Author Topic: Alas has arrogance taken root in the Investor Alley  (Read 23143 times)

tm_dunn

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Alas has arrogance taken root in the Investor Alley
« on: November 06, 2017, 06:50:29 PM »
New to the forms, and I was reading several different threads to see what could be learned.  It was a bit surprising to hear people apologize for buying or owning individual stocks.  That, and this comment was picked up more than once, “we don't do this around here”, which seems to pop up anytime someone wants to do something other than index investing.  If that’s truly the case, maybe the thread should be called “Long term Index Investing”, so people know the unwritten rule.  Then there was a comment about new people to the form who end up "leaving with their tail between their legs"… hmmm, maybe they leave because they find the group to be unfriendly, and a bit too much on the haughty side.

While I do agree LT index investing is the best bet for most investors, it's ridiculous to assume it’s the only way to make money, or that you can’t beat an index, when children can do it with a little guidance.

And even when it comes to an all-out spender vs a true saver (10 and done), who is to say that one is better than the other?  If a man lacks self-discipline, he is assuredly better off keeping himself busy with work.  "An idle mind is the devil's workshop", proves true every day of the year.  And if he wants to live paycheck to paycheck so be it, who am I to judge what is best for him?  Man is but a speck of dust on this earth, and for a short period of time.  As a noble man once said “the greatest need of the day is simplicity and humility”.  We seem to be on the right track with the simplicity part.

I may stop back, but more than likely will opt for a more friendly, broadminded form.

Hargrove

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #1 on: November 06, 2017, 07:24:02 PM »
I may stop back, but more than likely will opt for a more friendly, broadminded form.

THIS ISN'T EVEN YOUR FINAL FORM??

JLee

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #2 on: November 06, 2017, 07:59:43 PM »
New to the forms, and I was reading several different threads to see what could be learned.  It was a bit surprising to hear people apologize for buying or owning individual stocks.  That, and this comment was picked up more than once, “we don't do this around here”, which seems to pop up anytime someone wants to do something other than index investing.  If that’s truly the case, maybe the thread should be called “Long term Index Investing”, so people know the unwritten rule.  Then there was a comment about new people to the form who end up "leaving with their tail between their legs"… hmmm, maybe they leave because they find the group to be unfriendly, and a bit too much on the haughty side.

While I do agree LT index investing is the best bet for most investors, it's ridiculous to assume it’s the only way to make money, or that you can’t beat an index, when children can do it with a little guidance.

And even when it comes to an all-out spender vs a true saver (10 and done), who is to say that one is better than the other?  If a man lacks self-discipline, he is assuredly better off keeping himself busy with work.  "An idle mind is the devil's workshop", proves true every day of the year. And if he wants to live paycheck to paycheck so be it, who am I to judge what is best for him? Man is but a speck of dust on this earth, and for a short period of time.  As a noble man once said “the greatest need of the day is simplicity and humility”.  We seem to be on the right track with the simplicity part.

I may stop back, but more than likely will opt for a more friendly, broadminded form.

If someone wants to live paycheck to paycheck, then they probably shouldn't be hanging around here.  That's like an omnivore trolling vegan forums - there's no point.

powskier

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #3 on: November 06, 2017, 08:25:41 PM »
We need a "don't waste your click" flag.

Radagast

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #4 on: November 06, 2017, 08:26:42 PM »
it's ridiculous to assume [...] that you can’t beat an index, when children can do it with a little guidance.

And if he wants to live paycheck to paycheck so be it, who am I to judge what is best for him?

I may stop back, but more than likely will opt for a more friendly, broadminded form.

Bye.

bacchi

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #5 on: November 06, 2017, 10:10:49 PM »
I may stop back, but more than likely will opt for a more friendly, broadminded form.

THIS ISN'T EVEN YOUR FINAL FORM??

Great Scott! Market beating pod aliens have taken over!

Frankies Girl

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #6 on: November 06, 2017, 10:28:26 PM »



sol

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #7 on: November 06, 2017, 10:33:17 PM »
Plz don't leave us.  Stay, and show us the way to infinite internet riches with stock picking hot tips!

Travis

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #8 on: November 06, 2017, 10:53:46 PM »
which seems to pop up anytime someone wants to do something other than index investing.

