Young Pup looking for wisdom

[HFWR]

Well, I did say YMMV... :P

[Nords]

Quote:

Originally Posted by PsyopRanger So I guess on this forum there is only one way to skin a cat...

No, but most of the fuss starts when people start claiming that one particular way is better than another. There's more than one way to invest, and more than one way to ER.

Quote:

Originally Posted by PsyopRanger Make a lot of money, max your retirement accounts and buy index funds through dollar cost averaging and DRIPs?

Did the military recruiter mention that point? I hope people haven't been signing up again to make a lot of money...

I'd say that for passive investors it's more important to save money, max retirement accounts, and minimize expenses/turnover/taxes. As for active investors... well, if Nicolas Darvas could do it then so can anybody.

It's not that index investing is better or worse than active investing. It's that most investors do better with index funds because they aren't willing, able, interested, or motivated to do the work it takes to stay up with an active portfolio. Available time helps a lot, too-- Bill O'Neill's numbers would suck if he had to execute CANSLIM during a six-month overseas deployment without a data feed.

Quote:

Originally Posted by PsyopRanger I guess the millions of dollars of research by leading financial companies into the success of CANSLIM investing, is wrong by your account.

It's the usual paradox-- if they're so smart then why ain't they rich?

I'd think that if leading financial companies were so successful at CANSLIM then they wouldn't need to be selling it to us!

[Brat]

PsyopRanger your investing style is in sync with your personality and age.* If you stick with it you should do well.* No one knows if it will be better or worse than that using index funds and balancing after 20 years.

In addition to Nords comment about using your system during deployment, there is another event that you may not have covered: your wife may need to manage the family retirement savings (you are in a riskier than average occupation) she may need a passive approach.* *Don't overlook her financial education.

[cute fuzzy bunny]

Quote:

Originally Posted by PsyopRanger Actually no, this is what CANSLIM stands for: [...] The market direction is key to your investing; right now CANSLIM investors are mostly in cash.

You're market timing. 99.9% of the credible research I've read says that you will lose over the long haul. But everybody has to start somewhere and learn as they go.

I'll read the link you pointed out, but chances are at best its backward looking datamining. I'll be glad to give you my perspective on it later, but I doubt anything I'd say would change your mind.

Missing out on hundreds of thousands of dollars or losing your shirt is what that'll take.

Quote:

Originally Posted by PsyopRanger So I guess on this forum there is only one way to skin a cat... Make a lot of money, max your retirement accounts and buy index funds through dollar cost averaging and DRIPs? I guess the millions of dollars of research by leading financial companies into the success of CANSLIM investing, is wrong by your account.

Not necessarily. I always have my eyes and ears open to new ideas and approaches. Thing is, this isnt anything new to me.

People do get pissy when something they believe in isnt readily accepted by others. Hopefully that doesnt happen in your case.

The financial institutions have a huge vested interest in getting you to buy and trade expensively. Thats how they get paid.

Similarly (killing two birds with one stone), Kiyosaki makes money getting people to feverishly buy his books advising how you can do WAY better than stody old index funds, who clearly are for fools.

Like I said. One of us will learn a lesson from this, but it might take ten or twenty years.

[laurence]

Now I didn't mean to imply we're going to let you off without vigorously defending your heresy, Psyopranger!

[brewer12345]

ranger, how much fundamental analysis do you do on your investments?

I'm suspicious of and not convinced by the various mechanical investing systems. Most of them work great right up until they don't. The "when they don't" moment is usually extremely painful for the devotees of these systems.

But welcome. It is nice to hear from someone who does such different things from most of us here. You will be challenged, simply because what you are doing goes against too much blue ribbon/Nobel prize-winning academic research, but keep talking. What you are doing is at least interesting.

[PsyopRanger]

Quote:

Originally Posted by Nords No, but most of the fuss starts when people start claiming that one particular way is better than another. There's more than one way to invest, and more than one way to ER.

So why when I posted my investing strategy did I get shucked away as heresy? This is my way; I make great returns, stop loss at 10%. I keep hearing that this way is wrong?

Quote:

Originally Posted by Nords Did the military recruiter mention that point? I hope people haven't been signing up again to make a lot of money...

A pension over $5000 per month at 45 isn’t bad?

Quote:

Originally Posted by Nords It's not that index investing is better or worse than active investing. It's that most investors do better with index funds because they aren't willing, able, interested, or motivated to do the work it takes to stay up with an active portfolio. Available time helps a lot, too-- Bill O'Neill's numbers would suck if he had to execute CANSLIM during a six-month overseas deployment without a data feed.

