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Learning, Sharing, and Teaching => Investor Alley => Topic started by: tm_dunn on November 06, 2017, 06:50:29 PM

Title: Alas has arrogance taken root in the Investor Alley
Post by: tm_dunn 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, ďwe don't do this around hereĒ, which seems to pop up anytime someone wants to do something other than index investing.  If thatís truly the case, maybe the thread should be called ďLong term Index InvestingĒ, 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"Ö 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 itís the only way to make money, or that you canít 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 ďthe greatest need of the day is simplicity and humilityĒ.  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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Hargrove 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??
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JLee 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, ďwe don't do this around hereĒ, which seems to pop up anytime someone wants to do something other than index investing.  If thatís truly the case, maybe the thread should be called ďLong term Index InvestingĒ, 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"Ö 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 itís the only way to make money, or that you canít 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 ďthe greatest need of the day is simplicity and humilityĒ.  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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: powskier on November 06, 2017, 08:25:41 PM
We need a "don't waste your click" flag.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Radagast on November 06, 2017, 08:26:42 PM
it's ridiculous to assume [...] that you canít 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bacchi 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!
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Frankies Girl on November 06, 2017, 10:28:26 PM


(https://media.giphy.com/media/EOjHCVUmzbay4/giphy.gif)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol 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!
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Travis 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 itís the only way to make money, or that you canít 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Nate79 on November 06, 2017, 11:10:17 PM
LOL. Always good to see a humor thread.

Sent from my SAMSUNG-SM-G930A using Tapatalk

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Little Aussie Battler on November 07, 2017, 12:20:52 AM
(http://49.media.tumblr.com/b783f8c5426bd8a959bf2b01519f96aa/tumblr_o12szlRLyf1rqe0rbo1_540.gif)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Indexer 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 itís the only way to make money, or that you canít 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Mr Mark 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.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: MrSpendy 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: davisgang90 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...
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Dreamer 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: dandarc 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Car Jack 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: tralfamadorian 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!
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: fattest_foot 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: PDXTabs 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: DS 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Travis 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.

(http://www.scholastic.com/content/images/articles/sn_ts/sn_ts_octopus_071210_hdr.jpg)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown 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.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Travis 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: dandarc 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Travis 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...
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bobechs on November 07, 2017, 10:53:05 AM
One word: cannabis.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: kendallf 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Optimiser on November 07, 2017, 11:25:37 AM
One word: cannabis.

explain
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: BTDretire 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: BTDretire on November 07, 2017, 12:06:11 PM
One word: cannabis.

explain

  His way of saying, "chill out man!"
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bacchi 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.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: tralfamadorian 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: KTG 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.


Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: runbikerun 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown on November 07, 2017, 02:15:00 PM
^^^ excellent post ^^^
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JLee 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown 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?
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bacchi 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: KTG 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.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Optimiser 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?
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown 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
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: solon 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: laserlady on November 07, 2017, 03:43:11 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?!?


Oh, I thought it was brilliant advice.  Why hire an adult to work for you when children are morons who can easily be exploited into working for you for free with the help of some emotional manipulation?  Especially since children are apparently idiot savants who can easily beat the market with a little guidance.  Who know what else they can accomplish?  I don't know why I don't have an army of child slaves working for me for free right now.  Good thing OP is around to set me on the track to success.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: steveo on November 07, 2017, 04:34:35 PM
One word: cannabis.

I like that but I'm not sure if I'd invest in it. I still would love to know how to beat the index though. Maybe my 3 kids can teach me.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: steveo on November 07, 2017, 04:46:09 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?

My FIL has made millions from trading the market. He is a really smart guy. He received scholarships throughout university and studied overseas. He ran the Forex trading at a big bank in two countries and then he managed the hedge fund of a billionaire. He is now extremely wealthy but he saved his money rather than spending it and invested the vast majority of his wealth in real estate. He even sometimes makes money on his own account but he also loses money on his account. The hedge fund also went bust.

