Author Topic: What about a Successful Business or Long Term Investment Scenario?  (Read 22453 times)

grantmeaname

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #50 on: June 28, 2013, 12:01:18 PM »
People also tried splitting the atom, were successful, and now we have hundreds of thousands of nuclear war heads.
4,100 active and 17,000 total. Do you even google?

Also, 10% monthly average returns would give you 214% annual returns, because compounding. 8.2% annual returns would get you 120%.


[Mod Edit: Fixed Quote Tag.]
« Last Edit: June 28, 2013, 12:23:46 PM by arebelspy »

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #51 on: June 28, 2013, 01:13:26 PM »

"Now, you talk about that Bohagus boy. You know him, Billy Bohagus? They
 found him last week out behind the barn [dramatic pause] with his math
 teacher, his Scout leader, and the local minister, and that boy had the
 nerve to say it was part of a biology project. We killed him; had no
 other choice."

Wow, it has been a while since I have seen a Milkmen delivery... I remember listening to that album while driving my Camaro back from the Bahamas. 
« Last Edit: June 28, 2013, 01:15:58 PM by workwheniwantto »

AlexK

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #52 on: June 28, 2013, 01:44:06 PM »
Now that we know the OP's thoughts on investing, perhaps we could be educated on other subjects which are less trivial. How about free energy devices? Religion? Government conspiracies?

Freeyourchains2

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #53 on: June 28, 2013, 01:53:37 PM »
People also tried splitting the atom, were successful, and now we have hundreds of thousands of nuclear war heads.
4,100 active and 17,000 total. Do you even google?

[Mod Edit: Fixed Quote Tag.]

I forget that the public doesn't have access to classified intelligence reports. So carry on thinking that there are only 17,000 total.

Anyway, about that i bought some Tesla Motor Stocks at $40/share about 2 months ago...posted it in a thread on investor alley about short term hand picking stocks, which some people joined in and did the same thing...now shares are at $108/share..

« Last Edit: June 28, 2013, 02:07:54 PM by Freeyourchains2 »

brewer12345

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #54 on: June 28, 2013, 01:56:34 PM »

"Now, you talk about that Bohagus boy. You know him, Billy Bohagus? They
 found him last week out behind the barn [dramatic pause] with his math
 teacher, his Scout leader, and the local minister, and that boy had the
 nerve to say it was part of a biology project. We killed him; had no
 other choice."

Wow, it has been a while since I have seen a Milkmen delivery... I remember listening to that album while driving my Camaro back from the Bahamas.

I find that gibberish is enerallya good response to gibberish.

matchewed

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #55 on: June 28, 2013, 01:56:36 PM »
I forget and am shocked that you do.

Eric

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #56 on: June 28, 2013, 02:02:07 PM »
Wow, it has been a while since I have seen a Milkmen delivery... I remember listening to that album while driving my Camaro back from the Bahamas.

I would love to see a picture of this Camaro that has been converted into a boat/car.  Or is it a submarine/car?

matchewed

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #57 on: June 28, 2013, 02:04:59 PM »
Wow, it has been a while since I have seen a Milkmen delivery... I remember listening to that album while driving my Camaro back from the Bahamas.

I would love to see a picture of this Camaro that has been converted into a boat/car.  Or is it a submarine/car?

http://www.youtube.com/watch?v=1v3CzvQ9e_w

brewer12345

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #58 on: June 28, 2013, 06:49:34 PM »
Along the same lines, I think these two are hysterica and only recently stumbled across them:

http://www.youtube.com/watch?v=j8ZF_R_j0OY

matchewed

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #59 on: June 28, 2013, 07:12:02 PM »
Along the same lines, apparently this is a thing:

http://www.youtube.com/watch?v=ZRmELlhCZbA

*Edit* brewer that was fucking hilarious.
« Last Edit: June 28, 2013, 07:17:55 PM by matchewed »

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #60 on: June 29, 2013, 08:00:18 AM »
Wow, thanks for sharing that - I graduated with one of them - I was completely unaware that she was making music too. 

