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I have made the decision to disband Hindenburg Research

hindenburgresearch.com

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Re: I have made the decision to disband Hindenburg Research

#421

Post by eru »

graemep wrote: post #282
matwood wrote: post #263

Earlier quoted context omitted.

10+/trade is going back to the early 2000s for the US. Now it's effectively 0 for most common trades. Here is Schwab for example: https://www.schwab.com/pricing If someone is a big options trader they can probably find a better per contract price out there.

How do they profit? There must be a cost somewhere? Another reply mentioned spreads - still a cost (you lose money when you trade).

Low cost brokerages mostly earn money from the interest rate differential, ie what they pay from your un-invested balances vs what interest they pay you.

They also earn some money from 'payment for order flow'.

Re: I have made the decision to disband Hindenburg Research

#422

Post by eru »

kortilla wrote: post #420
graemep wrote: post #381

Earlier quoted context omitted.

tighter spreads are not zero spreads

What’s your point? The spreads are tighter than you would get on the open market. NBBO requires that if there is something better that Robinhood gives it to you.

I think the point is that if you trade, you pay the spreads. Market makers can help you pay narrower spreads, but you still pay them.

If you just hold your index fund, you don't pay these recurring spreads.

Re: I have made the decision to disband Hindenburg Research

#423

Post by eru »

intuitionist wrote: post #306
maest wrote: post #300

Earlier quoted context omitted.

You pay the spread and you also have impact in the market.

If you’re trading US large-cap stocks at low frequency these are not really material costs for even a wealthy retail investor. Certainly not next to taxes.

The spread is a material cost, but the market impact is negligible for retail investors, yes.

Re: I have made the decision to disband Hindenburg Research

#424

Post by eru »

fakedang wrote: post #214
tombert wrote: post #186

Earlier quoted context omitted.

This doesn’t surprise me in the slightest. Most of my investing is just in passive S&P index funds, but I do occasionally buy individual shares. Sometimes I make decent money, sometimes I lose money…turns out I consistently do worse than the S&P long term. I treat buying individual shares as yuppie gambling at this point. It can be fun, but it’s usually a bad strategy.

> I treat buying individual shares as yuppie gambling at this point. It can be fun, but it’s usually a bad strategy. I would actually recommend the opposite - buy shares of a few companies that you know exceptionally well. That is, not just the companies, but also the market, the industry trends, etc. Charlie Munger recommends holding 5 stocks at max, while Peter Lynch suggests industries that are tangential to your…

> That is, not just the companies, but also the market, the industry trends, etc.

That sounds like exceedingly bad advice.

Eg I work in software (like many people here). So my career itself already heavily exposes me to ups and downs of that industry; but it's also the industry I know best. The advice you quote would see me increase my already outsized exposure to that industry ever more.

Diversification is the only free lunch in finance. Your advice rejects it.

> The problem with most ETFs is that you'll still be investing in a bunch of dud companies, whose only reason for staying in the market is by virtue of being big (think HPs and IBMs, for example).

Feel free to use the gambling money part of your portfolio to short them.

And since HP and IBM etc are publicly traded, there are already lots of short sellers around making sure the prices stay reasonable.

Re: I have made the decision to disband Hindenburg Research

#425

Post by eru »

Scoundreller wrote: post #205
tombert wrote: post #186

Earlier quoted context omitted.

This doesn’t surprise me in the slightest. Most of my investing is just in passive S&P index funds, but I do occasionally buy individual shares. Sometimes I make decent money, sometimes I lose money…turns out I consistently do worse than the S&P long term. I treat buying individual shares as yuppie gambling at this point. It can be fun, but it’s usually a bad strategy.

> I treat buying individual shares as yuppie gambling at this point. It can be fun, but it’s usually a bad strategy. Naw, that's boomer gambling. Options are yuppie gambling.

Yuppies were a thing in the 1980s. I think you have your timelines off.

Re: I have made the decision to disband Hindenburg Research

#426

Post by eru »

kragen wrote: post #262
xenihn wrote: post #199

Earlier quoted context omitted.

I've done it repeatedly over the past ten years while DCA'ing. I basically made my own custom funds with 5-10 stocks, set daily purchases for a specific amount, and didn't think about it. Unfortunately I didn't invest enough each time for the amount to be significant, and I also stopped DCA'ing as soon as I couldn't resist checking, saw that I had reached or was approaching a 10% loss in my overall DCA portfolio, and…

I'm guessing "DCA" means "dollar-cost averaging": https://www.investopedia.com/terms/d/dollarcostaveraging.asp

Yes, and it's silly and doesn't work.

Re: I have made the decision to disband Hindenburg Research

#427

Post by eru »

dmos62 wrote: post #257
WalterBright wrote: post #147

Earlier quoted context omitted.

> I've ironically lost more money the more closely I've paid attention to my investments Money Magazine a few years ago compared various investment strategies in stocks. The #2 best performing one was investing in the S&P 500. The #1 best performing strategy was the "dead man strategy". The dead man strategy comes into play when the investor dies, and his estate gets frozen until it winds its way through the courts.…

So invest in s&p 500 and do nothing, right? That's a good strategy for someone young, because it makes sense to be risk tolerant then. As you age you want more and more of your portfolio in bonds/cash, because you want the reduced fluctuation in purchasing power (i.e. comfort) that that brings you. These are the bare fundamentals of portfolio management.

If you are young, you might even want to invest more than 100% of your portfolio into the S&P 500.

Re: I have made the decision to disband Hindenburg Research

#428

Post by eru »

JumpCrisscross wrote: post #175
WalterBright wrote: post #147

Earlier quoted context omitted.

> I've ironically lost more money the more closely I've paid attention to my investments Money Magazine a few years ago compared various investment strategies in stocks. The #2 best performing one was investing in the S&P 500. The #1 best performing strategy was the "dead man strategy". The dead man strategy comes into play when the investor dies, and his estate gets frozen until it winds its way through the courts.…

> turns out that doing nothing with your stock investments is (statistically) the best strategy The only thing a small investor can control are fees. Minimising transactions minimises fees.

No, you can also control diversification and taxes.

Re: I have made the decision to disband Hindenburg Research

#429

Post by eru »

WalterBright wrote: post #177
JumpCrisscross wrote: post #175

Earlier quoted context omitted.

> turns out that doing nothing with your stock investments is (statistically) the best strategy The only thing a small investor can control are fees. Minimising transactions minimises fees.

You also get heavily taxed for the short term gains.

Depending on jurisdiction.

Re: I have made the decision to disband Hindenburg Research

#430

Post by eru »

kjksf wrote: post #267
matwood wrote: post #250

Earlier quoted context omitted.

You can also short the USD by buying a different currency. BTC would be more like shorting all currencies.

Buying BTC is shorting money printing by your government. Today the only government (that I know of) committed to not printing money is Argentina but they have other issues affecting their economy and therefore inflating their currency. Given that governments don't seem to have desire stop money printing any time soon, buying BTC is sound.

> Today the only government (that I know of) committed to not printing money is Argentina [...]

You don't know many countries, do you?

Argentina still prints more money, and has higher inflation, than most places around the world.

Singapore and Switzerland are some examples of nicely conservative monetary policy.

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