Comparing Stock Market Strategies
Quote: ChallengedMillyThey've been right several times. Yes you can technically say they've been wrong more times than right since the 40s. Fair argument.
What seems very likely though looking at global financial instability is that things are eventually going to cascade across the globe and it's going to be worse than any other collapse except maybe the dark ages in Europe and Asia. It's less a thing of will it happen, only when it'll happen. So far we've been lucky.
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well, here's another point of view courtesy of the New York Times dated 12/31/2024
not that I believe them either
I'm from the nobody knows school of stock market prediction
my only belief is that it's a good investment for the long run - I know I can't foresee what will happen in the short run
from the article:
"on average analysts are forecasting that the S&P will rise around 10% in 2025
John Stoltzfus chief investment strategist at Oppenheimer is anticipating a 2025 gain of roughly 20%
this time last year there was so much trepidation and concern over the economy - markets just kept climbing the wall of worry"
https://archive.ph/uEsqN
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Quote: lilredrooster
I'm from the nobody knows school of stock market prediction
my only belief is that it's a good investment for the long run - I know I can't foresee what will happen in the short run
If you don't know what is going to happen you shouldn't be buying an index fund.
An index fund is essentially a bet that the top companies in the fund will go on being more profitable than alternative investments. If you don't know that to be the case you shouldn't invest.
Quote: Archvaldor1Quote: lilredrooster
I'm from the nobody knows school of stock market prediction
my only belief is that it's a good investment for the long run - I know I can't foresee what will happen in the short run
If you don't know what is going to happen you shouldn't be buying an index fund.
An index fund is essentially a bet that the top companies in the fund will go on being more profitable than alternative investments. If you don't know that to be the case you shouldn't invest.
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I like to play with my food.
Quote: ChallengedMillyMultiple well-done meta studies of investors have found only 1, perhaps sub 1 percent of day traders and amateur traders make back more than 7% annually. 99 percent lose far more than they gain.
Solve by experiment: use the exact same methodology on random blackjack players.
You will find the vast majority lose money.
So,no professional blackjack players exist? No. It is trivial to prove blackjack can beaten with card counting. Studies like this tell you nothing.
If 90% of these traders are losing, who is winning? Non-day traders?
Why doesn't anyone report on the success of buy-and-hold investors? What percentage of them had negative returns in the long term?
If 90% of day traders fail in the first year, are the remaining 10% thriving? I've been an A student almost my entire life and generally thrive in such situations.
Why did they fail? Did they have $50,000 and make a bunch of bad $5,000 bets? Did they lose half their bankroll and decide it wasn't for them?
A friend plays dividend roulette and lost about $ 200,000-day trading last year on his W/L statements. He pocketed about $240,000 in dividends. He'll happily tell you he loses money yearly on his day trading. Like the S&P, he omits divies in his returns.
Quote: billryanFor every trade, there is a winner and a loser.
If 90% of these traders are losing, who is winning? Non-day traders?
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This is one of a number of inherent contradictions in random walk theory.
I suspect our friends don't actually know the answer so I'll make it simple for them. Day trading isn't a zero-sum game because of commissions so frenetic and unfocused day-trading should result in all the investor capital being eaten up with no one winning but the brokers. There's one of the inherent contradictions dealt with for free: now our friends can deal with the other 139 that are much harder to reason away.
What happens when Investmet House B comes up with a similar program? Do the two programs work together , or possibly conspire with each other? Imagine if they were frontloading each other?
Quote: Archvaldor1Quote: lilredrooster
I'm from the nobody knows school of stock market prediction
my only belief is that it's a good investment for the long run - I know I can't foresee what will happen in the short run
If you don't know what is going to happen you shouldn't be buying an index fund.
An index fund is essentially a bet that the top companies in the fund will go on being more profitable than alternative investments. If you don't know that to be the case you shouldn't invest.
you're not qualified to give me advice - most of what you have posted here is nonsense
the idea that you DO KNOW what will happen in the short term is of course laughable
it's more likely that the world will end tomorrow than it is that I would place any value at all on advice from you
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There are roughly 15 separate major sectors of the market. Until the latest run of tech domination, almost everyone had years in the top five and years in the bottom five. Investing in only one part of the global market means you miss out on everything else.
Quote: billryanI'm guessing your tech index is the most successful of your ventures since you always harp on it. If that is the case, it isn't particularly impressive. Who cares how anyone else is doing if you are happy and on pace for a well-funded retirement? For someone who claims not to care , you sure do a lot of bellyaching.
There are roughly 15 separate major sectors of the market. Until the latest run of tech domination, almost everyone had years in the top five and years in the bottom five. Investing in only one part of the global market means you miss out on everything else.
