Author Topic: What a Snowball Really Looks Like  (Read 3455 times)

gtm

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What a Snowball Really Looks Like
« on: March 02, 2017, 08:45:23 AM »
"I recently met an 89-year-old woman named Ginny. She has a passion for investing, math and numbers. We talked for three hours and I learned a few critical things. She taught me about successful simple companies, what it was like to be a woman investor in the 1960s, and what time can do for an investor. I hope you enjoy her story as much as I did."

http://compoundingsnowballs.blogspot.com/2017/02/what-snowball-really-looks-like.html

HAPPYINAZ

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Re: What a Snowball Really Looks Like
« Reply #1 on: March 02, 2017, 09:59:13 AM »
nice...thanks for the article.  With the internet, it's so easy now for anyone to invest, it was interesting to think about how a woman in the 60s did it. 

AZryan

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Re: What a Snowball Really Looks Like
« Reply #2 on: March 02, 2017, 11:05:17 AM »
MOD NOTE: Much of the below message is unnecessarily rude, and violates forum rule #1. I'm not going to go line by line and edit, but please, give constructive feedback. Don't be a jerk. /END EDIT

Your first post here is to link to another blog? hmm... questionable. Is it your blog? If not, I don't get the point of it other than 'a woman invested in stocks, which is good'.

The details seem to be that this 'Ginny' does stock picking. Ok. In the age before index funds, that's all there was. But it's widely considered 'not wise' from the perspective of this forum for investors going forward. Same for pointlessly focusing on dividends like Ginny still does.
And then Ginny 'had a bone to pick with Warren Buffet'. Ok...

"She said, “If he isn’t going to give us dividend, why am I buying your stock?”

Both Ginny and the article's author act like this is a rhetorical question. It's not. And Ginny probably won't like the answer.

The article lists 4 stocks Ginny owned, and what they did over the past 20 years. It also says Ginny didn't hold 'em for 20 years, so what's the 20-year timeframe point?? Who knows what she actually did?? What else did she own and when? If this is all too much work, just tell us what her actual return was over her investing lifetime -if Ginny even knows that herself?? It could be so messy that she can't ever know.

It's very strange that the article prints Ginny criticizing Warren Buffet, then this stock list doesn't include BRK for comparison (or the total market or S&P 500). It took ~5 seconds from the same site they got the other results from to see BRK had ~10.5% 20-year return. That's much higher than 3 out of the 4 'Ginny stocks' listed. What was this article trying to tell us from that list?? That Ginny picked some good stocks by sheer luck and/or misguided dividend chasing?

The only stock on the list that beat BRK in that pointless 20-year timeframe was Sherwin-Williams. But over Sher-William's whole life, it had a ~19% return. That's GREAT... but in that same timeframe, BRK made ~20%. So, it's just random luck that SHW beat BRK in the last 20 years. And this Ginny didn't exclusively own either one for exactly those 20 years. Adding in her other lower return stock picks, it's clear that she would've been better off if she'd just invested 100% in Berkshire. Kinda dumb to knock it, then.

Or the article could make the point that Ginny got rich offa' brilliantly picking Sherwin-Williams, but I assume that's not true at all. Maybe she didn't even pick it at the right time and made much less than it's long term avg.?
Maybe it turns out that Ginny was good at picking stocks and beat the market all this time, but it doesn't say that, either. And nothing to show she wasn't just lucky, even if she had.

This is a very weird article that seems to either make no point, or lousy ones. But good for Ginny being a woman and investing all her life. I'm sure we can be happy for her for that.
« Last Edit: March 05, 2017, 12:08:11 AM by arebelspy »

AZryan

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Re: What a Snowball Really Looks Like
« Reply #3 on: March 02, 2017, 12:31:11 PM »
I thought maybe I got this article wrong and looked it over again. I don't think I did...

