Author Topic: Can't beat an Index  (Read 40978 times)

mrpercentage

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Can't beat an Index
« on: April 15, 2015, 01:13:49 AM »
Uh.. no timing needed really just in and hold on like you would an index. They even have yields. Im not saying everything folks. Im saying Im in my 30's 30%
you might need to read some fundamentals each quarter to see if she'll stop bucking but I think you will be safe this year. It gets really obscene if you push it out to forever. Like 25,000% obscene
« Last Edit: April 15, 2015, 01:15:40 AM by mrpercentage »

mrpercentage

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Re: Can't beat an Index
« Reply #1 on: April 15, 2015, 01:43:49 AM »
Im just a regular guy, so what do I know but...
Apple is being called a value stock because its so @##$$ big that people are afraid to invest for the long term.
Personally I lean towards Disney it is a little less Holy Shit on growth.

Im 23% Disney 7% Apple. My plan is 30% minus 2% for every year over 35 in stocks. Im not ivy league, but my gut says Bingo!
Im calling it.. you can scream at me next April, or you can face palm. Only time will tell

forestbound

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Re: Can't beat an Index
« Reply #2 on: April 15, 2015, 08:30:11 AM »
Word of caution, IBM used to be a "can't lose" stock. There really is no such thing. The new watch, well I have my skepticism.

That being said Apple was the first stock I snatched up during the Great Recession and it has done wonders for my portfolio. I won't buy any more, I have enough, not nearly 7% of my portfolio. I do make money using Apple products, been working on Macs for over 20 years. They rock!



SuperSecretName

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Re: Can't beat an Index
« Reply #3 on: April 15, 2015, 08:34:32 AM »
geez, talk about cherry picking data.

yeah, apple will be great.  until it isn't anymore.

GuitarStv

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Re: Can't beat an Index
« Reply #4 on: April 15, 2015, 08:48:46 AM »
All indicators showed that the pumpkin stock I bought near the end of October would be an unstoppable Juggernaut.  I was disappointed with performance in November.

Dodge

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Re: Can't beat an Index
« Reply #5 on: April 15, 2015, 10:41:10 AM »
Uh.. no timing needed really just in and hold on like you would an index. They even have yields. Im not saying everything folks. Im saying Im in my 30's 30%
you might need to read some fundamentals each quarter to see if she'll stop bucking but I think you will be safe this year. It gets really obscene if you push it out to forever. Like 25,000% obscene


No timing needed?  Tell that to the person who bought in AAPL 1980 and underperformed the market for 26 years.




surfhb

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Re: Can't beat an Index
« Reply #6 on: April 15, 2015, 11:31:40 AM »
geez, talk about cherry picking data.

yeah, apple will be great.  until it isn't anymore.

Yeah....no kidding!    Rolling eyes*

theoverlook

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Re: Can't beat an Index
« Reply #7 on: April 15, 2015, 02:20:54 PM »
I had a blind friend that loved to say: "Hindsight is 20/20 even if you're legally blind."

This is the definition of hindsight, and "past results are not indicative of future performance."  As therivler1 says, it'll be great until it isn't.

Indexer

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Re: Can't beat an Index
« Reply #8 on: April 15, 2015, 05:01:04 PM »
Check the fundamentals...

What fundamentals did Apple have... EVER... that suggested it would do what it did?

It made computers in the 80s.  Then it got %^$ raped by Microsoft for a couple decades.  It fired its founder/CEO.  He went on to start another successful company.  Then it made goofy colored bubble looking computers that had 1 highlight in their entire existence.


Then when they learned they were just as unsuccessful after firing that old CEO as they were before firing him... they hired him back.

Then they started getting programs from Microsoft... the same company that raped them... because otherwise no one would buy their computers.  Then they invented a mini computer that played music.  It was the biggest breakthrough in.... really... its not that impressive.  Hard drive+speakers=more music than a CD player.  What is sad is it took that long for someone to put the two together.

Then they had project purple.  At the time only a dozen or so people in the whole world new about it.  At the time I was in college and my technology professor was going on about how phones would eventually become computers that would revolutionize our lives because they would be able to do just about anything we needed.  Everyone assumed the blackberry would just keep getting better.  And then there was the iPhone.  Fundamentals didn't mean squat.  Unless you were one of those few people on project purple you were just dumb lucky to have owned Apple before it took off. 

mrpercentage

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Re: Can't beat an Index
« Reply #9 on: April 15, 2015, 05:23:03 PM »
I never said I new to invest in it back then, but I did say you could jump in now without timing didn't I.
Context.. granted what I am doing is more "dangerous". We will see next April.
Im on the hook.. its quoted right here 23% Disney 7% Apple for me. Nothing to say about Disney though huh.. cause you buy and hold that shit period. Now that Apple joined the DOW its an incredibly dangerous company getting a 70% return rate. Just saying

mrpercentage

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Re: Can't beat an Index
« Reply #10 on: April 15, 2015, 05:27:25 PM »
I forgot to mention that many eft's have as much as 5% Apple. You are buying it and not even knowing it. Read the holdings

Here is QQQ the Power is this Power share is Apple big guy 15% Apple


« Last Edit: April 15, 2015, 05:51:00 PM by mrpercentage »

skyrefuge

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Re: Can't beat an Index
« Reply #11 on: April 15, 2015, 07:33:37 PM »
Uh.. no timing needed really just in and hold on like you would an index. They even have yields. Im not saying everything folks. Im saying Im in my 30's 30%
you might need to read some fundamentals each quarter to see if she'll stop bucking but I think you will be safe this year. It gets really obscene if you push it out to forever. Like 25,000% obscene

Uh, what? I don't mean to alarm you, but you may be having a stroke.

Im on the hook.. its quoted right here 23% Disney 7% Apple for me. Nothing to say about Disney though huh.. cause you buy and hold that shit period. Now that Apple joined the DOW its an incredibly dangerous company getting a 70% return rate. Just saying

Ah, well, you're still alive 14 hours later, so hopefully it wasn't a stroke after all. You're still making no sense though. I'm unclear on how joining the DOW (stands for "Dangerous Operators Watchout!" I suppose?) jacked up Apple's dangerosity burners to 70% something something, but I will heed your astute analysis and buy myself some Apple stock!

