Investing Returns on the S&P500 • Hacker News Board

Re: Investing Returns on the S&P500

#151

Post by arjie » Wed, Jun 29, 2016, 4:35 PM UTC

charlesdm wrote: post #134

jgalt212 wrote: post #115

Earlier quoted context omitted.

> 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"

1. Markets aren't efficient. They're full of emotion and greed. They can be irrational. Just look at Brexit - even stocks that had zero exposure to the UK (directly or indirectly) sold off significantly. 2. Why would you assume you can't do better than an analyst, in your area of expertise? Someone who understands tech well will be able to make better tech investments, than, let's say, investments in mining. That see…

1. Did they actually have zero exposure to the UK? There are knock-on effects. If many airlines had exposure to the UK and this oil company only sold to american airline companies, they still effectively have exposure to the UK. If this spring manufacturer had the majority of their deals with that oil company, then they're going to suffer with them. I'm not saying you're wrong. I used the same hypothesis to buy on Brexit panic, but I don't know if it was correct.

2. Honestly, the analysts got it wrong in their own area of expertise often enough that I don't think it makes sense to pretend they're oracles in comparison to anyone else.

Re: Investing Returns on the S&P500

#152

Post by Apes » Wed, Jun 29, 2016, 4:36 PM UTC

pfarnsworth wrote: post #145

Try this on stock markets like the Nikkei, and I think you'll find completely different results.

I definitely am interested in seeing this for different stock markets, and the global stock market.

Re: Investing Returns on the S&P500

#153

Post by dap » Wed, Jun 29, 2016, 4:36 PM UTC

The NYTimes has a great visualization of S&P 500 returns for money invested any year between 1920 and 2009 and withdrawn between 1921 and 2010:

http://www.nytimes.com/interactive/2011/01/02/business/20110...

Re: Investing Returns on the S&P500

#154

Post by mailshanx » Wed, Jun 29, 2016, 4:38 PM UTC

chollida1 wrote: post #116

mailshanx wrote: post #100

Earlier quoted context omitted.

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...

Thanks, that is very valuable.

Re: Investing Returns on the S&P500

#155

Post by blueprint » Wed, Jun 29, 2016, 4:41 PM UTC

arjie wrote: post #131

blueprint wrote: post #78

Earlier quoted context omitted.

Stay far away from Robinhood. What a bunch of scammers. Not only is their software terribly buggy - and in core functions, too, like... Oh, I don't know, calculating the actual portfolio value instead of giving a figure 200% off. But their customer service blatantly ignores droves of customers' emails when those customers report bugs or request that their so-called Instant account be degraded because it turns out to…

IIRC, it displays value incorrectly when you have just deposited money. What did you think Instant was and why did you want it disabled? What's the scam?

I knew that Instant is a margin account. I didn't enter the terms ignorantly.

1. How does RobinHood make money?

2. Why are the bid-ask spreads so much greater on their platform versus others?

3. Why doesn't the application show you how much buying power is coming from the Instant account's margin account versus your own cash?

4. What will the SEC think of a company that misleads novice investor-consumers into a margin account that is branded merely as instant access to funds (even though the terms you have to accept state it's a margin account) and then obscures the actual amount of margin buying power to be used in the app's UI? It's absolutely in RobinHood's business model's financial interest to keep user's money in said margin accounts. That misaligns the company's incentives with the goals of the customers.

Re: Investing Returns on the S&P500

#156

Post by sokoloff » Wed, Jun 29, 2016, 4:41 PM UTC

nostrademons wrote: post #132

greeneggs wrote: post #49

Earlier quoted context omitted.

No, you do get taxed on dividends.

You do, but that's why dividends are becoming increasingly rare in the stock market. Many firms are preferring buybacks instead, which cause a pop in the stock price for remaining stockholders and so get taxed as capital gains.

Qualified dividends (which is most of them) are also taxed at long-term capital gains rates.

https://en.wikipedia.org/wiki/Qualified_dividend

Re: Investing Returns on the S&P500

#157

Post by atkinswj » Wed, Jun 29, 2016, 4:43 PM UTC

Redoubts wrote: post #142

JackFr wrote: post #23

Earlier quoted context omitted.

> USA is superpower at the peak. That remains to be seen > Argentina used to be richest country in the world. That is not true. In the early 20th century they were top 10, but never surpassed Britain or the US in GDP per capita.

> That remains to be seen What would a more powerful USA look like? It doesn't appear that the country is after an empire the same way the British had one 100 years ago, so raw aggression is out. I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America.

Embiggen?

Re: Investing Returns on the S&P500

#158

Post by BadCookie » Wed, Jun 29, 2016, 4:43 PM UTC

stevenmays wrote: post #15

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,…

> So at Year 1, we take every point on the S&P500 curve, look at every point on the S&P500 that's one year ahead, add in dividends and subtract inflation, and record all points as a relative gain or loss for Year 1. Point #3 is wrong.

It's not wrong. We don't know how markets behave at near-zero-to-negative interest rates over long periods of time. The types of central bank policies that are in play right now are unprecedented.

Re: Investing Returns on the S&P500

#159

Post by bduerst » Wed, Jun 29, 2016, 4:46 PM UTC

Redoubts wrote: post #142

JackFr wrote: post #23

Earlier quoted context omitted.

> USA is superpower at the peak. That remains to be seen > Argentina used to be richest country in the world. That is not true. In the early 20th century they were top 10, but never surpassed Britain or the US in GDP per capita.

> That remains to be seen What would a more powerful USA look like? It doesn't appear that the country is after an empire the same way the British had one 100 years ago, so raw aggression is out. I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America.

Imperialism is alive and well today, it's just that it's less noticeable since total war has been infeasible since the atomic age.

Re: Investing Returns on the S&P500

#160

Post by base698 » Wed, Jun 29, 2016, 4:47 PM UTC

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…

Can confirm. Been trading options for 3 years, lose money on 90% of my trades, but still up 30% for the year.

It's basic expected value, magnify your wins and minimize your loss to what you know you can lose.