The point is that my FIL is someone who has made money from the markets. Most of the money he has made has been from being paid an exorbitant salary to play the game of trying to beat the market rather than beating the market and he saved a huge amount of that salary and invested it conservatively. He is highly intelligent, educated and has spent a lifetime trading. If he can't make money reliably from the markets I can't see that I have any chance to beat the market.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: thenextguy on November 07, 2017, 05:11:32 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?

This guy?
http://www.passionsaving.com
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: MrThatsDifferent on November 07, 2017, 05:51:38 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.

Someone add this to the best thing Iíve read on MMM today.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: tralfamadorian on November 07, 2017, 07:44:41 PM
...

Someone add this to the best thing Iíve read on MMM today.

Already done :)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JAYSLOL on November 07, 2017, 08:21:44 PM
...

Someone add this to the best thing Iíve read on MMM today.

Already done :)

Wait, thats a thing?  Where is that? 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: tralfamadorian on November 07, 2017, 08:45:29 PM
...

Someone add this to the best thing Iíve read on MMM today.

Already done :)

Wait, thats a thing?  Where is that?

https://forum.mrmoneymustache.com/welcome-to-the-forum/the-best-post-i-saw-today-on-the-mr-money-mustache-forums-was/
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: maizefolk on November 07, 2017, 09:31:32 PM
One word: cannabis.

I like that but I'm not sure if I'd invest in it. I still would love to know how to beat the index though. Maybe my 3 kids can teach me.

"One word: Plastics"

https://www.youtube.com/watch?v=PSxihhBzCjk&t=32
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: runbikerun on November 07, 2017, 11:54:40 PM
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.

That would be utterly meaningless. To stretch my earlier analogy, it'd be like me claiming I can run a flat 13 for the 5k and offering as evidence a 13-second 100m run from two years ago. The entire point of indexing is that over the long term you cannot beat the market: even if you did beat the index in this single specific test, it would be statistically insignificant unless we compared your investment history over the past thirty years to the operation of an index fund.

It's also thoroughly disingenuous, because this is a stock you already know has appreciated significantly since you bought it. I have no sight of any other investment you've made in the past few months that aren't looking good: all you're offering is a stock you bought at 23 and plan to sell at a little over 30, which is currently at 29.24. That's not a test by any stretch of the imagination. We have absolutely no idea how many other companies you've put money into: all we have as your evidence that stock picking is doable by ordinary people is a single backdated data point that's already about to crystallise.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: BrokenBiscuits on November 08, 2017, 12:18:03 AM
One word: cannabis.

explain

  His way of saying, "chill out man!"

Most likely in a thread about alternative to passive investments, they are suggesting they have and are happy with cannabis fund/stock investments.

Personally Iím about 50/50 half my money outside of pensions and my home is with vanguard but I do have a few active investments. Mostly India and Russia. Not for everyone but I have faith in long term india and short to medium term Russia.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 on November 08, 2017, 08:27:56 AM
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.

That would be utterly meaningless. To stretch my earlier analogy, it'd be like me claiming I can run a flat 13 for the 5k and offering as evidence a 13-second 100m run from two years ago. The entire point of indexing is that over the long term you cannot beat the market: even if you did beat the index in this single specific test, it would be statistically insignificant unless we compared your investment history over the past thirty years to the operation of an index fund.

It's also thoroughly disingenuous, because this is a stock you already know has appreciated significantly since you bought it. I have no sight of any other investment you've made in the past few months that aren't looking good: all you're offering is a stock you bought at 23 and plan to sell at a little over 30, which is currently at 29.24. That's not a test by any stretch of the imagination. We have absolutely no idea how many other companies you've put money into: all we have as your evidence that stock picking is doable by ordinary people is a single backdated data point that's already about to crystallise.

You should post more
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 12:40:22 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 on November 09, 2017, 01:02:27 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.

You've done it for one year. So the Olympic analogy applies perfectly to this system.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Hargrove on November 09, 2017, 01:03:36 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.

It's a great anecdote (and congratulations to you). Not, however, any sort of truth about the market generally. You're right that the Olympics analogy has a kink in the short term - you have no chance to beat an Olympic athlete on a 500 yd dash, yet a chance to beat the stock market - a couple times. Maybe even for a year. You have little chance, however, to consistently beat the stock market over the long term (usually we consider that 30 years), which is really what the analogy is meant to address.