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I reported some of my holdings
you reported a very lot of yours
but my reporting seems to bother you
I'm so very sorry about that
my bellyaching is only towards nonsensical comments such as some of the ones you have made
but Soopoo expressed it better than me - right here in this post :
Quote: SOOPOOQuote: billryanI don't care if I underperform or overperform the market. I care about my return. Nothing else matters to me. I've no idea why it is important to you. I'd rather have money for an extra vacation than a trophy for outperforming a fictional entity.
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It’s amazing that you can’t see how stupid your post is, especially on a ‘math oriented’ forum. Last comment on your inanity.
You really have NO IDEA why it’s important for someone to want to exceed expectations, rather than underperform them?
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Quote: lilredroosteryou're not qualified to give me advice - most of what you have posted here is nonsense
the idea that you DO KNOW what will happen in the short term is of course laughable
it's more likely that the world will end tomorrow than it is that I would place any value at all on advice from you
I'm not attempting to give you advice. I am pointing out that your own words don't make any sense, your argument has no internal logic.
Obviously I do know what will happen as I illustrated a few days ago. I just told everyone exactly what was wrong with the market and why before the trillion dollar market crash. It is disingenuous to pretend I didn't do that, any one can go and check.
Quote: Archvaldor1Quote: ChallengedMillyMultiple well-done meta studies of investors have found only 1, perhaps sub 1 percent of day traders and amateur traders make back more than 7% annually. 99 percent lose far more than they gain.
Solve by experiment: use the exact same methodology on random blackjack players.
You will find the vast majority lose money.
So,no professional blackjack players exist? No. It is trivial to prove blackjack can beaten with card counting. Studies like this tell you nothing.
What's the liquidity in a blackjack game? Who is on the opposite side of the transaction? How high is the ceiling for an individual who can successfully use a hi-lo count?
(my answers: anything over $500 risks having it cut to zero real quick; one casino; about $100 per hour for about 1000 hours per year).
Now try the same questions with the stock market.
(my answers: trillions; the entire world; many millions).
I agree it is possible to beat the market. But if someone hasn't earned their millions by using that skill, it's doubtful they are one of the people doing it.
Quote: TomG
I agree it is possible to beat the market. But if someone hasn't earned their millions by using that skill, it's doubtful they are one of the people doing it.
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The level of efficiency in any market gets higher the more you seek larger absolute returns. To state the obvious, to make a billion dollars requires a company to become worth at least a billion dollars. Those companies are watched more closely,.
Additionally your initial capital makes a big difference. Say a trader is a super-genius who makes 20% per month. If he starts with 10k his profits get eaten up by living expenses and his bankroll never grows. Unless he acquires an angel investor or gets a job with a leading firm he will likely die poor.
Most people don't have a lot of money and need to spend what they have on stuff.
I
Quote: Archvaldor1Quote: TomG
I agree it is possible to beat the market. But if someone hasn't earned their millions by using that skill, it's doubtful they are one of the people doing it.
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Firstt, there are blackjack players who significantly exceed $100 an hour via the use of various advanced techniques.
Second I think pretty much everyone who believes that the market can be beaten at all acknowledges that it gets tougher the higher you scale things. i.e the more money you bet the lower the ceiling on profit for a skilled investor.
Finally initial bankroll is a huge factor. Say someone is really smart and in 2020 bets their life savings of $500 in the best mainstream stock: Tesla. He has $10000 now. In reality that would have been spent on something essential. Most people just don't have a lot of money and have to spend what they have.
I
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That's why you have to pay yourself first. Invest 15% off the top. Investing what you have leftover is a losing method.
People who get into good financial habits early on generally succeed. When you invest your money, you will eventually lose some of it. Sometimes, you lose some capital; sometimes, you suffer the loss of opportunity. Your losses will add up over time, but your winnings will dwarf them.
True. It is absolutely essential to be frugal during the growth period when growing a bankroll.
The problem is that nowadays, especially for young people, they are not even covering their expenses however frugal they are, so there is no growth. Cost of living is probably destroying the career of numerous investors.
I don't know all that many young people, but it strikes me that a lot of them have turned their couches into revenue streams.
Quote: Archvaldor1
Additionally your initial capital makes a big difference. Say a trader is a super-genius who makes 20% per month. If he starts with 10k his profits get eaten up by living expenses and his bankroll never grows. Unless he acquires an angel investor or gets a job with a leading firm he will likely die poor.
