Earlier quoted context omitted.
Why do you feel so convinced they can't?
because you can't know the future
Politically connected people can shape the future. Nancy Pelosi's stockpicking skills are legendary.
Does Market Timing Work?
121–130 of 292 posts
Re: Does Market Timing Work?
#122The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…
> No one really knows but it wont be as good as the last few decades.
A little bit contradictory.
If you don’t think the stock market is going to appreciate then it’s not for you. Don’t invest in it at all. You can stick with savings accounts, gold, and crypto scams.
Re: Does Market Timing Work?
#123Worth noting that about 30% of active fund managers have beat the S&P 500 going back to 1993 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4096205 They may not do so for their investors - this is before fees. But it does seem significant that they are beating the index on their own, and over a consistent period of time. 30% is not nothing. Seems like a blow to strong-form EMH to me. As an FYI, I never want to h…
Assuming a random distribution of yearly returns centered on 0 before fees, with enough fund managers you'd see plenty that would beat the market for 30 years. That past performance would also be in no way indicative of future performance given the stated process.
Re: Does Market Timing Work?
#124Earlier quoted context omitted.
> Buffett's ultimately successful contention was that, including fees, costs and expenses, an S&P 500 index fund would outperform a hand-picked portfolio of hedge funds over 10 years. The bet pit two basic investing philosophies against each other: passive and active investing. https://www.investopedia.com/articles/investing/030916/buffe...
Buffett says this kind of stuff publicly. But his own fund moves in and out of investments all the time.
Buffet is arguably the best who’s ever done it. He can do things your layperson shouldn’t try. Just because Bruce Lee could do an impressive spin kick, it doesn’t make spin kicks a good idea for 99% of people to try in a self defense situation.
Re: Does Market Timing Work?
#125Worth noting that about 30% of active fund managers have beat the S&P 500 going back to 1993 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4096205 They may not do so for their investors - this is before fees. But it does seem significant that they are beating the index on their own, and over a consistent period of time. 30% is not nothing. Seems like a blow to strong-form EMH to me. As an FYI, I never want to h…
A blind monkey throwing darts will beat the S&P 500 some of the time.
The problem isn't that it's impossible to beat the S&P 500 (it's actually trivial), the problem is it's hard to predict which portfolio will outperform the S&P 500.
Re: Does Market Timing Work?
#126Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situations where I believe something might happen within a certain window, but I absolutely wouldn't bet more than 1-2% of my portfolio on anything with time decay attached to it. What works better for me is joining in on earnings calls and reviewing presentation m…
>Monkey brain is much more dangerous than losing a few % APY
....and you don't even need a few percent to throw it in a target date fund that regularly rebalances for you
Re: Does Market Timing Work?
#127[deleted]
Re: Does Market Timing Work?
#128The problem with buy and hold and pretty much every current strategy is that its distorted by the huge 40 year bull market we've seen in the USA. Every American asset has gone up big time - of course "time in the market" is a good thing. If you look at Japanese or European stock markets they tell a very different story. Similarly the next 40 years in the USA could be a miserable time for investors. I can't believe ho…
Of course predicting the future is impossible. But there’s a lot more than 40 years of data to support the buy-and-hold idea. The updated Trinity Study spans from 1925 to 2009, so includes the worst economic calamity in US history. It concludes an inflation-adjusted 4% withdrawal rate is safe for 30 years in 95% of historical 30 year periods. An inflation-adjusted 3% withdrawal rate succeeded in every 30-year period.
Re: Does Market Timing Work?
#129Earlier quoted context omitted.
The dogma that it's impossible to beat the market is frankly weird at this point. If the markets were truly efficient, randomly picking stocks would beat SPX ~50% of the time. Since markets are not super efficient, basic exposure to performance factors (small cap, value, momentum...) puts you at a fairly high likelyhood of beating SPX.
> The dogma that it's impossible to beat the market is frankly weird at this point. I agree. Meta was literally priced below $90 not even a year ago (I entered at about $100 FWIW, which was my nice and round number). Now at $315. Anybody who believes the market is efficient is on some serious drugs. The market correctly valued Meta a $380 or so before the crash (because "TINA" I'm supposed to believe), then correctly…
The market correctly valued Meta a $380.
Then Meta announced they were going all in on the Metaverse, had set fire to $100bn so far and were going to continue to throw ~$20bn a year into the Metaverse - the market correctly valued Meta a $100.
Meta announded they were going all in on the Ai - the market correctly valued Meta at $315.
You have picked a poor example; the moves in the stock, are primarily the fault of themselves. Those that saw the emergence of Ai and Zuckerberg as one of the leaders in the space got a nice 3x. If it didnt happen, Meta stock would probably be worth about as much as MySpace.
fwiw I said they were going to zero when they rebranded to Meta. Turns out I was wrong.
Re: Does Market Timing Work?
#130Timing absolutely doesn't work in my experience. This effectively makes many forms of derivative instrument worthless to me. There are only a few targeted situations where I believe something might happen within a certain window, but I absolutely wouldn't bet more than 1-2% of my portfolio on anything with time decay attached to it. What works better for me is joining in on earnings calls and reviewing presentation m…
I keep telling my friends who get really into stock investment, read some stuff, invent strategies - and end up much worse (sometimes losing money) than me just dumping everything into a few almost random indices:
1. Greed (not as a pejorative or a judgmental term, just this itchy feeling that you want more than you have even if you gain and are not satisfied) is the fastest way to lose money, whether through a poor investment or being scammed.
2. When you decide to play a game of stock investment, who are you playing it against? Being better than average (just market returns) means being better than the average (not median!) player, who in this case is some institutional investor. Do they really think that with a few online courses they can be consistently better than people who do this stuff for a living?