Oh, except I was already aware that I own a buttload of Apple in my index funds. That's not exactly news to people who know anything about investing.

This Disney company though...you say they have this thing called STAR WARS? Hmm, I've never heard of that. And probably no one else has either, but if you have your ear to the ground and somehow know that it's something that a few people will care about, then you're probably going to make billions based on that secret knowledge!

Seriously, if your current level of knowledge is anywhere near what it appears to be from your posts, I strongly recommend that you stop picking individual stocks before you hurt yourself.

Dodge

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Re: Can't beat an Index
« Reply #12 on: April 15, 2015, 08:10:11 PM »
Seriously, if your current level of knowledge is anywhere near what it appears to be from your posts, I strongly recommend that you stop picking individual stocks before you hurt yourself.

Agreed, he reminds me of this guy:



Mrpercentage, I implore you.  Stop what you're doing and read some investment books.  A Random Walk Down Wall-Street, or The Bogleheads' Guide to Investing would be a good start.

mrpercentage

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Re: Can't beat an Index
« Reply #13 on: April 15, 2015, 08:34:06 PM »

Seriously, if your current level of knowledge is anywhere near what it appears to be from your posts, I strongly recommend that you stop picking individual stocks before you hurt yourself.

I told you I was just a guy. I probably should shut up. So I will. Finances are very personal. Im just not sure if I buy absolute diversity. It's very anti Neitzche. I see the general response here is of absolute index. God forbid you buy a company for a year or two and make a profit without paying someone else.. even if its just 0.35%

You can't learn how to have good ideas by the way. You either have them or don't. You can hedge against bad ones, and you guys are masters of that. I do respect that.

Perhaps I didn't come across right either. Im really bouncing around my ideas. Im not trying to preach but now see how it could come across that way. Is AAPL and Disney a bad call? I have been playing with other ideas with small purchases at Robinhood and am doing well, but have heard a bull market makes many a sage.

tj

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Re: Can't beat an Index
« Reply #14 on: April 15, 2015, 11:09:15 PM »
If Apple tanks, anyone holding a cap weighted index is going to get creamed too.

boarder42

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Re: Can't beat an Index
« Reply #15 on: April 16, 2015, 06:31:20 AM »
I forgot to mention that many eft's have as much as 5% Apple. You are buying it and not even knowing it. Read the holdings

Here is QQQ the Power is this Power share is Apple big guy 15% Apple


yeah but we're not only buying it.  no one here is advocating dont buy apple i'm perfectly happy owning a small percentage of it.

matchewed

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Re: Can't beat an Index
« Reply #16 on: April 16, 2015, 07:30:30 AM »
I forgot to mention that many eft's have as much as 5% Apple. You are buying it and not even knowing it. Read the holdings

Here is QQQ the Power is this Power share is Apple big guy 15% Apple


Um... pretty sure that we do know it. We're not stupid here. Knowing what an index is and is comprised of is part of knowing why they work so well.

I think if you want to select individual companies and accept that risk you are welcome to it. But acknowledge the risk and don't play it off as some miracle investment that guarantees a better performance consistently. It is possible to make money with going with individual companies (link). But why do you think you can pick the winner? As others have said, read some books about investing, educate yourself on investing, and then after that if you still feel you can pick the winners feel free. In the meantime stick with index investing as it has a good balance between risk and reward.


mrpercentage

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Re: Can't beat an Index
« Reply #17 on: April 16, 2015, 08:25:58 AM »
You guys don't seem to be able to see humor, understand what I am saying, and repeat each other's criticism.
1. AAPL isn't a miracle investment-- its the investment everyone is investing in anyway so Im removing the ETF rubber you are all using
2. I mentioned the DOW because that shows relative safety while displaying my smart ass nature.
3. Most of the people I know buy ETF's precisely because they don't want to pick stocks.
4. The bullshit diversification everyone displays is more reckless than mine. Im about 50% AMECX @NAV.. I own less AAPL than probably 90% of you. That biggest holding is 3% each of Merc and Microsoft.
5. Im not having a fucking stroke google finance AAPL and hit the fucking ALL key 25,000%
6. whatever... I listened to enough quotes of people who half read my post and pasted the opinion they completely absorbed from someone elses actual footwork.
7. I will accept the risk and more, all of life is one.

Thanks for your wisdom and understanding

brooklynguy

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Re: Can't beat an Index
« Reply #18 on: April 16, 2015, 08:34:39 AM »
You guys don't seem to be able to see humor...

...Im not having a fucking stroke

Anyone who did not see the humor in skyrefuge's comments must be entirely devoid of a sense of humor.  They had me in such a fit of comical hysteria they almost gave me a stroke.

theoverlook

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Re: Can't beat an Index
« Reply #19 on: April 16, 2015, 08:56:44 AM »
Then it made goofy colored bubble looking computers that had 1 highlight in their entire existence.


Then when they learned they were just as unsuccessful after firing that old CEO as they were before firing him... they hired him back.


Uhh, you might want to check your timeline there.  The "goofy colored bubble" computers were the first product launched under Jobs, were seen as revolutionary in a sea of beige, were enormously successful, and saved Apple from financial ruin.

Not going to argue against the rest of your points.

wtjbatman

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Re: Can't beat an Index
« Reply #20 on: April 16, 2015, 09:37:12 AM »

frugalnacho

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Re: Can't beat an Index
« Reply #21 on: April 16, 2015, 10:01:44 AM »
All indicators showed that the pumpkin stock I bought near the end of October would be an unstoppable Juggernaut.  I was disappointed with performance in November.

Simpsons did it.

Quote from: Homer's Broker
Homer, you knuckle-beak, I told you a hundred times: you've got to sell your pumpkin futures before Hallowe'en! Before!


