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

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

#371

Post by roenxi »

throwaway2037 wrote: post #320
gamepsys wrote: post #297

Earlier 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…

Most people can without much trouble. Income follows a statistical distribution. It follows that most people could choose to live the lifestyle of someone earning 10% less than them and save 10% of their income per month, building a buffer that grows by about one month per year.

You are right in that they have 632 reasons they couldn't possibly do that, but they are clearly wrong since other people are. The correct thing to do is to realise that having a little bit of financial stability is a higher priority than those reasons in the majority of cases.

Or option B, which is figure out a way to earn more and keep lifestyle inflation in check. In theory, everyone should be able to take that path.

> And most people who do save a lot have a much higher income than is average in their area.

Cause or effect? Because if you save consistently you are going to automatically have a higher income than your more average peers. You all have the same average income but savers supplement that with passive income.

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

#372

Post by dukeyukey »

zeroonetwothree wrote: post #139
dralley wrote: post #109

Earlier quoted context omitted.

I've done well (39% annual returns) investing in 2-3 individual stocks in addition to index funds for the rest of my investments. More than that would be IMO too much to pay attention to. Admittedly my choices for stocks are a bit on the high-risk side, but it's worked out well so far. Picking up lots of AMD in 2017, and Rivian 6 weeks ago, seems to have been decent calls.

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.

So I use the Freetrade app for my "fun" investments. I've got about £2k in there, and I've had it for about 4 years now.

There's a section where you can check the "Time-weighted rate of return", basically removing the effects of deposits and withdrawals. Their wiki says this is usually the best figure to compare portfolio performance.

Over that time, my performance has been 337%. The performance of the FTSE All-World Acc has been 67%.

Apparently I'm _massively_ outperforming the world market, which I'm a little suspicous of. I'm mostly invested in tech since I'm a software engineer - I got real lucky with both ARM and AMD, investing days before they skyrocketed, but also got good returns from TSMC (took ages though), Coinbase, and Games Workshop.

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

#373

Post by dukeyukey »

dralley wrote: post #248
BeetleB wrote: post #156

Earlier quoted context omitted.

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.

I did something similar albeit more recently - I saw Nvidia was doing _extremely_ well, and figured it would pull AMD up as one of the few genuine competitors. I was right.

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

#374

Post by roenxi »

abyssin wrote: post #345
throwaway2037 wrote: post #320

Earlier quoted context omitted.

> 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…

Coming from a family that has a frugal culture, it’s always been easy for me to save a substantial part of my income, even when I had to downsize my lifestyle after losing a relatively high paying job. Looking at how people around me spend their money, it can feel they’re actively trying to get rid of their entire salary.

> it can feel they’re actively trying to get rid of their entire salary.

They probably are, in a literal sense. Most people play status games and identify that money is a resource that can be used to buy higher status. They then work out how to spend all their money on status-boosting activities because they don't want money. They want status. And they want it ASAP because their instincts are confident that status now is more important than later.

It is a bit sad because it means they are less comfortable and prosperous later on, but there is not much that can be done. Human nature is a real obstacle; it isn't calibrated to understand exponential returns or capital investment.

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

#375

Post by mianos »

cinntaile wrote: post #341
gamepsys wrote: post #286

Earlier 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…

This sounds a lot like hindsight bias. Nvidia is a great company but they lucked out on two unpredictable hypes, crypto and AI, that happened in close sequence to each other.

Considering just before the AI hype came along they were in trouble according to Jensen on the Acquired podcast.

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

#376

Post by g15jv2dp »

Galanwe wrote: post #364
g15jv2dp wrote: post #346

Earlier quoted context omitted.

> 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,…

> 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.

Perhaps we should take it back to the beginning. What do you believe "random variable" means...?

> It is not said, but rather implied.

I see.

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

#377

Post by vitus »

gamepsys wrote: post #286
grepLeigh wrote: post #272

Disclaimer: 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…

So you've been invested in NVDA for 15 years? Because that's how long AMD's been trying unsuccessfully to crack CUDA's secret (OpenCL was initially released in 2009 when it was already clear that nobody wanted to use AMD cards for HPC).

Or how about 5-10 years, when it was clear that everyone was using Nvidia for crypto-related purposes? Heck, even start-of-pandemic when high-end graphics cards were nigh impossible to buy without a 3x markup? (A cool 1500% ROI to date)

This is the sort of thing that's obvious to everyone in hindsight, but it's not always clear in the moment, nor is it clear when the stock has peaked (how many people sold in Nov 2021 as the GPU shortage was starting to ease?).

If you bought NVDA on Jan 1 2006 and held it for 10 years, then you'd have about +100% ROI, or about 7% per year. Not terrible (S&P 500 was closer to +50% ROI over that timeframe), but not amazing (compare this to GOOGL which had a +250% ROI, or AMZN which grew 10x over the same timeframe). Amazon was also an obvious winner in that timeframe due to AWS, right? What about Google / Alphabet? What was unique about its circumstances that warranted it growing twice as fast as Nvidia in that timeframe? Google Plus? Android (it didn't grow 10x like Apple did)? YouTube?

It wasn't clear then that NVDA would have been the winner that it is today, and it's similarly not clear today if NVDA has another 10x gains ahead of it, or if it's already peaked. Or, for that matter, what the next big tech winner will be. (I bet it already exists. It might even already be publicly traded.)

edit: also, if I had perfect predictive knowledge of the financial markets, I'd have put $1000 on BTC back in 2011 when it was about $2 a pop, and sold at any of the recent peaks for $3+ million. There is literally no technical justification for those returns other than market speculation.

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

#378

Post by UncleMeat »

gamepsys wrote: post #286
grepLeigh wrote: post #272

Disclaimer: 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…

An extended family member is a software engineer who has worked in wireless networking for decades and decades, including being personally involved in the development of key parts of 5g.

In the 00s there was some company that had great tech. Surely useful for the future. He put a shitload of money in there. On each paycheck he put in more and more. But although the company had great tech, it didn't end up being the market winner for whatever reason. As the stock dropped and dropped he bought more and more. After all, it was the best tech.

He lost a fortune.

It is probably easy to look back and say "well, I knew that CUDA was easier to use than OpenMPI ages ago, it was obvious that nvidia would blow up."

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

#379

Post by UncleMeat »

spacebanana7 wrote: post #363
Terr_ wrote: post #292

Earlier 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…

> 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 ex…

> 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.

This works well if the EV industry slows and ICEs are poised to dominate the future. This works very very badly if the vehicle industry as a whole slows and the entire sector tanks.

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

#380

Post by UncleMeat »

lkdfjlkdfjlg wrote: post #368
milesvp wrote: post #300

Earlier quoted context omitted.

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.

The question is whether "thing that did well in the past" is more or less likely to do well in the future than "thing that did less well in the past." This seems to vary somewhat by "thing."
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