Author Topic: Alas has arrogance taken root in the Investor Alley  (Read 19651 times)

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #100 on: November 13, 2017, 07:21:34 PM »
There won't be a comparison in 10 years time because my $$ will be back in index funds by this july, when Canadian legalization of recreational marijuana begins. or perhaps sooner. sold half my portfolio after another 20% run up today. I think a correction is overdue.

If there is another industry blow up with like this one I may consider getting back in - but since this is the biggest one in a century, the statistics are against us.

Just to be clear, you are saying pot is going to be bigger than microchips? And the end of prohibition? And the internet and all the new business models which came along with it?

Yes. Compound returns have already outpaced those of the dotcom era, in both the U.S. and Canada.

https://www.google.ca/amp/s/www.forbes.com/sites/debraborchardt/2017/01/03/marijuana-sales-totaled-6-7-billion-in-2016/amp/

sol

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #101 on: November 13, 2017, 07:29:25 PM »
Just to be clear, you are saying pot is going to be bigger than microchips? And the end of prohibition? And the internet and all the new business models which came along with it?

Yes.

Okay, I think this discussion has outlived its usefulness. 

Breaking news:  stoners think legalizing weed is going change the world!

JLee

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #102 on: November 13, 2017, 07:41:49 PM »
Just to be clear, you are saying pot is going to be bigger than microchips? And the end of prohibition? And the internet and all the new business models which came along with it?

Yes.

Okay, I think this discussion has outlived its usefulness. 

Breaking news:  stoners think legalizing weed is going change the world!

It sure has a long way to go to get there, lol.

The Internet accounted for 21 percent of the GDP growth in mature economies over the past 5 years.

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #103 on: November 13, 2017, 08:09:54 PM »
Stoners. right. you mean institutional investors? such a typical comment from someone who is completely clueless about the context.

That comment reminded me of a quote I read earlier today from a John Gray book. "Human beings do not deal with conflicting beliefs and perceptions by testing them against facts. They reduce the conflict by reinterpreting facts that challenge the beliefs to which they are most attached."

JLee

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #104 on: November 13, 2017, 08:32:16 PM »
Stoners. right. you mean institutional investors? such a typical comment from someone who is completely clueless about the context.

That comment reminded me of a quote I read earlier today from a John Gray book. "Human beings do not deal with conflicting beliefs and perceptions by testing them against facts. They reduce the conflict by reinterpreting facts that challenge the beliefs to which they are most attached."

Funny you say that, as the mentioned quote is quite relevant to this thread as a whole.

steveo

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #105 on: November 13, 2017, 10:17:24 PM »
Just to be clear, you are saying pot is going to be bigger than microchips? And the end of prohibition? And the internet and all the new business models which came along with it?

Yes.

Okay, I think this discussion has outlived its usefulness. 

Breaking news:  stoners think legalizing weed is going change the world!

Mate:- something we can all finally agree with. Wouldn't it be unreal.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #106 on: November 14, 2017, 04:16:14 AM »
Stoners. right. you mean institutional investors? such a typical comment from someone who is completely clueless about the context.

That comment reminded me of a quote I read earlier today from a John Gray book. "Human beings do not deal with conflicting beliefs and perceptions by testing them against facts. They reduce the conflict by reinterpreting facts that challenge the beliefs to which they are most attached."

Sol is anything but clueless. Reading your quote aloud to yourself may help you understand the ridiculous claim you're making.

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #107 on: November 14, 2017, 05:42:04 AM »
You mean the FACT i'm 'claiming'? yes, it does sound ridiculous, if you're clueless ;)

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #108 on: November 14, 2017, 06:03:16 AM »
You mean the FACT i'm 'claiming'? yes, it does sound ridiculous, if you're clueless ;)

no one is doubting your claim that you're currently making money at this - we're saying its not predictable and doable consistently over time.  and if canada comes out tomorrow and says F you all we're not legalizing your stakes plummet.  and when they do that after hours and you're not an institutional investor who can get out then you're F'd and you just lost a boat load.

maizeman

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #109 on: November 14, 2017, 06:05:51 AM »
Just to be clear, you are saying pot is going to be bigger than microchips? And the end of prohibition? And the internet and all the new business models which came along with it?

Yes. Compound returns have already outpaced those of the dotcom era, in both the U.S. and Canada.

https://www.google.ca/amp/s/www.forbes.com/sites/debraborchardt/2017/01/03/marijuana-sales-totaled-6-7-billion-in-2016/amp/

In the late 1990s, the number of people with internet access was doubling every year. The share price of major mature tech stocks like intel growing at rates of 40-60%/year. Brand new companies were growing even faster. In its first three years after going public amazon's share price grew at a rate of ~400% per year.

But I mean, the 25-30% sales growth for marijuana quoted in that forbes article is nice. Just don't let yourself lose your sense of perspective.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #110 on: November 14, 2017, 04:02:02 PM »
I'm able to tune out the naysayors who think nobody can beat the market.  Its not easy, but it can be done.  I have handily beat the market over the past 10 years in an account with a single one time lump sum deposit, which makes it easy to calculate the return.  On 3/4/08, $17,895.49 was deposited into an account (this was a rollover from a company 401k into a traditional IRA. Stocks were purchased beginning 5/27/08.  No new money was ever added to the account and there have been maybe a half dozen total trades made during that time. 

Today as of 11/14/17 with only dividends being reinvested, but no new money added, the account that started with $17,895.49 now stands at $127,425.49.  That is a 712% total gain for the account vs. the SP500's 140.761% over the same period.  Compound annual growth rate of the account stands at 22.30% vs. 9.51% for the SP500 over the time period (note this is using 3/4/08 as the start date rather than 5/27/08, using the latter would actually give me a better annual return).   This has been over a period of 10 years, so while I have been fortunate in many respects, I don't think its a fluke.