When we have an 8-year-long raging bull, lots of great anecdotes like these will pop out, but they're terrible stock advice for the same reason Lady Gaga is not much proof that Jane Doe can go make millions with a career in music. You're correct that you can make money, and you're doing a disservice to ignore the overall proven rarity of beating indexes. It's not a values judgement or a "just put in the work" situation - overcoming other stock traders over the long term should be considered as difficult as the Olympics analogy makes it sound.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 01:27:56 PM
Call it what you will, but there is room for both long term and short term plays. It's why I plan to completely cash out by July (sell the news), why the rest of my portfolio is in ETFs. Come July, I may get out of swing trading completely. But there is a short window where the average person can make a LOT of money. Heck my mother is doing it. It's not rocket science. Just keep your stops tight. Sector is overvalued atm. Xmas may be a good time to get back in if you're new at this.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Optimiser on November 09, 2017, 01:34:16 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.

It's a great anecdote (and congratulations to you). Not, however, any sort of truth about the market generally. You're right that the Olympics analogy has a kink in the short term - you have no chance to beat an Olympic athlete on a 500 yd dash, yet a chance to beat the stock market - a couple times. Maybe even for a year. You have little chance, however, to consistently beat the stock market over the long term (usually we consider that 30 years), which is really what the analogy is meant to address.

The thing is though, you aren't running a 500 yard dash you're running a 5k. It's not really relevant that one or two of your 400 splits were faster than the Olympic runners because this is a 5k, and by the end of the race they are going to beat you.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 01:46:06 PM
BTW, I realize my current strategy is at odds with the general tactics of this audience. It's why I'm posting here though. I'm generally very conservative and went out of my comfort zone when researching and investing cannabis stocks. I've observed that those who are conservative, strategic and rational are having great success with MJ stocks (vs the typical penny flippers who are impulsive and irrational).

Anyway, I meant to post about this last May, which was the time to buy. Just didn't feel like getting shot down in flames. Thought the thread topic was relevant though.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 09, 2017, 03:39:58 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.

No offense but this is exactly the investing arrogance we are discussing
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 04:25:14 PM
Do you know anything about swing trading? Seems like a response from someone who doesn't.

The topic is the arrogance of the groupthink mentality that insists index funds are the only way. Ironically the first page of responses was just clever put-downs like this one. No interesting discussion.

I'm saying it doesn't need to be either/or.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Hargrove on November 09, 2017, 05:03:22 PM
Do you know anything about swing trading? Seems like a response from someone who doesn't.

The topic is the arrogance of the groupthink mentality that insists index funds are the only way. Ironically the first page of responses was just clever put-downs like this one. No interesting discussion.

I'm saying it doesn't need to be either/or.

What interesting discussion do you want for someone who shows up in a community to say "you're not all doing it my way and are all so arrogant not to change to my way, I'm leaving"? That's hilarious.

OP could have had a discussion. What people here don't put up with is "common sense" advice that you can beat the broad indices long term and "easily," because that advice is statistically wrong. Why be snide supporting opinions that have no evidence to back them up over the long term? Anyone at all can beat the index occasionally. Very, very, very few people have beaten the broad ones long-term, and advice on gambling is usually bad advice for FIRE.

Optimiser - we don't disagree, we're in the same boat on this, per the rest of my post. :p
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 09, 2017, 05:04:21 PM
Do you know anything about swing trading? Seems like a response from someone who doesn't.

The topic is the arrogance of the groupthink mentality that insists index funds are the only way. Ironically the first page of responses was just clever put-downs like this one. No interesting discussion.

I'm saying it doesn't need to be either/or.