GuitarStv

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Re: Can't beat an Index
« Reply #22 on: April 16, 2015, 11:40:02 AM »
:O

Indexer

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Re: Can't beat an Index
« Reply #23 on: April 16, 2015, 04:19:49 PM »
Then it made goofy colored bubble looking computers that had 1 highlight in their entire existence.


Then when they learned they were just as unsuccessful after firing that old CEO as they were before firing him... they hired him back.


Uhh, you might want to check your timeline there.  The "goofy colored bubble" computers were the first product launched under Jobs, were seen as revolutionary in a sea of beige, were enormously successful, and saved Apple from financial ruin.

Not going to argue against the rest of your points.

I had a feeling I got that backwards, but then it occurred to me... does it matter?  No one cared at the time. :)

skyrefuge

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Re: Can't beat an Index
« Reply #24 on: April 16, 2015, 04:55:11 PM »
Then they invented a mini computer that played music.  It was the biggest breakthrough in.... really... its not that impressive.  Hard drive+speakers=more music than a CD player.  What is sad is it took that long for someone to put the two together.

And while we're correcting false histories here, this one is also wrong. Several companies were selling hard-drive-based mp3 players before Apple did. http://en.wikipedia.org/wiki/Portable_media_player#History

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed more successfully than earlier companies did.

Indexer

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Re: Can't beat an Index
« Reply #25 on: April 16, 2015, 05:20:35 PM »
Then they invented a mini computer that played music.  It was the biggest breakthrough in.... really... its not that impressive.  Hard drive+speakers=more music than a CD player.  What is sad is it took that long for someone to put the two together.

And while we're correcting false histories here, this one is also wrong. Several companies were selling hard-drive-based mp3 players before Apple did. http://en.wikipedia.org/wiki/Portable_media_player#History

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed more successfully than earlier companies did.

There was even a phone that played Mp3s before the iPod, but it wasn't famous and I didn't feel like getting to far into the weeds.  I mean if we are correcting history.... Apple never invented anything.  They stole the whole idea for a personal computer.  If Xerox had bothered to copyright the thing Apple wouldn't even be a company... and likely neither would Microsoft.

aspiringnomad

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Re: Can't beat an Index
« Reply #26 on: April 16, 2015, 07:52:30 PM »
Then they invented a mini computer that played music.  It was the biggest breakthrough in.... really... its not that impressive.  Hard drive+speakers=more music than a CD player.  What is sad is it took that long for someone to put the two together.

And while we're correcting false histories here, this one is also wrong. Several companies were selling hard-drive-based mp3 players before Apple did. http://en.wikipedia.org/wiki/Portable_media_player#History

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed executed more successfully than earlier companies did.

FTFY. Otherwise I don't disagree. Thankfully for shareholders (including indexers) executing better than anyone else happens to be a profitable and not easily replicable business model.

skyrefuge

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Re: Can't beat an Index
« Reply #27 on: April 16, 2015, 10:35:53 PM »
There was even a phone that played Mp3s before the iPod, but it wasn't famous and I didn't feel like getting to far into the weeds.

Naw, I'm too much of an jerk to let you weasel out of that one. If you had simply said "they invented a mini computer that played music", I wouldn't have batted an eyelash. But you doubled-down, explicitly stating (with amazement) that they were the first to consider connecting a hard drive and speakers. It's ok, I'm an old man. It sounds like you weren't around to see my friend's ugly-ass Archos monstrosity, so no one expects you to know ancient history. But that's no excuse to go around making it up!

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed executed more successfully than earlier companies did.

FTFY. Otherwise I don't disagree. Thankfully for shareholders (including indexers) executing better than anyone else happens to be a profitable and not easily replicable business model.

Edit accepted. Inasmuch as "marketing" is a subset of "execution". And yeah, even if marketing was the only part of their execution that mattered (I agree that it's not), as a shareholder I'd still be totally onboard with that.

Dodge

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Re: Can't beat an Index
« Reply #28 on: April 16, 2015, 11:46:31 PM »
There was even a phone that played Mp3s before the iPod, but it wasn't famous and I didn't feel like getting to far into the weeds.

Naw, I'm too much of an jerk to let you weasel out of that one. If you had simply said "they invented a mini computer that played music", I wouldn't have batted an eyelash. But you doubled-down, explicitly stating (with amazement) that they were the first to consider connecting a hard drive and speakers. It's ok, I'm an old man. It sounds like you weren't around to see my friend's ugly-ass Archos monstrosity, so no one expects you to know ancient history. But that's no excuse to go around making it up!

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed executed more successfully than earlier companies did.

FTFY. Otherwise I don't disagree. Thankfully for shareholders (including indexers) executing better than anyone else happens to be a profitable and not easily replicable business model.

Edit accepted. Inasmuch as "marketing" is a subset of "execution". And yeah, even if marketing was the only part of their execution that mattered (I agree that it's not), as a shareholder I'd still be totally onboard with that.

Yup, I had one of those!  Was hoping someone would speak up and remind everyone that Apple didn't invent the mp3 player.  Actually, I remember telling my friends that the iPod was more expensive, and had less storage than my amazing Archos:


Scandium

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Re: Can't beat an Index
« Reply #29 on: April 17, 2015, 07:45:26 AM »
Uh.. no timing needed really just in and hold on like you would an index. They even have yields. Im not saying everything folks. Im saying Im in my 30's 30%
you might need to read some fundamentals each quarter to see if she'll stop bucking but I think you will be safe this year. It gets really obscene if you push it out to forever. Like 25,000% obscene

WTF? Are these sentences or the ramblings of a mental patient? You're in your 30s 30%? So you're 10 years old?
" no timing needed really just in and hold on"
ehh, that's what she said..?

YoungInvestor

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Re: Can't beat an Index
« Reply #30 on: April 17, 2015, 08:10:38 PM »
Yes, of course it's easy, beating the market.

All you had to do was buy 1000$ worth of MSFT in 1986, sell it on the last trading day of 1999, wait a year and move on to AAPL in January 2001. Should have been enough to make you a deca-millionaire today.

