Ask HN: How did you learn about stocks and the market? • Hacker News Board

Re: Ask HN: How did you learn about stocks and the market?

#121

Post by huac » Tue, Apr 19, 2016, 11:11 PM UTC

lloyd-christmas wrote: post #76

Homunculiheaded wrote: post #65

If you really want to dive into the technical details there's really no better book than Hull's "Options, Futures, and Other Derivatives". It's extremely well written and if you have a basic understanding of calculus and probability the math isn't too difficult. The only catch is that it is a very expensive book, but if you buy a used copy a few editions back it is more affordable. Also don't worry about the "derivat…

+1. I worked as an equities trader and this still sat on my desk in place of any equities books. > Personally, I think the basics of quantitative finance are just as relevant to Data Science as machine learning is. 100% agree. As a hobbyist on the data science side, I still refer back to the book whenever I get a "this looks familiar" thought.

do you have any particular points of crossover OTOH? interested in what some similarities between data science ~ quant finance are.

Re: Ask HN: How did you learn about stocks and the market?

#122

Post by dwc » Tue, Apr 19, 2016, 11:13 PM UTC

brianpgordon wrote: post #100

dwc wrote: post #91

Earlier quoted context omitted.

Agreed, with one exception: when you as an individual have fairly deep knowledge about something and spot a market opportunity based on that knowledge, you might be able to correctly judge whether you can take advantage of it. I've done this several times and made good money. Two times I approximately doubled my money over the course of several months. Yeah, not day trading but buying and waiting for the market to fi…

I admit that's a possibility, but be very careful and very limited in your domain. Stupid shit is wildly successful all of the time, and brilliant offerings fail all of the time. The market still hasn't figured out that SharePoint sucks and enterprise lock-in from vendors like Oracle is predatory and bad for business. Amazing achievements like NeXT and the Amiga never made money. Gimmicks like the Amazon Echo and the…

I'm as bad at those kind of picks as the next person. I wasted time and money figuring that out, though.

The only time I buy in is when the market overreacts to some bit of bad news or something and I see the undervaluation. Of a strong, established company.

Re: Ask HN: How did you learn about stocks and the market?

#123

Post by n13 » Tue, Apr 19, 2016, 11:25 PM UTC

dforrestwilson wrote: post #79

eorge_g wrote: post #11

"A Random Walk Down Wall Street" is THE book I recommend for accessible framework on the different strategies people approach the stock market and investing. http://www.amazon.com/gp/product/0393352242 Edit: WSJ Review: “Talk to 10 money experts and you’re likely to hear 10 recommendations for Burton Malkiel’s classic investing book.”

Khan Academy is a great resource for this. Salman worked in finance. And it really does depend on how deep down the rabbit hole you want to go. I do equity research now... feel free to contact me.

There's no contact information on your profile!

Re: Ask HN: How did you learn about stocks and the market?

#124

Post by n13 » Tue, Apr 19, 2016, 11:42 PM UTC

fiftyacorn wrote: post #64

acconrad wrote: post #34

Intelligent Investor and it's even denser cousin, Securities Analysis (both by Graham) are often touted as must reads without the recommender actually reading them. I have read both and you can safely skip most chapters. I can summarize for you, that based on your description in this post, you are what Ben Graham calls a Defensive Investor, as you want to preserve capital without being able to make significant time o…

Ive read Intelligent Investor twice - and there is a chapter midway through the annotated version which basically says that if you arent willing to put in the time finding value shares then stick with passive investing in low cost funds. I also read Buffetts share letter and he frequently touts how well passive investing would do, even with respect to Berkshire Hathaway Im purely passive now based mostly on boglehead…

Would you please mind giving some examples of low-cost ETFs?

Re: Ask HN: How did you learn about stocks and the market?

#125

Post by jamez1 » Wed, Apr 20, 2016, 12:11 AM UTC

brianpgordon wrote: post #80

You will never, ever beat the market by making smart trades. Get real- you're a beginner reading investopedia. Active funds employ hundreds or thousands of people who work more than full-time to support an operation of systematically studying investment opportunities and exploiting inside information to beat the market, and even they don't beat the market. Put your money in a diversified portfolio of index funds and…

There's a lot of folklore about how active funds consistently under perform passive funds, but that's only in aggregate.

If you aggregate a few active funds they will be a good proxy for the index, which after fees, will have less returns than buying the index.

There is dependence in active fund returns, a good fund will consistently be a good fund, and a bad fund will consistently be a bad. You also have selection bias, because the best funds do not tell the public they exist, while the worst prey on public money to exist.

From the public's point of view, of course active funds are all bad. From those in active fund management we gain nothing from correcting them.

Journalists don't care for the truth and we don't care for their falsehoods.

Re: Ask HN: How did you learn about stocks and the market?

#126

Post by peller » Wed, Apr 20, 2016, 12:27 AM UTC

I want to ask, what is it that you consider the "investing perspective?" Unless you _never_ plan on closing out your position, then at _some_ point, you will have to sell (or cover, as the case may be). My point is, even if buy-and-hold investing suits your personality more than any other style, technically, you are still a trader. Or more specifically, if you want to learn to reliably make money more often than not, you are going to need to learn to think like a trader, even if you prefer to fancy yourself an investor.

Things to note: This is going to be hard work. It will take time (years for most). Take notes on everything you think and do (keep a trading journal).

You will loose money at first (consider it your "tuition").