If initial capital makes a big difference, then any additional capital we add after the initiation must also make a big difference. If he's as good as you say he is, he can figure out a way to cut living expenses by $100 per month or sell his labor for $100 per month and become the richest person in the world in a few years.
Quote: TomGQuote: Archvaldor1
Additionally your initial capital makes a big difference. Say a trader is a super-genius who makes 20% per month. If he starts with 10k his profits get eaten up by living expenses and his bankroll never grows. Unless he acquires an angel investor or gets a job with a leading firm he will likely die poor.
If initial capital makes a big difference, then any additional capital we add after the initiation must also make a big difference. If he's as good as you say he is, he can figure out a way to cut living expenses by $100 per month or sell his labor for $100 per month and become the richest person in the world in a few years.
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It doesn't sound like you have ever tried to work with no money.
It is not a question of cutting out a coffee or something. You can't cut your expenditure without cutting your productivity. You would already be taking massive risks with diet, general health etc.
AP's/Investors are generally incapable of and/or unwilling to do the type of self-promotion required to sell their labour effectively. If they did they would likely have no interest in AP/Investing and would have chosen a more conventional career path.
Quote: Archvaldor1It doesn't sound like you have ever tried to work with no money.
It sounds like you aren't experiencing earing 20% per month, yet still willing to make the claim about people doing that and staying broke.
Quote: Archvaldor1It is not a question of cutting out a coffee or something. You can't cut your expenditure without cutting your productivity. You would already be taking massive risks with diet, general health etc.
I love that you came up with something that is testable. Next month I will cut my expenditures and take on whatever diet and general health risks come with that and if my productivity isn't cut, then that would show you are wrong.
Quote: TomGQuote: Archvaldor1It doesn't sound like you have ever tried to work with no money.
It sounds like you aren't experiencing earing 20% per month, yet still willing to make the claim about people doing that and staying broke.
Er..no...it ia hypothetical example.
Quote: billryanAs of today's opening bell, nearly 20% of the S&P value is concentrated on just four stocks. They are good stocks, but historically, that is not a good thing.
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Yeah there's the problem.
Investing in the S&P 500 isn't some kind of default low-risk option.
You are taking a position that big tech isn't running some kind of ponzi scheme based around AI data centers. You would be naive in the extreme not to consider that as a possibility after one trillion got wiped off the market.
Quote: Archvaldor1Quote: TomGQuote: Archvaldor1It doesn't sound like you have ever tried to work with no money.
It sounds like you aren't experiencing earing 20% per month, yet still willing to make the claim about people doing that and staying broke.
Er..no...it ia hypothetical example.
Obviously. Because the hypothetical person earning 790% per year and staying broke is a dumb and meaningless example because it doesn't happen.
Quote: TomGQuote: Archvaldor1Quote: TomGQuote: Archvaldor1It doesn't sound like you have ever tried to work with no money.
It sounds like you aren't experiencing earing 20% per month, yet still willing to make the claim about people doing that and staying broke.
Er..no...it ia hypothetical example.
Obviously. Because the hypothetical person earning 790% per year and staying broke is a dumb and meaningless example because it doesn't happen.
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No, hypothetical examples aren't meant to have happened. That is why they are hypothetical. They are thought experiments designed to illustrate something: even if you had an unbelievable level of skill you would still not become rich if you have no access to capital.
The point since you seemed to have missed it, is very obvious. Most people do not have the money to invest seriously. This is one of a number of reasons why people who could beat the market intellectually might not be able to do so.
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Quote: Archvaldor1
Though,this was actually very close to my experience decades ago trying to make it as an online ap without a secondary income.
I would often make 50%-100% of my bankroll in a given month which would often get completely eaten up by living expenses and then some. I remember getting a lot of useless advice from people like you "cut back on expenses" (sorry I like eating food so I can stay alive and not being homeless) and "why don't you get an angel investor" (because I don't like to beg and do you know how many people will take a risk on a kid who wants to gamble)?
But hey knock yourself out with some more trust fund kid, "let them eat cake"-level awareness input, I'm sure it will be fascinating....
Here's a hypothetical for you: someone with no money goes out and does some work and earns $100 that day. What percentage of their bankroll did they make?
How about someone with $1000 in debts and no money (ie a bankroll of -1000) who goes out and does some work and earns $100. What percentage of their bankroll did they make that day?
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Your attempt as an online ap was using your time and labor to earn income, ie a job. Just happened a job that also required capital to maximize income. As a hypothetical, if you did have an "angel investor" that covered your living expenses and gave you $1000 to use as an online ap, could you have come back in three years with $2 billion? If not, the claims of 50% would be like someone else claiming they get 1,000,000% to stock shelves at Wal Mart.