Along the same lines, I think these two are hysterica and only recently stumbled across them:
http://www.youtube.com/watch?v=j8ZF_R_j0OY

Freeyourchains2

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #61 on: July 01, 2013, 07:34:25 AM »
Tesla motors 183% return from April 1st - June 28th, 2013.

Cha-ching.

Netflix recovery 208% July 2, 2012 - today

Cha-ching.

OMG, how many has he gotten right in a row in the past, you may be wondering?

There's 2 out of 10 only needed choices in a decade right there!

"It is not possible" they say...

Compounded interest + doubling your investment + Research + Risk and Reward + skills on buying low and selling high + patience with no emotions
= Very Wealthy.

It's not easy, but very possible; however, only if you are in complete control!

 

From a business perspective:

There are many ways to take a $2,000 dollar investment and turn it into $1.024 Million dollars in ten years.

Say you are sitting at an office desk. You look around you and ponder the inventions and companies that produce those supplies/inventions. Each one of those objects made a million dollars for someone else.

The pencil. The wired phone, the LCD monitor, the wooden desk, the chair, the keyboard, the calculator, the vanilla folder, etc.

All of these had competing brands, yet all of those supplies were bought from a company that sold that object, and that company profited from your consumption. With earnings going to the company and founders, investors, and workers who made that product/service and buy/sell transaction possible for you to have that object.

Each office product you see in front of you became a Million dollar briefcase to someone else.

Of course, mustachians don't need $1 Million or even a Billion to FIRE and be Happy, it just may be a fun hobby to make your own businesses from nothing and then your own global enterprise empire after FI with any excess cash you happened to make doing the things you love to do anyway.
« Last Edit: July 01, 2013, 08:13:52 AM by Freeyourchains2 »

brewer12345

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #62 on: July 01, 2013, 09:17:25 AM »
Does anyone have a spare straitjacket and soem thorazine handy?

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #63 on: July 01, 2013, 10:19:02 AM »
the vanilla folder

Desk work was rough before the advent of food/filing hybrids. 

I'm all for the play the ($5000 - optionhouse's default value) virtual money stock game someone suggested a few posts ago.

Freeyourchains2

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #64 on: July 01, 2013, 10:55:50 AM »
the vanilla folder

Desk work was rough before the advent of food/filing hybrids. 

I'm all for the play the ($5000 - optionhouse's default value) virtual money stock game someone suggested a few posts ago.

I'm all for it too. Anything is possible, and people successfully do the impossible all the time. Your mind (let alone this universe) is a miracle, and you can do great, "impossible", things if you put your mind and willpower to it!

So any recommended websites you all like for this sort of virtual trading thing? I will probably start a separate thread soon for this. Because even some pre/after FI'ers may like to invest in short term and long term stock picking.

I was thinking http://www.marketwatch.com/game/

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #65 on: July 01, 2013, 11:02:04 AM »
the vanilla folder

Desk work was rough before the advent of food/filing hybrids. 

I'm all for the play the ($5000 - optionhouse's default value) virtual money stock game someone suggested a few posts ago.

I'm all for it too. Anything is possible, and people successfully do the impossible all the time. Your mind (let alone this universe) is a miracle, and you can do great, "impossible", things if you put your mind and willpower to it!

So any recommended websites you all like for this sort of virtual trading thing? I will probably start a separate thread soon for this. Because even some pre/after FI'ers may like to invest in short term and long term stock picking.

I was thinking http://www.marketwatch.com/game/

When you make your account FYC, can you make a second one called "arebelspy" and just do the opposite trades of everything from your main FYC account?

Thanks, that will save me a lot of time.

:)
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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #66 on: July 01, 2013, 11:18:52 AM »
An aside: Once one is an accredited investor ($1mm net worth), there are many investment options you can't access if you're not accredited, including vehicles like Master Limited Partnerships.

These are sector/allocation choices, not stock-picking. (I never stock-pick, speculate or try to time the market.) Being accredited simply gives you more opportunities than a non-accredited investor has.

(Now we return to our previously-scheduled... um... conversation.)

DoubleDown

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #67 on: July 01, 2013, 11:35:15 AM »

I forget that the public doesn't have access to classified intelligence reports. So carry on thinking that there are only 17,000 total.


