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Nevada’s public employee pension fund invests passively and beats peers (2016)
241–250 of 496 posts
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#242To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…
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Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#243Earlier quoted context omitted.
Because on HN we like titles to have information and not be click-bait. The WSJ title is prime click-bait.
So, clickbait is fine, as long as we just editorialize the title? That's an unusual standard.
Pretty much standard for HN, there are endless mod comments explaining it. Although they make more sense if you distinguish between 'changing' and 'editorializing'.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#244It 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.
It depends. I had a pension plan that grew x2 in 17 years (don't know what they invested into). My own investments grew much faster than S&P though.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#245Earlier quoted context omitted.
> Do you believe that investment is entirely random and there is absolutely no skill involved? The skill involved is more just "best practices" that let you match the market: Buy-and-hold, diversify, basically, do what the index funds do and you will be roughly +0 to the market. Beyond that, it's a totally random distribution that adds between -X and +X which allows some participants to beat the market and causes som…
> You can't tell beforehand which participants will beat the market, even having full knowledge of their strategies and skill I never implied that I can. That fact doesn't prove that it's somehow fundamentally impossible to do that. The problem is that it's impossible to tell if you "strategy" is working until a significant amount of time passes and by that point the markets conditions might have changed to such an e…
It must have been nice in the early 2010s to be so smart to predict AI would be a huge hit (after a couple previous AI winters) and that GPUs would be the key and that NVIDIA specifically would reap the benefits. But I'm sure you're smarter than me and a lot of other people. And AMD also did pretty well during much of that same period although I sadly sold my modest holdings after they went nowhere for years after spiking with some adoption by the big server makers. It would probably have made more sense to bet on Intel during that period.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#246All this is true, and there are many good comments in the thread here. But this "hey dude, stock picking is for idiots and all non idiots but index funds" should be treated with caution. Index funds are an extremely clever idea but were never meant to be used on such a scale. To give you some ideas: https://www.forbes.com/sites/chriscarosa/2024/04/02/index-fu...
Index funds are not some clever hack, they are just tracking the combined productivity of the publicly traded companies that make them up. Whole market, or the top 500 as a representative slice, whatever. When you buy the whole US market for example you are saying, "I strongly believe that the overwhelming majority of companies in the US want to make shitloads of money and pass it down to themselves and their shareho…
Something I've wondered is how index funds effect companies entering the index for the first time.
Like, let's say there's a company (TryerCo) that is the 501st biggest in the US. Big, but still one step away from being in the S&P 500.
Then, one of the S&P 500s collapse. They exit the index, and TryerCo enters the index at position 500, despite no material change since the day before.
Doesn't this mean a whole _heap_ of index funds will suddenly start buying TryerCo stock, sending it up thanks to the arbitrary number 500?
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#247Earlier quoted context omitted.
Which still means that SOME individual investors will inevitably beat the market.
Some will, but there is no reliable way to tell which one in advance.
And a lot of the Apple run-up happened relatively late in the game. Don't get me wrong. Apple--and what I was able to do with the money--was good to me. But so was a late 2010s Microsoft purchase and I don't think a lot of people are highlighting Microsoft as a stock they missed out on during the last 10 years.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#248Earlier quoted context omitted.
Sorry but I never believe these online claims given with no evidence about ridiculously high returns. It’s not to say you are lying but it’s easy to miscalculate these things.
He's talking about 7 years. Lots of people do very very well on short timeframes. They usually balance out in the long run.
I bought into AMD stock when it was $10 per share, it's now $180, yes it's a bit lucky but I'm not bullshitting.
It seemed quite logical to me at the time that they would do well. This was right as Intel was being savaged by Meltdown and the performance hits of the mitigations and Zen 1 was successful.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#249Earlier quoted context omitted.
There are some research (instead of cherry picking/anecdotes). I don't have any links right now but basically half of the funds lose compared to the index (by law of nature - averages and all that). Furthermore, taking fees into account, just a few percentages make anything more (over time) - which is probably within scope of randomness.
In general hard working prudent value investors are able to beat the index. It's just that those are very few. I mean Buffet has done it for half a century, that's not a coincidence.
Half will beat index by definition. The key is to beat it including the cost of beating - and we've also seen that the extra value have generally been captured by the fund managers - not the fund buyers.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#250Earlier quoted context omitted.
> On the contrary, these risk adjusted measures assume nothing more than a normally distributed random variable. The financial sector isn't yet so unrelated to reality that the price of securities is random.
I think when stating your opinion against 40 years of econometrical research, including multiple Nobel prizes in economy, you should feel enticed to explain your opinion a bit more than "no I don't think so"...
This is absolutely absurd. Economists including Nobel prize winners, including even Eugene Fama who proposed the Efficient Market Hypothesis, does not think the stock market is normally distributed.
At best, using a normal distribution is something that undergrads use as a tool to learn about the stock market and make some simplifying assumptions for pedagogical purposes, but it most certainly is not something that actual professionals or researchers in the field genuinely believe.