Heck, while we're at it, you might as well have bought some puts on MSFT with the money you had before initiating your AAPL position. Should put you in the hundred-millionaire club fairly easily.

The point I'm trying to make here is that MSFT wasn't obvious in 1986, just like AAPL wasn't obvious in 2001.

People in 2030 might look at us and complain about how idiotic we are not to be investing in company XYZ while we have a chance to. Unless you can give me that company's name (heck, I'll settle for the sector and exchange it trades on), there's not much I can do but hold a wide variety of stocks (through an index fund, as an example).

VanTran

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Re: Can't beat an Index
« Reply #31 on: April 17, 2015, 11:47:35 PM »
You don't have to hit the jackpot to beat the market. In the past 5 years, you could've just bought a leveraged index ETF, held for a year, then switch to an index fund. Boom,you've beaten the market for life. Mystery solved.

Yes, of course it's easy, beating the market.

All you had to do was buy 1000$ worth of MSFT in 1986, sell it on the last trading day of 1999, wait a year and move on to AAPL in January 2001. Should have been enough to make you a deca-millionaire today.

Heck, while we're at it, you might as well have bought some puts on MSFT with the money you had before initiating your AAPL position. Should put you in the hundred-millionaire club fairly easily.

The point I'm trying to make here is that MSFT wasn't obvious in 1986, just like AAPL wasn't obvious in 2001.

People in 2030 might look at us and complain about how idiotic we are not to be investing in company XYZ while we have a chance to. Unless you can give me that company's name (heck, I'll settle for the sector and exchange it trades on), there's not much I can do but hold a wide variety of stocks (through an index fund, as an example).

mrpercentage

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Re: Can't beat an Index
« Reply #32 on: April 18, 2015, 09:01:52 AM »
The definition of a weenie is someone who tries argue semantics and make up the definition of every word to match his own confirmation bias. Lot of Apple haters out there. Got a whole lot of Apple is a bunch of thieves.. and I hate apple because I can't get the shitty free music I didn't pay for unless I jailbreak it but then it would become like droid and get music herpies. Seriously, its the biggest complaint I here about Apple. Bill Gates wrote Office for Apple and gave them money that means its all Microsoft.. Waa!! Apple is consistent in their programming so people don't have to completely relearn in every 5 years-- thats bullshit!! They can't do that!!

None of that has to do with technical analysis or even a big world view.
None of it has to do with Apple making you money.
I will ride your stupid ETF's on actual Apple stock while maintain better diversity.


Indexer

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Re: Can't beat an Index
« Reply #33 on: April 18, 2015, 01:56:29 PM »
The definition of a weenie is someone who tries argue semantics and make up the definition of every word to match his own confirmation bias. Lot of Apple haters out there. Got a whole lot of Apple is a bunch of thieves.. and I hate apple because I can't get the shitty free music I didn't pay for unless I jailbreak it but then it would become like droid and get music herpies. Seriously, its the biggest complaint I here about Apple. Bill Gates wrote Office for Apple and gave them money that means its all Microsoft.. Waa!! Apple is consistent in their programming so people don't have to completely relearn in every 5 years-- thats bullshit!! They can't do that!!

None of that has to do with technical analysis or even a big world view.
None of it has to do with Apple making you money.
I will ride your stupid ETF's on actual Apple stock while maintain better diversity.

I'm confused.  Can someone translate this?  I can't tell what parts are serious, sarcasm, impersonations of "weenies," or impersonations of people the author thinks are smart. 

I don't think anyone here was actually trashing Apple in their current state.  I(and others) pointed out predicting their current state 20 years ago and realizing the 25,000% return you were going on about was unrealistic since they looked pretty pitiful at every point in their history until the ipod and they didn't actually look "good" until after the iPhone overtook Blackberry in smartphone sales.

Since I can't tell if "None of that has to do with technical analysis or even a big world view" was serious or sarcasm I'm not sure if I should laugh, cry, or feel confused.  In your first post you say we should look at the fundamentals.  So which is it?  Are we using fundamental analysis to pick the future or technical analysis to pick the future? 

As a side note most ETFs don't hold 15% Apple.  Most people here don't use QQQ.  They use VTI(or VTSAX.. same thing really).  It is only 3% apple, owns over 3500 companies, and when combined with its close cousin VXUS in a 70/30 ratio you are only about 2% apple and you own almost 10,000 different stocks.
« Last Edit: April 18, 2015, 01:59:27 PM by Indexer »

Bob W

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Re: Can't beat an Index
« Reply #34 on: April 18, 2015, 02:28:27 PM »
Samsung is to Apple as Apple was to BlackBerry.

mrpercentage

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Re: Can't beat an Index
« Reply #35 on: April 18, 2015, 04:26:38 PM »
The definition of a weenie is someone who tries argue semantics and make up the definition of every word to match his own confirmation bias. Lot of Apple haters out there. Got a whole lot of Apple is a bunch of thieves.. and I hate apple because I can't get the shitty free music I didn't pay for unless I jailbreak it but then it would become like droid and get music herpies. Seriously, its the biggest complaint I here about Apple. Bill Gates wrote Office for Apple and gave them money that means its all Microsoft.. Waa!! Apple is consistent in their programming so people don't have to completely relearn in every 5 years-- thats bullshit!! They can't do that!!

None of that has to do with technical analysis or even a big world view.
None of it has to do with Apple making you money.
I will ride your stupid ETF's on actual Apple stock while maintain better diversity.

I'm confused.  Can someone translate this?  I can't tell what parts are serious, sarcasm, impersonations of "weenies," or impersonations of people the author thinks are smart. 

I don't think anyone here was actually trashing Apple in their current state.  I(and others) pointed out predicting their current state 20 years ago and realizing the 25,000% return you were going on about was unrealistic since they looked pretty pitiful at every point in their history until the ipod and they didn't actually look "good" until after the iPhone overtook Blackberry in smartphone sales.