Before the naysayers jump in I will concede the following:  1. This is not my only account, but since it was only funded with a one time lump sum its what you get.  I'm not sure how to calculate returns on other accounts with a bunch of periodic deposits and a few withdrawals over the years, nor am I interested in spending the time to learn how to do so.  2. My other accounts more than likely have not done as well as this account, but they have been successful as well.  I suspect they have beaten the SP500 but by a much smaller margin.  3. I will not disclose my other account balances or net worth.  It's not my job to convince you, but here is a piece Warren Buffett wrote a number of years ago:

http://www.grahamanddoddsville.net/wordpress/Files/Gurus/Warren%20Buffett/Superinvestors%20of%20Graham%20and%20Doddsville%20-%20Hermes.pdf



surfhb

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #111 on: November 14, 2017, 04:22:29 PM »
I'm able to tune out the naysayors who think nobody can beat the market.  Its not easy, but it can be done.  I have handily beat the market over the past 10 years in an account with a single one time lump sum deposit, which makes it easy to calculate the return.  On 3/4/08, $17,895.49 was deposited into an account (this was a rollover from a company 401k into a traditional IRA. Stocks were purchased beginning 5/27/08.  No new money was ever added to the account and there have been maybe a half dozen total trades made during that time. 

Today as of 11/14/17 with only dividends being reinvested, but no new money added, the account that started with $17,895.49 now stands at $127,425.49.  That is a 712% total gain for the account vs. the SP500's 140.761% over the same period.  Compound annual growth rate of the account stands at 22.30% vs. 9.51% for the SP500 over the time period (note this is using 3/4/08 as the start date rather than 5/27/08, using the latter would actually give me a better annual return).   This has been over a period of 10 years, so while I have been fortunate in many respects, I don't think its a fluke.

Before the naysayers jump in I will concede the following:  1. This is not my only account, but since it was only funded with a one time lump sum its what you get.  I'm not sure how to calculate returns on other accounts with a bunch of periodic deposits and a few withdrawals over the years, nor am I interested in spending the time to learn how to do so.  2. My other accounts more than likely have not done as well as this account, but they have been successful as well.  I suspect they have beaten the SP500 but by a much smaller margin.  3. I will not disclose my other account balances or net worth.  It's not my job to convince you, but here is a piece Warren Buffett wrote a number of years ago:

http://www.grahamanddoddsville.net/wordpress/Files/Gurus/Warren%20Buffett/Superinvestors%20of%20Graham%20and%20Doddsville%20-%20Hermes.pdf

Once Again!  .....a retarded, blind monkey could have beaten the market these last 10 years.    You just cherry picked the greatest bull market in history ;)    Come back in 30-40 years and show us how you did. 
« Last Edit: November 14, 2017, 04:25:56 PM by surfhb »

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #112 on: November 14, 2017, 06:07:01 PM »
Your right that its almost all during the bull market, but my time frame does start a year prior. There were severe losses for the SP 500 for a year (bottom was around 3/8/09).  No doubt I benefited greatly from the gains over the past 8 years, but the market as a whole benefitted as well and I am multiples above the return thus far. Who knows what the future will hold. Also i didn't cherry pick anything, the start date was the date when a job change occurred and the account was started and funded and the end date is today. Timing may have been fortuitous but was not cherry picked.

I do not expect to be able to average up over 20% annual gains over 30-40 years but with my strong start I stand a decent chance of outperforming the SP500. Time will tell.  I don't predict the future however.

I'm not trying to troll anyone and agree that for the vast majority indexing is the preferred path. However I do believe it's possible to beat the market over time for some. 

A bit off topic but I would not personally touch cannabis stocks.  In this early stage how could you possibly have a good sense who the winners will be? What if some states/countries don't end up legalizing it?  I suspect the growth you see at the moment is a short term phenomenon and there will be more losing companies than winners in the industry.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #113 on: November 14, 2017, 06:13:29 PM »
Your right that its almost all during the bull market, but my time frame does start a year prior. There were severe losses for the SP 500 for a year (bottom was around 3/8/09).  No doubt I benefited greatly from the gains over the past 8 years, but the market as a whole benefitted as well and I am multiples above the return thus far. Who knows what the future will hold. Also i didn't cherry pick anything, the start date was the date when a job change occurred and the account was started and funded and the end date is today. Timing may have been fortuitous but was not cherry picked.

I do not expect to be able to average up over 20% annual gains over 30-40 years but with my strong start I stand a decent chance of outperforming the SP500. Time will tell.  I don't predict the future however.

I'm not trying to troll anyone and agree that for the vast majority indexing is the preferred path. However I do believe it's possible to beat the market over time for some. 

A bit off topic but I would not personally touch cannabis stocks.  In this early stage how could you possibly have a good sense who the winners will be? What if some states/countries don't end up legalizing it?  I suspect the growth you see at the moment is a short term phenomenon and there will be more losing companies than winners in the industry.

So why haven't you quit your job to do this full time. And started hanging others money.

sol

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #114 on: November 14, 2017, 06:31:00 PM »
I have handily beat the market over the past 10 years in an account with a single one time lump sum deposit

Boy there sure is a lot of arrogance in the Investor Alley these days.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #115 on: November 14, 2017, 06:38:31 PM »
Your right that its almost all during the bull market, but my time frame does start a year prior. There were severe losses for the SP 500 for a year (bottom was around 3/8/09).  No doubt I benefited greatly from the gains over the past 8 years, but the market as a whole benefitted as well and I am multiples above the return thus far. Who knows what the future will hold. Also i didn't cherry pick anything, the start date was the date when a job change occurred and the account was started and funded and the end date is today. Timing may have been fortuitous but was not cherry picked.

I do not expect to be able to average up over 20% annual gains over 30-40 years but with my strong start I stand a decent chance of outperforming the SP500. Time will tell.  I don't predict the future however.

