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Old 01-30-2011, 04:32 PM   #21
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Bonds are taking a hit here.
Take a look at these returns.

http://ttheory.typepad.com/.a/6a00d8...8223b70970c-pi

Best bonds is if you switched between the two types.
Where can I invest in the best bond total return fund?
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Old 01-30-2011, 07:39 PM   #22
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As they say. "Past performance is no guarantee of future returns" Interesting if somewhat self-serving definition of risk.
Nor does it qualify as a definition of risk.
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Old 01-30-2011, 10:17 PM   #23
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The Community Rules do not allow members to drum up business from others. If members start getting bothersome PM's then you can report the PM using the report PM icon or post them here like TP has done.

Nope.. not bothersome at all... it was more of a post about the definition of risk.. I do not see him drumming up business yet... but we will see...

Right now I can say that his investment style is very far afield of most everybody on this board... and from what I can tell, there are a lot of people that have done quite well on their returns...
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Old 01-31-2011, 07:08 AM   #24
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My investment strategy emphasizes saving and frugality over returns. I have control over my savings rate and expenses so I make sure I maximize, and minimize, those. I have a number that I need to reach to ER and I use a 50/50 "couch potato" portfolio. I'm not looking to maximize my return. I'm looking to minimize volatility on the way to achieving my goal. Accumulation of wealth as an end in itself has no interest for me.
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Old 01-31-2011, 08:26 AM   #25
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Because I love wading in the thick of it I ask how do you justify your investment strategy?
I don't have to, or intend to, justify my investment strategy to anyone but me. Enough said.
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Old 01-31-2011, 09:22 AM   #26
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So now you have an investment model that works great for you and you are happy with the returns/risk. Finance is linear for you from now on and is just a question of volume. i.e add 1 to x zeros on the end of each trade/transaction and let it rip. What does it matter how other people do it?
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Old 01-31-2011, 10:58 AM   #27
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So now you have an investment model that works great for you and you are happy with the returns/risk. Finance is linear for you from now on and is just a question of volume. i.e add 1 to x zeros on the end of each trade/transaction and let it rip. What does it matter how other people do it?
+1. He/She would be better off focusing on their market beating strategy rather than waste our their time trolling posting on the internet.

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Old 01-31-2011, 11:07 AM   #28
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I have outperformed the market in 10 of the 11 years I have been invested solely in individual companies. Cumulatively I am up 340% versus a 5% rise in the S&P 500 over the 11 years. Investing in bonds would have greatly increased my risk.
I see this comment all the time from newsletters and other websites. Personally, I don't care if you beat the S&P 500 if you are invested in International companies, or invested in small cap value stocks or something that is fundamentally different than what the S&P 500 is. It's only relevant to me if you say the type of investment did better than the corresponding index of that investment over the last X years.

Normally when I go back and compare the results, I find that sometimes the newsletter or investor did better for a brief periord of time and other times they did not. i.e. Most of the time they outperformed the S&P 500 due to asset allocation, not due to stock picking guru-ness. And therefore would have underperformed or was comparable to a similiarly allocated portfolio that was in index funds.

For me, I use a well diversified portfolio of index funds with 50% international/50% domestic. I'm young and do not invest in bonds, but that'll eventually change as I get closer to retirement and my time horizon shortens.
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Old 01-31-2011, 11:17 AM   #29
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+1. He/She would be better off focusing on their market beating strategy rather than waste our their time trolling posting on the internet.
Unless they actually make more money by stealthily peddling subscriptions to their newsletter in their posts. Not that anything like that is happening here, of course...
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Old 01-31-2011, 11:24 AM   #30
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If every alpha > 0 investor shares their picks with the world won't they be killing the goose?

I'm a resolute alpha = 0 investor......come join me in mediocrity
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Old 01-31-2011, 11:42 AM   #31
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Old 01-31-2011, 11:46 AM   #32
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My strategy...I've given up on chasing performance a long time ago. I'm an indexer because for every American Idol winner, there's plenty who got booed off the stage.

Not saying that those with a Midas touch don't exist (for example, Warren Buffett), but to identify them, hindsight is 20/20.

Or as in this column: Kiplinger.com

I'm a satisficer (I like to sleep well at night) instead of a maximizer.
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Old 01-31-2011, 11:57 AM   #33
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I see this comment all the time from newsletters and other websites. Personally, I don't care if you beat the S&P 500 if you are invested in International companies, or invested in small cap value stocks or something that is fundamentally different than what the S&P 500 is. It's only relevant to me if you say the type of investment did better than the corresponding index of that investment over the last X years.

Normally when I go back and compare the results, I find that sometimes the newsletter or investor did better for a brief periord of time and other times they did not. i.e. Most of the time they outperformed the S&P 500 due to asset allocation, not due to stock picking guru-ness. And therefore would have underperformed or was comparable to a similiarly allocated portfolio that was in index funds.

