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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)

#261

Post by lkdfjlkdfjlg »

ChrisMarshallNY wrote: post #133
benrapscallion wrote: post #91

Earlier quoted context omitted.

Is it invested in an index fund?

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.)

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

#262

Post by Marsymars »

qwytw wrote: post #64
cowthulhu wrote: post #46

Earlier quoted context omitted.

The key is that for every Apple, there are a ton of companies we don’t even remember the names of that went out of business or otherwise did not beat the SP500. Put another way - if you can reliably pick the next Apple before anyone else, you should go work in finance and make tons of money.

> Put another way - if you can reliably pick the next Apple before anyone else Problem is that it might take years to verify that. > The key is that That doesn't change the fact that there are plenty (in absolute numbers) of individual investors who consistently beat the market. Whether that's because of luck or something else is rather hard to tell.

> That doesn't change the fact that there are plenty (in absolute numbers) of individual investors who consistently beat the market. Whether that's because of luck or something else is rather hard to tell.

It's actually not very hard to tell; if it was because of something other than luck, you'd expect that beating the market in the past would have some predictive value of their ability to beat the market in the future.

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

#263

Post by citizen_friend »

emacdona wrote: post #104

To any fund manager out there that truly believes you can beat the market, here is how you can sell me your fund: We agree on an index and a time frame. You guarantee me the same return as the index within that time frame. If you beat the index, you keep 90% of returns ABOVE the index (and I get 10%). We both win, and you win big. If you don't beat the index (within the time frame), you make up the difference (so I g…

This sounds clever but many funds did exactly that. What’s your point?

S&P + nvidia was better than just S&P over the last 5 years.

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

#264

Post by DavidJowel »

dkekenflxlf wrote: post #211
jbs789 wrote: post #208

Earlier quoted context omitted.

Can you elaborate on the regulations preventing corp implementation here please?

Sure, thanks for this question! In case of public funds: Depending on the jurisdiction, funds are allowed to invest only in certain securities, like stocks or bonds. In most countries, they are not allowed to use all available products; esp all products which offer high leverage (and highlosschances) are not allowed for institutionals. A private prop trading company may do it, though they are not managing billions (a…

[dead]

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

#265

Post by [deleted] »

Galanwe wrote: post #101
hamilyon2 wrote: post #94

Earlier quoted context omitted.

Is 10x borrowing even an option if we are talking retirement savings? I don't know much about finance. I guess that at that point (you borrowed 10 times your net worth). This is no longer your investment, it's your lender's investment. They will adjust interest rate to match the riskiness of whatever you are doing, leaving you with net zero. Borrowing money is not free.

> Is 10x borrowing even an option if we are talking retirement savings? Of course it is, though not exactly by "borrowing money" in a "mortgage" sense. Margin trading is a way to take leverage, derivatives is another. The former is simpler but costly, the latter is cheaper and allows you much more than 10x leverage, though it requires some high school mathematical thinking.

[deleted]

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

#266

Post by Marsymars »

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_…

This is basically priced in based on the odds of entering an index in the same way that potential acquisitions get priced in based on the odds of the acquisition going through.

I swear I've seen actively managed funds that explicitly trade based on stocks' potential to enter/leave indexes, but it's a terrible batch of terms to try to google.

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

#267

Post by wingworks »

Cthulhu_ wrote: post #182
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.

Anecdotally I can confirm there's been a few 40% years in the past decade, but it really is a gamble, and because of survivorship bias it's easy to only hear about the ones that gained and not the ones that lost.

I started my investing journey about 5 years ago, started with stock picking, and my average yearly return is... 4.5% p.a. I would've 100% been better of investing in a low fee index fund, like S&P500 (VOO), or even just a world ETF like VT.

I picked some winners, like Microsoft / Google, both up 150%, but they're tiny fraction of my total portfolio, so hardly returned anything all counted up. I did 170% at one point with Tesla too, but didn't sell at the peak. So ended up with 4.4%p.a. over 5 years.

Save to say I don't stock pick anymore and just buy VTI (kinda like VOO) and some VT.

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

#268

Post by wingworks »

dralley wrote: post #248
BeetleB wrote: post #156

Earlier quoted context omitted.

He's talking about 7 years. Lots of people do very very well on short timeframes. They usually balance out in the long run.

I bought into AMD stock when it was $10 per share, it's now $180, yes it's a bit lucky but I'm not bullshitting. It seemed quite logical to me at the time that they would do well. This was right as Intel was being savaged by Meltdown and the performance hits of the mitigations and Zen 1 was successful.

But will you sell in time for all that growth to not be eroded away? Tech has been doing really well last few years, but it won't last forever looking at history. So when do you sell, and what do you buy when you sell.

This is why people opt for low fee index funds, like a total stock market fund. It'll always be in the right companies.

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

#269

Post by carbotaniuman »

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.)

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.

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

#270

Post by dralley »

wingworks wrote: post #268
dralley wrote: post #248

Earlier quoted context omitted.

I bought into AMD stock when it was $10 per share, it's now $180, yes it's a bit lucky but I'm not bullshitting. It seemed quite logical to me at the time that they would do well. This was right as Intel was being savaged by Meltdown and the performance hits of the mitigations and Zen 1 was successful.

But will you sell in time for all that growth to not be eroded away? Tech has been doing really well last few years, but it won't last forever looking at history. So when do you sell, and what do you buy when you sell. This is why people opt for low fee index funds, like a total stock market fund. It'll always be in the right companies.

As noted in my original comment, a large portion of my savings / retirement IS in index funds. My individual stock investments represent such a large percentage of my account only because they've done very well, not because I dumped all my money into them.
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