Author Topic: Mark Cuban's take on investing ...  (Read 2741 times)

StudentEngineer

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Mark Cuban's take on investing ...
« on: November 04, 2016, 08:43:39 AM »
Ran across this video and thought I would share it here.

https://www.youtube.com/watch?v=u5Pp1HEKSPM#t=460.779305897

Quick summary of what I've seen so far
-Cash is the safest bet
-Average investors get a better return paying off debt and buying physical consumables
-Diversification is for suckers
-Impossible to do better than the hedge funds
-Volatility is opportunity
-Buy and hold is for suckers



Thought everyone would like to have a field day with this :)

Cheers!

HeadedWest2029

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Re: Mark Cuban's take on investing ...
« Reply #1 on: November 04, 2016, 10:15:50 AM »
Haha...yep, his advice for investors in shockingly bad.  I otherwise enjoy what he has to say most of the time.  Maybe his advice works for Mark Cuban, but oh boy the average Joe would be so bad off following this.

Rufus.T.Firefly

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Re: Mark Cuban's take on investing ...
« Reply #2 on: November 04, 2016, 10:46:34 AM »
He does make one key assumption wrong: investing is a zero-sum game. That is, if you can't be the smartest guy in the room, you'll lose. Average is perfectly O.K. Average returns, combined with above-average savings produces vast sums of money.

Actually, I think the rest of his advice is pretty good overall.
1) Pay off debt
2) Figure out your budget
3) Buy your necessities in bulk

For people who are just starting out, these kinds of things are great. Also, his own personal investing is more of an active style - that is, spending a lot of time doing research before diving in. This is a sound method of investment, but not reasonable for us who work full-time jobs. Mark Cuban can sit down and study a trade for weeks at a time. He's so passionate when he talks about it, it's clearly a hobby for him. I don't have time for this, so I go the index fund route. Probably 95% of everyone else on this forum should too.

sol

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Re: Mark Cuban's take on investing ...
« Reply #3 on: November 04, 2016, 11:17:55 AM »
I think his advice is much more reasonable if you're trying to become a billionaire than it is if you want to become a millionaire.

The advice we dispense around here is basically "how to retire early and then live a very normal American lifestyle."  Our advice isn't going to make you into one of the 500 wealthiest people on the planet.  If that is your aspiration, then you need to take more risks.  Sounds like he is basically saying "you have to go for broke if you want to win big."

And it worked for him, so why not?  The internet is full of fabulously wealthy people who honestly believe anyone can become a billionaire through hard work and big risks, because that's what they did and it worked for them and they can't see the thousands of other people just like them for whom it didn't pay off.  That's why you see so many "follow your passions and it will all work out brilliantly" posts from rich celebrity actors and musicians and tech types.

GreatLaker

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Re: Mark Cuban's take on investing ...
« Reply #4 on: November 04, 2016, 11:38:30 AM »
I like Mark Cuban, but Warren Buffett and Jack Bogle could argue successfully against his investing logic. 8 years into Buffett's 10 year $1M buy & hold bet on the S&P500 is absolutely crushing the hedge funds, and it is an investing strategy that most investors could easily implement.

Here's why Buffett will win his $1 million bet against a hedge fund manager
http://finance.yahoo.com/news/jack-bogle--here-s-why-buffett-will-win-his--1-million-bet-against-a-hedge-fund-manager-200012224.html



Mighty-Dollar

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Re: Mark Cuban's take on investing ...
« Reply #5 on: November 04, 2016, 03:22:05 PM »
Horrible advice. BTW Trump for president.

moof

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Re: Mark Cuban's take on investing ...
« Reply #6 on: November 04, 2016, 04:30:51 PM »
Unless you want to spend all your time investigating companies to invest in, just buy the index.  Even if you do spend all your time investigating, you will still likely get creamed compared to the index due to trading fees and occasional mistakes (mostly emotional ones at times like now).

Very few people have been able to outperform any broad index for very long.  Gravity catches up with them.  Smart people turn out to often be seeing phantoms in the data, and their precious back tested algorithm suddenly fails them.

By time the headlines catch on and claim the market is going to crash, you are likely 1-3 months behind the professionals and the damage is already mostly done.  If everyone and their grandmother says sell, you should probably buy.  If everyone and their grandmother say you should buy, maybe consider selling to the bigger fool.

If you can't stomach an occasional 20-30% drop without freaking out, you have no business putting your money in the stock market in the first place.

powskier

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Re: Mark Cuban's take on investing ...
« Reply #7 on: November 05, 2016, 12:33:55 AM »
I remember a Shark Tank episode where Mark Cuban  told a guy he was a fool for being greedy, basically telling him put 1 million in the bank and never have to work again , just live off it and be aggressive with what he had left over, rather than go all or nothing with everything he had.
i guess that may also be considered "his take on investing".