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Old 12-24-2010, 06:26 AM   #21
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Take him for what the advice is worth. Not much. Entertainment but not a source of investment advice. I prefer boring
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Old 12-24-2010, 07:21 AM   #22
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I'm sure he was, when you take fees and commissions into account. The question is, what were his investor's returns?
He says that was the return after fees & expenses.

I find his claim not hard to believe. One of his tenets is to aggressively sell losers. IMHO that is probably the #1 tactic for large gains-cut your losers and let your winners run.
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Old 12-24-2010, 07:53 AM   #23
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My wife's brother has POA and is trustee of their mother's estate. Their mother has no concept of investing and has always been very conservative with her money.
During the last year he has bought and sold stocks from the trust. He has always been one of those folks who likes the get rich quick schemes and I'm sure that Cramer is his source of investment information. Although he thinks he knows it all he has no experience with investing. My wife and I wish there was a way to stop him. We went through this same thing with my brother with bad results.
Perhaps you can gently explain to him what fiduciary responsibility is and that he should invest consistent with his mother's needs and not his want to get rich quick.

On Cramer, part of the reason that I don't do individual stocks is because I don't have the time to do my homework so indexing is more prudent that blindly following some talking head's recommendations.
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Old 12-24-2010, 08:29 AM   #24
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part of the reason that I don't do individual stocks is because I don't have the time to do my homework
And even if you did have time to do your homework, there is always someone who has more time than you to do his homework. And even if you had the maximum time to do your homework, there is always someone who can do it more quickly than you. And if even if you could do your homework instantaneosly, there is always someone smarter than you. And even if you had maximum intelligence, there is always someone with better resources than you.

In all cases, you lose.

Whenever Cramer bleats out "not buy and hold, buy and homework," it makes me want to explode.

Yet I keep watching....
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Old 12-24-2010, 11:35 AM   #25
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Who is Cramer ?
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Old 12-24-2010, 11:57 AM   #26
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Who is Cramer ?
Jim Cramer - Wikipedia, the free encyclopedia

Television Show Host with a giant ego, on CNBC .

The fact that you do not know who he is , IS in your favor.

IMHO , Cramer is just another talking head.
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Old 12-24-2010, 01:12 PM   #27
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Jim Cramer - Wikipedia, the free encyclopedia

Television Show Host with a giant ego, on CNBC .

The fact that you do not know who he is , IS in your favor.

IMHO , Cramer is just another talking head.
Not to be confused with an ex-pat forum member which may be spelled Kramer. I learned about Jim Cramer from this forum; somewhere there is a thread of him doing a rant; I don't advise searching for it.
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Old 12-24-2010, 01:27 PM   #28
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And even if you did have time to do your homework, there is always someone who has more time than you to do his homework. And even if you had the maximum time to do your homework, there is always someone who can do it more quickly than you. And if even if you could do your homework instantaneosly, there is always someone smarter than you. And even if you had maximum intelligence, there is always someone with better resources than you.
This has been a popular argument of the Market Efficiency Theorists. As I have said in another past thread, I can extend this to make my own Political Efficiency Theory.

Why bother to vote? Everything you want to make up your mind on and to decide on will boil down to some controversial issues. Everything you want to vote for, someone will have an better argument against. Everything you are against, someone will have a good argument for.

Why not just stay home and to let the other "smarter" people decide for yourself? Similarly, why decide on some stocks or sectors to invest in? Why not just go with the flow, and to enjoy the average outcome that society has to offer? One has to admit that the advent of our society is such that it has been mostly true.

Or is it?

In the last housing bubble, most of us had a feeling that the outrageous rise in prices was not sustainable. Let's say if you happened to move into one of the areas that experienced such a stratospheric appreciation. Would you dare say that the housing market was irrational and to delay your home purchase, and to wait? Or would you be better off saying that the crowd had the wisdom, and that the house prices were always what they were worth, because the market said it was so?

When do we allow ourselves to have our own opinion on anything? When are we better off joining the crowd and when should we dissent?
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Old 12-24-2010, 05:49 PM   #29
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This has been a popular argument of the Market Efficiency Theorists. As I have said in another past thread, I can extend this to make my own Political Efficiency Theory.

Why bother to vote? Everything you want to make up your mind on and to decide on will boil down to some controversial issues. Everything you want to vote for, someone will have an better argument against. Everything you are against, someone will have a good argument for.

Why not just stay home and to let the other "smarter" people decide for yourself? Similarly, why decide on some stocks or sectors to invest in? Why not just go with the flow, and to enjoy the average outcome that society has to offer? One has to admit that the advent of our society is such that it has been mostly true.

Or is it?

