Comparing Stock Market Strategies

Until a few weeks ago, you'd have had to have been a terrible stock picker not to have been doing well. Everyone I know picks some losers, but so what? I never paid attention to any of ZG's stock picks, so I've no idea how he does. I wish him well and hope he has a good life.

Quote:

If those are from here, I haven't checked into those. Im going by... link to original post

Oh. Of course.

[This space reserved for reader's favorite choice of an "emogi" thingy.]

Quote: billryan

...I never paid attention to any of ZG's stock picks, so...
link to original post

Uh, yeah ya kinda did. You were the most frequent poster in his stock touting thread:

[Some other remarks were... less polite in their implications.]

Quote: billryan

Someone with a net worth of $50,000 and no certain source of income shouldn't be speculating on junk stocks.
What are you going to do? Tie up a quarter of your worth? A good rule of thumb is 3 to 5 percent of your portfolio in any one stock.
link to original post

Quote: billryan

The good news for the company is many of its target audience doesn't know how to use a computer. The bad news is they are dying off rather quickly. I thought Ann Taylor died off in the 70s. link to original post

And I'd have no quibble with any part of that. And more generally, when someone starts loudly touting what others should do with their money, whether it's buy this hot stock now or sports bet touts or call now for an herbal miracle hair growth & weight loss formula, it is very appropriate for questioning and disagreement to be not merely allowed but encouraged.

Quote: DrawingDead

Quote: billryan

...I never paid attention to any of ZG's stock picks, so...
link to original post

Uh, yeah ya kinda did. You were the most frequent poster in his stock touting thread:

[Some other remarks were... less polite in their implications.]

Quote: billryan

Someone with a net worth of $50,000 and no certain source of income shouldn't be speculating on junk stocks.
What are you going to do? Tie up a quarter of your worth? A good rule of thumb is 3 to 5 percent of your portfolio in any one stock.
link to original post

Quote: billryan

The good news for the company is many of its target audience doesn't know how to use a computer. The bad news is they are dying off rather quickly. I thought Ann Taylor died off in the 70s. link to original post

And I'd have no quibble with any part of that. And more generally, when someone starts loudly touting what others should do with their money, whether it's buy this hot stock now or sports bets or call now for an herbal miracle hair growth & weight loss formula, it is very appropriate for questioning and disagreement to be not merely allowed but encouraged.
link to original post

I have no memory of that. I'll have to reread the thread Edit- I count four posts I made in that thread and I'd stand by every one of them today.

Quote:

I have no memory of that. I'll have to reread the thread

Well then, I'm sincerely sorry to inflict that, as it clearly wasn't an enlightening or enjoyable little ride at the time for those participating. Forgetting is not always a bad thing. Methinks sometimes it exists for some good evolutionary survival reasons. Sometimes.

Quote: DrawingDead

Quote: billryan

...I never paid attention to any of ZG's stock picks, so...
link to original post

Uh, yeah ya kinda did. You were the most frequent poster in his stock touting thread:

[Some other remarks were... less polite in their implications.]

Quote: billryan

Someone with a net worth of $50,000 and no certain source of income shouldn't be speculating on junk stocks.
What are you going to do? Tie up a quarter of your worth? A good rule of thumb is 3 to 5 percent of your portfolio in any one stock.
link to original post

Quote: billryan

The good news for the company is many of its target audience doesn't know how to use a computer. The bad news is they are dying off rather quickly. I thought Ann Taylor died off in the 70s. link to original post

And I'd have no quibble with any part of that. And more generally, when someone starts loudly touting what others should do with their money, whether it's buy this hot stock now or sports bet touts or call now for an herbal miracle hair growth & weight loss formula, it is very appropriate for questioning and disagreement to be not merely allowed but encouraged.
link to original post

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, as you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego?). I even offered him a deal where I front 10k-20 and he takes a nice free roll %. He declined.

I'm up on evrything he has suggested(no charge, just bragging). He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks.

Quote: DrawingDead

Quote: billryan

...I never paid attention to any of ZG's stock picks, so...
link to original post

Uh, yeah ya kinda did. You were the most frequent poster in his stock touting thread:

[Some other remarks were... less polite in their implications.]

Quote: billryan

Someone with a net worth of $50,000 and no certain source of income shouldn't be speculating on junk stocks.
What are you going to do? Tie up a quarter of your worth? A good rule of thumb is 3 to 5 percent of your portfolio in any one stock.
link to original post

Quote: billryan

The good news for the company is many of its target audience doesn't know how to use a computer. The bad news is they are dying off rather quickly. I thought Ann Taylor died off in the 70s. link to original post

And I'd have no quibble with any part of that. And more generally, when someone starts loudly touting what others should do with their money, whether it's buy this hot stock now or sports bet touts or call now for an herbal miracle hair growth & weight loss formula, it is very appropriate for questioning and disagreement to be not merely allowed but encouraged.
link to original post

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, as you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego?). I even offered him a deal where I front 10k-20 and he takes a nice free roll %. He declined.

I'm up on evrything he has suggested(no charge, just bragging). He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks.

