Investment Thread

[YmoBeThere]

You, my friend who bought his home at the market peak and I should start a company. We could greenmail companies and entire industries to keep us away. It would be the Anti Buffett.

I'm in- it's past time to monetize our specialized skill set. For a mere 15% of a company's total investments we promise to not tank their portfolio. Oh, they will laugh and refuse at first. But after we buy in and crash a couple of their key sectors -- believe me they will be coming around, begging us to take their money!

Unfortunately, the hitch in your plans are that while specialized that skill set isn't exceedingly rare. I too possess it.

[Skydog]

Unfortunately, the hitch in your plans are that while specialized that skill set isn't exceedingly rare. I too possess it.

Well then our FOUR weapons are fear,...

[budwom]

the company from which I retired just sent out its annual info on the various investment options it offers (401-(k) ) and over the last tean years, the S&P 500 fund, aka Large Company Fund, earned 13.88% per year with expenses of 0.02%. Glad I've used it, wish I'd used it a tad more...

[duke79]

the company from which I retired just sent out its annual info on the various investment options it offers (401-(k) ) and over the last tean years, the S&P 500 fund, aka Large Company Fund, earned 13.88% per year with expenses of 0.02%. Glad I've used it, wish I'd used it a tad more...

I tell all my clients....in the long run, it is very, VERY hard for any active money manager to beat the broad stock market averages, especially when you factor in the expense ratios. And you can buy these broad, index funds from any of the major mutual fund companies (ETF's or mutual funds) with annual expense ratios of less than 5 basis points (.05%) per year (and Fidelity now offers their own proprietary index funds with 0.00% expense ratios).

[budwom]

I tell all my clients...in the long run, it is very, VERY hard for any active money manager to beat the broad stock market averages, especially when you factor in the expense ratios. And you can buy these broad, index funds from any of the major mutual fund companies (ETF's or mutual funds) with annual expense ratios of less than 5 basis points (.05%) per year (and Fidelity now offers their own proprietary index funds with 0.00% expense ratios).

yep, it's been my mantra for a long, long time, but our Financial Services industry is a juggernaut that has other notions, which is too bad.

[bundabergdevil]

I tell all my clients...in the long run, it is very, VERY hard for any active money manager to beat the broad stock market averages, especially when you factor in the expense ratios. And you can buy these broad, index funds from any of the major mutual fund companies (ETF's or mutual funds) with annual expense ratios of less than 5 basis points (.05%) per year (and Fidelity now offers their own proprietary index funds with 0.00% expense ratios).

And yet there are a lot of money managers in the world (acknowledging that they do much more than seek above market returns).

[cspan37421]

I tell all my clients...in the long run, it is very, VERY hard for any active money manager to beat the broad stock market averages, especially when you factor in the expense ratios. And you can buy these broad, index funds from any of the major mutual fund companies (ETF's or mutual funds) with annual expense ratios of less than 5 basis points (.05%) per year (and Fidelity now offers their own proprietary index funds with 0.00% expense ratios).

Next month my local financial analysts society is sponsoring a talk that is subtitled, "How passive investing is breaking the market" - should be interesting. I've often pondered how many active investors (or how many dollars of active investment, etc) is necessary to establish (and maintain) equilibrium pricing / market efficiency, upon which passive investors can ride the coattails. Put another way, how much passive investing can the market bear without breaking strong/semi-strong form market efficiency?

[Bluedog]

Next month my local financial analysts society is sponsoring a talk that is subtitled, "How passive investing is breaking the market" - should be interesting. I've often pondered how many active investors (or how many dollars of active investment, etc) is necessary to establish (and maintain) equilibrium pricing / market efficiency, upon which passive investors can ride the coattails. Put another way, how much passive investing can the market bear without breaking strong/semi-strong form market efficiency?

I think we're a LONG way off from that, but, yeah, Bogle even posited that if everybody indexed "markets would fail under chaos."

"The second thing is, although index funds have a pretty large share of total assets that are invested in managed funds, about 40% in the U.S., their share of trade volume is much lower. And that's because turnover in index funds tends to be a lot lower than the turnover ... Price discovery happens on the margin when shares trade hands. So, if index funds are accounting for a much smaller share of the overall trade volume than they are of total asset ownership, then actually active managers are still driving most of the price discovery that's happening. So, I think we're a long way from this being a problem. It's not to say that it couldn't be a problem at some point, but we're not there yet. And if we ever were to get to that point where there did, you know, become more mispricings, well, then active managers should start doing better and I think there will be this equilibrium that the market finds where people might shift back to active and back and forth until we find that equilibrium."
https://www.morningstar.com/articles...eryone-indexes

With HFT and tons of quants looking for these mispricing with HUGE trading volumes, I think index investors have nothing to worry about...And even an "index investor" could be hitting a LOT of different indices and trade hands. The S&P 500 is different than the MSCI Large Cap Index, some may be looking to value, size cap or even factor investing like quality, momentum, etc.