Do you have access to classified intelligence reports?

brewer12345

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #68 on: July 01, 2013, 12:22:43 PM »
An aside: Once one is an accredited investor ($1mm net worth), there are many investment options you can't access if you're not accredited, including vehicles like Master Limited Partnerships.

These are sector/allocation choices, not stock-picking. (I never stock-pick, speculate or try to time the market.) Being accredited simply gives you more opportunities than a non-accredited investor has.

(Now we return to our previously-scheduled... um... conversation.)

It also gives you lots more opportunities to blow yourself up (see: Bernie Madoff).  Caveat emptor (big time) on this stuff.

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #69 on: July 01, 2013, 02:01:27 PM »
An aside: Once one is an accredited investor ($1mm net worth), there are many investment options you can't access if you're not accredited, including vehicles like Master Limited Partnerships.

These are sector/allocation choices, not stock-picking. (I never stock-pick, speculate or try to time the market.) Being accredited simply gives you more opportunities than a non-accredited investor has.

(Now we return to our previously-scheduled... um... conversation.)

It also gives you lots more opportunities to blow yourself up (see: Bernie Madoff).  Caveat emptor (big time) on this stuff.
I agree it is riskier. I have been investing in accredited-investors-only instruments with part of my portfolio for seven years. A long-term, private REIT placement (which I'm now winding down because it now stinks) returned an average of 12% per year. Have they all been big winners? No. But none have lost money. And all have outperformed safer investments (which I also hold). You have to be OK with one of your small, accredited betst blowing up or underperforming at some point.

Once you are accredited you are assumed to be experienced enough to thoroughly vet the opportunities. If you are not dispassionate and experienced enough (regardless of your net worth), you're better off with safer options.

(I am a little surprised I don't see more conversation about accredited investment opportunities here btw. I realized many are starting out, but many here are well over $1mm net worth and sophisticated investors.)

brewer12345

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #70 on: July 01, 2013, 02:24:57 PM »
An aside: Once one is an accredited investor ($1mm net worth), there are many investment options you can't access if you're not accredited, including vehicles like Master Limited Partnerships.

These are sector/allocation choices, not stock-picking. (I never stock-pick, speculate or try to time the market.) Being accredited simply gives you more opportunities than a non-accredited investor has.

(Now we return to our previously-scheduled... um... conversation.)

It also gives you lots more opportunities to blow yourself up (see: Bernie Madoff).  Caveat emptor (big time) on this stuff.
I agree it is riskier. I have been investing in accredited-investors-only instruments with part of my portfolio for seven years. A long-term, private REIT placement (which I'm now winding down because it now stinks) returned an average of 12% per year. Have they all been big winners? No. But none have lost money. And all have outperformed safer investments (which I also hold). You have to be OK with one of your small, accredited betst blowing up or underperforming at some point.

Once you are accredited you are assumed to be experienced enough to thoroughly vet the opportunities. If you are not dispassionate and experienced enough (regardless of your net worth), you're better off with safer options.

(I am a little surprised I don't see more conversation about accredited investment opportunities here btw. I realized many are starting out, but many here are well over $1mm net worth and sophisticated investors.)

Different strokes, of course.  Personally, I believe that most individual investors have no business trafficking in such things.  The business has evolved to where most of the really good opportunities are set up and aimed at institutional investors and individuals either have to be lucky to find a good one or make do with second rate offerings.  Glad yours have worked out to your satisfaction, however.

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #71 on: July 01, 2013, 02:37:02 PM »
An aside: Once one is an accredited investor ($1mm net worth), there are many investment options you can't access if you're not accredited, including vehicles like Master Limited Partnerships.

These are sector/allocation choices, not stock-picking. (I never stock-pick, speculate or try to time the market.) Being accredited simply gives you more opportunities than a non-accredited investor has.

(Now we return to our previously-scheduled... um... conversation.)

It also gives you lots more opportunities to blow yourself up (see: Bernie Madoff).  Caveat emptor (big time) on this stuff.
I agree it is riskier. I have been investing in accredited-investors-only instruments with part of my portfolio for seven years. A long-term, private REIT placement (which I'm now winding down because it now stinks) returned an average of 12% per year. Have they all been big winners? No. But none have lost money. And all have outperformed safer investments (which I also hold). You have to be OK with one of your small, accredited betst blowing up or underperforming at some point.

