Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Investing Returns on the S&P500

github.com

Post reply on HN
Print view View original

111–120 of 357 posts

Re: Investing Returns on the S&P500

#111

Post by Coding_Cat »

hellofunk wrote: post #93
dforrestwilson wrote: post #36

Earlier quoted context omitted.

1. If you're right 51% of the time when you invest you're going to get rich. Unfortunately the odds of you being right 51% of the time are incredibly low. 2. Heed Rule #1, and put most (if not all) of your money in broad market ETFs. 3. If you DO decide to actively invest, think about your strengths both in terms of character and industry knowledge and play to those. I don't know jack about healthcare and have had my…

> If you're right 51% of the time when you invest you're going to get rich. Sorry, but this is completely incorrect. The approximate formula for success in investing or trading is "percentage right" * "average win profit" - "percentage wrong" * "average loss" = overall profit. Many traders are correct only 20% of the time (I'm looking at you, stock options traders) but make fortunes because they understand this formu…

And take in mind, most returns are relative to your initial investment, if you reinvest your profits so you have a static % 'at risk' the bad results will hit you harder than the good ones. Lose 50% and you need to make 100% RoI to get back to the start. Win 100% and you only need to lose 50% to get knocked back.

And there are also catastrophic losses, if you play it too risky, where you won't have enough to continue investing after a particular hard hit.

Re: Investing Returns on the S&P500

#112

Post by strictnein »

mark_edward wrote: post #41
georgeecollins wrote: post #37

Earlier quoted context omitted.

100 years ago you would have probably mostly invested in the UK, French, German and Russian stock market as well as the US. So if you want to predict the next 100 years I would try to combine the performance of the UK and the US, on the assumption that US is going to behave economically like an existing power rather than an up and coming power. Also, just as some risky "foreign" markets did awesome a hundred years ag…

You would've bought Russian stock in 1916?

Or the UK, France, and Germany during WW1. Seems suboptimal.

Re: Investing Returns on the S&P500

#113

Post by known »

Just find out how to do insider trading without getting caught.

This is even better :)

"Give me control of a nation's money supply, and I care not who makes its laws." --Rothschild, 1744

Re: Investing Returns on the S&P500

#114

Post by SilasX »

mark_edward wrote: post #41
georgeecollins wrote: post #37

Earlier quoted context omitted.

100 years ago you would have probably mostly invested in the UK, French, German and Russian stock market as well as the US. So if you want to predict the next 100 years I would try to combine the performance of the UK and the US, on the assumption that US is going to behave economically like an existing power rather than an up and coming power. Also, just as some risky "foreign" markets did awesome a hundred years ag…

You would've bought Russian stock in 1916?

If one took the long-term "buy and hold" strategy, there would be no reason not to include Russia in your portfolio, in proportion to its relative market cap.

Of course, "buy and hold" would have been very wrong in that era (two of your superpowers would permanently tank), as it might be in this one.

Re: Investing Returns on the S&P500

#115

Post by jgalt212 »

charlesdm wrote: post #67
dforrestwilson wrote: post #36

Earlier quoted context omitted.

1. If you're right 51% of the time when you invest you're going to get rich. Unfortunately the odds of you being right 51% of the time are incredibly low. 2. Heed Rule #1, and put most (if not all) of your money in broad market ETFs. 3. If you DO decide to actively invest, think about your strengths both in terms of character and industry knowledge and play to those. I don't know jack about healthcare and have had my…

+1 for using industry knowledge. Most of my money is invested in ETFs, however, I've been able to beat the market by significant amounts when I invested in tech stocks because I understood what drives the price. There are plenty of small cap tech stocks that have doubled / tripled the last few years. Understand the market, understand the product and technology well, and you can do significantly better than any wall s…

> Understand the market, understand the product and technology well, and you can do significantly better than any wall street analyst. Don't rush into it, but do your research. Look at the numbers and the growth potential.

This is very dangerous advice because it just ain't true. Under efficient markets, you can do equally well as "any wall street analyst"

Re: Investing Returns on the S&P500

#116

Post by chollida1 »

mailshanx wrote: post #100
chollida1 wrote: post #4

Cool, this is very similar to what I had people do at one point as part of the interview process. Give them a bunch of historical data - find me the longest period that we would be flat/negative - find the best time to invest - find the optimal portfolio off stocks to hold over a given period. I think I've said this before but I see too many people who think that they need to have a huge public repository of code to…

I'm interested in walking the quant path. Just how high is the bar? And would there be an equivalent project that would put a prospective quant to the top of the resume pile?