I'm not trying to troll anyone and agree that for the vast majority indexing is the preferred path. However I do believe it's possible to beat the market over time for some. 

A bit off topic but I would not personally touch cannabis stocks.  In this early stage how could you possibly have a good sense who the winners will be? What if some states/countries don't end up legalizing it?  I suspect the growth you see at the moment is a short term phenomenon and there will be more losing companies than winners in the industry.

So why haven't you quit your job to do this full time. And started hanging others money.

I'm planning to FIRE in the next year or so and one of my activities will be to manage my wife and I's funds.  As for managing others? Nah, that sounds like a job.  I will have enough soon. And as I admit, there is no guarantee that I can beat the market going forward.  I've done pretty well so far though. Reading up/thinking about stocks and investments is one of my hobbies. I suspect that helps somewhat.  I will continue on my path. And I do highly recommend indexing for most.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #116 on: November 14, 2017, 06:41:00 PM »
I have handily beat the market over the past 10 years in an account with a single one time lump sum deposit

Boy there sure is a lot of arrogance in the Investor Alley these days.

Not trying to be arrogant (although I admit the way I worded that comes off that way, sorry).  Just trying to offer a counter example with some data. Maybe I have been very lucky though. My example certainly may not be the case for all/most.

surfhb

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #117 on: November 14, 2017, 08:34:51 PM »
I have handily beat the market over the past 10 years in an account with a single one time lump sum deposit

Boy there sure is a lot of arrogance in the Investor Alley these days.

Not trying to be arrogant (although I admit the way I worded that comes off that way, sorry).  Just trying to offer a counter example with some data. Maybe I have been very lucky though. My example certainly may not be the case for all/most.

No.....most active investors such as yourself have beat the indexes the past 10 years.   That's the point of the blind monkey bit I was talking about.    In fact, there was a study done using a real monkey who handily beat the market.
« Last Edit: November 14, 2017, 08:41:37 PM by surfhb »

surfhb

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #118 on: November 14, 2017, 09:03:39 PM »


I do not expect to be able to average up over 20% annual gains over 30-40 years but with my strong start I stand a decent chance of outperforming the SP500. Time will tell.  I don't predict the future however.



That would make you one of the most successful investors of all time.   C'mon man...get real!  You should be a hedge fund manager ;)
« Last Edit: November 14, 2017, 09:06:06 PM by surfhb »

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #119 on: November 14, 2017, 09:07:24 PM »
So, if most active investors are beating the market over the past ten years (do you have some data for this assertion by the way?) and it's so easy even a blind monkey could do it, tell me again why you are not an active investor? 

I understand you think it's unlikely individual investors are unlikely to continue their success in the future, but the way I read your statements it seems like your investment philosophy ought to be: 1. invest in index funds when valuations are stretched 2. Switch to active stock picking (blind monkey version is sufficient) soon after a severe correction.  3. Repeat.  That obviously doesn't make a lot of sense as an investment philosophy.  Or does it?  Maybe indexing does not outperform during all investment cycles?




Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #120 on: November 14, 2017, 09:16:39 PM »


I do not expect to be able to average up over 20% annual gains over 30-40 years but with my strong start I stand a decent chance of outperforming the SP500. Time will tell.  I don't predict the future however.



That would make you one of the most successful investors of all time.   C'mon man...get real!  You should be a hedge fund manager ;)

Since I'm already up a factor of 5 or so vs the SP 500 roughly 10 years in, for me not to end up beating the SP500 over say 35 years total means I will have to go in the tank and severely underperform the SP 500 over the next 25 years. I'll have to go figure out the math.  I would bet on myself winning at year 35  given the huge head start I already have with this account.

Blanket statements like "no investor should ever stick pick" are easy to poke holes in.  While they may serve as good general rules especially for folks unskilled in the area there are always exceptions.
« Last Edit: November 14, 2017, 09:20:06 PM by Pylortes »

surfhb

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #121 on: November 14, 2017, 09:45:21 PM »
So, if most active investors are beating the market over the past ten years (do you have some data for this assertion by the way?) and it's so easy even a blind monkey could do it, tell me again why you are not an active investor? 


Because investing lasts a lifetime.    Only a handful of people have beat the indexes over such a time period....they are celebrities.  Make sense?   It actually is a very difficult thing to pull off ;)   Did you read the runner analogy earlier in the thread? 
« Last Edit: November 14, 2017, 09:46:58 PM by surfhb »

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #122 on: November 14, 2017, 10:29:38 PM »
So, if most active investors are beating the market over the past ten years (do you have some data for this assertion by the way?) and it's so easy even a blind monkey could do it, tell me again why you are not an active investor? 


Because investing lasts a lifetime.    Only a handful of people have beat the indexes over such a time period....they are celebrities.  Make sense?   It actually is a very difficult thing to pull off ;)   Did you read the runner analogy earlier in the thread?


The ones we hear about are celebrities yes. Iím sure there are others though as well who keep anonymous.   Not everyone goes around crowing about their investing successes.  Take this guy who has been discussed before http://www.cnn.com/2015/02/05/us/vermont-frugal-man-donates-millions/index.html

I was hesitant to even post in this thread as I donít want to claim Iím some sort of super investor.   Iíve lost quite a bit of money in certain stocks.  I agree itís difficult to beat the market over an extended period of time, there probably arenít a high percentage of people who beat the market over 30 plus years.  To do so in my opinion you need to own and hold solid profitable companies with low capital needs (and thus high returns on equity/assets) who have a moat around their product/services and can reliably increase their earnings above the rate of inflation for many years.  Consistently reinvesting dividends into these companies to build a bigger stake over time (and not selling into panicky) is key.  Even if you hold this kind of portfolio things can still go wrong.  The industry could shrink, bad management could take over and start squandering things, technology could disrupt things, etc. 

