenses in checking/savings account), but I have changed my mindset a bit given my particular circumstances. People need to do what helps them sleep well at night and fits their situation.

  20. #2200
    Quote Originally Posted by bundabergdevil View Post
    How do they feel about this week? 😂
    The more it drops, the more likely to hit trend or above trend returns in the future. 2-3% is definitely below trend.

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