Since I can't tell if "None of that has to do with technical analysis or even a big world view" was serious or sarcasm I'm not sure if I should laugh, cry, or feel confused.  In your first post you say we should look at the fundamentals.  So which is it?  Are we using fundamental analysis to pick the future or technical analysis to pick the future? 

As a side note most ETFs don't hold 15% Apple.  Most people here don't use QQQ.  They use VTI(or VTSAX.. same thing really).  It is only 3% apple, owns over 3500 companies, and when combined with its close cousin VXUS in a 70/30 ratio you are only about 2% apple and you own almost 10,000 different stocks.

If you are telling me Apple is a bad idea-- give me a reason. Any real reason.
I didn't hear-- you know mr percentage Apple has negative insider trading, or you know mr percentage it might be at the end of an incredible run, or you know factor X makes that theory crap.
Instead I get 25,000%.. Are you having a stroke.. or jerking off or whatever they meant.
I could be totally misreading reading you guys or I could be ambiguous.. the key to every prophet. I should address people by name in here to remove confusion and I suppose others should do the same. Maybe we need a light that goes on to display humor (perhaps a smiley face) so we know when we are being smart asses like the robot on interstellar.
____ just wanted to add, the last part you mentioned is much better.
------adding again, sorry I should think longer before I post, I use fundamentals to decide to sell-- not to buy, as you said they will not tell you if a company is going up 25,000% The bigger world view of hey everyone is buying this new smart phone does though...or hey all these ETF's that a lot of people buy are really heavy on Apple.. sure I used one of the most extreme versions with QQQ.. 25,000% also shows the value of holding a good company through thick and thin

On that note Disney has positive insider trading and a lot of reasons it will be very successful for the next few years. Hence I don't need to care what the price is cause I know it will be higher in five years. I know that I know that I know, unless some unforeseen major disaster that screws us all comes.
Also, I buy and own everything Apple. I have to check my own bias because I love that company and that is how I invest-- smart or not-- is when I see true value and quality. I have to answer the question would I want that as a family business? I still think Apple will go higher because they are a great company and because many people use ETF's heavy on Apple.
« Last Edit: April 18, 2015, 05:54:04 PM by mrpercentage »

dungoofed

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Re: Can't beat an Index
« Reply #36 on: April 18, 2015, 06:09:02 PM »
There was even a phone that played Mp3s before the iPod, but it wasn't famous and I didn't feel like getting to far into the weeds.

Naw, I'm too much of an jerk to let you weasel out of that one. If you had simply said "they invented a mini computer that played music", I wouldn't have batted an eyelash. But you doubled-down, explicitly stating (with amazement) that they were the first to consider connecting a hard drive and speakers. It's ok, I'm an old man. It sounds like you weren't around to see my friend's ugly-ass Archos monstrosity, so no one expects you to know ancient history. But that's no excuse to go around making it up!

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed executed more successfully than earlier companies did.

FTFY. Otherwise I don't disagree. Thankfully for shareholders (including indexers) executing better than anyone else happens to be a profitable and not easily replicable business model.

Edit accepted. Inasmuch as "marketing" is a subset of "execution". And yeah, even if marketing was the only part of their execution that mattered (I agree that it's not), as a shareholder I'd still be totally onboard with that.

Yup, I had one of those!  Was hoping someone would speak up and remind everyone that Apple didn't invent the mp3 player.  Actually, I remember telling my friends that the iPod was more expensive, and had less storage than my amazing Archos:



Owner of Diamond Rio 500 and Diamond Rio DR30 (Japan-only) here. My dumbass friends were all buying moving-parts devices like minidisc players and the ipod, but anyone who had listened to music while jogging/running in their life knew that mp3 was the way forward.

iamlindoro

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Re: Can't beat an Index
« Reply #37 on: April 18, 2015, 06:55:58 PM »
If you are telling me Apple is a bad idea-- give me a reason. Any real reason.
I didn't hear-- you know mr percentage Apple has negative insider trading, or you know mr percentage it might be at the end of an incredible run, or you know factor X makes that theory crap.
Instead I get 25,000%.. Are you having a stroke.. or jerking off or whatever they meant.
I could be totally misreading reading you guys or I could be ambiguous.. the key to every prophet. I should address people by name in here to remove confusion and I suppose others should do the same. Maybe we need a light that goes on to display humor (perhaps a smiley face) so we know when we are being smart asses like the robot on interstellar.
____ just wanted to add, the last part you mentioned is much better.
------adding again, sorry I should think longer before I post, I use fundamentals to decide to sell-- not to buy, as you said they will not tell you if a company is going up 25,000% The bigger world view of hey everyone is buying this new smart phone does though...or hey all these ETF's that a lot of people buy are really heavy on Apple.. sure I used one of the most extreme versions with QQQ.. 25,000% also shows the value of holding a good company through thick and thin

On that note Disney has positive insider trading and a lot of reasons it will be very successful for the next few years. Hence I don't need to care what the price is cause I know it will be higher in five years. I know that I know that I know, unless some unforeseen major disaster that screws us all comes.
Also, I buy and own everything Apple. I have to check my own bias because I love that company and that is how I invest-- smart or not-- is when I see true value and quality. I have to answer the question would I want that as a family business? I still think Apple will go higher because they are a great company and because many people use ETF's heavy on Apple.

OK, I'll bite.  Look, I will be frank with you.  What others here are trying to do is find a semi-humorous way of telling you that your style of communicating makes you seem extremely ill informed and uneducated.  That may not be the case-- indeed, you may be smarter than all of us-- but from the poorly punctuated, grammatically incorrect, overly dramatic, and extremely aggressive material you give us to work with, it's hard to take you seriously.  You come across as someone with very little experience in investing who is letting his dreams of dollar signs get in the way of good sense.