Quote: DrawingDead

Quote: billryan

...I never paid attention to any of ZG's stock picks, so...
link to original post

Uh, yeah ya kinda did. You were the most frequent poster in his stock touting thread:

[Some other remarks were... less polite in their implications.]

Quote: billryan

Someone with a net worth of $50,000 and no certain source of income shouldn't be speculating on junk stocks.
What are you going to do? Tie up a quarter of your worth? A good rule of thumb is 3 to 5 percent of your portfolio in any one stock.
link to original post

Quote: billryan

The good news for the company is many of its target audience doesn't know how to use a computer. The bad news is they are dying off rather quickly. I thought Ann Taylor died off in the 70s. link to original post

And I'd have no quibble with any part of that. And more generally, when someone starts loudly touting what others should do with their money, whether it's buy this hot stock now or sports bet touts or call now for an herbal miracle hair growth & weight loss formula, it is very appropriate for questioning and disagreement to be not merely allowed but encouraged.
link to original post

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, as you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego?). I even offered him a deal where I front 10k-20 and he takes a nice free roll %. He declined.

I'm up on evrything he has suggested(no charge, just bragging). He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks.

Quote: DrawingDead

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, and things you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego)

I'm up on evrything he has suggested(no charge, just him bragging).

He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks, but I have been keeping track of his other picks

Is it luck or variance? I can't say 100% sure, but he is way over the standard deviations.

Quote: AxelWolf

Quote: DrawingDead

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, and things you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego)

I'm up on evrything he has suggested(no charge, just him bragging).

He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks, but I have been keeping track of his other picks

Is it luck or variance? I can't say 100% sure, but he is way over the standard deviations.
link to original post

I fully understand that you truly, sincerely & confidently believe that, about him, and you.

Quote: AxelWolf

Quote: DrawingDead

I'm one of the most skeptical people you will find on the forums. Especially when it comes to touts, and things you mentioned above.

Don't get me started on herbal medicine, vitamin supplements, keto diets, and betting systems.

Anyways, when it comes to stock picking, I can only go on someone's history over the years. ZenK isn't selling or promoting anything(just his ego)

I'm up on evrything he has suggested(no charge, just him bragging).

He always has some logic and good fundamentals behind his picks. Unfortunately, I have only invested in a few of his overall picks, but I have been keeping track of his other picks

Is it luck or variance? I can't say 100% sure, but he is way over the standard deviations.
link to original post

In January 2017, the Dow was just over 20,000
In January 2025, it had doubled to well over 40,000.
Almost everybody has done berry berry well over that period. I'm glad you and he have done well, but it wasn't unusual

For some, doing well involves a rigorous set of specific verifiable well-defined quantitative metrics, recorded without exception. For some others, not.

I have seen more than a few poker players who truly 'know' they just 'ran over the table.' Again. After their third or fourth re-buy.

Such is the nature of the amazing instrument known as the human mind.

Quote: ZenKinG

ASNA + Macy's + XLP + Bitcoin = wealth
link to original post

.

the link is the only stock picking thread I could find from Zenking - maybe I missed one - IDK

in this link he touts 3 stocks - little Asna which he says will go a lot higher than $1.83 - he says it will shoot up to $3.50 - it's current price is $0.61

then he touts Macy's at $21.90 - it's now at $11.01 - it's done nothing but go down since he touted it in 2017

he did make a good call on XLP which has gone up quite a bit since he touted it but nowhere near 500% - it has about doubled since 2017

in fairness to Zenking these posts were made in 2017 - I could not find either Macy's or Asna doing anything but going down since 2017

I'm thinking Axel prolly saw other picks from ZenKinG elsewhere -


https://wizardofvegas.com/forum/off-topic/off-topic/28980-most-undervalued-beaten-down-stock-on-the-market/


.

Quote: lilredrooster

Quote: ZenKinG

ASNA + Macy's + XLP + Bitcoin = wealth
link to original post

.

the link is the only stock picking thread I could find from Zenking - maybe I missed one - IDK

in this link he touts 3 stocks - little Asna which he says will go a lot higher than $1.83 - he says it will shoot up to $3.50 - it's current price is $0.61

then he touts Macy's at $21.90 - it's now at $11.01 - it's done nothing but go down since he touted it in 2017

he did make a good call on XLP which has gone up quite a bit since he touted it but nowhere near 500% - it has about doubled since 2017

in fairness to Zenking these posts were made in 2017 - I could not find either Macy's or Asna doing anything but going down since 2017

I'm thinking Axel prolly saw other picks from ZenKinG elsewhere -


https://wizardofvegas.com/forum/off-topic/off-topic/28980-most-undervalued-beaten-down-stock-on-the-market/


.
link to original post

Yes, both in person, on Discord, and in chat. I didn't start paying any attention to his picks until after COVID started.

I just realized that five of my six biggest holdings didn't exist in 2017. I'm not sure that is a good thing.

Quote: lilredrooster

he did make a good call on XLP which has gone up quite a bit since he touted it but nowhere near 500% - it has about doubled since 2017

link to original post

Hard to believe that Walmart, snack chips, Coke, Twinkies, and smokes would suddenly do poorly....

