I just bought VFINX today

[unclemick]

Yawn - happens every generation.

Active managers beat indexing all the time before expenses and if they are allowed to select the time period. The latest poop if ala Clint E.'s Dirty Harry - 'Do ya feel lucky punk?---'

Goggle up Bogle Financial Markets Research Center - under speeches go to the May15 2006 and go to the last half - no math, simple arithmatic - I'll leave it to a bookie to calculate the odds.

Davis New York Venture, Fidelity Contrafund, Franklin Mutual shares - in the 35 yr rear view mirror. The view forward - heh heh heh - 'do ya feel lucky?'

I let my Nephew use my financial advisor Charles De Gaul (low cost) who put him in VFINX 1994 to present - and if you look at the chart you may agree with him - if he never invests another nickel - his retirement is in the bag.

Yep - VFINX - you heard me right. BTY - dead financial managers work the cheapest.

heh heh heh heh heh heh - let's try one more time - are indexers skins or shirts? : 8)

 

[Spanky]

If you actually do beat your benchmark, you usually get flooded with money. We had close to $100MM in new cash show up on our doorstep at the beginning of this year. Imagine trying to find a place to put that. Now make it $1 billion or $10 billion.

That's a nice problem to have - more inflow of cash, more profits or income. It's hard to turn down $$$ or close the fund even though that's right thing to do.

 

[d]

I just bought VFINX today ... And then I sold it

... must be a wizard ... though i could be mistaken, any trade in VFINX takes place at the market close, so would he not have purchased and sold at exactly the same price?

if he's "in fact smart than the indexers" wouldn't you think he'd know this? ... and have better grammar.

 

[mb]

We had close to $100MM in new cash show up on our doorstep at the beginning of this year. Imagine trying to find a place to put that. Now make it $1 billion or $10 billion.

Just ask AirJ! He'll know what to do with it

 

[SecondCor521]

I let my Nephew use my financial advisor Charles De Gaul (low cost) who put him in VFINX 1994 to present - and if you look at the chart you may agree with him - if he never invests another nickel - his retirement is in the bag.

heh heh heh heh heh heh - let's try one more time - are indexers skins or shirts? : 8)

We're skins...we've lost our shirts in the market ;-).

2Cor521
In VFINX since at least 1987

 

[Spanky]

Just ask AirJ! He'll know what to do with it

Let's me guess - may be he wants to have his own law firm so that he can be a partner.

 

[AirJordan]

Just ask AirJ! He'll know what to do with it

You guys are so helpless. Give me 1 billion dollars. That's worth like 10 BRKA shares, and voila, there I'll call it the AirJordan fund, all I do is leech off of Buffet's success.

 

[newyorklady]

i will read the four pillars of investing. this is actually an enlightening debate, if you can call it that. for me at least.

 

[AirJordan]

You guys should seriously have a throw down with the people at Motley Fool, Fund Alarm, and M-Star, they all swear by actively managed funds, but hey 1 out of 4 ain't bad

 

[newyorklady]

people here aren't looking to have "throw downs" with anyone. chill out airjordan.

 

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[TromboneAl]

P.S. read through each of those testimonials, and even if your not probability-challenged, you'll probably have a fleeting thought of "Hey, maybe there's something to this."

No wonder people believe that managers can actively beat the market in the long run.

 

[ERD50]

You guys should seriously have a throw down with the people at Motley Fool, Fund Alarm, and M-Star, they all swear by actively managed funds, but hey 1 out of 4 ain't bad

AJ, all you need to do is to present some real data, not anecdotal, (though I do like T-Al's references!) to back up your claim.

Bring us something that can be discussed. Everything else is just a childish 'is-to.... is-not....' 'throw down'.

Bring us some data - we are listening. Show us you are even 1/10 as smart as you first claimed.

-ERD50

 

[Grep]

I have a theoretical question about indexing that has been bothering me for a while. Forgive me for using AirHead's troll thread to ask it.

Let's suppose that the entire world, bar none, decides that indexing is best, and everyone "buys the market" for all their investment needs, and never trades on market data, nor even watches the market data, etc., but only trades per their own (e.g. retirement) needs. Is it not possible that volatility in the markets would then be (1) smoothed substantially and (2) driven substantially by macro-economic forces (e.g. baby boomer's retirements, etc.) that are unrelated to market fundamentals? If this is true, what are the other ramifications? What percentage of all holdings are in broad index funds?