Nobody here will deny that it is possible to beat the market over short timelines.  What is extremely hard is consistently beating the market over the timelines necessary to sustain an early and extended retirement.  Literally, the brightest financial minds in the industry have a 99%+ failure rate at beating the market at timelines over 10 years.  An index approach is *not* a conservative approach, just so you know.  Any all or mostly stocks approach is highly volatile.  An index approach is just as close to a sure thing as it gets when it comes to stocks:  You can't lose it all (barring total societal collapse) and there are over 100 years of evidence reinforcing a 7-8% annual return, which is more than enough to get the job done, quick.  Apple has a market beating performance of under 15 years, and while I love them as a company too, I'm not willing to stake my retirement claim on them.  The more successful Apple is, the more of the market they will represent and the more of them I will own by default.  But if, god forbid, Apple should have a major scandal that causes major damage to the company, even an apocalyptic "whole company is gone" scenario can't slow my FI/RE plans by much.  Just as Apple was able to take the entire market by surprise with the iPod and iPhone, the potential exists for another company to come out of nowhere and eat Apple's lunch.  It is that unknown factor that makes Index investing the best course of action if your primary goal is early retirement. If your goal is to roll the dice on the stock market and get rich as hell, I wish you the best of luck, but this probably isn't the place for you.

If you want to not be teased (and to be frank, the teasing you've gotten has been pretty gentle in nature), you need to present your ideas in a cogent, compelling, and data oriented way.  That is not way you've done so far.  Again, it is incredibly easy to cherry pick recent data and then suggest that recent stellar performance will continue.  To an extent, it may do so-- but if crushing the market were as simple as picking the most visible example of a hot stock, and then hopping onto the next one, until your money has to be kept in a swimmable vault, then everyone would be doing it.  Hell, then *anyone* would have done it.  Seeing people make it big on a single stock is not unheard of-- but it is so vanishingly rare that it is not a valid investment strategy.  For every one person to make massive returns on a small handful of stocks, literally tens of thousands lose their shirt.

Probably everyone responding to you here has made this mistake at least once, hopefully with a small amount of money, and probably some with a large amount of money.  The advice you're getting isn't because we're all pussies-- it's because we all have learned better in the most painful way possible.
« Last Edit: April 18, 2015, 06:58:40 PM by iamlindoro »

mrpercentage

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Re: Can't beat an Index
« Reply #38 on: April 18, 2015, 08:14:16 PM »
OK, I'll bite.  Look, I will be frank with you.  What others here are trying to do is find a semi-humorous way of telling you that your style of communicating makes you seem extremely ill informed and uneducated. 
Probably everyone responding to you here has made this mistake at least once, hopefully with a small amount of money, and probably some with a large amount of money.  The advice you're getting isn't because we're all pussies-- it's because we all have learned better in the most painful way possible.

Thank you for your candor. While I quoted only a small portion, I did read the entire post and will chew on it for a while.

Indexer

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Re: Can't beat an Index
« Reply #39 on: April 18, 2015, 09:17:31 PM »
If you are telling me Apple is a bad idea-- give me a reason. Any real reason.
I didn't hear-- you know mr percentage Apple has negative insider trading, or you know mr percentage it might be at the end of an incredible run, or you know factor X makes that theory crap.
Instead I get 25,000%.. Are you having a stroke.. or jerking off or whatever they meant.
I could be totally misreading reading you guys or I could be ambiguous.. the key to every prophet. I should address people by name in here to remove confusion and I suppose others should do the same. Maybe we need a light that goes on to display humor (perhaps a smiley face) so we know when we are being smart asses like the robot on interstellar.
____ just wanted to add, the last part you mentioned is much better.
------adding again, sorry I should think longer before I post, I use fundamentals to decide to sell-- not to buy, as you said they will not tell you if a company is going up 25,000% The bigger world view of hey everyone is buying this new smart phone does though...or hey all these ETF's that a lot of people buy are really heavy on Apple.. sure I used one of the most extreme versions with QQQ.. 25,000% also shows the value of holding a good company through thick and thin

On that note Disney has positive insider trading and a lot of reasons it will be very successful for the next few years. Hence I don't need to care what the price is cause I know it will be higher in five years. I know that I know that I know, unless some unforeseen major disaster that screws us all comes.
Also, I buy and own everything Apple. I have to check my own bias because I love that company and that is how I invest-- smart or not-- is when I see true value and quality. I have to answer the question would I want that as a family business? I still think Apple will go higher because they are a great company and because many people use ETF's heavy on Apple.

In summary...

Me:  "I don't think anyone here was actually trashing Apple in their current state."
your response: "If you are telling me Apple is a bad idea-- give me a reason. Any real reason."

The conversation you think we having is not the real conversation at hand.  I'm not trashing Apple.  I'm saying you shouldn't invest in something because in the past it was up 25,000%.  You should only invest in something if you can justify why it would go up in the future, AND your justification makes sense.  More importantly you need to recognize that when you own just a couple individual stocks you are taking 100% risk. Your value can hit zero.  If you own 'everything' through index funds you get the growth of the world economy.  There are ups and downs, but it trends up.  Why does that seem so strange?

Dodge

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Re: Can't beat an Index
« Reply #40 on: April 18, 2015, 09:26:56 PM »
There was even a phone that played Mp3s before the iPod, but it wasn't famous and I didn't feel like getting to far into the weeds.

Naw, I'm too much of an jerk to let you weasel out of that one. If you had simply said "they invented a mini computer that played music", I wouldn't have batted an eyelash. But you doubled-down, explicitly stating (with amazement) that they were the first to consider connecting a hard drive and speakers. It's ok, I'm an old man. It sounds like you weren't around to see my friend's ugly-ass Archos monstrosity, so no one expects you to know ancient history. But that's no excuse to go around making it up!

Besides the iPhone (whose keyboardless interface *was* unique at the time), most other things Apple wants you to believe it invented (iPod, iPad, big iPhone, Apple Watch) have really just been things that it has marketed executed more successfully than earlier companies did.

FTFY. Otherwise I don't disagree. Thankfully for shareholders (including indexers) executing better than anyone else happens to be a profitable and not easily replicable business model.