Given the mix of the brands XLP invests in, I'm mildly surprised it's not performing significantly better.

Quote: Dieter

Quote: lilredrooster

he did make a good call on XLP which has gone up quite a bit since he touted it but nowhere near 500% - it has about doubled since 2017

link to original post

Hard to believe that Walmart, snack chips, Coke, Twinkies, and smokes would suddenly do poorly....

Given the mix of the brands XLP invests in, I'm mildly surprised it's not performing significantly better.
link to original post

Right, they aren't suddenly doing poorly; instead, XLP is doing relatively poorly gradualy, steadily, and dependably. From 4/17 to present this Consumer Staples Index has significantly lagged the performance of the broad market S&P 500, so that "good call" did less well than the EV of blind chimp dart throwing.

Quote: DrawingDead

Quote: Dieter

Quote: lilredrooster

he did make a good call on XLP which has gone up quite a bit since he touted it but nowhere near 500% - it has about doubled since 2017

link to original post

Hard to believe that Walmart, snack chips, Coke, Twinkies, and smokes would suddenly do poorly....

Given the mix of the brands XLP invests in, I'm mildly surprised it's not performing significantly better.
link to original post

Right, they aren't suddenly doing poorly; instead, XLP is doing relatively poorly gradualy, steadily, and dependably. From 4/17 to present this Consumer Staples Index has significantly lagged the performance of the broad market S&P 500, so that "good call" did less well than the EV of blind chimp dart throwing.
link to original post

DD is correct

2 of the 3 picks from ZenKinG were horrible - and the other one was just poor - "good call" was not an apt description of it - my bad

.

It seems like the person who actually invested their money is happy, while the peanut gallery is harping on a six-year-old thread with three picks.

Quote: lilredrooster

...<SNIP>...

2 of the 3 picks from ZenKinG were horrible - and the other one was just poor - "good call" was not an apt description of it - my bad

.
link to original post

Well, it is one of those things that depends on what one is comparing it to and trying to accomplish. That appropriately varies between individuals. And, trying to come up with something potentially useful to someone out of that smoldering dumpster fire that streaked across the forum for a little while and inevitably imploded on itself...

If they don't already, folks should know the XLP "Consumer Staples" index is just the kind of thing that a professional financial advisor would likely suggest to clients who are relatively risk averse and becoming particularly concerned with the safety of their portfolio if there's a significant probability of an economic contraction and potential bear market. In other words, that sector specific index tends to be a lot less volatile, in both directions, than the broader market indices that include some relatively "high beta" securities with more growth potential.

So, it is commonly thought of as a place to sorta halfway hibernate in tough times. For a variety of reasons I'm not doing that with that, even though I personally happen to think the bear market contraction probability is now at least as high or higher than the current consensus of 50-60%. But I'm not in the business of helping manage others' financial affairs, and suggesting it as a partial cushion that doesn't go down so much in a downturn would be a perfectly reasonable and commonly suggested option for some.

On the other hand, that reality also happens to be exactly the opposite of what the Z-guy clearly thought he was up to with it, in his uniquely vehement 'don't be a stupid drone, getcha sum big bux, cuz number gonna go way up fast' ranting & raving.

---------------------------------------------------------------

>>>>>WoV Social Clubhouse Crap>>>>>>

EDIT to add: BillDude, the "peanut gallery is harping" on the data points that actually exist, in response to someone popping up yesterday promoting the purported financial genius of his buddy, the former member banned for what would charitably be described as extremely erratic behavior, doing so with no actual metrics of any sort other than his unquantified feelings from assorted selected recollections. Exactly the sort of thing that generally results in "seeing" what you feel you want to "find" and excluding "don't count" things. It is precisely as credible as some folk's description of spectacularly successful baccarat results. At best, it is called confirmation bias, combined here with an extreme case of Dunning-Kruger syndrome in which confidence becomes inversely proportional to knowlege & understanding. Really extreme. But snide on, its what you do, and it won't tend to mute anybody who isn't a newbie around here. Responses to the little "investing" infomercial have been very restrained, all things considered. "All things" that would be considered, are described here: DSM-V manual, more than in "investment" discussion, and it isn't the least bit subtle or a close call.

People grow and change. Picking good stocks isn't that hard, and it's very possible that the OP took a few hours and learned a bit more than they knew when they posted. Maybe he used COVID to learn how to beat the market. It isn't that hard.

People grow and change. Picking good stocks isn't that hard, and it's very possible that the OP took a few hours and learned a bit more than they knew when they posted. Maybe he used COVID to learn how to beat the market. It isn't that hard.

Quote: AxelWolf

Crazy ass ZenKinG had been the only one who has given his stock picks suggestions (and reasons why) that have done super well. Some as much as 500%.

By definition, "picks" are worthless. What has value is actually betting or investing on it. Did he really believe there was a big edge and bet anywhere close to Kelly on them? If yes, that's awesome. But a true rarity.

I used to mess around buying any individual stock that caught my attention when I first found the "high-frequency" Robinhood style apps. There were definitely bets that returned 200%+ in there. But never for a lot of money, and the losers dragged the total returns down to no better than the market as a whole. That's become a much more common result.