First, CANSLIM is not my only strategy as I posted in my intro.
Second, I am motivated to get better returns and I only spend about an hour per week analyzing investments.
Third, I have done 3 deployments to Iraq since 2003; I have managed to maintain my yields during this time.

CANSLIM is not day trading, or market timing.

It is using Fundamental and Technical analysis in growth stocks.

[PsyopRanger]

Quote:

Originally Posted by Cute Fuzzy Bunny You're market timing. 99.9% of the credible research I've read says that you will lose over the long haul. But everybody has to start somewhere and learn as they go.

Not market timing, read again.

[PsyopRanger]

Quote:

Originally Posted by brewer12345 ranger, how much fundamental analysis do you do on your investments? I'm suspicious of and not convinced by the various mechanical investing systems. Most of them work great right up until they don't. The "when they don't" moment is usually extremely painful for the devotees of these systems. But welcome. It is nice to hear from someone who does such different things from most of us here. You will be challenged, simply because what you are doing goes against too much blue ribbon/Nobel prize-winning academic research, but keep talking. What you are doing is at least interesting.

5 out of the 7 CANSLIM principles are fundamental analysis.

As far as the rest of my investments, most of research is fundamental since I am not that great on the technical side.

[PsyopRanger]

I’ll put it all on the line.

Anyone pick 5 investments, I’ll pick 5 investments.

I’ll use my system, you use your system.

Let’s see who is leading after 1 year?

If I’m wrong, I will apologize and claim that everything I am doing is heresy.

[Cool Dood]

Quote:

Originally Posted by PsyopRanger I’ll put it all on the line. Anyone pick 5 investments, I’ll pick 5 investments. I’ll use my system, you use your system. Let’s see who is leading after 1 year? If I’m wrong, I will apologize and claim that everything I am doing is heresy.

I think the fact that you consider that an appropriate test reveals most of what's wrong with the approach...

[73ss454]

Quote:

Originally Posted by PsyopRanger I’ll put it all on the line. Anyone pick 5 investments, I’ll pick 5 investments.* I’ll use my system, you use your system.* Let’s see who is leading after 1 year?* If I’m wrong, I will apologize and claim that everything I am doing is heresy.

Make it 30 years and you've got a bet!

[macdaddy]

Psyop you seem to be in a nice position... 2 points...

Are you sure that your pension will be 5k/month in today's dollars at 45? From my math you will have about 20 years in then. My dad retired after 30+ years and I think his pension is around 60k/year which of course equals 5k/month. From the material I read I think the difference between 20 and 30 years is 25% of your base rank pay, calculated after all special pay and bonuses are removed. An overlooked benefit may be health care for you and your spouse at 45 which would make it much cheaper to be self employed or to start your own business.

Second I wouldn't be in a hurry to convert your residential properties into NNN commercial properties. If you find them relatively low maintenance and easy to fill then why not hold on to them? NNN commercial is not "headache free" like a lot of people seem to assume and the vacancies can be more expensive and harder to fill. Since you will be in the military the residential properties will be an additional assurance that whenever you retire, you will be able to afford a house, no matter what the market does. The only investors I've known to transition from residential to commercial very successfully had multi millions to work with.

[PsyopRanger]

Quote:

Originally Posted by macdaddy Psyop you seem to be in a nice position... 2 points... Are you sure that your pension will be 5k/month in today's dollars at 45? From my math you will have about 20 years in then. My dad retired after 30+ years and I think his pension is around 60k/year which of course equals 5k/month. From the material I read I think the difference between 20 and 30 years is 25% of your base rank pay, calculated after all special pay and bonuses are removed. An overlooked benefit may be health care for you and your spouse at 45 which would make it much cheaper to be self employed or to start your own business. Second I wouldn't be in a hurry to convert your residential properties into NNN commercial properties. If you find them relatively low maintenance and easy to fill then why not hold on to them? NNN commercial is not "headache free" like a lot of people seem to assume and the vacancies can be more expensive and harder to fill. Since you will be in the military the residential properties will be an additional assurance that whenever you retire, you will be able to afford a house, no matter what the market does. The only investors I've known to transition from residential to commercial very successfully had multi millions to work with.

The retirement is based on your base pay when you retire, if someone retired 5-10 years ago, they do not make as much as today, though they are adjusted for inflation.

See the calculator here: http://www.dod.mil/militarypay/retir..._finalpay.html

Thanks for the advice on the NNN, didn't know that.

[PsyopRanger]

Quote:

Originally Posted by Cool Dood I think the fact that you consider that an appropriate test reveals most of what's wrong with the approach...

I used that as the example because I would be difficult to track 30 year performance.