Oh Brother...    I should have put a smiley face on my post.   ;)

I'm just pointing out that you just cherry picked the 3rd best year in the history of the equities market to make your point know.   Not to mention the greatest bull market in history!    A retarded and blind monkey could beat the indexes the last decade.   Investing is a 60+ year affair were talking about. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 05:20:38 PM
Exactly. Except this is the biggest industry breakout in 100 years. So why aren't more people on this board taking advantage?  And why the hostility to those who are?
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: runbikerun on November 09, 2017, 06:19:57 PM
I have to disagree with the Olympics analogy. One not be an expert to succeed in trading. I am a SAHM (former project manager) who has been swing trading cannabis stocks for the last year, with a 48% overall return on a measly 15K. My siblings have had bigger successes with less skills (they've put down more). I limit it to a small amount of my portfolio, but there are others who have retired on these stocks. I do my due diligence but mostly rely on others (like chartguys) for my TA. I don't daytrade but rather buy the dips and sell a few days or weeks later. The first step is realizing much of the volatility is based on hype - and yes this is a risk (though the gov't has July 1st announced for rec.)

And yes, I will admit, I partially do it for fun. Relax, people, and set up your practice account ;) The growth in this industry is unprecedented, and there are many smart people here who could excel at this if they start thinking a little more strategically.

This is exactly the point I was opposing in the first place. You're using as your example a single year of trading in which you're up 48%. That is not a statistically significant result. It's not even vaguely close to being a statistically significant result. You've had an above average year (although not as good as you may think, given that the passive equity fund my workplace pension scheme offers is up 39% in the same time frame), but that says absolutely nothing about your ability to do it on a consistent basis over decades. This has been tested and shown again, and again, and again, both in abstract mathematical analysis that indicates perhaps 0.6% of professional investors outperform the index, and in flashy large-scale bets between billionaires, like Warren Buffett's "index fund versus hedge funds" ten-year bet. Incidentally, the index beat the tar out of the hedge funds, returning close to four times as much money.

You will probably not beat the index over twenty years.
If you do, it will probably have been the result of dumb luck.
The odds that you are able to beat the index over twenty years through skill are, if you're being extremely optimistic, about one in a hundred and fifty.
The real odds are probably a hell of a lot longer.
This is not a pleasant thing to have to accept, but it's true.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol on November 09, 2017, 06:24:21 PM
You will probably not beat the index over twenty years.
If you do, it will probably have been the result of dumb luck.
The odds that you are able to beat the index over twenty years through skill are, if you're being extremely optimistic, about one in a hundred and fifty.
The real odds are probably a hell of a lot longer.
This is not a pleasant thing to have to accept, but it's true.

But what if I'm smarter than you?  All of you arrogant people are just dumb.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 09, 2017, 06:32:32 PM
Exactly. Except this is the biggest industry breakout in 100 years. So why aren't more people on this board taking advantage?  And why the hostility to those who are?

Hostility?!   LOL

Anyway....They do...then lose their ass (ie: retirement savings)  when the market takes a dive.     I don't think anyone is referring to "Fun Money" here.  If you want to double or triple your small $15K that's fine.   But please don't come onto an investing thread and imply that beating the indexes is easy and even "your mother can do it" over an investing lifetime.    I think that's where the runner analogy comes in.    Those who do beat the markets over long periods (over 40 years) are few and far between....like, only a handful of cases :)   

My biggest concern on this blog is that the demographics seem to be on the younger side.    I wonder what percentage of MMM FIRE crowd actually knows what they will do when your FIRE stash looses half its value in a couple months time?    I'm going to assume, but most here have known nothing but incredible equities growth their entire working lives.   It will be interesting to come back here when the market makes another correction :0
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 07:41:58 PM
Again, I am not talking about 'beating the market' over 20 years. I'm talking about taking advantage of the upward momentum of a burgeoning industry for a specified period. Again, it's not either/or. And I am a total nerf trader. Imagine the potential that some of you have.

The echo chamber in here is comical, and the opinion polarization tactics unproductive. Kind of what I expected, but like to test it out every few months. This place needs more diversity.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Hargrove on November 09, 2017, 07:46:07 PM
What do you mean? This forum is so popular that people will fill out a form, answer some unusual content questions, and even wait for approval just to show up and say they're leaving.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 09, 2017, 07:53:22 PM
Again, I am not talking about 'beating the market' over 20 years. I'm talking about taking advantage of the upward momentum of a burgeoning industry for a specified period. Again, it's not either/or. And I am a total nerf trader. Imagine the potential that some of you have.