I've made 20% per bet on certain college basketball edges. But $200 limits in the app and quite a bit of driving and walking to get down more than that. Hypothetically, if these opportunities came up everyday and I had $10,000 (and an investor to cover living expenses and worked 12 hours every day), that would be a 20% return on my bankroll the first day. But after three months it would be a 1% return. Calling a $2000 per day income "making 20%" would be dumb, because the percent changes by whatever my bankroll is. That's not how percents work.
Quote: TomG
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Your attempt as an online ap was using your time and labor to earn income, ie a job. Just happened a job that also required capital to maximize income. As a hypothetical, if you did have an "angel investor" that covered your living expenses and gave you $1000 to use as an online ap, could you have come back in three years with $2 billion? If not, the claims of 50% would be like someone else claiming they get 1,000,000% to stock shelves at Wal Mart.
I explained to you why people might not get rich from investing in the market even if they can beat it. One reason is that they don't have the money.
There isn't a lot of point getting into my or your ancient history with AP. Or discussing it at all. Investment is different. There was a reason why I deleted my original post.
How bizarre.
Quote: Archvaldor1I explained to you why people might not get rich from investing in the market even if they can beat it. One reason is that they don't have the money.
Beating the stock market requires a lot of time, labor, and expertise; getting rich off that requires capital. If someone doesn't have the capital, why are they going down the path of trying to build the skills to beat the stock market instead of something like optometry?
-If it's so they can start off as a fund manager, beating the market will absolutely get them rich.
-If it's as a hobby, they can also peruse something else along the way that will give them the money and then they'll become rich.
-Or they can do it to cover living expenses and from my experience something like that is much better working conditions than anything in the workforce. Because it's something with no liquidity issues, if they can also build the skills to figure out any possible ways to move past just covering living expenses, they'll get rich if they're beating it by anything close to your hypothetical example.
Quote: TomG
-If it's so they can start off as a fund manager, beating the market will absolutely get them rich.
You'd need 100k to be a fund manager.
Quote: Archvaldor1Quote: TomG
-If it's so they can start off as a fund manager, beating the market will absolutely get them rich.
You'd need 100k to be a fund manager.
All I would need is a job offer from Fidelity and then I would have access to millions or billions of client money to invest, plus a base salary of a few hundred thousand and if I can beat the market a bonus of a few million. If someone can show they've beaten the market so well in the past that they should be expected to do it in the future, why wouldn't they get that type of job offer?
Quote: TomGQuote: Archvaldor1Quote: TomG
-If it's so they can start off as a fund manager, beating the market will absolutely get them rich.
You'd need 100k to be a fund manager.
All I would need is a job offer from Fidelity and then I would have access to millions or billions of client money to invest, plus a base salary of a few hundred thousand and if I can beat the market a bonus of a few million. If someone can show they've beaten the market so well in the past that they should be expected to do it in the future, why wouldn't they get that type of job offer?
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For the same reason a kid who pitches a perfect game in high school isn't signed by the Yankees. Getting 15% returns on a smaller portfolio is much easier than on a grand scale. Many investment strategies aren't scalable. I can dump my entire position in a stock unnoticed. If Blackrock or Fidelity dumps a quarter of their position in a company, it sets off all kinds of bells and whistles. If I load up on a stock, no one notices. If the Oracle of Omaha does it, billions of dollars follow him.
I'm a tiny boat that can turn on a dime and be three steps ahead of the aircraft carrier who uses massive energy just to make a right turn.
Quote: billryanFor the same reason a kid who pitches a perfect game in high school isn't signed by the Yankees. Getting 15% returns on a smaller portfolio is much easier than on a grand scale. Many investment strategies aren't scalable. I can dump my entire position in a stock unnoticed. If Blackrock or Fidelity dumps a quarter of their position in a company, it sets off all kinds of bells and whistles. If I load up on a stock, no one notices. If the Oracle of Omaha does it, billions of dollars follow him.
I'm a tiny boat that can turn on a dime and be three steps ahead of the aircraft carrier who uses massive energy just to make a right turn.
Professional sports teams will be hiring thousands of athletes from the amateur ranks this year. This hypothetical 15-year-old will have an opportunity to pitch at a higher-level in a couple years. If he continues to do well, he will be signed by a pro team. At some point he will either wash out or be pitching at Yankee Stadium
Investment banks will also be hiring people coming out of college or moving over from other fields. They, too, will either keep moving up the ranks or stall out somewhere. The ones beating the market will be the ones making hundreds of millions during their careers. The ones who wash out are the ones who aren't beating the market.