There's a whole sub-forum called "real estate." 

Quote
While I do agree LT index investing is the best bet for most investors, it's ridiculous to assume it’s the only way to make money, or that you can’t beat an index, when children can do it with a little guidance.

You've met a lot of under-aged investors?  Where can these prodigies be found?

Quote
And even when it comes to an all-out spender vs a true saver (10 and done), who is to say that one is better than the other?...And if he wants to live paycheck to paycheck so be it, who am I to judge what is best for him?
 

Nobody here is claiming to be "better," and nobody suggests that you should judge.  We have a whole sub-forum if you want to go be judgemental.  What we provide here are advice and tools if you choose to change how you live your life, but I'm sure you already knew that.

Quote
I may stop back, but more than likely will opt for a more friendly, broadminded form.

Best of luck.  May I suggest Bogleheads? I'm sure you'll find them a captivating audience who will listen to your sound financing advice and reasoning.

Nate79

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #9 on: November 06, 2017, 11:10:17 PM »
LOL. Always good to see a humor thread.

Sent from my SAMSUNG-SM-G930A using Tapatalk


Little Aussie Battler

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #10 on: November 07, 2017, 12:20:52 AM »

Indexer

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #11 on: November 07, 2017, 02:44:39 AM »
1st paragraph response: I haven't seen comments about people leaving with their tail between their legs. Now, by my name you can probably guess I like index funds. This group shares a lot of members with the Bogleheads, and they are going to index index index. There are stock pickers here and people who tilt towards small cap value. While I don't agree with those strategies, as long as they have a well thought out strategy I respect what they are doing and I love to engage in the conversation. On the other hand, if a novice investor has a terrible strategy I'm going to poke holes in it until they see the flaws. I try to be nice about it, but I'm doing them a favor.

On that note, I read your other topic. boarder42 responded you should stick to indexing, and I agree with them. I think a strong argument can be made for international outperforming domestic over the next few years, and I love engaging in that conversation. However, your argument wasn't well thought out. You weren't even sure which Buffett quote you were basing your strategy on, and what you did say didn't even sound like a Buffett quote. If you did always invest based on who had the lowest rates you would have spent most of the past few decades invested in Japanese stocks. Sorry, but it isn't a sound strategy.

Quote
While I do agree LT index investing is the best bet for most investors, it's ridiculous to assume it’s the only way to make money, or that you can’t beat an index, when children can do it with a little guidance.

Children? Really.... Anyone can beat an index, one year, with luck. Doing it over time, well that's something that the vast majority of active fund managers can't do. People who get paid millions of dollars, people who hold advanced degrees and certifications, very rarely beat the market over the long term.

3rd paragraph: Who is to say saving is better than spending? Um... Mr. Money Mustache. That is what he says, and this is a forum dedicated to his savings strategies. If you want to spend all of your money and work until you are 70 by all means do so. Speaking of stocks, APPL is in my index funds, someone needs to buy those overpriced phones so my dividends keep coming in. Thank you for your contribution.
« Last Edit: November 07, 2017, 02:59:16 AM by Indexer »

Mr Mark

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #12 on: November 07, 2017, 03:03:37 AM »
Well, everyone's entitled to stay or go. 

But I would disagree with the characterisation. We have subthreads on RE, people picking individual stocks, people speculating in tulips investing in crypto. And then there's the never ending debate on what 'low cost index investing' means in practice - what's a good asset allocation? What % bonds and what kind? When to rebalance? How about International? Tax optimisation? Vanguard? REITs? Whole market or SP500? Small Cap tilt?

However we do like data, and the data suggests - especially for Americans or those with access to the US market - that Jack Bogle was right and regular & compounding low cost index investing is the most stress free reliable way to build wealth for ordinary people. A child can place a big winning bet at a roulette table too, but that doesn't make it a good strategy.

Even Saint JH Collins has adjusted his strategy over time. Heck Mr 'Why a house is a terrible investment' even bought a house.

If you think you have different POV, OK. Tell us what it is and why. If you want to give shitty advice (like stock picking to beat the index) for what to do with a retirement portfolio, expect some robust challenge.