I've attached two pdf's on what you should expect.

The latter was the take home an old company used to give quants as a test. If you can answer the questions on teh practicum then you probably have enough math skills to start as a quant.

https://drive.google.com/folderview?id=0B1iikX5PwNx4d2dKQ3FT...

Re: Investing Returns on the S&P500

#117

Post by ryandrake »

dceddia wrote: post #95
ryandrake wrote: post #92

Funny how his time horizon stretches out to 150 years, where the vast majority of people don't live past 100, and have probably, what 25-35 or so years of investing time in their lives? The insanely long term is a simplified look at the stock market as some money-multiplication machine, but I don't think it is really that to most people. Given a normal person's time horizon, the difference between "did I start invest…

A little further down it shows graphs of a "typical investing timeline" from around age 20 to age 60. It still looks pretty solid.

Ahh, you're right. My comment is directly addressed in the article--that's what I get for skimming it. My only nit then would be that I don't know too many people in their 20s putting money into the stock market. Most people that age are spending every dollar they make on rent and their student loans. You're probably not in the position to "invest" until you have a professional job, well into your thirties.

Re: Investing Returns on the S&P500

#118

Post by kerryfalk »

Chris2048 wrote: post #96
charlesdm wrote: post #67

Earlier quoted context omitted.

+1 for using industry knowledge. Most of my money is invested in ETFs, however, I've been able to beat the market by significant amounts when I invested in tech stocks because I understood what drives the price. There are plenty of small cap tech stocks that have doubled / tripled the last few years. Understand the market, understand the product and technology well, and you can do significantly better than any wall s…

But how do you understand the market? Is looking at the company numbers enough, or do you have to look at companies in detail? Is domain knowledge enough, or do you need to look at corporate culture, people and business plans? How fast do you need to be, in term of reacting to events?

To answer your first question: be a part of it, either as a consumer or a producer.

My professional life now revolves around mining. I'm confident to know who to invest in and who not to.

My personal life centers around various hobbies - I'm confident I could choose a few companies in those spaces to invest in. Unfortunately, most of those are well performing private companies.

Re: Investing Returns on the S&P500

#119

Post by emblem21 »

phonon wrote: post #101
comboy wrote: post #86

Earlier quoted context omitted.

This bet ends in less than 2 years. Does anybody know what would be the result if it would end now? edit: I guess it depends on the detailed terms that they haven't disclosed, but educated guesses are fine

65.67% vs. 21.87% returns so far (net after fees) http://fortune.com/2016/05/11/warren-buffett-hedge-fund-bet/ Almost impossible for Warren to lose at this point.

Hedge funds are downstream of money with performance-driven interest.

Markets (the major players that skew the averages) are downstream of banks who use money the Fed's pay the interest on.

His gamble is that the elite would rather give the market unlimited welfare a la Japan to keep the signals of valid global demand alive.

The Fed will not allow a correction... mostly for political reasons.

Re: Investing Returns on the S&P500

#120

Post by planteen »

VLM wrote: post #109
jakozaur wrote: post #12

I don't think it is fair to say that next 100 years will be same as last 100 years: 1. GDP growth is not as high as it used to be anywhere in developed world: http://www.oecd.org/std/productivity-stats/oecd-compendium-o... 2. USA is superpower at the peak. Plenty of other stock market economies hasn't been so successful. E.g. Argentina used to be one of the richest country in the world. Investing in history is easy,…

A tuyere is a weird, tough, heat proof, somewhat hard to make (depending on your local technological level) compressed air nozzle. If there's a steel mill blast furnace nearby, you can make a fat stack of cash making and selling tuyeres. Its kind of a specialists metalworking job in that an idiot can make one that doesn't last and falls apart at the worst possible time causing thousands of dollars of missed productio…

> I'd estimate a century ago "everyone" in my family and maybe in the country worked for a stock market financed industrial company, or indirectly in that all their revenue came from stock market financed industrial companies.

That is not true at all of my family - they were all farmers until my parent's generation. To pull out some real statistics: in 1870, over 50% of Americans were farmers. A century ago it looks like about 30%.

https://www.agclassroom.org/gan/timeline/farmers_land.htm

Post reply on HN