I did read the 5000 meter running analogy and enjoyed it.  That was pretty good but Iíd make a counter point- the disciplined individual investor has some advantages over hedge funds and mutual funds and even over index funds.  The individual investor is not subject to industry/size/country limitations and does not have to publish their results quarterly so can go anywhere including small caps and low volume stocks, international markets etc.  They also do not have to sweat losing their job if they underperform for a couple of years and donít have to dress up their portfolio shortly before quarter end to hide their underperformance (in the case of active management), and is not forced to buy shares of companies they otherwise would not choose to own or be forced to buy shares of companies that have recently run up so much that theyíve been added to the index (index funds).

I think in some ways the smartest guys on Wall Street are playing the game with restrictions that almost ensures underperformance. They are like the runners who are forced to wear heavier shoes and non-aerodynamic clothing.  If they charge high fees on top of that itís also like they start the race back 20 or more meters from the other runners. 
« Last Edit: November 14, 2017, 10:37:36 PM by Pylortes »

bacchi

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #123 on: November 15, 2017, 12:52:41 AM »
Since I'm already up a factor of 5 or so vs the SP 500 roughly 10 years in, for me not to end up beating the SP500 over say 35 years total means I will have to go in the tank and severely underperform the SP 500 over the next 25 years. I'll have to go figure out the math.  I would bet on myself winning at year 35  given the huge head start I already have with this account.

Piker. I'm up 19x vs SPY over 13 years. 10 years is nothing.

Scandium

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #124 on: November 15, 2017, 09:10:16 AM »
Can we get a checklist bot to preemptively post all the stock picking defense points every time this come up? We know what they will be so let's just save everyone the time! Most people here don't bother arguing against them anyway since the people who spout them unfailing refuse to listen to anything

1) Anecdotal short term "well, I made 60% on this one hot stock once"
2) "Institutional investors are held back by size/metrics/etc/etc. I don't so I can totally beat them!"
3) Unverified "I've beaten S&P for 10+ years"
4) worthless/well duh!: "You just have to buy profitable companies that never go out of business and make lots money!"

Of course all of these can really just be summarized and arrogantly believing you're smarter than the rest of the world..

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #125 on: November 15, 2017, 10:23:13 AM »
Can we get a checklist bot to preemptively post all the stock picking defense points every time this come up? We know what they will be so let's just save everyone the time! Most people here don't bother arguing against them anyway since the people who spout them unfailing refuse to listen to anything

1) Anecdotal short term "well, I made 60% on this one hot stock once"
2) "Institutional investors are held back by size/metrics/etc/etc. I don't so I can totally beat them!"
3) Unverified "I've beaten S&P for 10+ years"
4) worthless/well duh!: "You just have to buy profitable companies that never go out of business and make lots money!"

Of course all of these can really just be summarized and arrogantly believing you're smarter than the rest of the world..

Got anything original to add or will the bot do all the lifting for you? Somewhat ironic that you claim any stock investor refuses to listen to counter arguments.  I'm listening.  Let's hear your critiques.

On another note- one blindspot that I see on the MMM boards involves the general failure to recognize the difference between stock speculators and stock investors.  They are both automatically lumped together- "you aren''t smarter than the market", "you're gambling", etc.  I agree that speculators and those that pick stocks with no real research deserve a face punch- what they are doing is not wholly different than going down to the casino and placing bets at roulette.    However, for those that practice fundamental analysis, analyze earning statements/balance sheets, sample/research the product, perform discounted cash flow analysis, have a investing plan, invest in things they know/understand for the long term, and understand the risk-  they are investors.  Dishing out face punches to this group of investors and/or chasing it away from the boards because its not index investing is what is bothersome.  I'm with you all on face punching the speculators or those that have not done their homework before stock picking.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #126 on: November 15, 2017, 10:37:00 AM »
Can we get a checklist bot to preemptively post all the stock picking defense points every time this come up? We know what they will be so let's just save everyone the time! Most people here don't bother arguing against them anyway since the people who spout them unfailing refuse to listen to anything

1) Anecdotal short term "well, I made 60% on this one hot stock once"
2) "Institutional investors are held back by size/metrics/etc/etc. I don't so I can totally beat them!"
3) Unverified "I've beaten S&P for 10+ years"
4) worthless/well duh!: "You just have to buy profitable companies that never go out of business and make lots money!"

Of course all of these can really just be summarized and arrogantly believing you're smarter than the rest of the world..

Got anything original to add or will the bot do all the lifting for you? Somewhat ironic that you claim any stock investor refuses to listen to counter arguments.  I'm listening.  Let's hear your critiques.

On another note- one blindspot that I see on the MMM boards involves the general failure to recognize the difference between stock speculators and stock investors.  They are both automatically lumped together- "you aren''t smarter than the market", "you're gambling", etc.  I agree that speculators and those that pick stocks with no real research deserve a face punch- what they are doing is not wholly different than going down to the casino and placing bets at roulette.    However, for those that practice fundamental analysis, analyze earning statements/balance sheets, sample/research the product, perform discounted cash flow analysis, have a investing plan, invest in things they know/understand for the long term, and understand the risk-  they are investors.  Dishing out face punches to this group of investors and/or chasing it away from the boards because its not index investing is what is bothersome.  I'm with you all on face punching the speculators or those that have not done their homework before stock picking.

its not bothersome.  this isnt a forum where we delve into the research needed to beat the market - b/c 99.999% of people wont beat the market no matter their research strategies and investing plans. 

your statements that this forum should be open to this belong in the has this forum gone soft conversation.  There are a set of principals an guidelines you can follow to optimize your life happiness can you pick and choose what to follow yes.  but dont start a forum topic about how to select the best gardener maid handyman or limo driver b/c it will fall on deaf ears. 

when you start to have conversations around these things it waters down the message that the 99% need to hear.  And its already happening in other areas of the forum - in 10 years we'll probably walk in here and people will be discussing how to time the market b/c one guy said he did it in 2021 and he quadurpled his wealth by getting out at the top and in at the bottom. 

conversations like this dont add value to the fundamental basis that the forum was built on.  If there is some new tested tech or investment strategy that's been developed that beats how we currently view life and could add value to disucssion then lets bring it up but simply stating RESEARCH RESEARCH STRATEGY over and over doesnt change the fact that historically thats proven to be a failure even for large money managers who get paid alot to try to beat the market and fail. 