« Last Edit: November 07, 2017, 06:04:25 AM by Mr Mark »

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #13 on: November 07, 2017, 03:06:42 AM »
Hedge fund managers are making million dollar bets against Buffett and the s&p 500 index and losing.  Where are these child prodigies. And why aren't they at the top of hedge funds.

MrSpendy

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #14 on: November 07, 2017, 05:34:02 AM »
Stock picker here.

Go over to cornerofberkshireandfairfax.com to discuss stock picking.

The crowd over there is more open (because it is a value oriented stock picking forum) and knowledgeable about stock picking (because it is filled with people who have chosen to dedicate loads of time to stock picking). There are loads of talented and hard working incvestors on it who will teach you about investing.

Even amongst those, many will underperform the indexes over the long term.Stock picking is an arrogant act. Indexing is a humble one.

Can't tell if you're a troll or not, but you don't go to a frugality forum that suggests 100% of people should index to discuss stock picking.

Go to an investing forum that thinks 95% of people should index and is filled with people trying to be that 5% that shouldn't.

I wouldn't go on COBAF to look for good rice and beans recipes.

davisgang90

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #15 on: November 07, 2017, 06:00:20 AM »
Quote
If someone wants to live paycheck to paycheck, then they probably shouldn't be hanging around here.  That's like an omnivore trolling vegan forums - there's no point.


Mmmmmm, bacon...and stock picking...

Dreamer

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #16 on: November 07, 2017, 06:05:16 AM »
I completely agree with tm_dunn's post, and I'm glad someone had the nerve to call it out.  The closed-mindedness of some posters, coupled with rudeness, really irks me. 

dandarc

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #17 on: November 07, 2017, 06:13:30 AM »
Stock picking is an arrogant act. Indexing is a humble one.
Going to have to remember that line.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #18 on: November 07, 2017, 06:28:18 AM »
I completely agree with tm_dunn's post, and I'm glad someone had the nerve to call it out.  The closed-mindedness of some posters, coupled with rudeness, really irks me.

as was stated many many times even by some stock pickers... you're likely not going to beat the market and you're arrogant for trying... this also isnt the place to try to strike up a discussusion around stock picking as was also pointed out.  its not arrogance its just a simple fact that many will fail to beat the market trying to pick stocks.  if you'd like to gamble go right ahead you just wont get support here.  the same way you wont get support for hiring a gardener and a maid and driving a truck as a commuter car.

Car Jack

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #19 on: November 07, 2017, 07:00:49 AM »
There are absolutely people who can, for a time, beat the market.  I did day trading for a while.  Small number of stocks and I'd ride the small daily changes and take $100 profit, look for which one was in a small valley, buy.  Did pretty well until one of my picks went bankrupt and the other lost it's biggest investor.  Want to know how to turn $4k into $15?  I can tell you all about it.

Ok, so what about the big guns?  The people who get paid big dollars to manage a big endowment.  Well, in another forum, someone talked about a financial planner using "endowment style" like the ivy's use to manage their clients money.  So I looked up Harvard and Yale.  How'd they do last year compared to the S&P 500?  They had their heads eaten and spit out by the S&P.  They did better than CDs but not even close to the S&P.  They had more big dollar tools available to them than just about anyone and tanked.  Here's where a child could have beat someone....tell the child to hit "buy" for SPY and they win.

From my day trading days, don't forget that you pay fees on the buy and fees on the sell.  It seriously ate into the profits I made.....until I lost it all.  Then, well, it still ate into the sell to close the position.

tralfamadorian

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #20 on: November 07, 2017, 07:05:19 AM »
I completely agree with tm_dunn's post, and I'm glad someone had the nerve to call it out.  The closed-mindedness of some posters, coupled with rudeness, really irks me.

I know! How dare they use facts and data to disprove wild presumption. The nerve!

fattest_foot

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #21 on: November 07, 2017, 08:12:25 AM »
Stock picking is an arrogant act. Indexing is a humble one.
Going to have to remember that line.

Yeah, I really like that.

In one of my finances classes, I remember a professor talking about the efficient market (please don't derail this thread about whether you believe in the efficient market or not).