I think ZK has the added barrier of needing a big chunk of his money available for casino games, which limits what he can bet on financial markets.

Quote: billryan

You don't seem to understand how investment banking works. Having a 4.0 from Wharton doesn't mean you get to start as a fund manager. It gets you a seat on the back bench, doing menial research and being one of numerous assistants to those who matter to the firm.. Half the people who fail do so because they can't work the 70-100 hour weeks for years. Most of the rest lose their jobs because the people directly above them screwed the pooch and the team is let go. Unless you are a wunderkind, you will do research for someone who reports to someone who might report to someone who makes a decision. You mainly advance by attrition as those above you move up or move along.

You already noted this had degraded into trolling, so why keep doing it?

There may be some that do what you describe; and there are plenty of places that do the opposite. Places that believe if they aren't willing to throw someone into the fire right away, they aren't worth hiring. They'll be paid a moderate salary and if they can handle the working conditions and perform well enough they get their bonuses; if not they part ways. The bonuses are based on multi-year averages, so keep beating the market every year and it gets very high. Use that bonus money on bets that beat the market and it compounds into a huge number. I've crossed paths with a few people who have taken that route and done well for themselves. Not into the billion dollar range simply because they didn't beat the market consistently enough. But if they did, it absolutely would have got there.

"Unless you are a wunderkind"

Someone who can beat the stock market consistently qualifies as exactly that.

And even if that path starts in the late 20s instead of the early 20s, it still leads to the same place after enough years. What you said is analogous to saying how near impossible it is to get a big contract for hitting 50 homeruns per year because they'll have to start in the minors. Of course it's near impossible, but for the few people of each generation who can do it, they all get paid.

Quote: TomG

Quote: billryan

You don't seem to understand how investment banking works. Having a 4.0 from Wharton doesn't mean you get to start as a fund manager. It gets you a seat on the back bench, doing menial research and being one of numerous assistants to those who matter to the firm.. Half the people who fail do so because they can't work the 70-100 hour weeks for years. Most of the rest lose their jobs because the people directly above them screwed the pooch and the team is let go. Unless you are a wunderkind, you will do research for someone who reports to someone who might report to someone who makes a decision. You mainly advance by attrition as those above you move up or move along.

You already noted this had degraded into trolling, so why keep doing it?

There may be some that do what you describe; and there are plenty of places that do the opposite. Places that believe if they aren't willing to throw someone into the fire right away, they aren't worth hiring. They'll be paid a moderate salary and if they can handle the working conditions and perform well enough they get their bonuses; if not they part ways. The bonuses are based on multi-year averages, so keep beating the market every year and it gets very high. Use that bonus money on bets that beat the market and it compounds into a huge number. I've crossed paths with a few people who have taken that route and done well for themselves. Not into the billion dollar range simply because they didn't beat the market consistently enough. But if they did, it absolutely would have got there.

"Unless you are a wunderkind"

Someone who can beat the stock market consistently qualifies as exactly that.

And even if that path starts in the late 20s instead of the early 20s, it still leads to the same place after enough years. What you said is analogous to saying how near impossible it is to get a big contract for hitting 50 homeruns per year because they'll have to start in the minors. Of course it's near impossible, but for the few people of each generation who can do it, they all get paid.
link to original post

Okay.

Quote: TomG

"Unless you are a wunderkind"

Someone who can beat the stock market consistently qualifies as exactly that.

Beating the market is relatively easy.

Doing that with limited personal funds is not. 30% would be a good return on investment from stocks, but you would not be able to live on and grow your bankroll if you invested $100,000.

Quote: Archvaldor1

Quote: TomG

"Unless you are a wunderkind"

Someone who can beat the stock market consistently qualifies as exactly that.

Beating the market is relatively easy.

Doing that with limited personal funds is not. 30% would be a good return on investment from stocks, but you would not be able to live on and grow your bankroll if you invested $100,000.
link to original post

I'm not sure what you're trying to say, but $100,000 in an IRA that's earning 30% would grow into a few million dollars in a relatively short time.

Using the most common "broad market" (but primarily large-cap weighted) index of the S&P 500, the average "nominal" (not inflation adjusted) long term US stock market return is a little over 10% per year, on average inflation reduces the value of that price appreciation by about 3.5% per annum, and the "real" (inflation adjusted) return is a little over 6.5%. The UK somewhat less, the EU less than that, with broader US indices that include more volatile higher growth small-cap securites eventually returning more. That S&P average does not account for dividends and other distributions averaging a little under 2%, and is pre-tax.

Quote: DrawingDead

Using the common "broad market" (but primarily large-cap) index of the S&P 500, the average "nominal" (not inflation adjusted) long term US stock market return is a little over 10% per year, on average inflation reduces the value of that price appreciation by about 3.5% per annum, and the "real" (inflation adjusted) return is about 6.5%. The UK somewhat less, and the EU less than that, and broader US indices that include more volatile higher growth small-cap securites eventually returning more. That S&P average does not account for dividends and other distributions averaging a little under 2%, and is pre-tax.
link to original post

My rule of thumb is that it doubles every eight years.
$25,000 at 25 becomes $50,000 at 33 ,$100,000 at 41, $200,000 at 48 and $400,000 at 55. If you can get by without touching it until you are 72, you'll have $1.6 million pre-tax.
While you can't predict the short term, long-term trends track well. When projecting decades out, I think 9% is reasonable.
Inflation is usually around 30% per decade.