Things i see that could add life value moving forward include buying robotics and AI to assist in your daily life and get rid of a previous burden.  We as a society keep advancing and these inventions become tools we can use washing machines, dishwashers, etc. Now in the future lawn mowing bots and house cleaning bots will make sense. 

but what the two "investors" here are touting isnt a new tech or advancement in fundamental stock analysis that changes what everyone else before you touting this said.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #127 on: November 15, 2017, 11:35:44 AM »
Thank you for your thoughts. I see where you are coming from.   I have a couple of thoughts, and then maybe we (or at least I?) move on soon. 

1. I don't agree that a discussion of stock picking (utilizing fundamental analysis, not speculation) deserves to be in the "forum gone soft" thread.  I and many others still work hard and bust our rears to save and invest, but we are maybe utilizing a non-MMM endorsed method of investing those savings. I, for example, spend many hours working on and thinking about investments.  I am not using the money to buy a fancy truck or spending money to make life easier somehow (my method of investing requires much more time and effort than indexing), so I don't think categorizing stock selection as "soft" is really an appropriate fit.  I'm pretty hardcore about saving and investing as much and as early as possible.   I would support a compromise of funneling these type of topics into the "off topic" forums- as I acknowledge your point that stock selection is not for the vast majority of readers of this blog. Perhaps funneling any discussion of individual stocks into "off topic" would be more appropriate where those that are not interested can safely ignore it. 

2.  I do think that these discussion can add value for some- I'm able to get more specific than just "research"- I and others could discuss the methods we utilize to research, the quantitative numbers (and qualitative factors) we focus on when reviewing an investment,  some particular companies that we find attractive etc. but  this is not the particular thread to do so- so that's why I've only generally suggested utilizing fundamental analysis here in this thread (although I've been critiqued for example by Scandiums in his point #4 because I have not given more details- did you really want them here??).   Suggesting I or other investors are not capable of adding value to a retire early forum and shouting down discussions of alternative investment strategies seems a step too far, and I'm not sure that its backed up by any forum rules other than some forum members personal values/beliefs. 

3.  Speaking of this thread, it was clearly started in a negative tone.  So I'm not surprised it picked up a lot of shame early, and probably deserved it for its tone.  I agree some of the earlier posters didn't engage in a meaningful discussion.  I've held off on pushing back for quite a while but decided to jump in this thread (it admittedly isn't the best thread to do so).  What I'm trying to say is that points of view that are not "Index only.  Index all the time"  in regards to investing should not just be shouted down or dismissed out of hand. They have a role to play for some (interestingly real estate investing is permitted and endorsed to the extent that it own sub forum- but stock selection is taboo).  And I'm fine personally leading any discussion with, "for the vast majority of investors, indexing is the best way to go". 

4.  If we agree to do the two things above- funnel stock selections discussions into "off topic", and lead those threads with some line of "for the vast majority of investors, indexing is the best way to go", would the anti-individual stock selection members of the forum be able to relax and let the discussions occur over there without interruption?  I will even volunteer to throw out plenty of face punches to any speculators or those that have no clue what they are doing and send them back to the Investors Alley to read up on indexing! ;)

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #128 on: November 15, 2017, 12:08:34 PM »
Can we get a checklist bot to preemptively post all the stock picking defense points every time this come up? We know what they will be so let's just save everyone the time! Most people here don't bother arguing against them anyway since the people who spout them unfailing refuse to listen to anything

1) Anecdotal short term "well, I made 60% on this one hot stock once"
2) "Institutional investors are held back by size/metrics/etc/etc. I don't so I can totally beat them!"
3) Unverified "I've beaten S&P for 10+ years"
4) worthless/well duh!: "You just have to buy profitable companies that never go out of business and make lots money!"

Of course all of these can really just be summarized and arrogantly believing you're smarter than the rest of the world..

Got anything original to add or will the bot do all the lifting for you? Somewhat ironic that you claim any stock investor refuses to listen to counter arguments.  I'm listening.  Let's hear your critiques.

On another note- one blindspot that I see on the MMM boards involves the general failure to recognize the difference between stock speculators and stock investors.  They are both automatically lumped together- "you aren''t smarter than the market", "you're gambling", etc.  I agree that speculators and those that pick stocks with no real research deserve a face punch- what they are doing is not wholly different than going down to the casino and placing bets at roulette.    However, for those that practice fundamental analysis, analyze earning statements/balance sheets, sample/research the product, perform discounted cash flow analysis, have a investing plan, invest in things they know/understand for the long term, and understand the risk-  they are investors.  Dishing out face punches to this group of investors and/or chasing it away from the boards because its not index investing is what is bothersome.  I'm with you all on face punching the speculators or those that have not done their homework before stock picking.

No thanks. Not necessary, it's all been done before. Hence the bot.. No point to these groundhog day arguments. It's your money, do whatever you want. I don't care.

Lol, if anything I think the people who delude themselves that they can predict the future by "fundamental analysis, analyze earning statements/balance sheets" are more silly than the people who just buy stocks because they like the logo. The odds are the same so at least the latter group has more free time..
It is funny to read though. "future cash flow analysis" is my favorite. "In 10 years Coke will make this much money. I am the first to find this! This groundbreaking discovery will make me rich!". Hilarious

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #129 on: November 15, 2017, 12:53:19 PM »
pylortes, in any other investment forum people would be asking you questions.
What stocks were they, what type of TA you use etc. here they just compare you to a blind monkey (I have to wonder then what that makes them, with your kind of return). Write it off as jealousy, there is no other logical explanation. People get very emotional here when they are made to think of lost opportunities.

