/biz/ - Business & Finance

Now that this thread is almost 250 posts old, and all rational discussion ended 12 hours ago, the daytraders, stock pickers, and investing wizards arrive to circlejerk each other... right on cue.

Some brilliant samefag made the following prophetic comment -- 3 days ago:

>They only emerge deep in the depths of seldom visited shitposts where they can lie to each other about their "gainz" without the bright scrutiny of rational thinkers.

So what kind of shitposts do we get from the daytraders and stock pickers, now that the thread has died?

>>1119111
>fama's study done during vietnam war era
>date of study: December 14, 2009

>vietnam war era
>2009

Kek. Hard to follow an act like that. G'nite and drive home safely.

>>1118700
>the world is still recovering from 6-7 years later,
Huh? The markets recovered by 2012 or so. Credit returned to normal by 2012-2013. Housing prices haven't returned to 2008 level, but have normalized and are rising. Unemployment has been falling for years.

The world isn't burning. Stop watching Fox News.

>>1118732
>Indexing is definitely taught in classes my friend.
Seriously? Well, that's honestly great to hear. It certainly wasn't true in my day.

Where was this, and how would you rate the quality of the indexing information you were taught?

>>1118530
>international bond diversification is something that just isn't worth it, whether hedged or unhedged
I'm not to argue with someone who's smart enough to says nice things about me, but if you're interested in understanding why I recommend a (modest) allocation to international bonds, here's Vanguard's white paper on the subject:

https://personal.vanguard.com/pdf/icrifi.pdf

>>1118349
>>25% in stocks
>>25% in bonds
>>25% in cash
>>25% in gold
It's called the "Permanent Portfolio" and its been debunked by a raft of academics and analysts since the book came out in 1999. It's an interesting thought-experiment to highlight the importance of asset class diversification, but it's not a good blueprint for an actual long-term portfolio.

>>1118406
>I mean whats the point? And it's the same cherry picked charts, strawman arguments and logical fallacies in every thread. By probably the same 10-20 posters.
For every 10-20 idiots, there's maybe 100-200 people who lurk these threads looking to learn something. Perhaps even more, who knows.

In the absence of good information, these folks are going to be fooled by bad information. Because there's an entire industry of financial advisors, do-it-yourself brokerages, market journalists, and get-rich gurus who prey on the ignorance of the masses with wild promises, lies, and deception.

Yet if no one takes the time to teach young people how to invest the right way, then the hucksters will win because they'll be the only one's talking. And, unfortunately, indexing isn't something that's taught in classes or widely understood by the older generation. Nor is it always intuitive. So the only way to learn it is when someone like you or I make the effort to teach it.

>Besides which, it's fun to blow off steam by taking these autists to the woodshed. In my professional life I have to be civil, courteous, and respectful ... even when my opponents are morons. Here, I get to take the gloves off.

Trust me, I get exasperated by these morons too. Most days, I just don't have the time or patience to respond to their bullshit. So I mostly ignore them.

But when I do respond, I'm going to do it right and make sure the lesson is clear and complete.

>>1118337
>so basically biy msci and hold onto for ever?
No. Massively over-concentrating into one asset class is a mistake, as I've said several times already in this thread.

See >>1117544 if you want my advice on portfolio construction.

Why do you need life insurance? Who are you trying to help if you suddenly die?

Serious questions.

>>1118292
Bonds are debt too.

>>1117948
>Is buying a new car ever a fiscally responsible decision?
No, but it doesn't have to be fiscally IRresponsible either. Besides, not every decision in your life needs to be fiscally optimal, and you're allowed to enjoy life from time to time.

>>1117716
>>1117722
>insults me in one post and then asks for my advice in the next post

>>1117602
>Whats better, a three or four fund etf portfolio which is topped up quarterly/biannually or one growth mutual fund added to monthly?
A four fund portfolio because of the substantially better diversification.

Growth stocks are wonderful, but they're not inherently better than value or blend stocks. Like all asset classes, they'll perform very well in some years but poorly in others, And, unfortunately, its impossible to predict in advance. As such, its best to spread your money across as many asset classes as possible, consistent with your goals and risk tolerance.

>>1118068
>It has the same effect.
No it doesn't have the same effect. It has an effect in the same direction. Banks didn't automatically loan out all that cash sitting in their reserves (despite the Fed urging them to do so). In the wake of the mortgage crisis, banks massively tightened their credit standards, and for a long time, it was substantially harder to get credit of any kind. So no, the QE money didn't fly out into the economy and straight into equities.

Furthermore, typical (bad) investor behavior meant that many investors were buying bonds at the time they should have been buying stocks (despite QE). Look at fund inflows in 2009, 2010 and 2011 (and even into 2012 despite the bull market being 4 years old). People flocked to the apparent "safety" of bond funds at the exact moment that equities hit their glidepath. Investors always get it wrong.

>Why do you think indexers loved the 2009-2014 market so much? Because we were the one's who benefitted the most. All you had to do was stay the course and not change your strategy, and you nearly tripled your net worth.

So, ironically, to the exact that any of those QE dollars did make it into investor hands, a substantial portion went into fixed income.

Now, again, for the third time, I'll state that QE did have a positive effect on equity prices. That's not debatable. But the degree and timing remains open to examination.

>>1117595
>Why don't you day trade?

>>1117556
>So you're a full-time investor / business owner?
No, I'm an attorney. I do own my own law firm, but I'm not an entrepreneur in the traditional sense.