Quote: Archvaldor1

Beating the market is relatively easy.

Doing that with limited personal funds is not. 30% would be a good return on investment from stocks, but you would not be able to live on and grow your bankroll if you invested $100,000.

I know this is just trolling, but I love the commitment to the bit.

-Even with those limited funds, it still becomes $1 million in nine years and after 20 years it is $19 million, at that return.
-These are not WNBA player props. These are shares in billion- and trillion-dollar companies. We can keep adding to our positions.
-Adding 10% of average income per month (a little over $5000 according to quick online search) brings the $19 million up to $23 million.
-Adding 10% of an income commensurate with the ability to consistently earn 30% year over year gives us at least 10 times that amount, and more likely at least 20 times that. Also, people with high incomes like that can easily invest a higher percentage without any hardship, giving us a clear path to billions for anyone who earns what you say "would be a good return"

Now please make up some new reason why basic arithmetic is wrong.

Quote: DrawingDead

Using the most common "broad market" (but primarily large-cap weighted) index of the S&P 500, the average "nominal" (not inflation adjusted) long term US stock market return is a little over 10% per year, on average inflation reduces the value of that price appreciation by about 3.5% per annum, and the "real" (inflation adjusted) return is a little over 6.5%. The UK somewhat less, the EU less than that, with broader US indices that include more volatile higher growth small-cap securites eventually returning more. That S&P average does not account for dividends and other distributions averaging a little under 2%, and is pre-tax.

12% overall average annual returns is pretty good. Lots of people can use that along with typical incomes to accumulate a pretty good amount of money. At $1000 per month, the person who meets that markets average for 30 years would have like $2.8 million; the person who beat it by 3% would earn an additional $2.3 million.

It's fascinating that average market returns has been a good way to earn a lot of money, yet people are desperate to find reasons why beating the average market returns and having millions more is not.

My dividends for the month have been announced, and this month's income will be down almost 30%. However, if I were not harvesting income and needed to sell stocks to generate the income, I'd be much worse off.
AIPI has dropped from $45 to just around $40, but counting the $7 I've received in dividends, I'm slightly ahead for the year on that stock. Across my portfolio, I'm down about 3%, including dividends. It's not what I expected, but nobody could have anticipated someone trying to burn down the world economy.

My dividends for the month have been announced, and this month's income will be down almost 30%. However, if I were not harvesting income and needed to sell stocks to generate the income, I'd be much worse off.
AIPI has dropped from $45 to just around $40, but counting the $7 I've received in dividends, I'm slightly ahead for the year on that stock. Across my portfolio, I'm down about 3%, including dividends. It's not what I expected, but nobody could have anticipated someone trying to burn down the world economy.

Quote: TomG

It's fascinating that average market returns has been a good way to earn a lot of money, yet people are desperate to find reasons why beating the average market returns and having millions more is not.

many, actually a great many who try to beat average market returns will not succeed and will underperform the widely followed averages
kudos do those who do
most who do succeed in beating the averages will do so by actively trading which means they will owe capital gains taxes on their profits for every year they were profitable
the buy and holders will not pay capital gains taxes until they liquidate to use the money
if the buy and holders never liquidate a large amount due to necessity there may be no taxes (depending on the state) on the funds that are passed on to heirs or to charities
many states have exemptions from taxes for inheritances passed on to close relatives
there is no Federal Tax on inheritance
there are currently 33 states that impose no inheritance tax

the buy and holders will have profits building on top of profits year after year that the averages are profitable with no diminishment of their profits due to taxes

.

Quote: lilredrooster

Quote: TomG

It's fascinating that average market returns has been a good way to earn a lot of money, yet people are desperate to find reasons why beating the average market returns and having millions more is not.

many, actually a great many who try to beat average market returns will not succeed and will underperform the widely followed averages
kudos do those who do
most who do succeed in beating the averages will do so by actively trading which means they will owe capital gains taxes on their profits for every year they were profitable
the buy and holders will not pay capital gains taxes until they liquidate to use the money
if the buy and holders never liquidate a large amount due to necessity there may be no taxes (depending on the state) on the funds that are passed on to heirs or to charities
many states have exemptions from taxes for inheritances passed on to close relatives
there is no Federal Tax on inheritance
there are currently 33 states that impose no inheritance tax

the buy and holders will have profits building on top of profits year after year that the averages are profitable with no diminishment of their profits due to taxes

.
link to original post

And all you have to do is never touch the money. What a bargain. It amazes me what people will do to avoid paying taxes.
Businesses treat taxes as a fact of life. They do what they can to reduce them, but the idea is to make enough capital that taxes are a minor consideration. I've always figured if it works for them, it should work for individuals as well.
I was never obsessed with beating the market. I was obsessed with hitting the number I had determined was what I wanted to live on for a comfortable retirement. Part of me wishes I had put more into tax-deferred accounts, but the other part is glad I don't have a million-dollar tax bill in front of me.