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #130 on: November 15, 2017, 01:19:11 PM »
pylortes, in any other investment forum people would be asking you questions.
What stocks were they, what type of TA you use etc. here they just compare you to a blind monkey (I have to wonder then what that makes them, with your kind of return). Write it off as jealousy, there is no other logical explanation. People get very emotional here when they are made to think of lost opportunities.

Hardly.   I just don't think its a fair comment to tout you beat the index the last 10 years.   Its a very short time frame to start tooting your horn.   

This blog will be an interesting place when the next recession hits, people lose their jobs and a good chunk of their stash disappears in a flash.   If youre under 35 you never have feel the full brunt of what a bear market can do to your head when your account loses hundreds of thousands of dollars in a matter of months. 

DS

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #131 on: November 15, 2017, 01:23:55 PM »
http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

Unsure why anyone would be confused what the theme would be for people following MMM.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #132 on: November 15, 2017, 01:28:20 PM »
Can we get a checklist bot to preemptively post all the stock picking defense points every time this come up? We know what they will be so let's just save everyone the time! Most people here don't bother arguing against them anyway since the people who spout them unfailing refuse to listen to anything

1) Anecdotal short term "well, I made 60% on this one hot stock once"
2) "Institutional investors are held back by size/metrics/etc/etc. I don't so I can totally beat them!"
3) Unverified "I've beaten S&P for 10+ years"
4) worthless/well duh!: "You just have to buy profitable companies that never go out of business and make lots money!"

Of course all of these can really just be summarized and arrogantly believing you're smarter than the rest of the world..

Got anything original to add or will the bot do all the lifting for you? Somewhat ironic that you claim any stock investor refuses to listen to counter arguments.  I'm listening.  Let's hear your critiques.

On another note- one blindspot that I see on the MMM boards involves the general failure to recognize the difference between stock speculators and stock investors.  They are both automatically lumped together- "you aren''t smarter than the market", "you're gambling", etc.  I agree that speculators and those that pick stocks with no real research deserve a face punch- what they are doing is not wholly different than going down to the casino and placing bets at roulette.    However, for those that practice fundamental analysis, analyze earning statements/balance sheets, sample/research the product, perform discounted cash flow analysis, have a investing plan, invest in things they know/understand for the long term, and understand the risk-  they are investors.  Dishing out face punches to this group of investors and/or chasing it away from the boards because its not index investing is what is bothersome.  I'm with you all on face punching the speculators or those that have not done their homework before stock picking.

No thanks. Not necessary, it's all been done before. Hence the bot.. No point to these groundhog day arguments. It's your money, do whatever you want. I don't care.

Lol, if anything I think the people who delude themselves that they can predict the future by "fundamental analysis, analyze earning statements/balance sheets" are more silly than the people who just buy stocks because they like the logo. The odds are the same so at least the latter group has more free time..
It is funny to read though. "future cash flow analysis" is my favorite. "In 10 years Coke will make this much money. I am the first to find this! This groundbreaking discovery will make me rich!". Hilarious

That's cool. I suppose you and I have no further need to continue on with the conversation.  Although you are being somewhat sacrastic with your replies I still can appreciate your viewpoint.

Tegus, PizzaSteve or any others feel free to PM me or perhaps we can start an "off topic" thread that won't get bombarded if we want to discuss further, assuming the other forum posters would agree to the compromise suggestions I had above.  I agree it probably is not going to be productive to continue to debate the topic.

Surfhb- I am 41 and was invested through the early 2000s and the 2008/2009 eras, and saw large drops in my investments so I am comfortable about how I would react in another similiar situation.

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #133 on: November 15, 2017, 01:34:02 PM »
Write it off as jealousy, there is no other logical explanation.

You got to be kidding. Jealous of stock picking?

Nope. Just not interested in it. Huge difference.

surfhb

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #134 on: November 15, 2017, 02:04:17 PM »
Why go off the boards to continue the discussion?    Its been perfectly civil. 

Just don't expect some friendly blowback on a forum which promotes low costs, time saving, efficiency and simplification. 
« Last Edit: November 15, 2017, 02:08:54 PM by surfhb »

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #135 on: November 15, 2017, 02:06:36 PM »
How to beat VOO - buy VB instead. - proven track record for 100 years.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #136 on: November 15, 2017, 02:12:36 PM »
Thank you for your thoughts. I see where you are coming from.   I have a couple of thoughts, and then maybe we (or at least I?) move on soon. 

  I will even volunteer to throw out plenty of face punches to any speculators or those that have no clue what they are doing and send them back to the Investors Alley to read up on indexing! ;)

It would be next to impossible to define this as i would say many people here have not seen anything out of the members who keep posting they are beating xyz for ## time.  So your way which is againt the orthodox mustachian way is the correct way to pick stocks in a realm of people who consider stock picking to be a worthless waste of time and likely deterimental to everyones wealth trying to perform is the one not deserving of a face punch but you will dole them out - interesting -  the only way this should work is everyone who walks into a thread titled research and how i beat the market over 10 years to receive an instant face punch with the tag line jlcollinsnh stock series you dummy no one can do this consistently.

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #137 on: November 15, 2017, 02:41:50 PM »
Fascinating read thus far.

There's an interesting melange of ego, emotion, and efficiency going on here.

For the average FIREee, consistent growth and conservation of capital is key. Stock-picking, however informed or misinformed, could derail the FIRE plans. Planned, somewhat certain FIRE is more desirable than expedited yet uncertain FIRE via outperforming the market, particularly during the accumulation phase. Really, it's another manifestation of risk tolerance that spills over into the non-financial areas. With indexing, you are highly likely to see consistent growth and the conservation of capital over the long-haul with minimal involvement. Much less probable with individual equities.