The echo chamber in here is comical, and the opinion polarization tactics unproductive. Kind of what I expected, but like to test it out every few months. This place needs more diversity.

Huh?  We're not talking about the same thing.   Using "fun money" to play the next hot stock pick is a far cry from consistently out doing the indexes with your investing savings.

You got lucky is all.    Hell, I once made $15K in a single trading day on a biotech that went up %300 overnight back in the 90s.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 08:06:57 PM
Then why did you distort things and say that I was bragging about beating the indexes long term?

How am I lucky, if, as you said, a monkey can do it? There are a lot of lucky monkeys out there right now.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bacchi on November 09, 2017, 08:14:31 PM
Again, I am not talking about 'beating the market' over 20 years. I'm talking about taking advantage of the upward momentum of a burgeoning industry for a specified period. Again, it's not either/or. And I am a total nerf trader. Imagine the potential that some of you have.

You'll need to figure out which cannabis stocks to buy because some will flop. You'll also need to figure out when to sell because the industry will eventually collapse (i.e., DOJ cracks down on an illegal industry) or become fairly priced.

Yeah, it can be done. It is a specific moment in history, much like 1999 and the 1.0 dotcom. Take a look at pets.com and see how that turned out.

JNPR was another darling of the 1.0 dotcom boom years and it's never recovered: Juniper Networks chart from 1999 (https://finance.yahoo.com/chart/JNPR#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)

Don't bet the farm on it.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 09, 2017, 08:20:39 PM
I should clarify that I'm Canadian and talking about Canadian stocks. Not really following what's happening down south, though I have traded CRZ that has some US assets. It dips whenever Trump says something dumb. So, often :)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 09, 2017, 08:27:35 PM

There are a lot of lucky monkeys out there right now.

You got that right!   Take a look at the crypto currencies threads on here.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JLee on November 09, 2017, 08:28:06 PM

There are a lot of lucky monkeys out there right now.

You got that right!   Take a look at the crypto currencies threads on here.

I really wish I bought bitcoin at $10...or $100....or $1000.

But, I don't have a crystal ball. :(
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: steveo on November 10, 2017, 03:46:41 AM
Do you know anything about swing trading? Seems like a response from someone who doesn't.

The topic is the arrogance of the groupthink mentality that insists index funds are the only way. Ironically the first page of responses was just clever put-downs like this one. No interesting discussion.

I'm saying it doesn't need to be either/or.

I know heaps about swing trading. I also know that you can't predict the future. I bet that you will underperform the market over time.

I agree though that it doesn't have be either/or. You can choose to invest via index funds and retire early as well as gamble some money however you want to do that. You can't though choose to gamble and not invest in index funds because at some point I bet you will lose big time. Unless you quit early you will also lose those gains that you are so proud of. I've been there. Trading isn't a great long term idea.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: runbikerun on November 10, 2017, 04:58:38 AM
Again, I am not talking about 'beating the market' over 20 years. I'm talking about taking advantage of the upward momentum of a burgeoning industry for a specified period. Again, it's not either/or. And I am a total nerf trader. Imagine the potential that some of you have.

And trying to do this consistently will see you being outperformed by the index.

Maybe in this particular case it works out and you finish ahead. That still doesn't mean it was a good idea. Doing it carries a great deal more risk than investing in the index.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Travis on November 10, 2017, 08:24:21 AM
Again, I am not talking about 'beating the market' over 20 years. I'm talking about taking advantage of the upward momentum of a burgeoning industry for a specified period. Again, it's not either/or. And I am a total nerf trader. Imagine the potential that some of you have.

The echo chamber in here is comical, and the opinion polarization tactics unproductive. Kind of what I expected, but like to test it out every few months. This place needs more diversity.

Then why did you distort things and say that I was bragging about beating the indexes long term?

How am I lucky, if, as you said, a monkey can do it? There are a lot of lucky monkeys out there right now.

We were discussing long term indexing. That was the OP's entire premise - that a child could beat it.  You then showed up to brag about your short term hot stock success.    As Bacchi alluded to, your success is not complete until you've figured out when these stocks will peak and cash out or remind us years later that you got in the ground floor through deliberate study and not luck.  If these companies crash and burn will you know about it in time?