There are an enormous amount of financial firms out there, and they all have large staffs of analysts each dedicated to knowing everything there is to know about an individual business or industry/sector. These analysts have full time jobs to do this, and there are tons of them. Their research ends up baking in the "expected" value of a stock.

To then think that you know better than the dozens of analysts who are spending their entire day doing it is foolish. That's not to say there are sectors that are under-analyzed or that you may have some inside information. Or heck, you may just get lucky and they were wrong! If you're not putting in the time to read quarterly reports or do some in depth analysis, you're really doing no more than gambling.

PDXTabs

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #22 on: November 07, 2017, 08:47:29 AM »
I completely agree with tm_dunn's post, and I'm glad someone had the nerve to call it out.  The closed-mindedness of some posters, coupled with rudeness, really irks me.

I know! How dare they use facts and data to disprove wild presumption. The nerve!

Facts matter, but not being a jerk matters too.

DS

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #23 on: November 07, 2017, 08:50:09 AM »
Stock picking is an arrogant act. Indexing is a humble one.
Going to have to remember that line.

This is what I thought when I read the title. I thought the thread would be complaining about stock picking.

Travis

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #24 on: November 07, 2017, 09:17:52 AM »
Hedge fund managers are making million dollar bets against Buffett and the s&p 500 index and losing.  Where are these child prodigies. And why aren't they at the top of hedge funds.

I seem to recall reading about experiments where a child (or maybe it was a cat) picked random pieces of paper that had stock names on them.  They did better than some hedge fund managers.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #25 on: November 07, 2017, 09:20:52 AM »
Hedge fund managers are making million dollar bets against Buffett and the s&p 500 index and losing.  Where are these child prodigies. And why aren't they at the top of hedge funds.

I seem to recall reading about experiments where a child (or maybe it was a cat) picked random pieces of paper that had stock names on them.  They did better than some hedge fund managers.

haha yes there was that octopus that correctly predicted the world cup a few years ago too.  i gotta invest in one of those.


OurTown

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #26 on: November 07, 2017, 09:35:11 AM »
My confessions.  I have a REIT index fund.  And a Small Cap Value fund.  And a foreign / junk bond fund.  And an Emerging Markets fund.  I am not pure.  I am unclean.  I might even be arrogant.  Bogle forgive me, for I have sinned.  This fancy stuff, however, is only about 10% of my NW.

The rest of it is boring, vanilla, 3-fund portfolio, in broad, boring index funds.  I am not smart enough or lucky enough to stock pick, and I can't handle the risk. 

As with all things, YMMV.


Travis

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #27 on: November 07, 2017, 10:09:26 AM »
Hedge fund managers are making million dollar bets against Buffett and the s&p 500 index and losing.  Where are these child prodigies. And why aren't they at the top of hedge funds.

I seem to recall reading about experiments where a child (or maybe it was a cat) picked random pieces of paper that had stock names on them.  They did better than some hedge fund managers.

haha yes there was that octopus that correctly predicted the world cup a few years ago too.  i gotta invest in one of those.



There was a radio station in CO that would advertise for a pet store during football season by painting two mice with the Monday Night Football teams colors and dropping them into a box with a snake on the air.  The mouse that got eaten first was the predicted loser.  If only everything in life could be decided by these easy binary choices.

boarder42

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #28 on: November 07, 2017, 10:12:39 AM »
My confessions.  I have a REIT index fund.  And a Small Cap Value fund.  And a foreign / junk bond fund.  And an Emerging Markets fund.  I am not pure.  I am unclean.  I might even be arrogant.  Bogle forgive me, for I have sinned.  This fancy stuff, however, is only about 10% of my NW.

The rest of it is boring, vanilla, 3-fund portfolio, in broad, boring index funds.  I am not smart enough or lucky enough to stock pick, and I can't handle the risk. 

As with all things, YMMV.

i'm heavier in mid and small caps til we hit our FIRE number then its 50-60 VTSAX 30-40 Total INT EX US - and 0-10% VBTLX.

i'll take the higher risk higher reward in accumulation. b/c all the projections are at risk anyways b/c the market doesnt go up a flat 7% a year post inflation.

dandarc

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #29 on: November 07, 2017, 10:18:13 AM »
There was a radio station in CO that would advertise for a pet store during football season by painting two mice with the Monday Night Football teams colors and dropping them into a box with a snake on the air.  The mouse that got eaten first was the predicted loser.  If only everything in life could be decided by these easy binary choices.
I understand that's what snakes eat, but I don't think that would be a very effective advertisement.