Once you are accredited you are assumed to be experienced enough to thoroughly vet the opportunities. If you are not dispassionate and experienced enough (regardless of your net worth), you're better off with safer options.

(I am a little surprised I don't see more conversation about accredited investment opportunities here btw. I realized many are starting out, but many here are well over $1mm net worth and sophisticated investors.)

Different strokes, of course.  Personally, I believe that most individual investors have no business trafficking in such things.  The business has evolved to where most of the really good opportunities are set up and aimed at institutional investors and individuals either have to be lucky to find a good one or make do with second rate offerings.  Glad yours have worked out to your satisfaction, however.
I actually agree with you. And I should add that only 4.5% of my portfolio is in these investments.  The rest is in really, really boring index-y stock and bond index funds.

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #72 on: July 01, 2013, 04:04:31 PM »
I was thinking http://www.marketwatch.com/game/

Okay, set it up.  I am sure there are some other people on here that would not mind playing.  I bet some will want to do it just to prove you cannot beat the market.  I would guess they have ETF options right? 

I'd say "advanced" mode, whatever amount of money, but no margin. 

JamesAt15

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #73 on: July 01, 2013, 08:07:39 PM »
I'd be interested in playing or at least being able to see the results of the other players. But it seems to me like we would need to have a pretty long time frame for this game to draw any real conclusions. Do they let you start a game with a (say) five year time period?

Although I imagine the players will lose interest long before then.

grantmeaname

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #74 on: July 01, 2013, 08:14:54 PM »
Why don't we just each see who can pick the best five stocks from the last five years?

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #75 on: July 01, 2013, 08:27:20 PM »
Why don't we just each see who can pick the best five stocks from the last five years?

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workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #76 on: July 02, 2013, 05:37:30 AM »
we would need to have a pretty long time frame for this game to draw any real conclusions. Do they let you start a game with a (say) five year time period?
Although I imagine the players will lose interest long before then.

I for one would lose interest.  It is more about estimating alpha, albeit anecdotal, from thinking about stock picks rather than ETFing all funds.  I think a few "competitors" should be chosen that just do some agreed ETF.  I was thinking more of a 3 month period, though we could re-up it 20 times if the interest remains.  I suspect that within the first season or two we will have a good enough idea that the return on effort (even if it is just logging  in to virtually choose stocks we already are researching for real money) will be diminishing.

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #77 on: July 02, 2013, 10:05:11 AM »
we would need to have a pretty long time frame for this game to draw any real conclusions. Do they let you start a game with a (say) five year time period?
Although I imagine the players will lose interest long before then.

I for one would lose interest.  It is more about estimating alpha, albeit anecdotal, from thinking about stock picks rather than ETFing all funds.  I think a few "competitors" should be chosen that just do some agreed ETF.  I was thinking more of a 3 month period, though we could re-up it 20 times if the interest remains.  I suspect that within the first season or two we will have a good enough idea that the return on effort (even if it is just logging  in to virtually choose stocks we already are researching for real money) will be diminishing.

But if enough monkeys do it, one of the darts will hit a home run in the superbowl.
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workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #78 on: July 02, 2013, 10:29:59 AM »
But if enough monkeys do it, one of the darts will hit a home run in the superbowl.

I fail to understand how derision of a person testing a hypothesis furthers your argument.  Also, what do you think will more poignantly get a certain poster to stop spouting nonsense - feeding his desire to debate, or testing and possibly proving him to be less than omniscient?

On a side note, there is a strongly documented psychological bias toward loss avoidance over gain seeking.  I think that is part of why all mutual funds (including ETFs) are so appealing.  I personally would let 3 of my monkeys get shot if the fourth pulls out a sand wedge to score a hat trick at Wimbledon.  Or, more likely, I would expect that of the four stocks picked because they seem superior, one slightly trails, one roughly meets , one slightly exceeds and one is actually superior than the market average. 

