The value of the fund is now up to $63B.
Here is the latest overview: https://www.nvpers.org/sites/default/files/2024-05/PERS-Inve...
Nevada’s public employee pension fund invests passively and beats peers (2016)
361–370 of 496 posts
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#362Earlier quoted context omitted.
1. It's normal in the tech industry to own a lot of stock in the company you work for. Investing in a vendor (in Nvidia's case) or another adjacent company is lower risk. You cannot avoid risk in investing, it's a natural part of the situation. 2. You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. With all the layoffs in the last few years everyone should have…
> You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. I see this (3-6 mos savings) constantly quoted in basic personal mgmt blog posts, but it seems unrealistic for most. Seriously, what percentage of people in OECD can do this? Surely, less than 5%. I am not sure it is great advice because it is discouragingly unrealistic for most. The average person has out o…
> I see this (3-6 mos savings) constantly quoted in basic personal mgmt blog posts, but it seems unrealistic for most. Seriously, what percentage of people in OECD can do this
Also worth noting that in most of the OECD, 3+ and even maybe 3 months depending on the situation is quite high, bordering on the wasteful. Americans have to worry about healthcare and crappy if present unemployment payments if they lose their jobs; in most other developed countries (of course your mileage will vary), you cannot be fired on the spot with no notice without compensation. And if you do, you don't lose your healthcare. Also, you can't be fired for being sick/unavailable to work for medical reasons, and at least some countries have medical provisions for burnout too (you get months of paid sick leave to recuperate, while your job is being kept).
Therefore, in most of the OECD (at the very least the EEA + UK + Australia and NZ), there are very few, if any, situations which can leave you with zero income with no notice. Therefore the safety cushion you need is much lower than an American that might lose their job tomorrow and then need to pay tens of thousands in medical bills.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#363Earlier quoted context omitted.
> As a retail investor, it's good to remind myself that if I actually had the skills to invest professionally, someone would probably be paying me to do it for them. Don't discount the knowledge you have from being deep into an industry. The higher quality of the CUDA toolkit compared to other SIMD languages, combined with it's increasing relevance in compute (gaming, followed by blockchain, followed by ML, followed…
> Don't discount the knowledge you have from being deep into an industry. [...] diverse portfolio It's worth emphasizing that investing in the same sector that you are employed-in is actually a kind of anti-diversification, and it won't usually show up using "rate my portfolio" tools. The archetypal example that comes to mind--unusually extreme but illustrative--would be all those Enron employees who invested their 4…
> investing in the same sector that you are employed-in is actually a kind of anti-diversification
You can reduce your microeconomic risks by making investments in and around your sector of occupation. Especially when betting against yourself.
For example, someone who works in the electric vehicle space could reduce their risk by making personal investments in ICE companies, just in case EV adoption is slower than expected. A person who works in a payment processor could invest in visa/mastercard, to protect from the risk of fee rises. A privacy tech investor could put money into adtech, so they can make money whoever wins.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#364Earlier quoted context omitted.
> explaining that stock prices are To be pedantic, stock returns, not prices. As for the quotes, I encourage you to strongly think about the meaning of the work of Sharpe, Black & Scholes and Markowitz applied to non normal distributions (both Nobel prizes, we understand each other). In particular, try to articulate the relevancy of sharpe ratios between two non normally distributed portfolios.
> To be pedantic, stock returns, not prices. If one is a random variable, so is the other. It's a simple change of variables. What's your point? > As for the quotes, I encourage you to strongly think about the meaning of the work of Sharpe, Black & Scholes and Markowitz applied to non normal distributions (both Nobel prizes, we understand each other). Could you quote the part where they say that actual, real-world st…
> If one is a random variable, so is the other. It's a simple change of variables. What's your point?
Not sure I follow your reasoning. Prices are positive only, and non stationary. That is very much not the same for returns. Usually prices are log normal, leading to normal (log) returns.
> Could you quote the part where they say that actual, real-world stock prices (or returns, whatever) are random?
It is not said, but rather implied. Take the Sharpe ratio for instance, it is a measure that:
1) is used to compare different assets / portfolio returns
2) rely on the 2nd moment of the returns.
The standard deviation is less relevant the further away from the normal distribution you go, so since this is a comparison metric, it can only be reasonably applied to compare normally distributed returns.
If you believe the returns are not generally normal, then you reject the use of the Sharpe ratio as a relevant measure of comparison.
I don't have a B&S reference at hand, and I did not read it since 15 years, but I'm pretty sure it assumes lognormals prices as well.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#365Disclaimer: I'm not a financial advisor. Whenever I'm tempted to buy individual high performing tickers (e.g. NVDA, TSLA, AMD), I restrict the purchase to no more than 2% of my portfolio and I only allow myself to bet on 2-3 "race horses" at a time. I think this fulfills the desire to gamble a little and see 100-200% YoY returns. NVDA cracked 300% cost basis when I finally sold, which is wild. The reason I can do thi…
> As a retail investor, it's good to remind myself that if I actually had the skills to invest professionally, someone would probably be paying me to do it for them. Don't discount the knowledge you have from being deep into an industry. The higher quality of the CUDA toolkit compared to other SIMD languages, combined with it's increasing relevance in compute (gaming, followed by blockchain, followed by ML, followed…
> Sometimes you can see a company is positioning itself for a great long term position before the entire wallstreet herd takes notice.