[bundabergdevil]

I think we're a LONG way off from that, but, yeah, Bogle even posited that if everybody indexed "markets would fail under chaos."

"The second thing is, although index funds have a pretty large share of total assets that are invested in managed funds, about 40% in the U.S., their share of trade volume is much lower. And that's because turnover in index funds tends to be a lot lower than the turnover ... Price discovery happens on the margin when shares trade hands. So, if index funds are accounting for a much smaller share of the overall trade volume than they are of total asset ownership, then actually active managers are still driving most of the price discovery that's happening. So, I think we're a long way from this being a problem. It's not to say that it couldn't be a problem at some point, but we're not there yet. And if we ever were to get to that point where there did, you know, become more mispricings, well, then active managers should start doing better and I think there will be this equilibrium that the market finds where people might shift back to active and back and forth until we find that equilibrium."
https://www.morningstar.com/articles...eryone-indexes

With HFT and tons of quants looking for these mispricing with HUGE trading volumes, I think index investors have nothing to worry about...And even an "index investor" could be hitting a LOT of different indices and trade hands. The S&P 500 is different than the MSCI Large Cap Index, some may be looking to value, size cap or even factor investing like quality, momentum, etc.

Yeah, as long as humans want to get rich quick, I’m not worried about too much passive investing. So….

[Acymetric]

I think we're a LONG way off from that, but, yeah, Bogle even posited that if everybody indexed "markets would fail under chaos."

"The second thing is, although index funds have a pretty large share of total assets that are invested in managed funds, about 40% in the U.S., their share of trade volume is much lower. And that's because turnover in index funds tends to be a lot lower than the turnover ... Price discovery happens on the margin when shares trade hands. So, if index funds are accounting for a much smaller share of the overall trade volume than they are of total asset ownership, then actually active managers are still driving most of the price discovery that's happening. So, I think we're a long way from this being a problem. It's not to say that it couldn't be a problem at some point, but we're not there yet. And if we ever were to get to that point where there did, you know, become more mispricings, well, then active managers should start doing better and I think there will be this equilibrium that the market finds where people might shift back to active and back and forth until we find that equilibrium."
https://www.morningstar.com/articles...eryone-indexes

With HFT and tons of quants looking for these mispricing with HUGE trading volumes, I think index investors have nothing to worry about...And even an "index investor" could be hitting a LOT of different indices and trade hands. The S&P 500 is different than the MSCI Large Cap Index, some may be looking to value, size cap or even factor investing like quality, momentum, etc.

Speaking as a complete non-expert, I feel like the process of finding that equilibrium might be a tad more painful a process than the description there implies. Also, "don't worry, the HFT guys have us covered" doesn't provide me with a ton of comfort.

[Jeffrey]

I’ve reinvented myself at least twice during my investing life. I began in my late teens (small inheritance) buying individual stocks. Webster should have used a pic of me for the definition of dumb money! Back then, the pros had much better access to timely and detailed information. Insider trading was also much more rampant than today. I was making decisions based upon information from a one page Value Line, company reports, and guests on FNN and WSW. Fortunately, Grateful Dead tours occupied most of my free time and I never day traded.

The best investment I’ve ever made was using most of my inheritance to earn an MBA. I spent the vast majority of those two years learning about investing, instead of trying to earn good grades. I reinvented myself and left completely convinced passive investing was the prudent choice and the larger equity markets were efficient. I then began primarily investing in the Vanguard S&P 500 and Extended Market Index Funds (50/50).

Due to my love for the game, I continued investing my small Traditional IRA solely in individual stocks. In 1998, I converted my $70k IRA to a Roth and have solely invested it in individual stocks, for the last 23 years. I haven’t added a penny (I opened other IRAs), since 1998, and today have $625k in that Roth. I have earned 9.93% versus the S&P’s 7.85%. The extra 2.08% may not sound like a lot but over a long period (23 years) it’s very material (the difference between having $403k and 625k in that Roth).

I’ve reinvented myself again and now believe markets are not efficient due to irrational human nature. For example, I’m relatively strong on the buy side (I’d guess +3%) and relatively weak on the sell side (I’d guess -1%). Guess which side I prefer and where I spend the vast majority of my time and energy?

