461–470 of 496 posts
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Reminds me of that scene in The Long Short where Michael Burry is hemorrhaging money on the bet against CDSes and basically everyone has completely turned on him.
*The Big Short, for anyone curious.
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> 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…
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> 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…
1000% but when it is the right time (per fundamental analysis). For example around the subprime crisis companies such as Microsoft had a low PE ratio and the average person thought that Microsoft was a loser vs. Apple and Google. Microsoft has a resilience track record that would be the envy of most companies and .NET was a real thing. I also remember other companies such as Globant that has a lower PE price vs. simi…
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They mentioned the timeframe as 2006-2016. I think they were purposely omitting the recent gains to highlight their point about the unexpectedness of NVDA's stock jump.
Exactly. NVDA wasn't clearly a winner until the past 2 years or so. From Jan 1 2016 to Jan 1 2020, it grew by 8x -- certainly impressive (70% year-over-year growth). From there until the ChatGPT announcement in Nov 2022, it maybe doubled once more (peaked from the crypto-induced GPU shortage, then was falling). But from there on out, in the course of 20 months, it's skyrocketed 8x (an absurd 250% year-over-year growt…
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.
What about the book made the difference? I'm 100% convinced that it's better to do as you say, and forget about the accounts, and also unable to resist the temptation to check them every day. I'm constantly tempted to make changes.
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Yep I’m just pointing out S&P. Or VTI anre not magic There are funds that beat them often. Is your claim they don’t exist? Or that you can’t find them.
The claim is that there are no funds that can make a convincing argument that they will beat S&P. When you say funds did "exactly that", the "exactly that" you're talking about is not the thing OP is asking for. Taking on 90% of upside and 100% of downside is one way to make a convincing argument, and nobody does it. Let's make the dice analogy. You can't make a convincing argument that you will roll a 5, even though…
The reason why no fund will take that deal is the market for investments is much more favorable to managers than that.
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Do you have data to back that up?
You can pull up SP100 and SP500 and look at their historical returns. SP100 is an actual index, not something I made up for illustration. If you look at the last 40ish years, SP100 is up roughly 45 times, SP500 is up roughly 50 times. What might help understand this concept intuitively is if you take it to the extreme: what if you always held only the very first company of the SP500. Sure, you would have a lot of the…
These are the 10 year returns I’m seeing according to S&P:
S&P 500: 11.1%
S&P 500 Top 50: 13.2%
S&P 500 Top 10: 18.1%
The trend is pretty clear, at least in the last decade. My other point was that the historical data may not be as relevant because the index is much more top-heavy today, perhaps in part due to the popularity of index funds and part because the top companies are actually outperforming.
Here’s an article to that effect - the top 20 stocks in the S&P accounted for ~90% of the index’s gains last year: https://www.visualcapitalist.com/cp/top-20-stocks-sp-500-ret...
To your question about picking the extreme Top 1 stock - again I’m having trouble finding good data on that, but I’d be curious what the hypothetical outcome would have been over the last 20 years.
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The claim is that there are no funds that can make a convincing argument that they will beat S&P. When you say funds did "exactly that", the "exactly that" you're talking about is not the thing OP is asking for. Taking on 90% of upside and 100% of downside is one way to make a convincing argument, and nobody does it. Let's make the dice analogy. You can't make a convincing argument that you will roll a 5, even though…
I think we are talking past each other and it’s not worth continuing this discussion. The reason why no fund will take that deal is the market for investments is much more favorable to managers than that.
That's the problem. When you use the phrase "exactly that", you're making a claim that you're not talking past.
I agree that this is a talking past situation. But that makes your original post wrong, because of how you used the phrase "exactly that".
> The reason why no fund will take that deal
It's less about this specific deal and more about any deal that shows confidence.
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> 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.
Your falling for the same trap as most novice investors - past performance has no predictive value of future performance. In fact, high performing equities if anything tend to fall and regress to the mean.
Ok, honest question. Have you ever looked at the S&P, say over 50 years? Just simple yes or no.
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Wouldn’t the most risk-efficient strategy both depend on a large number of factors and also, in any case, start off with a higher allocation of equities and move over time to a higher allocation of bonds? The stock market has never not outperformed bonds over a 45 year period, maybe even half that, so if you’re 20 and putting 40% of your savings in an account you can’t touch until your 65, you’re kind of just chuckin…
> Wouldn’t the most risk-efficient strategy both depend on a large number of factors and also, in any case, start off with a higher allocation of equities and move over time to a higher allocation of bonds? Not really. The most risk-efficient strategy optimizes the ratio between expected return (less the risk-free rate) and volatility (standard deviation), regardless of the absolute value of those parameters. If that…
Ending up at 60/40 might be a good plan, but starting there seems a waste of money.