Travis

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #30 on: November 07, 2017, 10:22:27 AM »
There was a radio station in CO that would advertise for a pet store during football season by painting two mice with the Monday Night Football teams colors and dropping them into a box with a snake on the air.  The mouse that got eaten first was the predicted loser.  If only everything in life could be decided by these easy binary choices.
I understand that's what snakes eat, but I don't think that would be a very effective advertisement.

I'm sure the name-drop of the store was secondary to two DJs cheering on a snake as it killed live prey on the air.  Anyways, back to poking at the stock picker...

sol

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #31 on: November 07, 2017, 10:28:19 AM »
Stock picking is an arrogant act. Indexing is a humble one.
Going to have to remember that line.

This is what I thought when I read the title. I thought the thread would be complaining about stock picking.

It's an unsubtle sort of irony, to start a thread about the "arrogance" of indexers when it is supposedly so easy to be smarter than a hedge fund and pick the winners from the market.  Like "you're so arrogant, I'm too smart for that."

But I seriously doubt the OP was trolling, even though it looks pretty obvious in that light.  I think he genuinely believes that he is too smart to just capture guaranteed market returns, and that he can and should do better by bucking the advice of all of these arrogant people telling him to be humble.

bobechs

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #32 on: November 07, 2017, 10:53:05 AM »
One word: cannabis.

kendallf

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #33 on: November 07, 2017, 10:53:34 AM »
I have nothing to contribute here but I wanted to congratulate the OP for easily the strangest quote I've seen in a signature. 

Optimiser

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #34 on: November 07, 2017, 11:25:37 AM »

BTDretire

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #35 on: November 07, 2017, 11:43:05 AM »
My confessions.  I have a REIT index fund.  And a Small Cap Value fund.  And a foreign / junk bond fund.  And an Emerging Markets fund.  I am not pure.  I am unclean.  I might even be arrogant.  Bogle forgive me, for I have sinned.  This fancy stuff, however, is only about 10% of my NW.

 Oh, for a second I thought you bought !
I do have individual REIT stocks, some preferreds, some regular. Some in regular accounts, some tax advantaged.
In the taxed account I receive about $20k in dividends, it helps with my kids college  expenses. Plus my income is low enough that there is no tax on them.
  I didn't realize buying indivdual stocks would make me persona non grata, in fact, I don't think it does.
I think the OP was just mad because he sees people here with disipline saving money and getting ahead, and he feels bad because he's not.

OurTown

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #36 on: November 07, 2017, 11:48:12 AM »
In the taxed account I have the "Vanguard Tax Managed Balanced."  I believe it is 50% mid and large cap index, and 50% municipal bonds.

At one time we had some individual stocks laying around from my wife's previous employer.  We cashed them in and I remember it was the world's biggest pain in the ass to try and figure out the basis.

BTDretire

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #37 on: November 07, 2017, 12:06:11 PM »

bacchi

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #38 on: November 07, 2017, 12:23:06 PM »
I have nothing to contribute here but I wanted to congratulate the OP for easily the strangest quote I've seen in a signature.

Yeah, it is pretty strange. It's suggesting to work for "love" (of the boss or the task?) as an employee (indentured servant?), with no pay, and that somehow that's better than doing an agreed upon job for an agreed upon wage?!?


I've bought individual stocks, too. When Brexit hit, I picked up some British bank stocks at a steep discount. The gamble (and it was a gamble) paid off. Less than 5% of my stocks are individual and I'm closing most/all of those positions in January.


tralfamadorian

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #39 on: November 07, 2017, 12:48:44 PM »
I completely agree with tm_dunn's post, and I'm glad someone had the nerve to call it out.  The closed-mindedness of some posters, coupled with rudeness, really irks me.

I know! How dare they use facts and data to disprove wild presumption. The nerve!

Facts matter, but not being a jerk matters too.