[bundabergdevil]

I’ve reinvented myself at least twice during my investing life. I began in my late teens (small inheritance) buying individual stocks. Webster should have used a pic of me for the definition of dumb money! Back then, the pros had much better access to timely and detailed information. Insider trading was also much more rampant than today. I was making decisions based upon information from a one page Value Line, company reports, and guests on FNN and WSW. Fortunately, Grateful Dead tours occupied most of my free time and I never day traded.

The best investment I’ve ever made was using most of my inheritance to earn an MBA. I spent the vast majority of those two years learning about investing, instead of trying to earn good grades. I reinvented myself and left completely convinced passive investing was the prudent choice and the larger equity markets were efficient. I then began primarily investing in the Vanguard S&P 500 and Extended Market Index Funds (50/50).

Due to my love for the game, I continued investing my small Traditional IRA solely in individual stocks. In 1998, I converted my $70k IRA to a Roth and have solely invested it in individual stocks, for the last 23 years. I haven’t added a penny (I opened other IRAs), since 1998, and today have $625k in that Roth. I have earned 9.93% versus the S&P’s 7.85%. The extra 2.08% may not sound like a lot but over a long period (23 years) it’s very material (the difference between having $403k and 625k in that Roth).

I’ve reinvented myself again and now believe markets are not efficient due to irrational human nature. For example, I’m relatively strong on the buy side (I’d guess +3%) and relatively weak on the sell side (I’d guess -1%). Guess which side I prefer and where I spend the vast majority of my time and energy?

A Jeffrey sighting! We wondered where you went.

[Jeffrey]

A Jeffrey sighting! We wondered where you went.

The heat came round and busted me for smiling on a cloudy day.

[bundabergdevil]

The heat came round and busted me for smiling on a cloudy day.

Happens to the best of us.

[YmoBeThere]

Bitcoin up 50% in the last few weeks, surprised no one has said anything.

[YmoBeThere]

Abbott Labs could be interesting. I sold my holding April 20th at $119, $106 is tempting.

ABT trading at $125 today.

[bundabergdevil]

Bitcoin up 50% in the last few weeks, surprised no one has said anything.

Maybe Wheat bought another boat and is otherwise indisposed?

I’m living the emotional crypto roller coaster vicariously through others, including the posters on this thread.

[Wheat/"/"/"]

Maybe Wheat bought another boat and is otherwise indisposed?

I’m living the emotional crypto roller coaster vicariously through others, including the posters on this thread.

Good call, I did buy another boat, supposed to arrive this week in fact. Pictures to follow

I didn’t use Bitcoin profits, I’m buying and hodling all I can there. The more I looked into it the more I’m convinced I have a good plan. It takes serious study to understand it all enough to have confidence to hold on during the volatility, that’s for sure.

Now, I’m actually looking into moving my Roth IRA account over to Itrustcapital.com and convert that savings into Bitcoin to get better gains and to avoid capital gain taxes when I cash out someday. It’s not a big amount, most of my main retirement money is in an annuity and real estate, but it’s enough to get another Bitcoin, and I am a believer that bitcoin’s monetary network will become integrated throughout the world and the scarcity of coins will make owning them much more valuable over time.

We shall see….

Btw, would be happy to answer any questions some might have on Bitcoin, Ethereum etc… I’m no expert or financial advisor, but I feel like I have a pretty good understanding of this new asset and network.

[bundabergdevil]

Good call, I did buy another boat, supposed to arrive this week in fact. Pictures to follow

I didn’t use Bitcoin profits, I’m buying and hodling all I can there. The more I looked into it the more I’m convinced I have a good plan. It takes serious study to understand it all enough to have confidence to hold on during the volatility, that’s for sure.

Now, I’m actually looking into moving my Roth IRA account over to Itrustcapital.com and convert that savings into Bitcoin to get better gains and to avoid capital gain taxes when I cash out someday. It’s not a big amount, most of my main retirement money is in an annuity and real estate, but it’s enough to get another Bitcoin, and I am a believer that bitcoin’s monetary network will become integrated throughout the world and the scarcity of coins will make owning them much more valuable over time.

We shall see….

Btw, would be happy to answer any questions some might have on Bitcoin, Ethereum etc… I’m no expert or financial advisor, but I feel like I have a pretty good understanding of this new asset and network.

Hah! Nice - here’s hoping your next one has a helipad!

[Wheat/"/"/"]

#1 pick Cade Cunningham set to start out his NBA career stacking Sats….

https://www.coindesk.com/blockfi-sig...aid-in-bitcoin