"-Being a young woman interested in investing in the 1960s was difficult and Ginny explained it in the perfect way, “if you didn’t go out and play cribbage with the other ladies then you got frowned upon. There were some things you had to do. You weren’t yourself. You were a Mrs. Somebody.”

While it TOTALLY SUCKS that some (not all) women were treated like a men's accessory, I don't get how this explains (much less 'perfectly') how that made being interested in investing difficult?? Was she not able to talk to the other housewives she hung around with about it? It doesn't say if she ever tried? And did she need to? She seemed fine doing investing on her own.
And would other women not being interested be the fault of their husbands? I know there are lots of neighborhood investment groups, and I could be wrong, but I'd bet a majority of members in those are women.
 
"-Investing is a useful skill for everyone to have.-"

Is it a 'skill'? I thought it's more of a smart habit or practice, and that being 'skilled' at it has been proven to be an illusion for almost everyone.

The article keeps saying Ginny loves to point out how she did very well in this or that stock, but it doesn't actually show if she was good at it or not. Maybe she's just a braggart? Even the title about 'snowballing' doesn't ever connect with anything. It should mean how Ginny's investments have snowballed into big profits over the years, but this isn't addressed or even implied. Is she a multi-millionaire?? Did she do better than the stock market, even? We have no idea.

If that's not the point, then it's just a puff piece about girl power. I'd argue that in 2017, that's kinda anti-feminist.

It offhandedly says Ginny really 'did her homework' before buying, but did she? I don't think the writer actually knows. I can say, "I did the most homework", but it's just a totally unsubstantiated claim if I do nothing to back it up.

And the 'homework' line seems weird when it says Ginny seems to pick out stocks based on the random things around her. Like if her friend painted her walls with a nice paint, she buys stock in that paint company. Or that she noticed old people use oxygen, so bought stock in it. That's like saying, "I should invest in Apple or Tesla or Netflix because they're popular."

That sort of anecdotal evidence shouldn't even be a part of investment research.

"-It doesn’t require leaving the house therefore even “house wives” back then could use investing.-"

Wait... if you didn't even have to leave the house, how was it even difficult at all, then??
There were a TON of things that were far more difficult for women to do than a man in the past (and sadly, still to this day). But it seems like investing might have been one of the most equality-based, accessible things that a woman could do to get ahead. Give company money, get stock -they don't care who you are.

If anything, the problem was that women who were housewives had no income and were beholden to the will of their husbands. But that's not 'investing's' fault. And it sounds like Ginny had no issue with this to deal with at all. And I doubt the writer of the article does, either.

"-You need money, a sense of risk and a sense of numbers, that is something the majority of people have, including 1960’s “house wives.”

Confusing. I would've actually guessed a  typical 1960's housewife wouldn't have that open access to money. If they did, along with the other things listed, then investing would've been easy for them to do. And that totally ruins the writer's implication that it was so tough for women to do it back then. Which was it -hard or easy?

"-Ginny taught me a lot about being a female investor. You have to stand up for yourself and work twice as hard to get the same treatment.-"

What does a 'female investor' even mean? How's it meaningfully any different from just 'an investor'? Of all the things where there's a clear diff. between men and women in various pursuits, I don't see it in investing.
And what work does this young, female blogger have to do that's twice as hard to get the same treatment? She just kinda makes this claim and moves on like it's self-evident. That kind of hyperbole (or fiction) does a disservice to feminism.

I mean, I wrote 95% of this not knowing, or caring, if the article was written by a man or woman, their age, anything... so they got equal (if very critical) treatment from me.

The article ends with the 'important' question 'why do you invest?'. Ginny says it's so she doesn't have to slave at a hamburger place. Isn't that just implying the same answer everyone has to this question? We all invest to make more money, which gives us a higher standard of living. Far from an important question, it seems like one so obvious and simple I don't even get the point of asking it? But it gets it's own key bullet point? And unanswered by the author. weird.

