Investing General Discussion

Khane · May 30, 2024

Araysar said:
I just fundamentally disagree with that from experience. Anyone who is willing to put in some time to learn can beat the average market return easily. Its 13% a year. You're being asked to produce just a tad more than a 1% return per month to beat the average. Its not a lot.

Anyone with 100-200 hours of basic investment/market/macros education can beat that and you already probably spent that much if not more in your life on this topic, you just didnt have direction or didnt know what to focus on. You're not being asked to become a day trader, to learn charts, technicals, candle patterns, etc.

All you're being asked to do is to take an ETF that you put money into blindly on a regular basis and then ask yourself: how much of this ETF is under performing and overperforming, and why am I paying an expense ratio for someone to load me up with losers on top of my winners aka "investing into the total market". Just take the winners from ETF, invest into them separately. What, you think you'll do worse than Cathie Wood or the professional hedge fund manager that loaded up that ETF with losers to begin with? This exercise alone can be done in just a couple of hours and produce meaningful improvements in your gains

Take the top 5% of performing companies and distribute your money amongst them and make your own quasi-ETF.

I get it, it sounds terrifying. I used to just do the SPY thing myself. But once you start taking it apart you realize how easy it is and what a ripoff ETFs are.

So what's the scoop with that poll?

Gravel · May 30, 2024

Araysar said:
I just fundamentally disagree with that from experience. Anyone who is willing to put in some time to learn can beat the average market return easily. Its 13% a year. You're being asked to produce just a tad more than a 1% return per month to beat the average. Its not a lot.

Anyone with 100-200 hours of basic investment/market/macros education can beat that and you already probably spent that much if not more in your life on this topic, you just didnt have direction or didnt know what to focus on. You're not being asked to become a day trader, to learn charts, technicals, candle patterns, etc.

All you're being asked to do is to take an ETF that you put money into blindly on a regular basis and then ask yourself: how much of this ETF is under performing and overperforming, and why am I paying an expense ratio for someone to load me up with losers on top of my winners aka "investing into the total market". Just take the winners from ETF, invest into them separately. What, you think you'll do worse than Cathie Wood or the professional hedge fund manager that loaded up that ETF with losers to begin with? This exercise alone can be done in just a couple of hours and produce meaningful improvements in your gains

Take the top 5% of performing companies and distribute your money amongst them and make your own quasi-ETF.

I get it, it sounds terrifying. I used to just do the SPY thing myself. But once you start taking it apart you realize how easy it is and what a ripoff ETFs are.

Miraculously even professionals somehow can't do this. But any asshole with 100 hours to spare and it's a foregone conclusion. Amazing stuff.

Araysar · May 30, 2024

Gravel said:
Miraculously even professionals somehow can't do this. But any asshole with 100 hours to spare and it's a foregone conclusion. Amazing stuff.

Its amazing how much you trust the "professional" class even knowing how much you hate them. But you're essentially correct. Yes, you can do better than them with 100 hours of learning.

I summarized this in Stock Pals chat earlier this morning:

You can extend advisors to ETF managers. They're not there to make you money, theyre there to avoid losing it while skimming off the top. Once you realize that, you realize why your ETF makes ONLY 13% a year on average and is loaded up with underperformers and sometimes outright losers.

Just look at Cathie Wood and ARKK

Jysin · May 30, 2024

Araysar If it's that easy, I have a close friend that is a Managing Director for CS (ex-Goldman). If those returns are "that easy", I guarantee you can find a spot on their trade desk.

Spoiler:

Captain Suave · May 30, 2024

Araysar said:
They're not there to make you money, theyre there to avoid losing it while skimming off the top. Once you realize that, you realize why your ETF makes ONLY 13% a year on average and is loaded up with underperformers and sometimes outright losers.

You're saying they intentionally lose client money by willfully foregoing reliably available returns in order to keep from losing client money?

Khane · May 30, 2024

Why is anyone arguing with someone who's position is that because he beat the S&P over a 5 month period in 2024 he's proven his track record?

Araysar · May 30, 2024

Captain Suave said:
You're saying they intentionally lose client money by willfully foregoing reliably available returns in order to keep from losing client money?

No, I am saying the opposite. They dont forego reliably available returns, they RELY on them. But in order to rely on them, they have to be low risk. And if they are low risk, then they are likely low yield. Because if there was a high yield, low risk security everyone would be holding that.

And that's why you get only 13% on average per year.

Araysar · May 30, 2024

Jysin said:
Araysar If it's that easy, I have a close friend that is a Managing Director for CS (ex-Goldman). If those returns are "that easy", I guarantee you can find a spot on their trade desk.