FWIW, my anecdotal track record over the last 4 years is roughly double my funds performane (mid-30's vs. high teens).  Well, at least it is in my retirement accounts - in my non-retirement accounts, my brain told me to make moves that would have granted that, however I let my emotional avoidance of short-term capital gains taxes dissuade me.  As a result, it has been only comparable over the same period.  I need to learn to accept taxes (until I can get everything into tax sheltered accounts).

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #79 on: July 02, 2013, 10:41:14 AM »
But if enough monkeys do it, one of the darts will hit a home run in the superbowl.

I fail to understand how derision of a person testing a hypothesis furthers your argument.  Also, what do you think will more poignantly get a certain poster to stop spouting nonsense - feeding his desire to debate, or testing and possibly proving him to be less than omniscient?

You clearly missed the point of my post.

I wasn't talking about one monkey, but enough.

Or, to simplify it for you: The problem with such an "experiment" over such a short timeframe is variance.  If a bunch of people pick some random stocks over a short time period and hit a grand slam, boom, 110% return, yay.  And how does that help this poster?  He'll point to it as a fact that "See? It's possible! The universe is infinite and majestic and the sun gives a million solar lumens and that shows the stock market can as well!"

It's counter productive, due to the fact that enough monkeys can, and will, hit a home run, simply due to variance and randomness.

That doesn't prove any method as working.
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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #80 on: July 02, 2013, 11:25:46 AM »
But if enough monkeys do it, one of the darts will hit a home run in the superbowl.

I fail to understand how derision of a person testing a hypothesis furthers your argument.  Also, what do you think will more poignantly get a certain poster to stop spouting nonsense - feeding his desire to debate, or testing and possibly proving him to be less than omniscient?

You clearly missed the point of my post.

I wasn't talking about one monkey, but enough.

Or, to simplify it for you: The problem with such an "experiment" over such a short timeframe is variance.  If a bunch of people pick some random stocks over a short time period and hit a grand slam, boom, 110% return, yay.  And how does that help this poster?  He'll point to it as a fact that "See? It's possible! The universe is infinite and majestic and the sun gives a million solar lumens and that shows the stock market can as well!"

It's counter productive, due to the fact that enough monkeys can, and will, hit a home run, simply due to variance and randomness.

That doesn't prove any method as working.

The more important point is to develop your open mind to taking a chance and creating something greater then there ever was before.

Everything we have now, was once "impossible" to the rest of the human population, except to that one or group of individuals that made it possible, through hard work and determination, after taking an initial risk.

I'm not saying invest 100% of your MMM portfolio into an extreme risk for a grand slam at all! And no one should ever!

But even a little bit of money before FI, and/or excess cash from fun hobbies after FI, can be enough to make the impossible, possible! As long as you have fun taking a risk and action to get started!

grantmeaname

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #81 on: July 02, 2013, 11:26:51 AM »
Lumens.

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #82 on: July 02, 2013, 12:21:27 PM »
Lumens.

Not sure if that is meant to be enlightening :) though from the inanity undercurrent of this thread, my mind went immediately to lupins, a la the documentary of Dennis Moore by Monty P.

Freeyourchains2, please stop digging your hole, and instead create the competition to provide anecdotal evidence of your merit.  Also, create a new thread (and link to it from here), without any excelsior overtones - just say something like "We are running a little competition on stock picking.  We are running a few ETFs as the control/AI competition.  Feel free to join in.  Rules are:  .... no margin." I will participate, and perhaps others will as well.

Arebelpsy,  while I understand the merit in your argument, I still believe this is a better way to approach.  Your nightmare scenario is his default, so I only perceive potential upside.

I like the idea of ETFs, its just that I expect the 25 "best-priced" stocks would have a better than 50% chance of exceeding the 400 "best-priced."  I am still looking for some ETF that just tracks the 20-50 most "juicy" value (low p/e, low p/bv, reasonable p/eg, decent cashflow, etc.) stocks.  If anyone knows of one (rather than a 400-stock index), please inform me.  Bonus points if it includes some of those emotional indicators into the analysis as a secondary filter (location relative to moving averages, etc.) since automated value investing seems to be exceptionally prone to catching falling knives. 

Freeyourchains2

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #83 on: July 02, 2013, 01:45:13 PM »
k, no problem.