I just happen to know quite a lot about investing and how to make optimal investment decisions. I manage my own investment portfolio, which is currently more than $12 million dollars total. I put a lot of effort into making smart decisions for my own money, and I'm happy to share my insights with others.

>>1117542
>So tell us how we should invest instead
No problem. Assuming you have a stable wage/income, a fully-funded emergency fund appropriate to your circumstances, and a long-term commitment to growing your wealth, then I recommend that the core of your investments be a "Four Fund Portfolio" (you can Goggle it for the details). If you're not comfortable selecting your own allocations, then you can go with an "all-in-one" fund like Vanguard's Target Retirement investments.

Remember that investing is a long term prospect, calculated to take advantage of the long-term growth rate of the markets. This is not a strategy to supplement your income or produce a rags-to-riches miracle. It's a strategy designed to safely (as safely as the market permits) grow your money so that you can, hopefully, have comfort, security, and wealth in your later years, including long after your regular income ceases.

>>1117498
The only thing I take from your entire post is that if an investor can accurately guess which stocks will outperform and which stocks will underperform, then they can beat the market.

Duh.

The problem (do I really need to explain this, again?) is that the individual investor can't accurately make those predictions. Study after study proves its not possible to a sufficient degree of accuracy to beat the benchmark. Even if you guess right sometimes, you'll be wrong other times. And even when you guess right, you'll mess up the timing. And you'll pay more in fees while you try to figure it out.

>What would really hurt my feelings would be for you to logically disprove me and point out any fatal errors I might be making.
Ok, I've now done exactly that. Your entire comment is logically unsound, and assumes its premise.

But for the record, the reason that I insulted you is because you jumped into a thread without reading it, and made a stupid comment
that I had expressly disproven in this same thread earlier. This tends to indicate the you're someone who's only interested in making snarky, meme-quality posts and not engaging in serious discussion.

Personally, I don't care either way. If you want to act like an asshole, then I'll treat you like an asshole. Act with civility, and you'll get the same in response. Your choice.

>ITT, morons who don't know that fraudulently incurred debt is non-dischargeable
Every one of your little schemes has been tried -- and failed -- thousands of times.

>>1117411
I answered this one two days ago, snowflake.
>>1115167
Try harder next time.

>>1117238
>how much did you start out with?
I don't really understand what you're asking. My parents did pay for my education, for which I'm eternally grateful. But I wasn't given money, and I don't have a trust fund.

>>1117173
Hmmm, I wonder what the advisors of actively-managed mutual funds, like the one's studied by Fama do? Oh yeah! They pick individual stocks and try to beat the market.

I'm not sure if you're trolling or just desperate for attention, but looking back you haven't made an intelligent post in this entire thread. You've also lied, engaged in multiple logical fallacies, and attempted to put words in my mouth. If you had anything worthwhile to say, you would have already said it. I won't be spending any more time responding to your garbage.

Good luck, snowflake.

>>1117166
>Thats not how statistics work. Thats how dice rolling works. Because the 90% (assuming that number is accurate) would fail again the next year, and the next, and maybe get lucky here and there. The successful percentage would continue their success as stock analysis is not a random "roll of the dice"
Well, Nobel Prize winning academic Eugene Fama says I'm right and you're wrong. So I'm gonna go ahead and disregard your stupid comment.

https://www.dimensional.com/famafrench/essays/luck-versus-skill-in-mutual-fund-performance.aspx

>>1117148
>Thousands of people beat the market every year.
True, but only 10% do it again next year. And 10% of those in the following year. And 10% of those the year after. And none in the 5th year.

That's how statistics work, snowflake.

Investing isn't a one-year exercise. Considering the 90% failure rate of stock pickers, you're looking at 1 positive year for every 9 years that you underperform. That''s a pretty shitty record.

Meanwhile, equity indexes rise in 7 years out of every 10.

So, pop quiz: Would you rather have the best strategy in 1/10 years or 7/10 years?

>>1117092
>Exceptionally intelligent investors have beaten the markets year after year where dumb luck can't explain it
No they don't.

https://www.dimensional.com/famafrench/essays/luck-versus-skill-in-mutual-fund-performance.aspx

>Markets are not so efficient that it's impossible to make intelligent purchases based on value discrepancies
No one said otherwise. However, the size of the inefficiencies, their scarcity, and the time and cost of finding and exploiting them is a sufficiently large drag on performance that is becomes a suboptimal strategy.

By way of example, trading your way to a 12% return may sound attractive, but if you give back 4% to costs and lost time in market, then you're only booking an 8% return. Meanwhile, index equities have averaged 9% plus 2% in dividends for an 11% return. Choose one.

I don't know why you stock pickers (and day traders, TA wizards, etc.) have such cognitive dissonance over this simple concept. Yes, it's possible to earn positive returns with your speculative strategies. But you're still underperforming the index, which means you're falling behind.

Investing is about making choices between alternatives. Indexing simply outperforms stock picking. Period. And its more tax efficient, not to mention simpler and less time consuming. All happy accidents, but true nonetheless.

At this point, I'm not going to waste any more time on your unsupported arguments. All you're doing is taking potshots at indexing from tangential perspectives, ignoring the fact that you have no evidence to refute the main point: indexing is the superior performing risk adjusted strategy. So come up with evidence, or don't bother posting. Because neither you nor any blogger you read has 1/1000th of the qualifications of any one of the academics I've cited in support of indexing.

Good luck, snowflake.

>>1116857
>He said don't declare any of it. It's neither income nor expense in any area.
Correct. Your sale of the vehicle has no taxable effect.