To-may-to, to-mah-to.  One person's hilarious snark is another's rudeness.

But really, does one expect sunshine and roses when one takes a stand that indexes are for suckas in a website where the core tenant is "Thou shalt invest higher than average savings in low-cost index funds until thoust savings equal 25x expenses" ? In general, I find mustachians to be a patient and intelligent bunch.

KTG

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #40 on: November 07, 2017, 12:58:10 PM »
I've bought individual stocks, too. When Brexit hit, I picked up some British bank stocks at a steep discount. The gamble (and it was a gamble) paid off. Less than 5% of my stocks are individual and I'm closing most/all of those positions in January.

I have most of my money tied up in ETFs, but always have cash on hand to buy into selloffs. Last year I picked up two energy companies when the whole sector went down after the Saudi's flooded the market, and sold them when they near peaked at the end of the year. Made a killing. Far far more than my ETFs during the same amount of time. I also made a lot on the Financials from last year to this year too. I've had some losses too, but far far less than what I have made.

And I am not advocating having an entire portfolio of individual stocks either. I am more about finding a ratio of ETFs/Individual Stocks just as you would with Stocks/Bonds. Actually, to be more specific, I am actually more like Cash/ETFs/Individual Stocks/Bonds. The cash is for taking advantage of selloffs, the EFTs and Bonds I rarely touch, and the Individual Stocks I try to time.

If this makes me less mustachian I could care less.



runbikerun

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #41 on: November 07, 2017, 02:07:37 PM »
I use a pretty simple test for determining whether it's a good idea for me to try stock picking: I go and take a look at the times for the men's 5,000 metres at the last Olympics.

Wait, bear with me.

In the market, the vast majority of actively traded money and stocks is in the control of professional money managers of one stripe or another. They're generally extremely intelligent, work incredibly hard, and are backed up by some of the most advanced analytical tools money can buy. And, generally speaking, they don't successfully outperform index funds.

If I decide that I can actively trade in this world and do better than the weighted average of this market, then I'm also implicitly deciding that my estimation of likely market moves is superior to that of some of the smartest, hardest-working people in the world. As mrspendy puts it, stock picking is an arrogant act.

This is why I look at the 5,000 metres. Thanks to the sheer weight of the biggest and most professionalised players in the market, trading in the stock market is roughly equivalent to running a 5k against Olympian specialists. Successfully competing at that level involves being the trading equivalent of an Olympic finalist. I know what my best 5k time is, and I can compare it to the last-placed finalist from Rio.

It turns out that Joshua Cheptegei ran that final in 13:09. My personal best is a solid eight minutes slower than that. Not only can I not run that kind of pace, I'd be out of my goddamned mind to imagine I could ever run that kind of pace. I am not lean enough. I am not long-legged enough. I do not cool fast enough. I do not train enough. I will never train enough. But if running was like investing, I could beat Cheptegei and claim a time of 13:06 and change, simply by indexing my run. No 5am alarms for double sessions, no vomiting on the side of the track after one sprint too many, no skipping roast potatoes at Christmas because it doesn't match my diet. Instead I just sign a piece of paper that says I understand I'll get the average time from the final, and I magically lose thirty kilos and gain fifty watts on my power threshold.

In other words:
1. The existence of the index fund is like being able to become a sub-14-minute 5k runner by signing a document.
2. Given that there are no medals for being best at retiring, refusing to sign that document because you think you can train hard enough to go to 13:03 is not a particularly sane option for people simply aiming to retire early.

OurTown

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #42 on: November 07, 2017, 02:15:00 PM »
^^^ excellent post ^^^

JLee

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #43 on: November 07, 2017, 02:33:10 PM »
I use a pretty simple test for determining whether it's a good idea for me to try stock picking: I go and take a look at the times for the men's 5,000 metres at the last Olympics.

Wait, bear with me.

In the market, the vast majority of actively traded money and stocks is in the control of professional money managers of one stripe or another. They're generally extremely intelligent, work incredibly hard, and are backed up by some of the most advanced analytical tools money can buy. And, generally speaking, they don't successfully outperform index funds.