This forum has quite a bit of diversity and always welcomes more; however, showing up and shouting "I beat the index this year and probably only this year for a portion of this year and you can too!" is the literal advertising model of unscrupulous active trading managers. They don't get a warm reception around here.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 on November 10, 2017, 08:50:54 AM
i made a well timed tesla play in 2013 and barely beat the market - i found MMM in feb 2014 and wised up after 17 years of trying to trade stocks b/c i thought that was how it worked.  But i dont advertise that one year i got lucky and barely beat the market b/c you arent going to do it consistently as has been said many times here active fund manager who spend hours and have large resources cant even do it.  so good luck with you pot pouri plays but you should just admit your gambling with it and not try to site it as a success story as you're trying to do.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 10, 2017, 09:12:01 AM
Wow, it's like you guys (all guys i'm assuming, from the know it all tone) just like to repeat your little mantras to yourselves over and over, regardless of the context. As for long term indexing, it's where 90% of my holdings are. I've set it and left it, and I'm trying to learn how to make some active income trading during an exceptional time in a burgeoning industry.

I was thinking there would be more Canadians on this that know about what's happening with the cannabis sector in Canada and why the stocks have been running up like this for years.

Here's one of a few relevant articles
https://beta.theglobeandmail.com/report-on-business/corporate-canada-warms-to-marijuana-industry/article36550498/?ref=http://www.theglobeandmail.com&

Once you've done some actual research, happy to discuss/debate further.  In the meantime I'll stick to the cannabis-specific threads.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 on November 10, 2017, 09:21:41 AM
Good points by all.

For example, I accept that MMMers are using real estate to build wealth faster.  If you know your local area, have tenant resources, can fix homes cheaper via your own labor, and have a super low cost morgage I dont doubt at all your story or claim that you will outperform the market's expected 6%ish returns.  There are whole threads outining the tactics and strategies.  A combo of #4 and higher concentration risk plus leverage has a good outcome probability curve.  May lose it all to a fire or something, but not a bad bet IMHO.



yes i think we can all agree the real estate sector is a great way to use leverage to get higher ROI than indexing.  our famous ARS is proof of that.  and biggerpockets strategies have proven track records of working and the current low interest rate environment helps facililtate this.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Maenad on November 10, 2017, 09:33:09 AM
Yeah, it can be done. It is a specific moment in history, much like 1999 and the 1.0 dotcom. Take a look at pets.com and see how that turned out.

Those who do not learn from history are condemned to repeat it. The same "beating the market is easy" certainty was all over the place 20 years ago too - I saw tons of it on the old Motley Fool boards.

Everyone should read Bernstein's "The Four Pillars of Investing" before betting on their strategies with any significant amount of money.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: caffeine on November 10, 2017, 01:00:24 PM
I appreciate the forum being blunt. This is helpful to anyone who just begins investing and immediately begins thinking they'll beat the market or confuse investing and speculation.

Further, nothing is more helpful (in my opinion) than an emotional face punch to help someone financially. I need to someone willing to tell me I'm making a mistake.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: jmwagner5 on November 12, 2017, 10:32:58 AM
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?

This was some legendary level trolling in just one post.  Thanks for the share.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol on November 12, 2017, 10:57:07 AM
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?

This was some legendary level trolling in just one post.  Thanks for the share.

For people who won't follow the rabbit hole, I think we're talking about the following post from that link (quoted below), that argues that market timing is the best way to index.





Quote
I am a severe critic of the Lazy Investing approach, at least in its conventional form.

I see the appeal. There is indeed a huge amount of unnecessary complexity in much of what we hear about investing. Avoiding needless complexity is a perfectly sensible goal.

And there is no need to pick individual stocks. Index funds provide huge diversification at low cost. They are a great option for those of us who have other things we want to do with our free time than research stocks.

Thereís even a sense in which I advocate a Lazy Investing approach myself. I advocate Valuation-Informed Indexing, which is an indexing strategy in which you lower your stock allocation at times of insanely high prices and increase it at times of insanely low prices.