.
a profitable active trader who pays about 12% in capital gains taxes each year he is profitable and about equals the market averages

compared to a buy and holder who pays no taxes

without doing the math, there is absolutely no doubt that after 30 years the buy and holder will have way, way more than the active trader

if he begins withdrawing some after he has retired he may still pay no taxes because he has no other income -

.

Quote: lilredrooster

.
without doing the math, there is absolutely no doubt that after 30 years the buy and holder will have way, way more than the active trader

Assuming the inactive investor is simply meeting total market returns, that means the active investor is not beating the market. That active investor would need even higher returns to cover liabilities to have enough net profits to be included in those who do beat the market. Yet there are people here who continually insist both that that beating markets with trillions in liquidity is easy and is not a skill that can help a person earn much money.

Quote: lilredrooster

.
a profitable active trader who pays about 12% in capital gains taxes each year he is profitable and about equals the market averages

compared to a buy and holder who pays no taxes

without doing the math, there is absolutely no doubt that after 30 years the buy and holder will have way, way more than the active trader

if he begins withdrawing some after he has retired he may still pay no taxes because he has no other income -

.
link to original post

One investor will have more money and owe more in taxes. The other has less money, but doesn't owe taxes. Dos caminos, un destino.

My problem with buy-and-hold is simple. A stock may be an industry leader when you buy it, but twenty years later it's lost it's edge.
When I first bought Sears, it owned Allstate, it owned Dean Witter, it was one of the largest retailers in America, and one of the biggest commercial landowners. A generation later, it is a sad cautionary tale. Far too many people stuck around to the bitter end and lost almost all their investment.
Buy and Hold is a good strategy. I don't think it's the best but that is subjective. Figure out what you'll need, double that amount, and drive on until you reach it.

Quote: billryan

One investor will have more money and owe more in taxes. The other has less money, but doesn't owe taxes. Dos caminos, un destino.

My problem with buy-and-hold is simple A stock may be an industry leader________etc.

re the tax part of your post
that is often not the case
age is also a factor in investing - again, if the buy and holder begins withdrawing after he is retired he may still owe no taxes because he has no other income and the amount of the capital gain re his withdrawal may not be enough to trigger taxation

re buy and hold I am referring to one of the indexes - not to individual stocks

of course some stocks in the index may perform terribly but others will overachieve

.

Quote: TomG

Quote: Archvaldor1

Beating the market is relatively easy.

Doing that with limited personal funds is not. 30% would be a good return on investment from stocks, but you would not be able to live on and grow your bankroll if you invested $100,000.

-Even with those limited funds, it still becomes $1 million in nine years and after 20 years it is $19 million, at that return.

*Facepalm* It doesn't become anything. You need $30000 a year to buy food and pay rent with. You aren't growing anything at all. OBVIOUSLY. That was the point.

Did you think we were talking about playing at trader while we live off Daddy's trust fund or something?

RE: AIPI, JEPI, JEPQ, et al.

This is not expressing any sort of judgement along the lines of "y'all should buy this not that." It is a "your money, your choice, do your diligence" thought, however much of it someone decides they want to do with their money involved.

People should understand that buying things like AIPI & JEPI & JEPQ is definitely NOT the same or even really very closely analogous to investing in shares of companies running actual business enterprises. They are new financial product inventions, recently become very popular to some, that involve trading in derivitives (in this case selling covered call options), within a mass-market friendly ETF wrapper, that in the past would be limited to the realm of some presumably highly sophisticated traders knowingly either taking a distinct gamble or putting on a hedge against a short term position. To do that brokerages required individual account customers to certify a significantly higher level of experience & financial literacy than that possessed by most people investing for their own account. Their actual performance (of these particular ETF products) in a variety of market conditions cannot be definitively known, since they have not existed during a long enough period to demonstate their performance across the variety of market conditions that will invevitably occur over time.

I am not wanting to make an argument for or against them. They could be a useful piece for some, while definitely not a useful instrument for some others. But it is important to have a good understanding of what one owns and how it does its thing, and I strongly suspect that many who got on board with these derivitive ETFs in the last several years do not. The high-frequency distributions technically labled as "dividends" from those "covered call" funds are NOT dividends produced by a long term income stream from the opertation of a business producing any sort of productive goods & services. They aren't Chevron or Phillip Morris or even Berkshire or BlackRock, so they won't act like it.

Some might reasonably disagree about my opinion of prospective performance of covered call ETFs, as there cannot yet be sufficient actual history to reliably demonstrate real results with solid predictive value. But with that said, besides the clear known trade-off of getting some attractive distributions in some market conditions in exchange for giving up some significant capital gains during major bull markets, I would also expect their exceptionally high distribution rates demonstrated over the last few years to be in significant danger of drying up in some other circumstances. That can occur at times where the call options they write, and must continuously re-write and sell to fund distributions, have trouble catching a bid. And for the share price to also do quite poorly in the periodic economic contractions and/or market corrections that certainly will occur at times. Possibly to the point that some of them won't exist in another year or two.

