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Stock market charts you never saw (2021)

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Re: Stock market charts you never saw (2021)

#241

Post by baby »

coliveira wrote: post #71

Until the beginning of the 20th century, stocks were viewed as a purely speculative investment. The idea that buy and hold will provide great returns is a modern one and is supported by the growth of the stock market in the 20th century. There is also the issue of survivorship bias. The SP500 and Dow Jones indices regularly discard the losers and add new companies, so we don't know the true results of holding compani…

Tangential but why do people always cite the DJ when it only has a dozen handpicked companies? Doesn’t sound like a great metric

Re: Stock market charts you never saw (2021)

#242

Post by baby »

bionsystem wrote: post #235
trompetenaccoun wrote: post #230

Earlier quoted context omitted.

Everyone doesn't know how to successfully invest or there wouldn't be so many middle class and poor people. Buying and holding (a broad index tracker) seems like the best strategy for someone who doesn't know about the businesses or can't be bothered to follow the market. It's the most passive strategy. Imo the mistake most make is they mentally compare it to themselves reading a bit online and then picking stocks ba…

There are hedge funds beating markets over and over, some have been macro driven, some are equity driven, some are quant driven... Now of course it's a pareto law, only a handful out of 100 will get all the excess return and the others will stagnate or underperform indices (or even fail completely). But the same goes for building any company, most of them fail and we watch winners in awe.

I remember reading this book pointing out that the big hedge funds that would repeatedly beating markets in the past ended up failing hard in recent years. That really nothing beats index funds.

Re: Stock market charts you never saw (2021)

#243

Post by spyder »

worik wrote: post #96

For modern computing/finance type of people (I was but now have reformed) the lack of financial data is a problem. Even if you can get access to every trade, which is hard, the amount of data is not what modern machine learning types require. Thr EMH is a hard mistress too. There is no amount of data that can help you solve unsolvable equations. So alot fall into this trap, synthetic data. Some of the best statistici…

If you are interested in the machine learning part, you can try the Numerai tournament ( https://numer.ai ). They provide obfuscated high quality hedge fund data that participants can train their models on and send back only their predictions and then they combine the user's predictions into their market neutral meta model which they actively trade. So far their fund's returns looks promising in their category (market neutral fund) especially in the latest months: https://numer.ai/fund

You can get reward too if you stake their own "made up" crypto token on your prediction, but that comes with the usual crypto volatility risks too, so I do not recommend staking as a beginner unless you have a top model and OK with the crypto risk. Also they use only the staked predictions in their meta model because they use the stake size as an indicator for confidence of the user in their model (they are creating a stake weighted metamodel)

It's not easy too be good at it and it's getting harder because they want not only good predictions but diverse set of models which help eachother to improve their meta model (that's the TC metric on their leaderboard of models). If you have some machine learning experience it's easy to get started with their example script and see how far you can get with hedge fund quality data. Boosted tree models are having good results but Neural Nets are more customizable so you can try more exotic models with them to have the diversity they are looking for.

Also one of their early investor is Howard Morgan the co-founder of Renaissance Technologies.

Re: Stock market charts you never saw (2021)

#244

Post by baby »

bionsystem wrote: post #234

I read a few books on early 20th century finance and trading last years, some stories are quite fascinating to say the least. I really like this period of time, everything both in the economy and finance / stocks was quite reckless, it still is today of course but it was on a whole other level with bucket shops, insider trading, fake tips, etc. This work is interesting because few people were really doing charts at t…

Damn. I’m wondering if crypto could follow a similar path, especially with ICOs.

Re: Stock market charts you never saw (2021)

#245

Post by baby »

duderific wrote: post #110
nly wrote: post #87

Earlier quoted context omitted.

Peoples perceptions of number sizes don't change quickly. 1 million will still seem like a big number. It's likely at some point we'll have to re-denominate. There will be a 'new Pound' or something that is worth 100 'old Pounds'. You can see the number phenomenon today. People still talk about "winning £1M on the Lottery" like it'd set them up for a life of luxury. To reasonably replace even a median UK full-time sa…

Or we can make 100 trillion pound notes like in Zimbabwe https://www.cnn.com/2016/05/06/africa/zimbabwe-trillion-doll...