Don't put too much weight on the publication date of a resource. Certainly, some specifics of market implementation have changed over the years, but as a whole, human nature (fear and greed) is the same now as it was when the first humans decided to build financial markets.

I know you didn't mention books as a preferred learning source, but, IMO they contain the most condensed stores of knowledge by the most reputable people (read: retired and/or independent) on this subject. Here's my list of recommendations:

High Probability Trading by Marcel Link

How Technical Analysis Works by Bruce Kamich

How to Buy by Justin and Robert Mamis (out of print; worth every penny)

When to Sell by Justin and Robert Mamis

Trading in the Zone by Mark Douglas (don't underestimate the importance of getting your psyche under control!)

Japanese Candlestick Charting Techniques by Steve Nison Market Wizards by Jack Schwager (these are well worth reading)

And of course, the timeless classic, Reminiscences of a Stock Operator by Edwin Lefevre

Good luck!

Re: Ask HN: How did you learn about stocks and the market?

#127

Post by crazypyro » Wed, Apr 20, 2016, 12:53 AM UTC

brianpgordon wrote: post #92

protomok wrote: post #54

Earlier quoted context omitted.

+1 for Index investing - also called passive investing, couch potato investing etc. It is so simple and elegant I can put it in code: // Decide asset allocation based on risk tolerance. E.g. 75% Stocks / 25% Fixed income set_asset_allocation(risk_tolerance) // Determine which index you want to track. E.g. 25% Canada (TSX) // 25% US (S&P500), 25% Developed World (MCSI EAFE) select_funds(list_of_funds) // Set up automa…

And there are services now which automate this. For a management fee (generally 0.025%/year) you can set up automated recurring deposits, choose a risk tolerance, and let the algorithm continuously rebalance your portfolio automatically in a tax-efficient way. Just click some nice big friendly buttons and enter your information and forget about it, and watch your portfolio grow (or drop, with the market). I work at a…

Are you sure about that management fee number? Your company's website differs.

Re: Ask HN: How did you learn about stocks and the market?

#128

Post by log0 » Wed, Apr 20, 2016, 12:56 AM UTC

baccredited wrote: post #93

brianpgordon wrote: post #80

You will never, ever beat the market by making smart trades. Get real- you're a beginner reading investopedia. Active funds employ hundreds or thousands of people who work more than full-time to support an operation of systematically studying investment opportunities and exploiting inside information to beat the market, and even they don't beat the market. Put your money in a diversified portfolio of index funds and…

>You will never, ever beat the market by making smart trades. Agree. Just buy ticker VOO and get on with your life. Even Warren Buffet has said to buy 90% VOO and 10% bonds. And you will never be as good at this as Warren Buffett. That said, I take 10% of my net worth and put it in a 'casino fund' where I can buy whatever I want. Startups, peer to peer nonsense, individual stocks, and so on.

Curious question to all you investment experts. The SPY/VOO guys did not improve since 2015 and even now. Proponents of the SPY/VOO are based on the 2008... which has been rising until 2015. So how is investing into index fund ETFs still relevant today? Just earn on dividends?

Re: Ask HN: How did you learn about stocks and the market?

#129

Post by Spooky23 » Wed, Apr 20, 2016, 1:33 AM UTC

wdr1 wrote: post #118

acconrad wrote: post #115

Earlier quoted context omitted.

But you can beat the market by doing a few things: 1. Invest, don't trade. That means buying companies in large quantities when they're at a bargain, and holding for a long time (think years or even decades). This will keep your costs and commissions down. 2. Look where others won't. As Ben Graham and Seth Klarman have pointed out in their books, you want to look for companies that no one else is looking at for a var…

Any support evidence?

I've been investing like this since high school and that portfolio consistently beats the performance of the Boglehead style 401k & 457 plans that I am stuck with from my employers.

I use a narrower field of 5-8 companies, a reasonable cash portfolio and occasionally municipal bonds. It's like anything else, if you are motivated, it's quite possible to find undervalued assets with good potential.

Re: Ask HN: How did you learn about stocks and the market?

#130

Post by Spooky23 » Wed, Apr 20, 2016, 1:44 AM UTC

the_gastropod wrote: post #107

dsacco wrote: post #99

Earlier quoted context omitted.

You're making a lot of absolute statements that are demonstrably false. >> You will never, ever beat the market by making smart trades. How do you define "smart" trades? There are people and firms which consistently beat the S&P 500 after fees and trade commissions on a timeline of 20+ years without using insider trading. What would this be called, other than "smart" trading? >> Active funds employ hundreds or thousa…

>There are people and firms which consistently beat the S&P 500 after fees and trade commissions on a timeline of 20+ years without using insider trading. What would this be called, other than "smart" trading? Mind naming a few? I'm unfamiliar with any firms that consistently can beat the S&P 500, much less for 20+ consecutive years. This could, of course, be called "luck". Given the number of investors, some will in…

There is a difference between an institutional investor or advisors with fiduciary responsibility and a free agent. Professionals have consequences for fucking up beyond the money lost. So they always parrot whatever advice will not get them sued.

Warren Buffet has been quoted elsewhere in this story recommending index funds. But, funny enough, his own behavior is 180 degrees from that.

I always find these threads amusing. The average commenter treat stocks as some sort of black magic that requires a mystical priesthood of professionals to touch. But nobody says "OMG, buying a house is a crazy investment, buy a REIT ETF and rent!"

Stocks are like any other commodity. My wife is an aggressive shopper -- she understands the marketing cycles and can get 6 months of Tide for $0.50 on the dollar. With some work, you can get deals on equites.