101–110 of 323 posts
So clearly, for the individual, the optimal strategy is to simply invest in index funds and just wait. But a new question that is being raised is: "what happens if everyone only invests in index funds?"
This does not surprise me. My personal experience with hedge fund managers is that they are good salesmen that peddle their financial expertise to clients, convincing them of their financial rock-star status (usually gained through a lucky investment or two). Paulson is a classic example. Wealthy individuals buy into it, especially those that are less educated (e.g. those that have inherited money), and happily alloc…
I've only dabbled a little in cryptocurrency exchanges, so the terms seem to refer to the same thing to me, but maybe it's contextual? Forgive my ignorance, but can you explain the difference between market makers and speculators?
Market makers perform a similar function on illiquid stocks, where there may be more sellers than buyers at one moment but more buyers Jan sellers the next.
Speculators are simpler. They're the guy who buys Telsa roadsters because he thinks they will be a collectible soon.
What is increasing S&P value other than the crowd willing to walk a little further out on the gangplank? I'd say it's a little too early to call that bet. (people can vote this one down as much as they want. The reality is that is the only thing making the value go up now.. just more people crowding into the same trade. Watch out when the crowd changes its mind)
One can of course win any bet by stopping it when it's convenient, but that doesn't make it a very good bet, which is why a fixed period is used.
Earlier quoted context omitted.
Some people think you should not be in the left lane unless you are passing at that moment. In some places, there are even signs saying "keep right except to pass". Perhaps this person was driving aggressively because they were enraged at the line of traffic on the left. Which is to say, they may not have been doing it for a quantitative benefit as you assume. This might strengthen rather than weaken the analogy to t…
I don't drive, but as a passenger, it is my understanding that the left lane is the fast lane and the right lane is to remain empty or mostly empty so cars can enter and exit the highway? Please correct me if I'm wrong. Regardless, if I ever get my license, I'm pretty much always going to avoid the highway as my anxiety cannot handle those speeds.
This is impossible in a car because we are isolated from each other. To handle this we make rules for each situation that if followed would result in the most efficient use of the road.
The idea of drive right/left lane to pass is that nobody has to say "excuse me" to pass the car in front of them because that's impossible. In the same way it is not polite to stop on a busy street to "let someone in" from a parking lot or to let the car to your left at a four way stop go first. The rules are there so we can predict what anyone else will do.
In reality we all learn a different set of rules or have a different understanding of them so it all falls apart. Arguing about the specific rules doesn't make a lot of sense in reality because for any of them to work we all have to do the same thing and I don't know of anywhere that makes drivers take more than one skill test in a lifetime.
Earlier quoted context omitted.
Some people think you should not be in the left lane unless you are passing at that moment. In some places, there are even signs saying "keep right except to pass". Perhaps this person was driving aggressively because they were enraged at the line of traffic on the left. Which is to say, they may not have been doing it for a quantitative benefit as you assume. This might strengthen rather than weaken the analogy to t…
That doesn't really apply when the road is so busy that all of the lanes are full of cars.
Although there is still tons of money going to actively managed funds it seems to be more and more common knowledge that index fund investing is ultimately the smartest thing to do for personal finance. Does anyone know what the risk factors are (if any) to this type of passive investing if EVERYONE begins to do the same thing?
I had an interesting conversation with a very smart investor last year, and basically his idea was that while active managers will sell certain specific stocks (less volatile stocks) to fulfill redemptions in the event of a decline and/or crash, ETFs will generally just hit an (automated) sell on everything across the board. So proportionally they will sell off significantly more volatile small and midcaps vs large c…
https://www.amazon.com/Little-Book-Common-Sense-Investing/dp...
Index funds will almost always outperform actively managed funds. They are the best choice for the layman investor. An excellent book on this topic is The Little Book of Common Sense Investing by John Bogle. https://www.amazon.com/Little-Book-Common-Sense-Investing/dp...
Although there is still tons of money going to actively managed funds it seems to be more and more common knowledge that index fund investing is ultimately the smartest thing to do for personal finance. Does anyone know what the risk factors are (if any) to this type of passive investing if EVERYONE begins to do the same thing?
I had an interesting conversation with a very smart investor last year, and basically his idea was that while active managers will sell certain specific stocks (less volatile stocks) to fulfill redemptions in the event of a decline and/or crash, ETFs will generally just hit an (automated) sell on everything across the board. So proportionally they will sell off significantly more volatile small and midcaps vs large c…