Edit accepted. Inasmuch as "marketing" is a subset of "execution". And yeah, even if marketing was the only part of their execution that mattered (I agree that it's not), as a shareholder I'd still be totally onboard with that.

Yup, I had one of those!  Was hoping someone would speak up and remind everyone that Apple didn't invent the mp3 player.  Actually, I remember telling my friends that the iPod was more expensive, and had less storage than my amazing Archos:



Owner of Diamond Rio 500 and Diamond Rio DR30 (Japan-only) here. My dumbass friends were all buying moving-parts devices like minidisc players and the ipod, but anyone who had listened to music while jogging/running in their life knew that mp3 was the way forward.

I had a Rio too!  It only had 32mb of storage, which forced me to recompress everything as 64kbps WMA, but hey, it was the year 2000 :-P

I can't tell you how amazed I was a few years later when I upgraded to 20GBs of:





I remember sitting at dinner with a bunch of friends, and saying, "Look at this device.  It has more storage than the iPod, it's cheaper than the iPod, it has a built-in kick-stand, and a HUGE screen for watching TV!  It even automatically connects to my computer, and updates every night with the latest TV shows I've recorded from the previous day.  And you know what?  In a few years, Apple will make a device that looks just like this, with a video screen and everything, again it be more expensive, and with less features than this...but it'll be white, it will have an Apple logo....and guys, I promise you...people will think Apple invested it!"

I was right



The best part?  I'm friends with someone who sold at today's equivalent of $28, "It will never go higher than this.  I promise you!"  He got in at something like $5, so he was quite happy with himself.  Well had he kept the stock until now, he would've grown his money an additional 5x from when he sold at $28.  You can't predict the future mrpercentage...even when you're right.  Quit while you're ahead, go 100% index funds, and spend all your new-found free time doing something fun :)

Ricky

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Re: Can't beat an Index
« Reply #41 on: April 18, 2015, 09:50:44 PM »
You can't predict the future mrpercentage...even when you're right.  Quit while you're ahead, go 100% index funds, and spend all your new-found free time doing something fun :)

Investing is fun for some people. I wouldn't be one to advocate against speculative plays, so long as it didn't make a significant part of one's portfolio. Apple is not necessarily a spec play in terms of risk nor growth. It isn't exactly super risky as long as you're not all in, but it's never going to see the kind of growth it has, at least not likely.

For the record, no one can predict the future of index funds either. If one's rationale for not investing in Apple is solely based on the fact that it has already seen 25,000% growth, then logically one should not use history as an indicator for future success across any securities. The only thing that makes the index marginally safer is the high amount of exposure and diversification one usually gets, of course.

There is most certainly room in most people's portfolios for spec plays. If you truly understand business and value and the company you're investing in, and you don't feel like you're gambling, then by all means you should make those bets if it suits your timeline and risk tolerance.

Dodge

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Re: Can't beat an Index
« Reply #42 on: April 18, 2015, 10:49:57 PM »
You can't predict the future mrpercentage...even when you're right.  Quit while you're ahead, go 100% index funds, and spend all your new-found free time doing something fun :)

Investing is fun for some people. I wouldn't be one to advocate against speculative plays, so long as it didn't make a significant part of one's portfolio. Apple is not necessarily a spec play in terms of risk nor growth. It isn't exactly super risky as long as you're not all in, but it's never going to see the kind of growth it has, at least not likely.

For the record, no one can predict the future of index funds either. If one's rationale for not investing in Apple is solely based on the fact that it has already seen 25,000% growth, then logically one should not use history as an indicator for future success across any securities. The only thing that makes the index marginally safer is the high amount of exposure and diversification one usually gets, of course.

There is most certainly room in most people's portfolios for spec plays. If you truly understand business and value and the company you're investing in, and you don't feel like you're gambling, then by all means you should make those bets if it suits your timeline and risk tolerance.

I was hoping someone would mention that individual stock picking can be fun.  Once I show an individual stock picker that they are almost statistically guaranteed to lose money vs the index over the long term...it suddenly becomes less fun for them!

Do you think mrpercentage would still have fun picking individual stocks if he/she consistently earned less money each and every year, over the next 30-50 years, despite all the extra work?

beltim

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Re: Can't beat an Index
« Reply #43 on: April 18, 2015, 10:56:40 PM »
You can't predict the future mrpercentage...even when you're right.  Quit while you're ahead, go 100% index funds, and spend all your new-found free time doing something fun :)

Investing is fun for some people. I wouldn't be one to advocate against speculative plays, so long as it didn't make a significant part of one's portfolio. Apple is not necessarily a spec play in terms of risk nor growth. It isn't exactly super risky as long as you're not all in, but it's never going to see the kind of growth it has, at least not likely.

For the record, no one can predict the future of index funds either. If one's rationale for not investing in Apple is solely based on the fact that it has already seen 25,000% growth, then logically one should not use history as an indicator for future success across any securities. The only thing that makes the index marginally safer is the high amount of exposure and diversification one usually gets, of course.

There is most certainly room in most people's portfolios for spec plays. If you truly understand business and value and the company you're investing in, and you don't feel like you're gambling, then by all means you should make those bets if it suits your timeline and risk tolerance.

I was hoping someone would mention that individual stock picking can be fun.  Once I show an individual stock picker that they are almost statistically guaranteed to lose money vs the index over the long term...it suddenly becomes less fun for them!

Do you think mrpercentage would still have fun picking individual stocks if he/she consistently earned less money each and every year, over the next 30-50 years, despite all the extra work?

Someone losing to the market every year for 50 consecutive years is probably rarer than someone beating the market every year for 50 straight years.  About the only way to do it is rack up more in fees than the market has ever returned.

Dodge

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Re: Can't beat an Index
« Reply #44 on: April 18, 2015, 11:06:07 PM »
For the record, no one can predict the future of index funds either. If one's rationale for not investing in Apple is solely based on the fact that it has already seen 25,000% growth, then logically one should not use history as an indicator for future success across any securities. The only thing that makes the index marginally safer is the high amount of exposure and diversification one usually gets, of course.