There's selection bias going in this particular sub-forum: folks interested in investing visit Investor Alley. Many MMMers, I am willing to wager, are happy to be saving their X%, investing it in to a market index ETF, and likely not delving further, as there's no need. Odds are they infrequently visit this particular part of the forum. Others actually like to research investments, be it stocks, real estate, new businesses, etc. Like a hobby, if you will. There are positive emotions associated with it. It's fun. Most importantly, it probably has no negative implications for FIRE plans. Those folks congregate here.

So, control. There are varying degrees of control over investments. Own an Etsy shop, blog, or MMM HQ? Personal control largely dictates profits/returns. Rental house? Some personal control can help juice the earnings, but the local market will set the overall parameters. Commercial real estate? Even less so. Publicly-traded stocks? Zero control. I think that is one of the main reasons stock-picking is stigmatized here (with the Stoic philosophy undertones). It is hubris to assert that you can beat the market over decades. It is a statistically peculiarity if you have. Fortuitous. Luck. With a dash of educated guess.

This weird polarization happens the moment someone brings up individual stock investing. It is not binary: 100% indexing or 100% fucking yourself by picking stocks.

Do I think indexing is the most efficient, risk-adjusted means to FIRE? Yes. Absolutely. Do I think that precludes any other investment vehicle? Not at all. But don't bet FIRE on it.

Pylortes

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #138 on: November 15, 2017, 02:49:26 PM »
Thank you for your thoughts. I see where you are coming from.   I have a couple of thoughts, and then maybe we (or at least I?) move on soon. 

  I will even volunteer to throw out plenty of face punches to any speculators or those that have no clue what they are doing and send them back to the Investors Alley to read up on indexing! ;)

It would be next to impossible to define this as i would say many people here have not seen anything out of the members who keep posting they are beating xyz for ## time.  So your way which is againt the orthodox mustachian way is the correct way to pick stocks in a realm of people who consider stock picking to be a worthless waste of time and likely deterimental to everyones wealth trying to perform is the one not deserving of a face punch but you will dole them out - interesting -  the only way this should work is everyone who walks into a thread titled research and how i beat the market over 10 years to receive an instant face punch with the tag line jlcollinsnh stock series you dummy no one can do this consistently.

Assuming I start the thread it would not be titled "I beat the market over 10 plus years- here's how!"  or anything of the sort.  I would title it something along the lines of "Individual Stock Investors Thread"- I'm not interested in a topic where people come to just crow about their results- I would want a thread where people who have investment ideas to share post them and discussion/critique occurs and hopefully some learning occurs (note- I want to avoid the type of critique that occurs in the Investor Alley where people pop in to flame stock picking in general).  I would need to figure out how to prominently put the rules of the thread (perhaps in the title or right up in the first post?) Here are some rules I might consider: 1. Indexing is the best method for most.  If you don't know what you're doing read up on that first (referral back the Investor's Alley and/or MMM posts on indexing) as beating the market is difficult  2. Stock speculators/gambles will be face punched (gently)  3.  Anyone coming in to crow about their results with nothing tangible to add would be not allowed 4.  Anyone coming in from the Investors Forum (or elsewhere) to flame that indexing rules and only an idiot would stock pick would be not allowed  and redirected back over here 5.  Crypto-currency discussions (or other currency discussions) would not be permitted.

I'd also ask that if anyone starts asking about picking individual stocks over here in the Investors Alley you all politely refer them over to the off topic thread (a plug for index investing would be okay, but don't beat them up over the head okay?)  Anyone who is obviously new and/or clueless about investing we would send back over here to read up more on indexing. Contrary to popular belief, I am also a big proponent of indexing, and my 401k is invested in index funds with positive results- so no problem with me recommending indexing for those new or unprepared to put in the time/work to get proficient. 

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #139 on: November 15, 2017, 03:20:56 PM »
Fascinating read thus far.

There's an interesting melange of ego, emotion, and efficiency going on here.

For the average FIREee, consistent growth and conservation of capital is key. Stock-picking, however informed or misinformed, could derail the FIRE plans. Planned, somewhat certain FIRE is more desirable than expedited yet uncertain FIRE via outperforming the market, particularly during the accumulation phase. Really, it's another manifestation of risk tolerance that spills over into the non-financial areas. With indexing, you are highly likely to see consistent growth and the conservation of capital over the long-haul with minimal involvement. Much less probable with individual equities.

There's selection bias going in this particular sub-forum: folks interested in investing visit Investor Alley. Many MMMers, I am willing to wager, are happy to be saving their X%, investing it in to a market index ETF, and likely not delving further, as there's no need. Odds are they infrequently visit this particular part of the forum. Others actually like to research investments, be it stocks, real estate, new businesses, etc. Like a hobby, if you will. There are positive emotions associated with it. It's fun. Most importantly, it probably has no negative implications for FIRE plans. Those folks congregate here.

So, control. There are varying degrees of control over investments. Own an Etsy shop, blog, or MMM HQ? Personal control largely dictates profits/returns. Rental house? Some personal control can help juice the earnings, but the local market will set the overall parameters. Commercial real estate? Even less so. Publicly-traded stocks? Zero control. I think that is one of the main reasons stock-picking is stigmatized here (with the Stoic philosophy undertones). It is hubris to assert that you can beat the market over decades. It is a statistically peculiarity if you have. Fortuitous. Luck. With a dash of educated guess.

This weird polarization happens the moment someone brings up individual stock investing. It is not binary: 100% indexing or 100% fucking yourself by picking stocks.

Do I think indexing is the most efficient, risk-adjusted means to FIRE? Yes. Absolutely. Do I think that precludes any other investment vehicle? Not at all. But don't bet FIRE on it.

Best post in this thread so far.

