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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)

#251

Post by financltravsty »

archagon wrote: post #191
financltravsty wrote: post #167

Earlier quoted context omitted.

You are not an UHNW individual/institutional investor, so no "fund managers" of any note are going to waste their time on this wager. "Beating an index" is really easy. Up to $10MM you can choose most any financial instrument class in the U.S markets and have a good probability of finding alpha for a long time (that would beat the S&P500 18.40% YTD). Many proprietary trading firms, or market makers, or quantitative t…

What are “hyper-growth strategies”?

Anything entrepreneurial where there are outsized rewards for amount of risk taken.

I.e. not working a career unless it's necessary to build contacts or learn the "secret sauce" that you can leverage for the aforementioned

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

#252

Post by Maxatar »

Galanwe wrote: post #136
bumby wrote: post #116

Earlier quoted context omitted.

> assume nothing more than a normally distributed random variable But look at something like systemic risk: it’s not necessarily normally distributed. The S&P returns skew left. I’m sure there are other risk metrics that break this assumption as well.

Right, risk is often fat tailed, but unless we enter an expert discussion, for which HN is hardly a good medium, it is safe to assume 99% of strategies out there yield normally distributed returns. Non normally returned strategies are rarer and sophisticated.

The level of discussion that HN is a good medium for has absolutely no bearing or causal relationship with whether or not the actual stock market is normally distributed.

Imagine really thinking that the nature of a discussion forum can somehow influence the distribution of stock prices, as if stock prices examine comments on the Internet to determine their behavior.

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

#253

Post by mort96 »

KptMarchewa wrote: post #218
mort96 wrote: post #179

Earlier quoted context omitted.

I mean it does mean that they don't have faith in their ability to beat the market on average across significant time spans.

Or, it's just that risk management isn't about faith.

In my eyes, "we have sincere faith in our ability to sustain higher-than-market returns on average" and "our risk management calculations tell us that we will have beat the market on average with very high probability" are the same statement.

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

#254

Post by asdasdsddd »

OJFord wrote: post #106
asdasdsddd wrote: post #12

Earlier quoted context omitted.

The catch 22 for active management is that if they are actually good then they would just use their strategies to manage their own money.

They do. But if you offer the service to other people, you get a lot more money to play with (meaning you can do more or different things than you could with less) and get to charge performance fees etc. in addition to your own capital gains. Really, you could say it about absolutely any job, it's just a bit more direct with managing money. 'If you were any good at writing software you would just sell your own SaaS',…

That's the common claim, but if you actually look at the successful funds that beat market year after year, their public fund is always the low yield, experimental strategies while the internal funds demolish the market. The reality is that most lucrative strategies have a yield cap and people who find them quickly surpass the cap so they just keep the strategies to themselves.

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

#255

Post by gizajob »

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.

You could have doubled your money on Nvidia since January?? Look at the charts for all the evidence you need. There's survivorship bias in all the claims but it's easily done for the survivors.

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

#256

Post by gizajob »

throw0101d wrote: post #122
selestify wrote: post #23

Earlier quoted context omitted.

How does that explain Warren Buffet’s spectacular success?

> How does that explain Warren Buffet’s spectacular success? 1. Buffett has been underperforming the S&P 500 for about twenty years now: * https://www.linkedin.com/pulse/warren-buffett-has-underperfo... * https://news.ycombinator.com/item?id=37827101 For most people who are saving for retirement between the ages of (say) 30 to 65, that's most of their investing lifetime, and such underperform could radically effect t…

To be fair to him, he does say time and time again "Invest in an S&P Index Fund"

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

#257

Post by gizajob »

dukeyukey wrote: post #246
bityard wrote: post #207

Earlier quoted context omitted.

Index funds are not some clever hack, they are just tracking the combined productivity of the publicly traded companies that make them up. Whole market, or the top 500 as a representative slice, whatever. When you buy the whole US market for example you are saying, "I strongly believe that the overwhelming majority of companies in the US want to make shitloads of money and pass it down to themselves and their shareho…

Something I've wondered is how index funds effect companies entering the index for the first time. Like, let's say there's a company (TryerCo) that is the 501st biggest in the US. Big, but still one step away from being in the S&P 500. Then, one of the S&P 500s collapse. They exit the index, and TryerCo enters the index at position 500, despite no material change since the day before. Doesn't this mean a whole _heap_…

The ETFs are generally rebalanced once a quarter, so yeah, it really is a big deal when a company enters one of the main indices, and the price starts to move up in anticipation of the listing, then stays up because the ETFs, as you intuit, have to start buying it as a component of the market. Supermicro entering S&P500 and Arm entering Nasdaq 100 being good examples recently.

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

#258

Post by swexbe »

stavros wrote: post #217
hhmc wrote: post #216

Earlier quoted context omitted.

If you can consistently make more than 10% you don’t need to hamstring yourself with this terrible deal, you can just get investment on typical terms.

If I can consistently make 30%, this terrible deal will make me 20%, whereas the typical terms of management fees will make me 5%.

If you can consistently make 30%, a bank loan will make you 24%.

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

#259

Post by stavros »

swexbe wrote: post #258
stavros wrote: post #217

Earlier quoted context omitted.

If I can consistently make 30%, this terrible deal will make me 20%, whereas the typical terms of management fees will make me 5%.

If you can consistently make 30%, a bank loan will make you 24%.

Fair point. I don't know why BlackRock did it, then.

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

#260

Post by bobsmooth »

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.

I 10x with NVDA, but I got lucky. It's like winning the lottery.
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