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

Nevada’s public employee pension fund invests passively and beats peers (2016)

wsj.com

Post reply on HN
Print view View original

81–90 of 496 posts

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#81

Post by qwytw »

StackRanker3000 wrote: post #73
qwytw wrote: post #67

Earlier quoted context omitted.

That claim is not phrased like that, so why would we interpret that way? > average So what? It's like saying that since an average person can't run a marathon it wouldn't make sense for any individual to even try it. How does that make sense? > cherry picked If we agree that 50% of all investors can't beat the market, what proportion can? 1%, 10%, 30%? Because there is a massive difference. How do we even define that…

You’re missing the word ”expect” in the original claim. You can beat the house at blackjack, but you can’t reliably expect to do it.

Investment is hardly a zero sum game. If it were nobody would make anything buy investing passively either. So how is that a reasonable analogy?

> you can’t reliably expect to do it.

Sure, I can't. But assuming that it's not entirely random chance some proportion of people certainly can.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#82

Post by qwytw »

hibikir wrote: post #66
qwytw wrote: post #63

Earlier quoted context omitted.

> picking stocks yourself, the answer is also pretty cut and dry. There’s strong evidence no individual trader can expect to beat the market. Is there? It would make sense if an average individual trader can't expect to beat the market. Claiming that there are no individual investors who did/can do that over a reasonably long period is both objectively false and rather absurd.

Read the GP carefully.Expect to beat is very different than beat. You don't expect to beat the casino in roulette, but some people will luck out. That doesn't mean they could expect to win in advance: They should expect a small loss, depending on the table, and be surprised when luck smiles upon them.

> You don't expect to beat the casino in roulette,

Do you believe that investment is entirely random and there is absolutely no skill involved?

Because if not, that's a nonsensical analogy. You should use a a both both luck and skill based game like poker (probably not the casino variety, though) etc.

Otherwise if you can reasonably expect to beat 50% of all "players" (of course it takes much more time to verify that in the market) then you can expect to make more than the average.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#83

Post by bluGill »

wcoenen wrote: post #48
throwaway2037 wrote: post #15

Earlier quoted context omitted.

But why stress about beating the market? Just be the market with an ETF that tracks the S&P 500 index. Literally, setup auto invest from your paycheck. Go to sleep (Rip van Winkel style). Wake up 40 years later and retire comfortably. Look at total returns over the last 40 years on the most popular indices in the world. S&P 500 crushes them all. I see a lot of "Internet advice" recommending various MSCI world indices…

Picking the S&P500 over a world index because you think it will outperform, has the same problem as picking individual stocks over an index. You can't actually know which will outperform in the future.

You don't need to be the best, just do well.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#84

Post by throwaway2037 »

wcoenen wrote: post #48
throwaway2037 wrote: post #15

Earlier quoted context omitted.

But why stress about beating the market? Just be the market with an ETF that tracks the S&P 500 index. Literally, setup auto invest from your paycheck. Go to sleep (Rip van Winkel style). Wake up 40 years later and retire comfortably. Look at total returns over the last 40 years on the most popular indices in the world. S&P 500 crushes them all. I see a lot of "Internet advice" recommending various MSCI world indices…

Picking the S&P500 over a world index because you think it will outperform, has the same problem as picking individual stocks over an index. You can't actually know which will outperform in the future.

Over 40% of revenues from S&P 500 companies come from overseas. That is world enough for me.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#85

Post by qwytw »

jefftk wrote: post #77
qwytw wrote: post #63

Earlier quoted context omitted.

> picking stocks yourself, the answer is also pretty cut and dry. There’s strong evidence no individual trader can expect to beat the market. Is there? It would make sense if an average individual trader can't expect to beat the market. Claiming that there are no individual investors who did/can do that over a reasonably long period is both objectively false and rather absurd.

We expect some individual traders to beat the market (and some to do much worse than the marker); that's variance. But each individual trader should not expect to beat the market, because they don't know if they're one of the lucky ones.

> But each individual trader should not expect to beat the market

In aggregate sure. But unless we believe that it's entirely random some individual investors can still certainly expect to beat the market, they just can't verify that in advance.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#86

Post by throwaway2037 »

rblatz wrote: post #36
theK wrote: post #30

Earlier quoted context omitted.

Sometimes I wonder whether ETFs that track top valuation will lead to some weird stickyness and overvaluation in say, S&P500.

I have the same thoughts. Eventually there will be a lot of money to be made breaking the s&p 500.

Can you explain the "breaking" trade? And why haven't we seen more written about it?

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#87

Post by ChrisMarshallNY »

thevillagechief wrote: post #79

It was Richard Thaler's Misbehaving: The Making of Behavioral Economics book that finally broke through my thick, anxiety ridden skull and convinced me to stop reading economic news everyday and just forget the the retirement accounts existed. If I'd read that book earlier, I'd be up 3X on my positions.

I haven't touched my 401(K) in over 30 years. It's done 9-20% per year. It's not super aggressive, but will take a hit, on really bad markets (the only year it actually lost money, was 2020 -and it has completely made up for that. It even made some money in 2008).

I ignore the Fidelity calls. Every time a new broker rotates in, they try to get me to move my money around.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#88

Post by rr808 »

In general avoiding fees is definitely a good thing. Its one of those things that hindsight finds the best strategy and they were kinda lucky about the crazy bull market in the USA in this time.

If you were a Pension fund in France, Australia, UK, Japan, China etc and put all your money in the local passive index tracker you'd maybe double your money in the last 20 years but way under perform S&P which is like 6x in that period.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#89

Post by amanaplanacanal »

TrainedMonkey wrote: post #80
taraparo wrote: post #70

Earlier quoted context omitted.

It is the opposite. Market timing does not work reliably. Active management produces worse results on the long run. no individual trader or active manager can consistently beat the market. however active fonds may have periods (even several years) where they out perform. for private investors buy-and-hold of highly distributed ETFs is the best way to do it. The easiest way to get started is a one ETF portfolio like e…

Noting that it is possible to beat market, with strategies / algorithms that are generally non-public. For example medallion fund, see https://posts.voronoiapp.com/markets/Jim-Simons-Medallion-Fu... . Note that these crazy performance stats are after the steep fixed + performance fees.

Strangely, the other funds operated by the same company and actually open to outside investors, have not performed as well. It is unexplained exactly why.

Re: Nevada’s public employee pension fund invests passively and beats peers (2016)

#90

Post by jltsiren »

qwytw wrote: post #67
satvikpendem wrote: post #52

Earlier quoted context omitted.

It is on average, not from cherry picked examples.

That claim is not phrased like that, so why would we interpret that way? > average So what? It's like saying that since an average person can't run a marathon it wouldn't make sense for any individual to even try it. How does that make sense? > cherry picked If we agree that 50% of all investors can't beat the market, what proportion can? 1%, 10%, 30%? Because there is a massive difference. How do we even define that…

"Average" is a bit misleading word when it comes to the market.

If you're a top investing expert, you do things carefully in the right way, and you don't make mistakes, you can expect average performance. Because the market primarily consists of experts like you.

Of course, investing is a random process, and you often beat the market by being lucky. But luck doesn't last indefinitely.

There are basically two ways to beat the market consistently. One is trading based on information not available to the rest of the market. This is sometimes banned, because it makes the market less fair and less efficient. It can also be a crime. The other is finding a market that's small enough or obscure enough that it's not interesting to the professionals.

But there is no investing stat that allows you to beat the market. Life is not an RPG.

Post reply on HN