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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)

#421

Post by iamacyborg »

dukeyukey wrote: post #372
zeroonetwothree wrote: post #139

Earlier 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.

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…

GW seems to be mostly flat though the dividends are nice. I wish I’d bought a chunk a decade ago

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

#422

Post by triceratops »

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…

> Seriously, what percentage of people in OECD can do this?

Far more than those that actually do.

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

#423

Post by rybosworld »

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.

The majority of supposed "experts" are not beating the market. Its probable that the only difference between them and you is the belief/confidence in their skillset.

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

#424

Post by orojackson »

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…

> You can reduce your microeconomic risks by making investments in and around your sector of occupation. Especially when betting against yourself.

Or I can just put my money in something like VTI (total US stock market) or VT (total world stock). Effectively does the same thing with almost zero effort. One thing I don't really like about the comments here is how insistent people are in doing something specific as opposed to picking the simplest thing and then sticking to it. Most of the power of investing comes from time.

Admittedly, though, I have been putting new money into a leveraged ETF, RSSB, which is a 2x leveraged 50/50 global stocks and bonds fund (so 100/100). Existing money is still in VT. The only reason why I'm pursuing this is because of Cliff Asness's great article [1], which argues against going 100% stocks (which I used to do) and instead prefers using something like leverage on a 60/40 portfolio.

[1] https://www.aqr.com/Insights/Perspectives/Why-Not-100-Equiti...

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

#425

Post by milesvp »

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.

If you can time the market, then by all means, do that. The reason periodic rebalancing works, is because stocks and bonds don’t exclusively go up (or down). By rebalancing you can take advantage of a racheting effects as a result of signal variance. By rebalancing at set times, you can overcome the psychological effects of waiting just one more day to get gains that then evaporate while you watch.

I’m having a hard time finding the paper around instantaneous rebalancing eroding the effects (or any good papers atm). But you can model this very easily. You can take 2 signals that randomly walk up or down. One at a “high apr” and one with a “low apr”. I’m not sure if it matters, but typically I’d expect the lower apr to have lower variance of the 2. Most of the literature around rebalancing assumes lower volatility of at least one asset class, but I’m not convinced it’s necessary from some of the math I’ve seen. You may need to add an assumption of correlation between the 2. Be sure to include code that if a signal reaches 0 it stays there. Be sure to backtest as well. Few strategies work in a bear market, but rebalancing is expected to still outperform when markets go down.

Kelly criterion is another thing to look up. It’s a mathematical look at betting stategies and what’s the biggest bet you can afford to make in the long term given that no bet is 100% gauranteed.

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

#426

Post by dukeyukey »

iamacyborg wrote: post #421
dukeyukey wrote: post #372

Earlier quoted context omitted.

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…

GW seems to be mostly flat though the dividends are nice. I wish I’d bought a chunk a decade ago

I only bought about a month ago, and I'm up 10% already, plus a round of dividends. I'm not trying to time the market, I just think GW is a great company with a lucrative future.

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

#427

Post by usaar333 »

ChrisMarshallNY wrote: post #87
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.

> the only year it actually lost money, was 2020 -and it has completely made up for that. It even made some money in 2008

How did you manage to not lose money in 2022? Almost every asset class was negative then.

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

#428

Post by exclusiv »

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…

I agree and Michael Burry has warned about it. There's no real price discovery on these index funds. Money comes in - buy all in the fund regardless of any fundamental. And many of those stocks aren't that liquid so in an exit and a dump, they will get destroyed.

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

#429

Post by arcanemachiner »

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.

With enough darts (and monkeys throwing them), you're bound to get some outliers over time.

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

#430

Post by sofixa »

ghaff wrote: post #419
sofixa wrote: post #414

Earlier quoted context omitted.

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?

As discussed, there is much less of a chance that you'll suddently find yourself with no income when you live in most of the EU+UK+Aus+NZ.

And if you do, you're still less uncomfortable because your healthcare is not tied to your employer. Unemployment and other related aids/insurances/benefits will vary wildly between countries, but I'd still bet the majority do it easier than in most US states.

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