Spoiler:

View attachment 530828

Top 50 hedge funds outpaced S&P 500 by more than 3% over the past five years - Hedgeweek

This year's Top 50 Hedge Funds – according to new research from Global Investment Report – collectively outpaced the market over the trailing five years

www.hedgeweek.com

Palum · May 30, 2024

IDK, also when you need to sell 10 shares it's a lot different than trying to liquidate 1.5M. I've been able to 'beat the market' over the last couple of years just by being slightly discerning on shorter timescales (like lowering my position in Boeing when they started having serious issues).

Tuco · May 30, 2024

Araysar said:
Top 50 hedge funds outpaced S&P 500 by more than 3% over the past five years - Hedgeweek

This year's Top 50 Hedge Funds – according to new research from Global Investment Report – collectively outpaced the market over the trailing five years

www.hedgeweek.com

.

Outsize returns are a killer. Avoid funds that are generating numbers that are too good to be true. Sooner rather than later, that will be borne out.

Araysar · May 30, 2024

Palum said:
IDK, also when you need to sell 10 shares it's a lot different than trying to liquidate 1.5M. I've been able to 'beat the market' over the last couple of years just by being slightly discerning on shorter timescales (like lowering my position in Boeing when they started having serious issues).

Yes, thats the other big part of it. The act of buying large blocks of stock disrupts the market price by itself. Unloading the stock on bad news is also very difficult if you're holding millions of shares

As a retail trader you have the flexibility and the agility that hedge funds dont have, on the other hand they fuck you with HFT shenanigans to make up for it

Araysar · May 30, 2024

Tuco said:
.

Man, its really something to watch the "professional class" tell you to keep your expectations low and just be happy with what you're given.

I doubt they stay happy with a 13% return themselves.

Captain Suave · May 30, 2024

Araysar said:
No, I am saying the opposite. They dont forego reliably available returns, they RELY on them. But in order to rely on them, they have to be low risk. And if they are low risk, then they are likely low yield. Because if there was a high yield, low risk security everyone would be holding that.

Araysar said:
Anyone who is willing to put in some time to learn can beat the average market return easily... Anyone with 100-200 hours of basic investment/market/macros education can beat that

So are these trivially accessible increased returns low risk or high risk? It sure seems like you're advocating to adopt more risk and only counting the upside. That's the kind of strategy that works great until it doesn't.

Araysar · May 30, 2024

Captain Suave said:
So are these trivially accessible increased returns low risk or high risk? It sure seems like you're advocating to adopt more risk and only counting the upside. That's the kind of strategy that works great until it doesn't.

Dumping your losers isn't increasing risk.

To me the strategy of taking an ETF, stripping out all the losers, keeping the winners, then bucketing them into industries, then calculating which industries are performing the best to discover top performing industries, and then rotating into the performers in that industry seems like a no brainer vs. just investing into SPY. It also seems to be very low risk to me especially if these companies are indispensable (like energy companies) or have had large caps for a while (MSFT, GOOGL, AMZN, etc)

Captain Suave · May 30, 2024

Araysar said:
Dumping your losers isn't increasing risk.... seems like a no brainer vs. just investing into SPY. It also seems to be very low risk to me

Right, so like I said before you're claiming that the entire investing world is willfully passing up a high-return low-risk strategy, which is a choice that loses money, in order to not lose money.

Khane · May 30, 2024

Fairly new 401k as I was a consultant for this company until 2022. Here is my rate of return since 2022:

Here is my fund distribution (my plan won't allow me to invest in a single fund, I have to put at least a trivial amount into at least 5 funds)

Care to share your performance and fund distribution for that 401k over the same time frame comrade?

Araysar · May 30, 2024

Khane said:
Fairly new 401k as I was a consultant for this company until 2022. Here is my rate of return since 2022:

View attachment 530833

Here is my fund distribution (my plan won't allow me to invest in a single fund, I have to put at least a trivial amount into at least 5 funds)

View attachment 530834

Care to share your performance and fund distribution for that 401k over the same time frame comrade?

I dont have a fund distribution. I dont hold ETFs. I hold individual equities. That's the point.

P.S. at least 2% of your FXAIX is in Real Estate which is almost certainly losing you money.

Khane · May 30, 2024

So you won't put up AND you won't shut up

Araysar · May 30, 2024

Captain Suave said:
Right, so like I said before you're claiming that the entire investing world is willfully passing up a high-return low-risk strategy, which is a choice that loses money, in order to not lose money.

You're clearly just looking to argue and I'm just trying to help. We can disagree.

Captain Suave · May 30, 2024

Araysar said:
You're clearly just looking to argue

Because what you're claiming is confidently incoherent and facile.

Investing General Discussion

Got something right about marriage

Mr. Poopybutthole

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Got something right about marriage

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what Suineg set it to

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Caesar si viveret, ad remum dareris.

Got something right about marriage

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Chief Russia Reporter. Stock Pals CEO. Head of AI.

Got something right about marriage

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Chief Russia Reporter. Stock Pals CEO. Head of AI.

Caesar si viveret, ad remum dareris.