Thanks.

 

[AirJordan]

AFAIK, no Nobel laureates or other Economics PhD's have discovered it either.

-ERD50

Ummm... look at the DFA staff, I'm pretty sure they've "discovered" it

 

[lswswein]

I have a theoretical question about indexing that has been bothering me for a while. Forgive me for using AirHead's troll thread to ask it.

Let's suppose that the entire world, bar none, decides that indexing is best, and everyone "buys the market" for all their investment needs, and never trades on market data, nor even watches the market data, etc., but only trades per their own (e.g. retirement) needs. Is it not possible that volatility in the markets would then be (1) smoothed substantially and (2) driven substantially by macro-economic forces (e.g. baby boomer's retirements, etc.) that are unrelated to market fundamentals? If this is true, what are the other ramifications? What percentage of all holdings are in broad index funds?

Thanks.

The numbers follow: btw I posted about this before -
http://early-retirement.org/forums/index.php?topic=5034.msg89291#msg89291
You should read the posts on that topic in the link - this has been discussed extensively and the synopsis is that we are so far away from even getting close to 20% of all invested funds being indexed that it is not an issue. Also MPT says that if everyone thinks it is a good idea and does it it will create inefficiences that will get exploited.

this is the data I collected for S&P 500 since that is the biggest Index - I think this is for 2004.

1. $626 billion is indexed to the S&P 500.
1a. $255 billion of S&P 500 indexing is by Mutual Funds - the rest is all the Institutional money not in mutual funds by indexed.
2. Float Adj Market Cap of S&P 500 is $11,000 billion

That's 6% guys and not that high. Also 10% of individual investors hold Index funds & 30% of Institutional Funds do so.

References:
www.ici.org
http://www.standardandpoors.com/
http://www.nasdaq.com/reference/IndexDescriptions.stm
http://www.ifa.com/

 

[ERD50]

Ummm... look at the DFA staff, I'm pretty sure they've "discovered" it

got a link? - ERD50

 

[Alex]

Hey AJ - be a man, not a punk. Go ahead and post your current holdings and cost basis along with your subsequent trades here online. That way we 'helpless haystackers' can learn from your awesomeness. Otherwise I second the motion that you get a cup of STFU.

 

[JohnEyles]

Hey AJ - be a man, not a punk.

And while you're at it, would you please stop implicitly comparing
yourself to Michael Jordan ? It's not appropriate. I know Michael
Jordan, and you sir are no ...

 

[AirJordan]

10k DODFX (Dodge and Cox)
8k RYVPX (Royce Value Plus)
5k FAIRX (Fairholme)
5k JSVAX (Janus Contrarian)
5k FBRVX (FBR Small Cap)
5k ARTKX (Artisan Small Cap)
10k VPCCX (Primecap Core)
10k PREOX (Perrit Emerging Ops.)

Beating Indexes is EZ

Also, I really don't like to trade, I'm more of a buy and hold type. I don't believe that panicing got anyone anywhere, and timing the market is too hard. If I wanted to trade I'd play with equities, but the consensus of the board is I'm not that smart...

 

[newyorklady]

more info on DFA please

 

[lswswein]

www.dfaus.com

 

[AirJordan]

more info on DFA please

NYL, here's a good primer on them

http://www.thestreet.com/funds/mutualfundmondaybg/10038756.html

With the millions you have, DFA would be happy to take your money, and you wouldn't even have to lose the 1% to an advisor. IMHO, other than Dodge and Cox, DFA is the best fund family out there

 

[unclemick]

Hmmm - time for my 'graduate level' crusty curmudgeon lecture.

If you can't get a grip on hormones and insist on trying to beat indexes - you might as well go all the way to individual stocks AND go right to the top.

1. Never listen to men. Women are better at investing.

2. pssst Investment Quality Trends - at least the men are trained by Geraldine.

heh heh heh - for added points look up the Hulbert rating. BTY - as a fallback DFA is a good house but you still have the drag of their fees.

 

[AirJordan]

Hmmm - time for my 'graduate level' crusty curmudgeon lecture.

If you can't get a grip on hormones and insist on trying to beat indexes - you might as well go all the way to individual stocks AND go right to the top.

I would mick, but I don't have the time, and effort to pick stocks, and find great ipo's, or undervalued companies. Picking mutual funds is what I'm content doing.