As you correctly identify, at a certain point, they can become so good they essentially are the market and they really can't beat themselves. That's the point when they've moved from having hundreds of millions in wealth to billions.
Quote: TomGQuote: Archvaldor1Quote: TomG
-If it's so they can start off as a fund manager, beating the market will absolutely get them rich.
You'd need 100k to be a fund manager.
All I would need is a job offer from Fidelity and then I would have access to millions or billions of client money to invest, plus a base salary of a few hundred thousand and if I can beat the market a bonus of a few million. If someone can show they've beaten the market so well in the past that they should be expected to do it in the future, why wouldn't they get that type of job offer?
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You seem to have absolutely no idea how the world works.
Competence in some area does not elevate you to a position of importance.
Personal charm, networking, nepotism, corruption, dark triad traits, these are the things that determine success in the corporate world. Competence is not the issue: and in many cases this will mark you out as a threat to people higher up, retarding advancement.
This is why most of us are AP's. We don't have to deal with any of that crap ever.
If fund managers actually knew what they were doing then you couldn't beat the market in the first place.
Quote: Archvaldor1You seem to have absolutely no idea how the world works.
Competence in some area does not elevate you to a position of importance.
Personal charm, networking, nepotism, corruption, dark triad traits, these are the things that determine success in the corporate world. Competence is not the issue: and in many cases this will mark you out as a threat to people higher up, retarding advancement.
Needing personal charm or nepotism is far different than your previous claim that I would need $100,000 to be hired by an investment bank.
When investment banks start hiring recent college grads this year, a 4.0 from MIT or Wharton can go just as far as any of those other things. Then once in the pipeline tangible results do matter and has a lot to do with how people in those jobs are compensated. If someone qualified does get passed over because they lack the networking, they can ignore places like New York and go to the smallest and least prestigious online firm located in Delaware or New Mexico. And if they beat the market while working there, they'll get rich.
As a last resort they just use their high levels of skills and talents in a related position (or even an unrelated position) to earn an income that gets invested at returns that beat the market. Which makes them rich.
Quote: Archvaldor1This is why most of us are AP's. We don't have to deal with any of that crap ever.
Anyone who bets on casino games as a job can also bet on the stock market. And if they do well at casino games and those stock bets do better than the market over time, they'll get rich. The only possible thing that could ever stop them is if they instead spend their time on the internet making up excuses for why it can never work out like that for them.
Quote: billryanThis is approaching Dark Oz territory.
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Yeah I think it is just garden variety trolling. Tedious.
Quote: billryanPepsi just completed its takeover of Seite Foods, a leader in the Mexican food market. Pepsi has quietly cornered the Hispanic food market over the last few years. Pepsi's stock has been relatively mundane over the last few years, and the company is becoming less dependant on its cola/beverage division.
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Doesn't Pepsi own FRITO-LAY? i assumed that brought in more revenue than the soda.
Quote: DRichQuote: billryanPepsi just completed its takeover of Seite Foods, a leader in the Mexican food market. Pepsi has quietly cornered the Hispanic food market over the last few years. Pepsi's stock has been relatively mundane over the last few years, and the company is becoming less dependant on its cola/beverage division.
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Doesn't Pepsi own FRITO-LAY? i assumed that brought in more revenue than the soda.
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No. The Frito Lay Division brings in slightly less than the Beverages Division in North America, but worldwide, the beverages lap the snack division. Pepsi's foreign divisions bring in less revenue but are much more profitable.
Quote: billryanPepsi just completed its takeover of Seite Foods, a leader in the Mexican food market. Pepsi has quietly cornered the Hispanic food market over the last few years.
That would have been quite an exciting purchase before the trade wars started.
Quote: billryanMy primary investment account hit an ATH this morning. It had briefly cracked a milestone number about six weeks ago, then dropped a few percent, and finally cracked it again. There are too many days off in January. Between New Year, President Carter's Funeral, MLK Day, and the Inauguration, this has been a month of very light trading. Getting five cents less per share doesn't seem like much, but multiplying it by a few thousand shares causes some serious belt-tightening.
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My Shit4 stock has been on a tear lately. My expectation is some news will be released soon. I am guessing a potential buyout offer. Sadly I sold 40% of my FOUR about a week ago but I still own quite a bit.
If you have money in an index fund you have to look at the richest and arguably the most powerful man in the world off his face on ketamine waving a chainsaw around talking gibberish while dressed like a 90's pimp, and think "that's fine it will all even out. Money managers have degrees from Harvard and know more about these things than poor little me.".
I don't think it is fine. I sold my shares in Tesla. Like a sane person. So I didn't get wiped out.