If I decide that I can actively trade in this world and do better than the weighted average of this market, then I'm also implicitly deciding that my estimation of likely market moves is superior to that of some of the smartest, hardest-working people in the world. As mrspendy puts it, stock picking is an arrogant act.

This is why I look at the 5,000 metres. Thanks to the sheer weight of the biggest and most professionalised players in the market, trading in the stock market is roughly equivalent to running a 5k against Olympian specialists. Successfully competing at that level involves being the trading equivalent of an Olympic finalist. I know what my best 5k time is, and I can compare it to the last-placed finalist from Rio.

It turns out that Joshua Cheptegei ran that final in 13:09. My personal best is a solid eight minutes slower than that. Not only can I not run that kind of pace, I'd be out of my goddamned mind to imagine I could ever run that kind of pace. I am not lean enough. I am not long-legged enough. I do not cool fast enough. I do not train enough. I will never train enough. But if running was like investing, I could beat Cheptegei and claim a time of 13:06 and change, simply by indexing my run. No 5am alarms for double sessions, no vomiting on the side of the track after one sprint too many, no skipping roast potatoes at Christmas because it doesn't match my diet. Instead I just sign a piece of paper that says I understand I'll get the average time from the final, and I magically lose thirty kilos and gain fifty watts on my power threshold.

In other words:
1. The existence of the index fund is like being able to become a sub-14-minute 5k runner by signing a document.
2. Given that there are no medals for being best at retiring, refusing to sign that document because you think you can train hard enough to go to 13:03 is not a particularly sane option for people simply aiming to retire early.
That is a brilliant analogy.

OurTown

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #44 on: November 07, 2017, 02:35:34 PM »
Do you guys know about the infamous "Rob Bennett?"  He was a market timing troll who spammed the shit out of the Morningstar Vanguard Diehards group, which uncontrollable trolling was the reason for the very existence of the Bogleheads site.  He also trolled GRS back in the original J.D. Roth days.  I give you this taste from the GRS archives:  http://www.getrichslowly.org/2009/06/02/the-lazy-way-to-investment-success/

That guy was arrogant and unstoppable.  Until banned.  I wonder if he is still around?

bacchi

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #45 on: November 07, 2017, 02:41:14 PM »
Do you guys know about the infamous "Rob Bennett?"  He was a market timing troll who spammed the shit out of the Morningstar Vanguard Diehards group, which uncontrollable trolling was the reason for the very existence of the Bogleheads site.  He also trolled GRS back in the original J.D. Roth days.  I give you this taste from the GRS archives:  http://www.getrichslowly.org/2009/06/02/the-lazy-way-to-investment-success/

That guy was arrogant and unstoppable.  Until banned.  I wonder if he is still around?

Yeah, the OP's sig line made me think of Rob Bennett. He was all about "passion work" and was virulently against ER in any form.

KTG

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #46 on: November 07, 2017, 02:42:40 PM »
In the market, the vast majority of actively traded money and stocks is in the control of professional money managers of one stripe or another. They're generally extremely intelligent, work incredibly hard, and are backed up by some of the most advanced analytical tools money can buy. And, generally speaking, they don't successfully outperform index funds.

If I decide that I can actively trade in this world and do better than the weighted average of this market, then I'm also implicitly deciding that my estimation of likely market moves is superior to that of some of the smartest, hardest-working people in the world. As mrspendy puts it, stock picking is an arrogant act.

I would say Peter Lynch would disagree with you. There are a lot of analysts who lose sight of the forest for the trees. And even these smart, hard-working people can't get their act together and agree on any number of things when interviewed on CNBC or Bloomberg, so how smart are they? And stock picking isn't just analyzing numbers, a lot of it is instinct. That's what sets Buffet aside from others. Everyone has access to the same numbers. Its instincts that sets them apart.

The problem with calling it arrogant is that it overlooks a whole host of reasons why a stock could be a great buy. Many of these fund managers have benchmarks to meet and may be forced to play a hard before they want to as well. If I am not bound by the same rules they are restricted by, since I am the only person I am paying out to.  I can be more patient.

For example, we are hitting the beginning of an upward cycle for oil, for numerous reasons. Soon you'll be hearing from all sorts of analysts saying oil stocks are worth looking into, only this is after the bottom already happened. Buying up oil stocks in 2018 is like being late to the party. Not that money can't be made, but if the plan is to buy low and sell high, then now is the time.

