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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)

#411

Post by graemep »

ghaff wrote: post #391
graemep wrote: post #360

Earlier quoted context omitted.

> 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 Analysts do follow what is happening in an industry and talk to people in an industry. SOme have worked in the industry they follow. If you want to get ahead of them you need to focus on something ahead of them - something small or specialist at the time.

I might argue that financial analysts are too focused on their models and this quarter's numbers but most of the better ones are actually pretty savvy about the trends and other happenings in the industry that they follow. They're as susceptible to the hype du jour as most people are but they're not actually stupid for the most part.

Yes, but remember there are multiple layers to that. I have worked as a buy side analyst in a small team (in my former career) and did much less detailed modelling.

There is an incentive structure that pushes fund managers to look at their rankings this year: there is no point in aiming at outperforming over a decade if you got fired two years in for underperforming. It has happened to people who have not bought into booms.

I actually think avoiding the "hype de jour" is one place where small investors have a chance to do well. Avoid the overhyped, pick up the neglected and you can outperform.

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

#412

Post by mrb »

UncleMeat wrote: post #378
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…

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 m…

You extended family member's story is a classic error of "putting all your eggs in one basket."

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

#413

Post by njarboe »

lkdfjlkdfjlg wrote: post #261
ChrisMarshallNY wrote: post #133

Earlier quoted context omitted.

Yes. I contributed 50% to a bond fund, as well, but that is like, 10% of the total, nowadays.

> 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.)

I think that this holding stocks and bonds and then re-balancing every year or so is advice from back in the 1980's when historically bonds got under valued when stocks boomed and vice versa, so this made sense. I don't think that works so well now, especially when we had zero or negative interest rates for such a long time. If you can tolerate the risk (have a large amount of assets relative to your spending), investing in close to 100% stocks for retirement makes more sense.

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

#414

Post by sofixa »

ghaff wrote: post #409
throwaway2037 wrote: post #405

Earlier quoted context omitted.

Why is this being downvoted? There are lots of great points in this post. I never considered that most of the advice that I am reading is aimed toward US people, where the labour laws and social safety net for working people is awful, compared to the rest of OECD.

Probably because of the narrative that people are routinely fired out of the blue and that there is no recourse to also suddenly having tens of thousands of dollars in medical expenses also out of the blue.

It doesn't really matter how regularly it happens, only that it does happen and that there is zero recourse in that case. So people need to build their own safety nets in the US.

I know it happens less frequently in tech, where people get compensation, but what % of workers are in tech? The median worker has no such luck.

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

#415

Post by SkyBelow »

mattmaroon wrote: post #279
carbotaniuman wrote: post #269

Earlier quoted context omitted.

The tradeoff is you lock some of those gains down in safer assets. Probably the wrong choice for retirement earlier on, but if you need money during an economic crisis, say you got laid off, then that might change how it's viewed.

That’s very true, but he’s had the account for 30 years and assuming that means he started it young, 50% in bonds is borderline insane. It’s a lot more likely to cost you a large amount in retirement than bail you out in your 30’s.

Isn't the point to change as you get closer to retirement? When your investments have a decade plus to recover, leave them in aggressive investments. There is a risk that a decade+ recession might mean delaying retirement, but in that situation delaying retirement is likely the best option even if your money was in s safe investment.

Once you are close to needing some amount of money, say X a year, then you don't have time for that X to recover, so the idea is to move X into a safer investment so it won't go up or down. Any money you don't need is still in aggressive options that have time to recover. Now you need X money every year, so you decide how many years you want to sacrifice growth for safety. Maybe 5 years, maybe 10 years. Call it Y years. Simulations show the historic optimal Y, though I don't recall the exact number and some people might want to gamble depending upon how much freedom they have to change X if needed. So X*Y is roughly the amount of money that needs to be in safer investments.

This all ends up being too complicated a math equation to optimize for the average person, so percentages are given that are much easier to follow which roughly work as a solution to this equation.

Individuals should be able to come up with their own plans based on what they want. For example, if I'm heading towards an early retirement, I might leave all my money in aggressive investments because if a market downturn hits, I'm okay with working a few more years before retiring. I'm also aiming for a retirement with big X spend a year, but have plans on how to live life if I have to move down to medium X or small X. Others might be aiming for a retirement of X and won't be able to make finances work with les than X, so they have to take a much safer approach to guarantee a retirement that doesn't lead to running out of money.

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

#416

Post by humansareok1 »

jacobsimon wrote: post #143
Beijinger wrote: post #130

All 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…

100% you're just adding additional volatility for higher returns. Backdate the strategy, doubtful you're beating the overall index on decade timescales.

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

#417

Post by [deleted] »

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…

[deleted]

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

#418

Post by Rinzler89 »

TacticalCoder wrote: post #350
jl2718 wrote: post #322

The original idea behind passive investing was to use the pooled intelligence of many traders guessing the value of cr I think we’re beyond that. Most traders are just trying to get a timing edge over the indices. This introduces the modern concept of passive investing as a positive feedback loop force-fed by monetary supply. The market seems to hate dividends and buybacks, preferring expansion or acquisition, but th…

Yeah. Some are saying passive investment is the biggest bubble of all times. The P/E of so many companies, not just tech ones, makes zero sense. Mandatory pension funds are a ponzi. And btw the EU is hard at work working on one atm: they re currently thinking hard as to how to capture the wealth of EU citizens and the latest iteration would be a mandatory fund to invest in... State sponsored companies. They ll oc cou…

Which EU countries do that?

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

#419

Post by ghaff »

sofixa wrote: post #414
ghaff wrote: post #409

Earlier quoted context omitted.

Probably because of the narrative that people are routinely fired out of the blue and that there is no recourse to also suddenly having tens of thousands of dollars in medical expenses also out of the blue.

It doesn't really matter how regularly it happens, only that it does happen and that there is zero recourse in that case. So people need to build their own safety nets in the US. I know it happens less frequently in tech, where people get compensation, but what % of workers are in tech? The median worker has no such luck.

And how comfortable are people in Europe and elsewhere when they don't have an income coming in?

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

#420

Post by ghaff »

graemep wrote: post #411
ghaff wrote: post #391

Earlier quoted context omitted.

I might argue that financial analysts are too focused on their models and this quarter's numbers but most of the better ones are actually pretty savvy about the trends and other happenings in the industry that they follow. They're as susceptible to the hype du jour as most people are but they're not actually stupid for the most part.

Yes, but remember there are multiple layers to that. I have worked as a buy side analyst in a small team (in my former career) and did much less detailed modelling. There is an incentive structure that pushes fund managers to look at their rankings this year: there is no point in aiming at outperforming over a decade if you got fired two years in for underperforming. It has happened to people who have not bought into…

No argument. Incentives matter. There's one company I looked at for a modest investment and I was like "This is the only company in the world that can do something that is obviously needed in semiconductors but has long cycles" and it stagnated for a year or two. (And then went up considerably.)

As a financial analyst I might very well have logically held off for a bit.

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