What I am trying to prove is that for my age and risk tolerance, my investing style is sound.

I never said I would be chasing 30% returns into my 40’s-50’s.

So tell me, if you were making 30% gains from the time you were 25-35 and then switched to more stable, solid 6-8% performers, would it of helped you overall?

Note that one of my investments is a Dow Jones Indexed Fund in the Euro, hardly ultra-risky.

[PsyopRanger]

Let me ask this question in a different way.

You are 29, married with 2 kids in elementary school.
You make $70k per year, have $150K in a Roth IRA.
Your company does not match your 401(k)
You move every 3 years.
You have a pension at age 45, as well as health insurance and LTC if you stay at your job for another 14 years.
You own 2 real estate rental properties that bring in NOI of just over $500 per month.

Your goal is to have a net worth of at least $4M at age 45, be able to retire on at least $60,000 per year in today’s dollars and build a log cabin worth over $2M to retire to.

How do you do it?

[cute fuzzy bunny]

Quote:

Originally Posted by PsyopRanger Not market timing, read again.

Actually market timing is exactly what you're doing. You're merely putting a lot of analysis in the middle to make it look like you're making informed decisions.

If this process you describe was so foolproof and so easy, why havent any of the mutual fund managers employed these strategies to put out a fund offering to employ it? With such a sure fire approach with limited risk and downsides, and huge returns, people would flock to their doors.

Oh wait...exactly that has happened a bunch of times until the specific system being employed failed...

I'm sorry for beating you up a little, but the evidence is pretty much in. Index investing may not be the best, but the active strategies definitely dont work.

[eyetri2]

Wow! A long cabin that will cost you 2 million bucks to build? *How many of us can fit in that?

From one (soon to be former) military person to another, you are doing well, very well. *Just a couple of things:

I am overseas as well in Asia. *What time are the markets open for you that you can do your trading and not interfere with work? *I would have to be up at 2 AM.

I do systematic trading as well both in taxed and tax-deferred accounts. *It has done well up until the last few months of slaughter. *Will I stick with it? *Yes. *Has it been hard recently? *Yes. *But I am 30 and I can live with the volatility.

Having said that, is most of my taxable account money in dividend paying stocks where I currently make 8%/yr (not all qualified) no matter what the market does? *Yes. *You have to know where you can take your risks and sleep at night.

I do commend you for the success that you have had over the last decade. *But are you looking for wisdom or are you tooting your own horn? *It seems more like the latter.

Finally, I'll take you up on your stock game. *In fact, I will only pick one stock, dividends reinvested to be fair. *We can start the game on any day you want. *My pick (as much as some people will start screaming at me): NFI.

eyetri2

[cute fuzzy bunny]

Oh heck, CANSLIM's that old Investors Business Daily strategy. I used to fiddle with that in the late 90's.

Its a data mining product from looking at stocks since 1973, and its a momentum strategy using technical analysis that stresses bailing out when prices start dropping. Works great when theres good momentum in growth stocks.

Stops working when most of the stuff you buy all drops to your stop loss, and then the next stuff does too, and the next, and the next. Then by the time the signals go off to get back in, you've missed a big chunk of the upward movement.

It'll work for a couple of years, maybe 5, maybe 10. GREAT strategy for the late 90's. Really lousy strategy when Growth is out of favor or the markets 'drunk'...which is pretty often.

[macdaddy]

Quote:

Originally Posted by PsyopRanger See the calculator here: http://www.dod.mil/militarypay/retir..._finalpay.html

I put in an 06 with 20 years service and it came out to 4k/month... I don't see how this would increase over time since the active duty raises are probably the same as (or less than?) the mandated CPI pension raises. 4k/month + healthcare is a really nice pension at 45.

Quote:

Your goal is to have a net worth of at least $4M at age 45, be able to retire on at least $60,000 per year in today’s dollars and build a log cabin worth over $2M to retire to.

If you consistently save 50% of your pre tax income (so 35k this year and increase it as your pay increases) and earn a 10% + inflation return (the hard part... but maybe you have that covered) then you'll have (combined with your Roth account) a little over 2 million in liquid cash. If you add in your rental properties, any windfalls, and any money from your wife then you could have a shot at 4 million in assets plus the pension when you retire at 45. I see it as possible... the pitfalls are expensive kids (tuition for school?) and a less than 10% return, especially in the early years. Even if you don't hit it exactly I think you will come close, if you really can save 50% of pre tax income. Property tax on a 2 million dollar cabin, if the money is in the cabin and not the land, is probably a minimum of 10k or 15k a year... (1% of the structure cost).