Or japan. In romania people still say “one million” instead of “one hundred”

Re: Stock market charts you never saw (2021)

#246

Post by baby »

nly wrote: post #87
nostromo wrote: post #78

The Titanic was built a bit over 100 years ago for 1.5m pounds -- today that'd buy you a nice London two-bedroom apartment. I wonder if in 100 years from now, people will casually be talking about their nice (but modest) London two-bedroom apartment they bought for 100m pounds.

Peoples perceptions of number sizes don't change quickly. 1 million will still seem like a big number. It's likely at some point we'll have to re-denominate. There will be a 'new Pound' or something that is worth 100 'old Pounds'. You can see the number phenomenon today. People still talk about "winning £1M on the Lottery" like it'd set them up for a life of luxury. To reasonably replace even a median UK full-time sa…

Interesting. I remember that some Bitcoin people were trying to do the reverse when the price was 1000+ by talking about mBTC instead of BTC. I guess http://bitcoinity.org/markets still does it.

Re: Stock market charts you never saw (2021)

#247

Post by Galanwe »

tiffanyh wrote: post #203
Galanwe wrote: post #201

Earlier quoted context omitted.

I don't see how that relates to the article?

The graphs are about long term returns. And how are those returns calculated? Because if they used arthritic mean, it’s overstating the actual annualized return.

Two things to note here.

First, it does not "overstate" the annualized returns. It just brings a particular view of them, which is the "expected annual return" vs the "compoundable annual return". Both are perfectly equivalent and represent different ways to look at annual returns. I would expect most practitioners to expect the former.

Second, this debate is completely irrevant here, as all charts show cumulative returns based on a $1 investment.

Re: Stock market charts you never saw (2021)

#248

Post by gpderetta »

NovemberWhiskey wrote: post #114
ghaff wrote: post #113

Earlier quoted context omitted.

Right. Life annuities may or may not be a good deal. But that's certainly the main way to not be essentially forced to pass on assets. (Modulo real estate you own and are living in.) And, as you say, defined benefit pensions basically work the same way--although, in the US, current ones are fairly uncommon outside public sector--although a lot of people still have them from years past. Just to add. Bonds and CDs do h…

In the UK this is actually the typical pattern for defined-contribution schemes; I haven't looked recently but it used to be the case that you were legally required to buy an annuity with 75% of your tax-deferred retirement savings.

The rules were changed some time ago; also buying an annuity hasn't been worth it for a while.

Re: Stock market charts you never saw (2021)

#249

Post by _glass »

smaddox wrote: post #98
sleton38234234 wrote: post #92

I have a theory. The last 100 years has seen govt spending as percent of gdp increase to ever greater levels. People are expecting more and more handouts and no one wants to pay for it. Without the ability to pay for it via taxes, the govt will eventually have to default on it's currency and thus real returns on fixed income/bonds will have to become increasingly negative. Their article already shows a slight widenin…

Private debt dwarfed public debt until very recently, and it's still significany higher: https://braveneweurope.com/steve-keen-what-is-the-role-of-pu... Also GDP is a terrible proxy for economic prosperity. A broken window adds to GDP, but subtracts from prosperity. If we had a better proxy for prosperity, it would be easier to see if government debt was actually net negative or net positive effect. As is, all argume…

The Human Development index is kind of okay, if you don't want to go down the more qualitative path. https://hdr.undp.org/data-center/country-insights#/ranks

Re: Stock market charts you never saw (2021)

#250

Post by coliveira »

ClumsyPilot wrote: post #189
nwiswell wrote: post #171

Earlier quoted context omitted.

Moreover the more modern approach is share repurchases, which are largely not subject to the tax drag and use the same money that was used historically for dividends.

It is worth noting that until 1982, stock buybacks were illegal—deemed as market manipulation

It is still market manipulation, but made legal by the US gov, like other crimes such as lobbying.
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