- END OF "STOCK" SPECIFIC STUFF -

Recessions & bear markets are both inevitable and necessary, along with both bubbles and market corrections, with cyclic turns in which optimistic fluffy start-ups & ailing unproductive flawed enterprises & schemes get taken out & shot; they are how a free economy takes out the trash, and the failure to do so is one major part of how centralized command & control economies end up making people poorer. Individual investors should expect some cyclic downturns of uncertain timing & duration, even if the plan is simply to be sure one is well prepared financially & emotionally to do nothing about it.

I came to the opinion that conditions for economic contraction were probably underway beginning last year. And I was sure not alone at all in that opinion that the fuse was visibly lit at least as far back as August for some degree of a contraction within six to eighteen months. For reasons having nothing to do with any more current catalysts, due to changes in liquidity demonstrated by some econ-geek measurements and other indications, which were probably near invevitable to some degree following both extremely stimulative fiscal and monetary actions over the preceding years. The pump-up causes the downdraft, as it must.

That's not to say anything about any meritricious or meritorious recent policy actions. I sure do have have some opinions about some policy decisions and the likely effect on capital flows and economic activity. But I have no intention of doing that here, since in this forum it will inevitably result in a bunch of higher gas & water bills from needing to take extra showers after getting involved in that. But whatever one's opinion about the contribution of any combination of factors, recently or less so, it is necessary to understand that stuff does happen - not only can, but for good or ill must and absolutely will. And will again.

I would hope someone wouldn't buy something like AIPI without knowing what it is. If they buy something they don't understand, that is on them.
The ETFs you mentioned don't pay dividends, they pay a monthly return on investment.
Are the returns sustainable? Almost certainly not, but why not take advantage of limited-time offers. Both the J.P. Morgan funds you mentioned have appreciated, and they also pay nice dividends. They may be the flavor of the month, but when they stop performing well, people can move on.

Quote: DrawingDead

RE: AIPI, JEPI, JEPQ, et al.
...

I am not wanting to make an argument for or against them. They could be a useful piece for some, while definitely not a useful instrument for some others. But it is important to have a good understanding of what one owns and how it does its thing, and I strongly suspect that many who got on board with these derivitive ETFs in the last several years do not. The high-frequency distributions technically labled as "dividends" from those "covered call" funds are NOT dividends produced by a long term income stream from the opertation of a business producing any sort of productive goods & services. They aren't Chevron or Phillip Morris or even Berkshire or BlackRock, so they won't act like it....

[Disclosure: I am heavily invested in this kind of ETF.]

Consider that these are covered call funds, which means they also own the underlying stock. They're usually the same large-cap stocks everyone else holds, and they pay some dividends and appreciate in value too. So it's not like you're just buying a derivative with an expiration date; these funds could not write options at all and they would still be perfectly valid investment vehicles.

What they're doing is exactly what you stated in another part of your post that I carelessly trimmed- annuitizing the expected profit of those shares in a risk-managed way, generating cash for the fund holders.

Quote: billryan

The ETFs you mentioned don't pay dividends, they pay a monthly return on investment.
Are the returns sustainable? Almost certainly not, but why not take advantage of limited-time offers.

If you don't believe in the product then it is just betting into a ponzi scheme, right?

Quote: AutomaticMonkey

Quote: DrawingDead

RE: AIPI, JEPI, JEPQ, et al.
...

I am not wanting to make an argument for or against them. They could be a useful piece for some, while definitely not a useful instrument for some others. But it is important to have a good understanding of what one owns and how it does its thing, and I strongly suspect that many who got on board with these derivitive ETFs in the last several years do not. The high-frequency distributions technically labled as "dividends" from those "covered call" funds are NOT dividends produced by a long term income stream from the opertation of a business producing any sort of productive goods & services. They aren't Chevron or Phillip Morris or even Berkshire or BlackRock, so they won't act like it....

[Disclosure: I am heavily invested in this kind of ETF.]

Consider that these are covered call funds, which means they also own the underlying stock. They're usually the same large-cap stocks everyone else holds, and they pay some dividends and appreciate in value too. So it's not like you're just buying a derivative with an expiration date; these funds could not write options at all and they would still be perfectly valid investment vehicles.

What they're doing is exactly what you stated in another part of your post that I carelessly trimmed- annuitizing the expected profit of those shares in a risk-managed way, generating cash for the fund holders.
link to original post

Yeah, but, some "yabbut" aspects come to mind, but that gets into burrowing way far down into the weeds, and I don't see a good return on spending a whole lot of electrons that way, as it seems clear enough that you do know what you bought & why. So good luck.

I'll just mention for the webverse that some are closer than others to having characteristics to some extent similar, in some conditions, to a portfolio of dividend paying stocks: JEPI more so, JEPQ less so, and AIPI still less like that than that.

I have nothing in those, but I do have a significant position in a handful of BDC's (Business Development Companies) that are arguably more of a black box than those ETFs, with uncertain performance change in a softer economy, albeit currently high yielding in the meantime. Especially since they don't (really can't for the most part) truly "mark to market" on their private-equity stakes & non-traded first-lien secured debt, until the point where they exit one of their small-cap mostly non-public portfolio companies. When I got more liquid/defensive with my portfolios, shrinking or closing a number of positions and taking the cap-gain tax-hit, I didn't choose to trim the BDCs much. So good luck to me. "Little piggy says 'Wheee!' all the way..."