Stock Picking game starts here next monday:

http://www.mrmoneymustache.com/forum/investor-alley/investor-alley-stock-trading-game/

with no margins.


arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #84 on: July 02, 2013, 02:00:02 PM »
Soooo who can predict which stocks will perform well over the next 3 months, huh?

Sounds fun and educational!
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workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #85 on: July 02, 2013, 02:11:53 PM »
Soooo who can predict which stocks will perform well over the next 3 months, huh?

Sounds fun and educational!

So, what other negatives would you like us to prove while we are at it?  The absence of god is always a fun one.

What are your favorite 3-5 ETFs and I'll put them in as the baseline.

Its mostly for fun/idea bouncing BUT if the self-managed returns are less than the baseline, I am certain this will be referenced as educational without sarcasm.  The inverse is not necessarily true...

matchewed

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #86 on: July 02, 2013, 08:55:45 PM »
Regardless of the results from a crappy experiment it is still a crappy experiment.

JamesAt15

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #87 on: July 03, 2013, 01:13:26 AM »

What are your favorite 3-5 ETFs and I'll put them in as the baseline.

Its mostly for fun/idea bouncing BUT if the self-managed returns are less than the baseline, I am certain this will be referenced as educational without sarcasm.  The inverse is not necessarily true...

ARS may have his own ideas, but I was planning to play using basically the Bogleheads Three-Fund portfolio.

I was thinking 50% Vanguard Total Stock Market Index Fund (VTSMX), 30% Vanguard Total International Stock Index Fund (VGTSX), and 20% Vanguard Total Bond Market Fund (VBMFX).

I am also toying with the idea of entering a second account as a monkey-with-darts portfolio. Was thinking of watching FYC2's trades and when he buys a stock, to also buy a stock chosen basically at random from the same industry class. Or maybe I would choose what looked to be the biggest dog in that class. I would sell after I noticed his sales.

JamesAt15

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #88 on: July 03, 2013, 01:20:39 AM »
we would need to have a pretty long time frame for this game to draw any real conclusions. Do they let you start a game with a (say) five year time period?
Although I imagine the players will lose interest long before then.

I for one would lose interest.  It is more about estimating alpha, albeit anecdotal, from thinking about stock picks rather than ETFing all funds.  I think a few "competitors" should be chosen that just do some agreed ETF.  I was thinking more of a 3 month period, though we could re-up it 20 times if the interest remains.  I suspect that within the first season or two we will have a good enough idea that the return on effort (even if it is just logging  in to virtually choose stocks we already are researching for real money) will be diminishing.

Well, that's too bad, though it does highlight one of the strengths of passive investing - once you set up your account and buy your funds, there's pretty much no effort and you can keep it up as long as you care to. I'll even commit to doing a portfolio rebalance every year if we were to keep this up.

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #89 on: July 03, 2013, 08:10:58 AM »
I was thinking 50% Vanguard Total Stock Market Index Fund (VTSMX), 30% Vanguard Total International Stock Index Fund (VGTSX), and 20% Vanguard Total Bond Market Fund (VBMFX).

I am also toying with the idea of entering a second account as a monkey-with-darts portfolio. Was thinking of watching FYC2's trades and when he buys a stock, to also buy a stock chosen basically at random from the same industry class. Or maybe I would choose what looked to be the biggest dog in that class. I would sell after I noticed his sales.

I totally support running multiple accounts, particularly if just passive baselines.  And the monkey-with-darts portfolio sounds awesome, though I would put my money on the person who chose intentionally > chose from that asset class at random > chose biggest dog.  Unless biggest dog means most undervalued, which is what I would choose intentionally...

Looking back at how my stock picks did over the last 4 years, I am beginning to realize how ridiculously short a 3 month timeline is.  Its more about betting momentum than value.  All my decisions have been value based, and most of my gains have happened in a span of a month, which was not necessary in the first three months of owning the stock (but almost always in the last three months...)

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #90 on: July 03, 2013, 08:24:47 AM »
Does anyone have a spare straitjacket and soem thorazine handy?

+1

I think we need a detailed diagram immediately, freeyourbrains.

