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

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

#111

Post by dharmon »

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…

Off the top of my head: Baupost Group (Seth Klarman), Greenlight (David Einhorn), Gotham (Howard Marks), Renaissance (Jim Simons), Oaktree (Joel Greenblatt), Graham & Newman (Benjamin Graham), Magellan (Peter Lynch), Pabrai (Mohnish Pabrai), ...

Most of these are closed and closely held. Keeping your capital base small with long-term-minded investors (e.g., "family" money) is a huge leg up.

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

#112

Post by writtles »

Too many naysayers in this thread (get burned before guys?).

Motley Fool Investment Guide is where I started. I've subscribe to their Stock Advisor newsletter for nearly a decade and have picked from their recommendations in that newsletter. Basically i've invested money in one of their picks once per month with the expectation to hold that investment for 10+ years. That portfolio has gained an average of 25% PER year and I've never researched a stock.

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

#114

Post by acconrad »

writtles wrote: post #112

Too many naysayers in this thread (get burned before guys?). Motley Fool Investment Guide is where I started. I've subscribe to their Stock Advisor newsletter for nearly a decade and have picked from their recommendations in that newsletter. Basically i've invested money in one of their picks once per month with the expectation to hold that investment for 10+ years. That portfolio has gained an average of 25% PER yea…

When did you start investing? Because by saying "never researched a stock" sounds like you have been lucky in a bull market rather than investing for decades across multiple bull/bear cycles.

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

#115

Post by acconrad »

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…

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 variety of reasons:

* They've hit rock bottom in the last 1/3/5 years. If people are selling, you should look at buying.

* They're special situations. Is the stock going through the process of bankruptcy, merger/acquisition, spin-off? This is the basis for books like Margin of Safety and You Can Be a Stock Market Genius.

* They're complicated. Distressed debt, credit-default swaps, and other alternative investments to access by the public can be profitable if one is willing to put in the time (years) and dedication to analysis, but I generally wouldn't recommend it

* They don't fit the fund's portfolio / low institutional ownership. Active funds may employ thousands of people to work full-time on investments that suit their fund. This generally means large cap companies because the funds have to utilize so much capital that they can't waste it on institutional ownership of small and micro cap companies. Everyone and their mom has done research analysis on Google, few spend their time on Sanderson Farms, which only broke into mid-cap territory for the first time in over a year, and has since risen by over 10% after being massively undervalued.

If you are in a diversified basket of 15-30 value-oriented stocks with at least some focus on quality, you can stand to beat the market over the very long term.

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

#116

Post by brianpgordon »

aforarnold wrote: post #110
brianpgordon wrote: post #92

Earlier quoted context omitted.

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…

The services you mentioned only for US, or anyone can access it. For example EU citizens can also open account and set periodic investment?

There are some Quora questions about that:

https://www.quora.com/Is-there-an-equivalent-company-to-Weal...

The answer from some brief poking seems to be that there's nothing in the greater EU right now.

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

#117

Post by jimcsharp »

dsacco wrote: post #99
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'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…

It's investment hyperbole. Like when a gun enthusiast tells you "your gun is always loaded"

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

#118

Post by wdr1 »

acconrad wrote: post #115
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…

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?

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

#119

Post by dandelany »

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…

Or as Keynes put it, "The market can stay irrational longer than you can stay solvent."

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

#120

Post by bbcbasic »

dwc wrote: post #91
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…

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 own shares given to me in a company I used to work for that has now floated. I am keeping the shares, which is effectively a pick but I know it is well run and very good at executing value acquisitions
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