Lets do this. MUR (Murphy Oil). I picked up in Sept at $23 when it near bottomed. They make their last debt payment in Dec and don't have another one due till 2022. They will be making money hands over first till then, paying a nice dividend for the price of the stock along the way. When the stock goes over $30 you'll start hearing analysts upgrading the stock. Then all the people who are behind the curve start buying it up and that is when I will sell. Note the closing quote info 9/1 for any ETF you want, and we'll compare % of gains since then when I go to sell, which I will come back here and announce.

It can be done. Not saying all the time but if you follow a certain sector, and international news, politics, and trends that can effect it, yes you can have success. If you don't have any interest in doing that, then yes leave it to someone else to do.


Optimiser

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #47 on: November 07, 2017, 02:50:10 PM »
In the market, the vast majority of actively traded money and stocks is in the control of professional money managers of one stripe or another. They're generally extremely intelligent, work incredibly hard, and are backed up by some of the most advanced analytical tools money can buy. And, generally speaking, they don't successfully outperform index funds.

If I decide that I can actively trade in this world and do better than the weighted average of this market, then I'm also implicitly deciding that my estimation of likely market moves is superior to that of some of the smartest, hardest-working people in the world. As mrspendy puts it, stock picking is an arrogant act.

I would say Peter Lynch would disagree with you. There are a lot of analysts who lose sight of the forest for the trees. And even these smart, hard-working people can't get their act together and agree on any number of things when interviewed on CNBC or Bloomberg, so how smart are they? And stock picking isn't just analyzing numbers, a lot of it is instinct. That's what sets Buffet aside from others. Everyone has access to the same numbers. Its instincts that sets them apart.

The problem with calling it arrogant is that it overlooks a whole host of reasons why a stock could be a great buy. Many of these fund managers have benchmarks to meet and may be forced to play a hard before they want to as well. If I am not bound by the same rules they are restricted by, since I am the only person I am paying out to.  I can be more patient.

For example, we are hitting the beginning of an upward cycle for oil, for numerous reasons. Soon you'll be hearing from all sorts of analysts saying oil stocks are worth looking into, only this is after the bottom already happened. Buying up oil stocks in 2018 is like being late to the party. Not that money can't be made, but if the plan is to buy low and sell high, then now is the time.

Lets do this. MUR (Murphy Oil). I picked up in Sept at $23 when it near bottomed. They make their last debt payment in Dec and don't have another one due till 2022. They will be making money hands over first till then, paying a nice dividend for the price of the stock along the way. When the stock goes over $30 you'll start hearing analysts upgrading the stock. Then all the people who are behind the curve start buying it up and that is when I will sell. Note the closing quote info 9/1 for any ETF you want, and we'll compare % of gains since then when I go to sell, which I will come back here and announce.

It can be done. Not saying all the time but if you follow a certain sector, and international news, politics, and trends that can effect it, yes you can have success. If you don't have any interest in doing that, then yes leave it to someone else to do.

Is it safe to assume that you have successfully beat the market year after year? Or have you only occasionally managed to pick winners?

OurTown

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #48 on: November 07, 2017, 02:52:04 PM »
Do you guys know about the infamous "Rob Bennett?"  He was a market timing troll who spammed the shit out of the Morningstar Vanguard Diehards group, which uncontrollable trolling was the reason for the very existence of the Bogleheads site.  He also trolled GRS back in the original J.D. Roth days.  I give you this taste from the GRS archives:  http://www.getrichslowly.org/2009/06/02/the-lazy-way-to-investment-success/

That guy was arrogant and unstoppable.  Until banned.  I wonder if he is still around?

Yeah, the OP's sig line made me think of Rob Bennett. He was all about "passion work" and was virulently against ER in any form.

More here:  http://www.retireearlyhomepage.com/rob_stock.html

solon

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Re: Alas has arrogance taken root in the Investor Alley
« Reply #49 on: November 07, 2017, 03:32:52 PM »
I ran into Rob Bennett back in 2007. That was the first time I heard the concept that you need 25x spending to retire for good.