In the last housing bubble, most of us had a feeling that the outrageous rise in prices was not sustainable. Let's say if you happened to move into one of the areas that experienced such a stratospheric appreciation. Would you dare say that the housing market was irrational and to delay your home purchase, and to wait? Or would you be better off saying that the crowd had the wisdom, and that the house prices were always what they were worth, because the market said it was so?

When do we allow ourselves to have our own opinion on anything? When are we better off joining the crowd and when should we dissent?
This is an interesting post, from you big bag of Devil's Advocate positions.

Regarding your first point about political efficiency, I read a really interesting book which I unfortunately can no longer cite that said in presidential election in a big country like this, many if not most votes are decided by the voter's feelings about various extreme and polarizing issues. For the most part, we know before an election how the winds are blowing, and generally we also know that whichever puppet wins, it is unlikely to make much difference. So people vote for or against abortion, for or against gun control, for or against immigration, for or against school prayer. This enable them to feel good about themselves, and also to solidify their social position in their group by things such as bumper stickers saying-"Don't blame me, I voted for Gore (or substitute McCain).

Essentially voting gives one a low cost opportunity to align with the “good” angels.

Ha
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Old 12-24-2010, 06:49 PM   #30
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This is an interesting post, from you big bag of Devil's Advocate positions.
Well, I am not sure what you meant when you called me that name, but if you meant a trouble maker, then I will have to admit that I am always a bit mischievous.

I like to ask questions, not neccessarily that I would have an answer of my own or expect that someone would have. I may be too philosophical for my own good. Perhaps I should stop asking questions. Hey, I stick to engineering to make a living, but even that can turn controversial too often. Hence, I have always preferred mathematics, whose truth is most absolute and unambiguous.

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... So people vote for or against abortion, for or against gun control, for or against immigration, for or against school prayer. This enable them to feel good about themselves, and also to solidify their social position in their group by things such as bumper stickers saying-"Don't blame me, I voted for Gore (or substitute McCain).

Essentially voting gives one a low cost opportunity to align with the “good” angels.
About the theory that voters simply wanting to feel good, I think there's some truth in it. However, I don't think that people necessarily want to vote with the crowd, to tilt with the wind as whatever the current poll indicates. I think that the stronger a voter's conviction, the better he feels after casting his vote, no matter whether his side wins or loses. As I do not often have such a strong conviction, I guess it is my loss. As I get older, I tend to care less and less about which political side wins.

At a lesser level, we can observe sport spectators. As I watch no sport games, I do not understand why it is such a big deal that this or that team wins. By being indifferent, I guess I miss out on the excitement that most people derive from such popular passive pastimes. By cheering for one's team in a sport game that will soon be forgotten as any other games before it, people feel alive with joy if it wins, or anger or sorrow if it loses. It makes them feel alive.

And although I have resigned to fatalism regarding politics, I look at the stock market as a place where you have complete control over your decision. Vote against your fellow investors if you wish, if you have a strong conviction about how things will work out. Strangely, many shy away from such an individual responsibility, from being able to make up their own choices. Is it because they would have only themselves to blame if things do not work out? Is it because that when our pocketbook is at stake, that we no longer wish to differentiate from the masses, and simply wish to be anonymous in the crowd?

Ah, back to being mischievous, I guess I answer my own pondering as to why I like to cause trouble by asking questions. It may be my perverse way of having fun as I cannot entertain myself the same way most people do.

PS. I need to log off to go grill some steaks for dinner, in case you don't see me hanging around.
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Old 12-24-2010, 07:07 PM   #31
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Percentage of right/wrong doesn't matter. What matters is the overall gains & losses.

Correct 47% of the time with 20% gain is better than correct 90% of the time with 1% gain. (Or correct 90% of the time with a net 5% loss. As in Covered Calls.)
If that were true yes, of course there is no evidence that it is.
TJ
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Old 12-24-2010, 08:06 PM   #32
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IMO he's an intelligent, entertaining guy dispensing investment porn.
I would refine that:

He's an intelligent, entertaining, knowledgeable guy dispensing investment porn.

Sometimes he has really interesting/unique/useful insights.

But it's still investment porn.

Audrey
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Old 12-25-2010, 05:02 AM   #33
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Perhaps you can gently explain to him what fiduciary responsibility is and that he should invest consistent with his mother's needs and not his want to get rich quick.
Thanks. We will try that again when things quiet down a little and after he gets his $20k for the past 2 years + $10k/future yr. from the trust that he will award himself for handling it.

Cheers!
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Old 12-25-2010, 07:46 AM   #34
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I would refine that:

He's an intelligent, entertaining, knowledgeable guy dispensing investment porn.

Sometimes he has really interesting/unique/useful insights.

But it's still investment porn.

Audrey
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Old 12-25-2010, 10:19 AM   #35
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