If this blog was by a middle-schooler, I would be feel bad about being this tough. But I'm thinking it's written by an adult.

dandarc

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Re: What a Snowball Really Looks Like
« Reply #4 on: March 02, 2017, 12:47:51 PM »
If this blog was by a middle-schooler, I would be feel bad about being this tough. But I'm thinking it's written by an adult.
I think the author actually is in middle or high school, based on the style and the blogger profile.  "I love dancing, investing, money, math, robotics and numbers!"

AZryan

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Re: What a Snowball Really Looks Like
« Reply #5 on: March 02, 2017, 01:03:00 PM »
If this blog was by a middle-schooler, I would be feel bad about being this tough. But I'm thinking it's written by an adult.
I think the author actually is in middle or high school, based on the style and the blogger profile.  "I love dancing, investing, money, math, robotics and numbers!"

Then, I hope she isn't the one who posted this here. Or, that she can learn from what I wrote, so she can get better at writing. Rethink if what you said makes sense. Rethink what the point of your article is. Rethink if you made your point or drifted out of focus, etc.

gtm

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Re: What a Snowball Really Looks Like
« Reply #6 on: March 02, 2017, 01:03:20 PM »
Thanks HappyInAZ, glad you liked it. The great Jason Zweig did as well

https://twitter.com/jasonzweigwsj/status/835987198176526341

Along similar lines he also wrote - "Has there ever been a better time to be an individual investor?"
http://blogs.wsj.com/totalreturn/2012/03/01/has-there-ever-been-a-better-time-to-be-an-investor/

So thank you HappyinAZ

And thanks to you too AZRyan - for reminding me how much I dislike many message board level of discourse

AZryan

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Re: What a Snowball Really Looks Like
« Reply #7 on: March 02, 2017, 01:19:01 PM »
Ok. I assume from the 'thank you' to HappyInAZ that you are the one who wrote the article (still not actually admitting it), you learned nothing from my accurate, in-depth criticism, and just want people fawning over you. Like the 'great Jason Zwieg'? (your link is behind a paywall, so it's pointless)

And you joined here just to promote your own blog somewhere else. That's poor etiquette. You posted it as if you were just quoting someone else and linking to some article you read. I thought it was deceptive, and it appears I was right.
« Last Edit: March 02, 2017, 01:20:53 PM by AZryan »

Heroes821

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Re: What a Snowball Really Looks Like
« Reply #8 on: March 02, 2017, 01:42:49 PM »
Thanks HappyInAZ, glad you liked it. The great Jason Zweig did as well

https://twitter.com/jasonzweigwsj/status/835987198176526341

Along similar lines he also wrote - "Has there ever been a better time to be an individual investor?"
http://blogs.wsj.com/totalreturn/2012/03/01/has-there-ever-been-a-better-time-to-be-an-investor/

So thank you HappyinAZ

And thanks to you too AZRyan - for reminding me how much I dislike many message board level of discourse


Are you even aware of what forum you're on? This place is for FACE PUNCHING and leaving your comfort zone.  AZryan made some really good points against the content of the article. This isn't facebook this place is for learning. If the article (which I probably won't get to read) leaves important questions unanswered and goes down rabbit holes that don't ever connect to the original point why should it be praised?

Why title snowball anything if that isn't even brought up? 

MOD NOTE: It is not a place for being rude, however.
« Last Edit: March 05, 2017, 12:07:24 AM by arebelspy »

Scortius

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Re: What a Snowball Really Looks Like
« Reply #9 on: March 02, 2017, 02:05:59 PM »
...

And thanks to you too AZRyan - for reminding me how much I dislike many message board level of discourse

This is a very immature response to someone who took a good amount of time and effort to give constructive feedback.

Unfortunately, the criticism is justified.  The title of the article is 'What a snowball really looks like", but there's no mention of anything related to compound growth in the article aside from a list of 4 stocks, 3 of which underperformed the market.  There were no comparisons to other investment vehicles, there was no discussion of the thought process behind picking those stocks (why Pepsi?).  I am confused about what exactly I am supposed to get from that article?  What is the takeaway that you want your readers to receive?