Using past performance as an indicator to buy a specific company, is idiotic, and isn't even in the same league as using past performance as an indicator to buy the entire market.  And not because of risk either.  When someone buys the whole market, they are doing so with the expectation that the entire world economy as a whole will continue to grow, because of things like population and productivity (technology makes us more productive) increases.  This is the equivalent of looking in a petri dish and watching bacteria grow.  We can measure the growth rate, and be reasonably sure it will continue to grow at around the same pace.

Most people are missing a very important aspect of the market...They don't see that it's a competition.  Tell someone they can beat Michael Jordan in a game of basketball, and they will laugh in your face...but give them a sales pitch for "one weird trick" to beat the market, and they will line up to give you money.

When someone buys individual stocks, or an active fund, there is a competition factor which is missing from the above petri dish example.  You're competing against all other market participants, and unlike the bacteria, they adapt and make changes based on available information.  When someone claims they can beat that market over the long term, they're saying they can beat over half of all money invested in the market this year, then again next year, and again the year after that...for as long as they live.  All by using published, widely known information, that the other market participants (the people they claim to be beating) are aware of.  This is essentially the claim:

"<Insert Strategy Here> beat over half of all invested dollars in the past.  While this information is public, I do not expect the losers to adopt my published strategy, or change to a better strategy, so I expect it to continue beating over half of all invested dollars in the future."

This isn't just someone saying, "I can beat Lebron James in a 1 on 1 basketball game, you can too!"

It's, "I can beat Lebron James in a 1 on 1 basketball game, every single year, and he knows exactly what I'm going to do each time, and he doesn't copy my strategy or figure out a way to beat me, so I expect I will continue beating him in the future, you can too!"

Compared to:

"Indexing beat or matched half of all invested dollars in the past, I do not expect mathematical laws to change, so I expect it to beat or match half of all invested dollars in the future."

Which one of these statements are you willing to bet your life savings on?
« Last Edit: April 18, 2015, 11:16:47 PM by Dodge »

aspiringnomad

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Re: Can't beat an Index
« Reply #45 on: April 18, 2015, 11:07:26 PM »
My brother sent me a Rio 32 MB that he had been given to test as part of his software dev job. Was excited to get it until I realized it only held 8 songs. Sold it on ebay in early 2001. Will never forget about that because I shipped it to the buyer's office at the World Trade Center.

While we're going down memory lane, I had a friend who was an early adopter Apple freak who had the first iPod before it really got popular. When I saw it held 1k songs and then used that click wheel I thought I need to buy some Apple stock right now. Wish it had been more than just a thought.
« Last Edit: April 19, 2015, 12:30:46 AM by dcmustachio »

Dodge

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Re: Can't beat an Index
« Reply #46 on: April 18, 2015, 11:13:03 PM »
Someone losing to the market every year for 50 consecutive years is probably rarer than someone beating the market every year for 50 straight years.  About the only way to do it is rack up more in fees than the market has ever returned.

I disagree, but it doesn't matter, because the probabilities aren't relevant to my point.

beltim

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Re: Can't beat an Index
« Reply #47 on: April 18, 2015, 11:19:04 PM »
Someone losing to the market every year for 50 consecutive years is probably rarer than someone beating the market every year for 50 straight years.  About the only way to do it is rack up more in fees than the market has ever returned.

I disagree, but it doesn't matter, because the probabilities aren't relevant to my point.

It doesn't matter, except that by overstating your case people are less likely to heed your advice.  Whether it's up or down for 50 consecutive years isn't important, but saying he's going to lose to the market for 30-50 straight years is so unbelievably improbable that it's easy to dismiss the rest of what you're saying.  And that would be a shame.

Dodge

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Re: Can't beat an Index
« Reply #48 on: April 18, 2015, 11:32:58 PM »
Someone losing to the market every year for 50 consecutive years is probably rarer than someone beating the market every year for 50 straight years.  About the only way to do it is rack up more in fees than the market has ever returned.

I disagree, but it doesn't matter, because the probabilities aren't relevant to my point.

It doesn't matter, except that by overstating your case people are less likely to heed your advice.  Whether it's up or down for 50 consecutive years isn't important, but saying he's going to lose to the market for 30-50 straight years is so unbelievably improbable that it's easy to dismiss the rest of what you're saying.  And that would be a shame.

While based on his/her posts thus far, I don't believe it to be so improbable, I made no such assertion.  I wasn't going down that path.  The point of the question was to separate "fun" from "monetary gain" and show that they are linked.  Simply put, it's not fun to lose money.  I assert that if people truly believe their stock picking efforts will end up losing them money (vs the index), they wouldn't do it.

beltim

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Re: Can't beat an Index
« Reply #49 on: April 18, 2015, 11:49:41 PM »
Someone losing to the market every year for 50 consecutive years is probably rarer than someone beating the market every year for 50 straight years.  About the only way to do it is rack up more in fees than the market has ever returned.

I disagree, but it doesn't matter, because the probabilities aren't relevant to my point.

It doesn't matter, except that by overstating your case people are less likely to heed your advice.  Whether it's up or down for 50 consecutive years isn't important, but saying he's going to lose to the market for 30-50 straight years is so unbelievably improbable that it's easy to dismiss the rest of what you're saying.  And that would be a shame.

While based on his/her posts thus far, I don't believe it to be so improbable, I made no such assertion.  I wasn't going down that path.  The point of the question was to separate "fun" from "monetary gain" and show that they are linked.  Simply put, it's not fun to lose money.  I assert that if people truly believe their stock picking efforts will end up losing them money (vs the index), they wouldn't do it.

Technically you didn't assert it.  You just asked if they lost money each of the next 30-50 years, would they still find it fun.  I agree with your general point, but if you start a question with a premise that is statistically impossible, then the rest of your question is irrelevant.

It's like starting a question with, if you got struck by lightning 10 times, would you still enjoy hiking outdoors?  Well, probably not, but who cares?