Quote: Archvaldor1

Quote: billryan

The ETFs you mentioned don't pay dividends, they pay a monthly return on investment.
Are the returns sustainable? Almost certainly not, but why not take advantage of limited-time offers.

If you don't believe in the product then it is just betting into a ponzi scheme, right?
link to original post

No. When Mycomicshop started doing consignments, it was fee free. It was unsustainable, but it was a limited-time introductory offer. Last year, they did over eight million dollars, with most books sold on a 10% .
A fund like these ETFs is competing with larger and better-known funds. They could spend $ 50 million on celebrity endorsers and saturate the web with their products, or they could save that money and return it to investors. It can outperform J.P. Morgan funds, not because it's better, but because it is leaner and doesn't have 20,000 VPs receiving outsized bonuses.
I believe it is currently a good source of regular income. Consider me a renter, not a long-term owner. I appreciate it until something better comes along.

Like any ETF, JP Morgan has established a fixed rate of "expense ratio" as their 'rake' or 'hold' for managing (and marketing) these funds, just as they do for the rest of their entire selection of about 60 current exchange traded funds. No different than the way they do with the others, that publicly defined expense ratio is what they take from them as revenue for staff & company. For comparison among JP Morgan ETFs, that expense ratio is 35 basis points (translating to 0.35% in layman's terms) for both JEPI & JEPQ, 18 pts for JPST, 44 for JGRO, 18 for JMST, 38 for JCPB, 65 for JTEK, 18 for JMUB, etc. In each of them, that's what makes up their contribution to the VP's lunch money and Lamborghini payments. AIPI is the one discussed here that is not a JP Morgan product; it charges an expense ratio of 65 basis points.

Quote: DrawingDead

Like any ETF, JP Morgan has extablished a fixed rate of "expense ratio" as their 'rake' or 'hold' for managing (and marketing) these funds, just as they do for the rest of their entire selection of about 60 current exchange traded funds. No different than the way they do with the others, that publicly defined expense ratio is what they take from them as revenue for staff & company. For comparison among JP Morgan ETFs, that expense ratio is 35 basis points (translating to 0.35% in layman's terms) for both JEPI & JEPQ, 18 pts for JPST, 44 for JGRO, 18 for JMST, 38 for JCPB, 65 for JTEK, 18 for JMUB, etc. In each of them, that's what makes up their contribution to the VP's lunch money. AIPI is the one discussed here that it not a JP Morgan product; it charges an expense ratio of 65 basis points.
link to original post

I'm mostly into the GlobalX offerings, with a couple of others.

DJIA, QYLD, QRMI, FTQI, WTPI, XRMI are a few of my big ones. How do you like that mix?

Quote: AutomaticMonkey

Quote: DrawingDead

Like any ETF, JP Morgan has extablished a fixed rate of "expense ratio" as their 'rake' or 'hold' for managing (and marketing) these funds, just as they do for the rest of their entire selection of about 60 current exchange traded funds. No different than the way they do with the others, that publicly defined expense ratio is what they take from them as revenue for staff & company. For comparison among JP Morgan ETFs, that expense ratio is 35 basis points (translating to 0.35% in layman's terms) for both JEPI & JEPQ, 18 pts for JPST, 44 for JGRO, 18 for JMST, 38 for JCPB, 65 for JTEK, 18 for JMUB, etc. In each of them, that's what makes up their contribution to the VP's lunch money. AIPI is the one discussed here that it not a JP Morgan product; it charges an expense ratio of 65 basis points.
link to original post

I'm mostly into the GlobalX offerings, with a couple of others.

DJIA, QYLD, QRMI, FTQI, WTPI, XRMI are a few of my big ones. How do you like that mix?
link to original post

Uh oh, I don't wanna get anywhere near something like "this be good stock, that bad one." Partly because, of course, what is and isn't good for one will and should differ from someone else, and will appropriately change over time even for the same individual. I have held some other GlobalX offerings that are international (non-US equities) funds. So, how 'bout dem Dodgers?!?

But since you and others have posted some of their holdings, fair is fair, and I just mentioned a category of a somewhat (maybe just a little) analogous portion of one of my portfolios, here is the list of my current BDC holdings, so y'all can enjoy a free opportunity to rag on it a year or dos or tres from now, if you like: ARCC, CCAP, CGBD, FDUS, GLAD, MAIN, MSDL, SCM.

Quote: DrawingDead

...
But since you and others have posted some of their holdings, fair is fair, and I just mentioned a category of a somewhat (maybe just a little) analogous portion of one of my portfolios, here is the list of my current BDC holdings, so y'all can enjoy a free opportunity to rag on it a year or dos or tres from now, if you like: ARCC, CCAP, CGBD, FDUS, GLAD, MAIN, MSDL, SCM.
link to original post

Ah I see you like the financials! No criticism from me. Those are the kinds of shares that I might choose for my dividend capture game, not so much to buy and hold.