Well, the investment landscape is littered with the rotting husks of companies with great products. Wonderful, amazing products. They had incompetent management. Or the market for their amazing product never took off. Or there was a general downturn in the economy and they couldn't get cash when they needed it.
If the company has demonstrated itself a good investment, you can rest assured the wolves of Wall Street have already picked the carcass clean before you as a retail investor even get a whiff. They run analyses on factors you don't even know about to make their picks, and they do it in large number like you're never likely to see.
Even if you make the right picks, it's often the wrong pick. Consider if you had invested in Oxycodone a few years ago. It was a great product, brought simple, accessible, effective pain relief to the masses. Prescriptions were flying off the shelves like no other drug before it that wasn't a statin. I'm sure a handful of retail investors are smugly crying "inb4" but most of them are left holding the bag on that one. Hindsight investing is mostly a bitter strategy.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#366Disclaimer: I'm not a financial advisor. Whenever I'm tempted to buy individual high performing tickers (e.g. NVDA, TSLA, AMD), I restrict the purchase to no more than 2% of my portfolio and I only allow myself to bet on 2-3 "race horses" at a time. I think this fulfills the desire to gamble a little and see 100-200% YoY returns. NVDA cracked 300% cost basis when I finally sold, which is wild. The reason I can do thi…
> As a retail investor, it's good to remind myself that if I actually had the skills to invest professionally, someone would probably be paying me to do it for them. Don't discount the knowledge you have from being deep into an industry. The higher quality of the CUDA toolkit compared to other SIMD languages, combined with it's increasing relevance in compute (gaming, followed by blockchain, followed by ML, followed…
That comparative is doing a lot of work.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#367Earlier quoted context omitted.
> I contributed 50% to a bond fund, as well, but that is like, 10% of the total, nowadays. That's one of the ridiculous aspects of fixed-percentage allocations: by constructions those allocations tell you that you should get rid of the things that are making you the most money, and put it into the things which are underperforming instead. (I get that you didn't do that, I'm just got reminded of it.)
Not underperforming but with less risk. If something goes to the moon there is high chances it will drop back to the ground. So you want to put some of that growth into something that will keep on flying.
I guess we think about risk very differently.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#368Earlier quoted context omitted.
> I contributed 50% to a bond fund, as well, but that is like, 10% of the total, nowadays. That's one of the ridiculous aspects of fixed-percentage allocations: by constructions those allocations tell you that you should get rid of the things that are making you the most money, and put it into the things which are underperforming instead. (I get that you didn't do that, I'm just got reminded of it.)
You are thinking about it backwards. Humans have a tendency to buy high and sell low. It seems to be a psychological benefit of some sort that holds us back in abstract market scenarios. By having a fixed percentage portfolio you are forcing yourself to sell high and buy low. This was also the only basic strategy that mathematically beats the market based on papers I read during undergraduate (there may be others now…
> By having a fixed percentage portfolio you are forcing yourself to sell high and buy low.
Yes, and the things you sell high are the ones that performed well in the past, so you'll have less of those in the future, which is what I said. I'm not thinking about anything backwards.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#369All 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...
One of my big brain investing ideas is to pick the stocks at the top of the index instead of buying the whole index. If index funds continue to rise in popularity, the stocks that are at the top will benefit most from passive investment volume. Plus, index funds follow a kind of Pareto principle where the top stocks contribute disproportionately to the total return anyway. As I’ve gotten older though, one of my reali…
Hint: this idea has been around for as long as index funds have been around, if it actually worked well, everyone would be doing it. Alas, a big part of why index funds work well in the long term is diversification, and when you cherry pick a subset you also lose out on diversification. It's one of those strategies that looks clever if you don't delve into it, but actually the returns are worse. As an example, if you take the SP100 it might outperform the SP500 on single year performance every now and then, but in the long term, SP500 has consistently outperformed it.
Re: Nevada’s public employee pension fund invests passively and beats peers (2016)
#370Earlier quoted context omitted.
> Don't discount the knowledge you have from being deep into an industry. [...] diverse portfolio It's worth emphasizing that investing in the same sector that you are employed-in is actually a kind of anti-diversification, and it won't usually show up using "rate my portfolio" tools. The archetypal example that comes to mind--unusually extreme but illustrative--would be all those Enron employees who invested their 4…
1. It's normal in the tech industry to own a lot of stock in the company you work for. Investing in a vendor (in Nvidia's case) or another adjacent company is lower risk. You cannot avoid risk in investing, it's a natural part of the situation. 2. You can avoid the sell low situation by having 3-6 months of expenses saved in an emergency savings account. With all the layoffs in the last few years everyone should have…
Man, I'd be comfortably retired now if I had held my GOOG GSUs and sold (at peak) when I quit rather than selling them as I got them.
Same, my wife, worked for Apple from 2003-2010. We had Apple stock back in 2004/2005, for just a few $ a share... oh man.
But that went against most most financial advice, and we needed the money as it came.