Also, why did you post it here?  That's a very important question you need to answer for yourself.  This is a sub-forum on investing on a site about early retirement.  What specific information are you trying to bring to the people reading this site?  What information do you imagine us readers will gain from reading your article?  Don't get me wrong, we are here to read and learn and interact with each other... but what is it about YOUR article that you think is appropriate to this audience?  Again, I'm not saying you don't have an answer, but it seems as though you didn't think about this question.  When you're writing for other people's consumption, that question must be answered before any writing is done.

Hargrove

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Re: What a Snowball Really Looks Like
« Reply #10 on: March 02, 2017, 04:07:32 PM »
I think the OP wanted to give a simple human-interest piece on investing with a likeable and unlikely heroine. It surely took some work to craft, interview, take pictures, and so on. It may have been an early blogging foray. It represents an effort that isn't "bad" just because it may have been offered in hopes of positive feedback, but this is the wrong audience.

While the response wasn't warm and fuzzy, the critique is actually very useful investment information, which would really matter to anyone who was actually trying to replicate Success™, which is what people here are interested in. The OP's intent was probably mostly to tell financial newbies that it's ok to have something to say about Warren Buffet and to put money in the stock market, but it didn't have the qualifiers people here would strongly prefer for financial pieces (namely, they insist such pieces offer both robust and sound financial advice).

We can be kind of ruthless about what simply works.

OP, I am on the one hand sorry you felt sidelined by the response, but the response you get here is freelance investment consultation. Please consider that your audience is highly financially literate and extremely more likely than any other audience to actually crunch any numbers or advice you offer, and their advice can actually help. The crowd here will tend to explain what they think, and put in a lot of time to do it. The feature of that is shocking people from complacency, because gently saying "there are an awful lot of assumptions here that can hurt you" just doesn't usually work as well as what we call "facepunching." The drawback is that some find it unapproachable, but the hope is that constant improvement is more important to readers than the tone of feedback, per basically every blog article.

gtm

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Re: What a Snowball Really Looks Like
« Reply #11 on: March 02, 2017, 05:44:20 PM »
Maybe a bit of British translation or something but rest assured, I hear what you say, with the greatest respect, thanks for your very interesting proposals, I will bear them in mind

Heckler

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Re: What a Snowball Really Looks Like
« Reply #12 on: March 05, 2017, 04:41:28 PM »
Maya (if gtm is you),

I watched your Power of Investing  middle school presentation and am very impressed.  Don't be discouraged by the crowd here - as you say, you've got time to learn and have a huge head start!

Great work getting so far ahead of the income curve. How many MMMs can say thier 14 yo daughters own BRK?!

My only caution to you - diversify to reduce risk!   For example, Pepsi has a class action lawsuit with Coke and goes under.  You're done if you just own Pepsi.   Diversifying can easily be done with ETFs that you are already set up to buy.  Please look into:

https://www.bogleheads.org/wiki/Bogleheads_investment_philosophy
« Last Edit: March 05, 2017, 04:49:46 PM by Heckler »


charis

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Re: What a Snowball Really Looks Like
« Reply #14 on: March 05, 2017, 05:21:13 PM »
Maya (if gtm is you),

I watched your Power of Investing  middle school presentation and am very impressed.  Don't be discouraged by the crowd here - as you say, you've got time to learn and have a huge head start!

Great work getting so far ahead of the income curve. How many MMMs can say thier 14 yo daughters own BRK?!

My only caution to you - diversify to reduce risk!   For example, Pepsi has a class action lawsuit with Coke and goes under.  You're done if you just own Pepsi.   Diversifying can easily be done with ETFs that you are already set up to buy.  Please look into:

https://www.bogleheads.org/wiki/Bogleheads_investment_philosophy

Agreed.  And I am also duly impressed!