Before the NSA, Goldman Sachs and George Soros have you tracked down and kidnapped. This is a breakthrough of genius proportions.

grantmeaname

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #91 on: July 03, 2013, 08:26:43 AM »
And the monkey-with-darts portfolio sounds awesome, though I would put my money on the person who chose intentionally > chose from that asset class at random > chose biggest dog.
I'd put my money on them finishing all about the same if the experiment were repeated enough times. That's the difference between the efficient market viewpoint and the I'm-smarter-than-the-market viewpoint.

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #92 on: July 03, 2013, 09:58:14 AM »
the efficient market viewpoint...

Is this the viewpoint that people act rationally without emotion individually, and trends even moreso en masse, and that sufficient persons remain hypervigilant to eliminate any discrepancies from reasonable value, before, um, persons can determine discrepancies from reasonable value?  I forget - is it only applicable to the stock market, or all aspects of life?

Anyway, for fear of being tagged as a silly trader and lumped in with FYC2, I will make an attempt to refrain from stating any interest in stock picking on perceived merits.

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #93 on: July 03, 2013, 10:10:11 AM »
the efficient market viewpoint...

Is this the viewpoint that people act rationally without emotion individually, and trends even moreso en masse, and that sufficient persons remain hypervigilant to eliminate any discrepancies from reasonable value, before, um, persons can determine discrepancies from reasonable value?  I forget - is it only applicable to the stock market, or all aspects of life?

Anyway, for fear of being tagged as a silly trader and lumped in with FYC2, I will make an attempt to refrain from stating any interest in stock picking on perceived merits.

It's actually the viewpoint that putting up a ridiculous character (often called a "straw man") of another viewpoint will somehow make you win an argument or be right.

Well done, you've fully embraced it.
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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #94 on: July 03, 2013, 10:20:53 AM »
OP fits so well into the book I'm reading right now -  "the match king. Ivan Kreuger, the financial genius behind a century of wall street scandals." By Frank Partnoy.

http://frankpartnoy.com/the-match-king/

Highly recommended reading for any investor.

workwheniwantto

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #95 on: July 03, 2013, 10:30:10 AM »
"straw man"

I am inferring you meant I was putting forth a straw man of efficient market theory.  Unfortunately, that is what I understand the premise of it to be, in terse form.  I am open to being wrong and expanding my understanding.

I try to be rational to a fault, so when someone indicates I have made a logical fallacy, I want to verify the claim and correct it.  Especially if it is a systemic problem rather than a lack of information.  Not sure it is helpful for others, and as a global mod you are probably a better judge of that, so choose to do so by message or publicly as you prefer. 

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #96 on: July 03, 2013, 10:34:55 AM »
OP fits so well into the book I'm reading right now -  "the match king. Ivan Kreuger, the financial genius behind a century of wall street scandals." By Frank Partnoy.

http://frankpartnoy.com/the-match-king/

Highly recommended reading for any investor.

Added to my list; thanks!
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kyleaaa

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #97 on: July 03, 2013, 11:29:11 AM »
I am inferring you meant I was putting forth a straw man of efficient market theory.  Unfortunately, that is what I understand the premise of it to be, in terse form.  I am open to being wrong and expanding my understanding.

No, the efficient market hypothesis does not require individuals to act rationally and unemotionally. It doesn't care about individual investors at all, in fact, but merely the aggregate result. Since prices are set at the margin, it doesn't take much for them to be set correctly as the emotional crazies tend to cancel themselves out. Note that the efficient market hypothesis DOES NOT SAY you can't beat the market, merely that you can't beat the market reliably after expenses except through luck without having possession of inside knowledge.

arebelspy

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Re: What about a Successful Business or Long Term Investment Scenario?
« Reply #98 on: July 03, 2013, 12:03:41 PM »
No, the efficient market hypothesis does not require individuals to act rationally and unemotionally. It doesn't care about individual investors at all, in fact, but merely the aggregate result. Since prices are set at the margin, it doesn't take much for them to be set correctly as the emotional crazies tend to cancel themselves out. Note that the efficient market hypothesis DOES NOT SAY you can't beat the market, merely that you can't beat the market reliably after expenses except through luck without having possession of inside knowledge.

This, and also see strong vs weak EMH.
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