The problem with the other Lazy Investing approaches is that they do not call for changing oneís stock allocation in response to big price swings. When you fail to adjust your stock allocation, you permit your risk level to go wildly off the mark from what you had intended it to be and from what is right for you. That means that you end up suffering huge losses and eventually feel pressed to abandon stocks altogether.

The particular form of laziness that causes people not to want to consider stock prices when setting their allocations is a form of laziness that generates huge amounts of stress in the long run. Valuation-Informed Indexing is a low-stress ďlazyĒ approach. Thereís nothing appealing in my eyes to being worried that my retirement plan is not going to work out because I was too ďlazyĒ to make the adjustments in my allocation needed to keep my risk profile roughly stable.

How often do you need to change your allocation to achieve a low-stress approach to laziness? About once every 10 years on average. But the one change in 10 years means the difference between an approach that works in the real world and one that does not. I donít believe in being so lazy that I am not willing to take that one critical step toward achieving my goal of long-term investing success.

Rob
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: tralfamadorian on November 12, 2017, 12:21:58 PM
Wow, it's like you guys (all guys i'm assuming, from the know it all tone) ...

There's no need to be sexist to try to prove a point. 

BTW, it has been previously shown (extrapolated?) that the MMM forum is over 50% female.  Confidence + data driven =/ XY chromosomes.

I'll look forward to your return in ten years to show up how wrong we are- just like this guy-
https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp (https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 13, 2017, 02:45:45 PM
Wow, it's like you guys (all guys i'm assuming, from the know it all tone) ...

There's no need to be sexist to try to prove a point. 

BTW, it has been previously shown (extrapolated?) that the MMM forum is over 50% female.  Confidence + data driven =/ XY chromosomes.

I'll look forward to your return in ten years to show up how wrong we are- just like this guy-
https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp (https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp)

Wow - the point has been missed yet again.

I won't get into the correlation between arrogance and gender but you just made my point by not paying attention to what I wrote.

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.

All I am saying is sometimes you have to reassess your position when new information comes in. And that may require going outside your comfort zone.


https://beta.theglobeandmail.com/globe-investor/investment-ideas/marijuana-stocks-in-melt-up-amid-canadian-legalization-fever/article36938808/?ref=http://www.theglobeandmail.com&

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: OurTown on November 13, 2017, 03:31:14 PM
You should sell when it reaches $4.20.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Financial.Velociraptor on November 13, 2017, 04:18:00 PM
If I can tootle my own horn...I'm doing just fine as a stock picking heretic.  Summary of my market performance is always available on my blog here: http://velociraptor.cc/transparency/ (http://velociraptor.cc/transparency/)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: maizefolk on November 13, 2017, 05:10:08 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?
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb on November 13, 2017, 05:52:27 PM
If I can tootle my own horn...I'm doing just fine as a stock picking heretic.  Summary of my market performance is always available on my blog here: http://velociraptor.cc/transparency/ (http://velociraptor.cc/transparency/)

Rate of return vs the S&P and length of time investing? 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus 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/
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol 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!
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JLee 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.

Quote from: https://www.mckinsey.com/industries/high-tech/our-insights/the-great-transformer
The Internet accounted for 21 percent of the GDP growth in mature economies over the past 5 years.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus 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."
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: JLee 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: steveo 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus on November 14, 2017, 05:42:04 AM
You mean the FACT i'm 'claiming'? yes, it does sound ridiculous, if you're clueless ;)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: maizefolk 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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


Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: sol 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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 ;)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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?



Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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? 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: bacchi 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Scandium 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..
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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! ;)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Scandium 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
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: DS 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Retire-Canada 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: surfhb 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 on November 15, 2017, 02:06:36 PM
How to beat VOO - buy VB instead. - proven track record for 100 years.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: MustachioedPistachio 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Pylortes 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. 
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus 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.

Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: dandarc on November 15, 2017, 04:20:13 PM
You caught me Tegus - I went to the Mugatu school of investment.

(https://i.imgflip.com/1zgb4x.jpg)
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Cwadda 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Tegus 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: PizzaSteve 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Radagast 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: Radagast 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.
Title: Re: Alas has arrogance taken root in the Investor Alley
Post by: boarder42 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.