The other points I would add are :

1) so many references to historical performances. yet as any investor will tell you, previous performance is not indicative of future performance. if we really are talking about 60 years from now, than with the acceleration of climate change, the next 60 years are going to look very different from the previous 60. and do we really think index funds are going to stay hot for that entire time?   there's already lots of chattering about how they're going to jump the shark soon. and that's without considering the financial impact of an ecological collapse, which top biologists are warning is now a certainty.

2) most people on this thread appear to be already quite wealthy compared to the rest of the population. some are making six figures. i'm living in a small town with very few opportunities and very sparse income.  i'm not dependent on swing trading, but it's nice that my net worth hasn't decreased since i left my job. that's what i meant about taking advantage of an industry breakout. i don't care what history says. it's not relevant to what's happening in this particular industry right now.  the fact that so many here seem so wary of cannabis stocks assures me to follow Buffet's advice and invest when others are fearful.


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Re: Alas has arrogance taken root in the Investor Alley
« Reply #140 on: November 15, 2017, 04:20:13 PM »
You caught me Tegus - I went to the Mugatu school of investment.


boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #141 on: November 15, 2017, 04:35:40 PM »
Fantastic market research there tegus. A sub forum of 5 people if that are against cannabis stocks. I actually happen to think they will do well I'm not against the stocks and when that happens they will be in my index fund. Invest when others are fearful based on a couple people in a forum doesn't justify anything.  But if that's the extent of your research initiative. I'd say most commenters have been correct thus far.

You probably should start a poll to further justify your position.

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #142 on: November 15, 2017, 04:49:26 PM »
Quote
follow Buffet's advice and invest when others are fearful.

He also tells ordinary people to invest in low cost index funds.

Tegus

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #143 on: November 15, 2017, 04:56:30 PM »
Quote
follow Buffet's advice and invest when others are fearful.

He also tells ordinary people to invest in low cost index funds.

Which I have more than enough of.

Oh right. this is MMM. It can only be either/or.

PizzaSteve

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #144 on: November 15, 2017, 05:35:46 PM »
A good test of this idea is to participate in the Bogleheads annual stock picking contest.  Believe me, the results are hilarious.  They select funny investment fund names and pick 3 longs and 3 shorts.  They can sell any time during the year.

Mostly they track the average, some do great some do horribly, as expected.
« Last Edit: November 17, 2017, 07:36:55 AM by PizzaSteve »

Radagast

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #145 on: November 16, 2017, 11:34:36 PM »
If you find yourself picking stocks and beating the Vanguard S&P500 fund, congratulations. That is something which only 99% of monkeys can accomplish. https://www.cass.city.ac.uk/news-and-events/news/2013/april/monkeys-beat-market-cap-indices A better benchmark might be the percentage of 100-stock monkey portfolios you beat, rather than a total market fund. Also along those lines, the above is why I am not as gung-ho about total market or S&P500 funds, I find buy-and-hold monkeys to be more aspirational especially when adding lots of new money regularly.

A good analogy for trading is roulette. Buyer gets black, seller gets red, and green goes to Wall Street. While buy-and-hold monkeys and total market indexing have positive expected returns over the long term, trading has a negative expected return.

Imagine a roulette tournament with 1,073,741,824 entrants (2^30), and each entrant puts $1 into the first round to kick things off. All entrants pair up and spin a wheel. Losers drop out of the tournament with nothing from the round, winners keep half their winnings and put the other half plus principal into the next round. If it lands on green, Wall Street wins the round and both contestants drop out. Nearly half the entrants make money from the first round, which gives a general feeling that winning is doable. By the fourth round, 10% of the entrants have made lots of money, which are more than 100,000,000 people. They talk up how easy it is to make a fortune at roulette, and are annoying to hang out with to everyone else. By the 7th round more than 1% of the roulette entrants continue to win, which is 1,000,000 people, and they hit the internet, converging on unsuspecting comments sections and forums to say that they did it, why canít everyone else? Eventually a handful of people turn their $1 into $1,000s or even $10,000s. They buy politicians and write books called ďHow to Beat Roulette.Ē A new tournament starts every business day, with mass participation.

All those roulette people lost sight of the bigger issue, which is that none of them had any skill, it was entirely due to luck, and by the 27th round or so, the expected outcome was that Wall Street had taken more than half the starting money. The expected outcome for all entrants is a loss. Beating the market is not evidence you have skill. With a starting pool of a billion, many many people can be expected to beat the market with undiversified investments through random chance. If your stock picking has high turnover, this analogy might be a very good one. The harder question is, are your returns high enough to know for certain that you are more than just a lucky roulette player?

A final point is I am beating a buy-and-hold portfolio of any combination of Vanguard funds whose names contain ďTotalĒ by about 1% annualized (I aspire to be a monkey, but all my investments contain ďIndexĒ in their names). I learned enough about investing to know that chance was involved, but over long periods this is the expected outcome. The part that I didnít include is I spent probably 2,000 hours reading books, forums, and blogs to learn that. If I had worked that many hours at a Home Depot side gig and put all my money in the Vanguard 2050 fund I would have been far, far ahead. If I put in that time at the $35/hr I get at work, I would have been better off (so far) never learning about investing and sticking it in a Wells Fargo 0% saving account. If your time is important to you for doing something else you are almost certainly coming out far behind by not indexing.

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #146 on: November 17, 2017, 12:02:29 AM »
I'm not sure how to calculate returns on other accounts with a bunch of periodic deposits and a few withdrawals over the years
Its super easy. Use Open Office. Type the date each deposit entered the account in one column, the amount of the deposit in the next, and today's date and the current balance as a negative number at the top of those columns. Use the XIRR function in the third column.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #147 on: November 17, 2017, 03:50:37 AM »
Consistently beats market - doesn't understand how Excel works.

MOD EDIT: Is there any point to this post besides being rude? Don't do that, please.
« Last Edit: November 17, 2017, 08:52:50 PM by arebelspy »