For me, I use a well diversified portfolio of index funds with 50% international/50% domestic. I'm young and do not invest in bonds, but that'll eventually change as I get closer to retirement and my time horizon shortens.


Yes... which index matters a lot... I remember one of my finance professors... we were talking about 'beating the market'... his comment was insightful... to paraphrase...

"It is easy to bet the Dow index. Determine which stock is going to perform the worst. More than likely it will perform below average. Buy the other 29."

Now, if you think about it a bit... all you have to do is pick ONE stock that will do bad.... and you beat the market... sure, you might not pick right that often, but more often than not you will... now, will you do that much better than the market doing this probably not... but you can have bragging rights to betting the market...

Also, if you think about it more... isn't it easier to pick a few loosers and buy the rest of the market than pick a bunch of winners
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Old 01-31-2011, 01:28 PM   #34
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If every alpha > 0 investor shares their picks with the world won't they be killing the goose?
Not if they buy before sharing their picks. And technically I guess they'd have to sell after sharing, too.
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Old 01-31-2011, 01:56 PM   #35
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I don't mind hearing about something other than the common Vanguard index fund/Couch Potato/Bogle mantra normally voiced here. I also used to enjoy watching the Tom Vu and ilk "make massive money buying distressed property" TV commercials. Maybe I've bought some index funds and distressed property - and gold after reading about fiat currency, but I'd hardly say the farm was bet on any one thing.

Funny thing regarding demographics and where one mines. Up north in Oregon we would get solicitations to attend talks about retirement planning to be held at hotel conference rooms - maybe coffee would be offered. Down here in La Quinta we got an invite to LG steakhouse. Think the free steak would cost too much.
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Old 01-31-2011, 08:13 PM   #36
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All very fine and well, but where is the shill? Where is the newly registered poster who gushes at OP:"tell me more!!!"

The quality of the pitch from the skeevy scamsters here has really fallen in quality and style. I want my money back.
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Old 01-31-2011, 09:21 PM   #37
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I don't mind hearing about something other than the common Vanguard index fund/Couch Potato/Bogle mantra normally voiced here. I also used to enjoy watching the Tom Vu and ilk "make massive money buying distressed property" TV commercials. Maybe I've bought some index funds and distressed property - and gold after reading about fiat currency, but I'd hardly say the farm was bet on any one thing.

Funny thing regarding demographics and where one mines. Up north in Oregon we would get solicitations to attend talks about retirement planning to be held at hotel conference rooms - maybe coffee would be offered. Down here in La Quinta we got an invite to LG steakhouse. Think the free steak would cost too much.
REad the first post.

Quote:
how do you justify your investment strategy
I don't have to. Notice he didn't ask what it was. Should I tell him? (If so, why?)
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Old 02-01-2011, 12:26 PM   #38
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I am convinced investors can beat the market
ALL of them?

Are you saying you believe all investors can beat the market, if we just educate ourselves and share information?

Have I somehow stumbled into Lake Wobegon? Where "all the children are above average?"

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and I don't think it is all that hard.
OK, let's try a little logic exercise.

Ignoring the mathematical impossibility of everybody beating the market (because the market is "everybody"), let's examine your assertion that it's not hard to beat the market.

First, let's assume that the market can be beaten. Although nobody has ever done it, let's go ahead and assume that there is actually a strategy out there that will allow its followers to consistently achieve above-average market returns. Let's even assume that, as you say, "it's not all that hard."

Now, which actors have the best shot at discovering this strategy and achieving those above-average returns? Is it the educated, experienced, full-time pension fund managers, with billions of dollars at their disposal, access to up-to-the-second market news and quotes, and instantly-executed trades?

Or is it the bored hobby investor, sitting at home reading CNN Money and following 20-minute old quotes on his eTrade account?

Now, mathematically, one of these guys has to lose. The reality is, we can't all be above average. So if we accept that the market must consist of "winners" and "losers," it seems obvious to me that the former investor has a much better shot at achieving consistent success than the latter. How could you possibly argue otherwise?
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Old 02-01-2011, 02:52 PM   #39
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Somebody's been watching too much Cramer....
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Old 02-01-2011, 03:02 PM   #40
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Now, which actors have the best shot at discovering this strategy and achieving those above-average returns? Is it the educated, experienced, full-time pension fund managers, with billions of dollars at their disposal, access to up-to-the-second market news and quotes, and instantly-executed trades?

Or is it the bored hobby investor, sitting at home reading CNN Money and following 20-minute old quotes on his eTrade account?
I think it's the AI systems running on colocated machines within the exchange server buildings, wired with sub-100 microsecond latencies to the trading feeds, watching critical news feeds, operated by market makers so as to front-run retail and institutional traders.

But yeah, if someone thinks they can beat those machines while sitting at the end of 50-100 milliseconds of latency, reading a display that only updates every 16 milliseconds, processing data on an absurdly slow neural network, and keying in their orders using ridiculous meat-based appendages with hundreds of milliseconds of latency, hey, more power to them.

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