Does value investing really work?

[Anonymous No.895841]

Say if I knew all my ratios, balance sheets and actively read the financial news everyday, how likely would it be to become a multi-millionaire by the time I'm 30 if I start of value investing with $1000?

[Anonymous No.895850]

>>895841
Very likely. As long as you're <20 and find a job that pays $100 000+ a year right now.

[Anonymous No.895869]

This guy cucked the whole financial sector.
All mutual funds today are gladly walking around with "I love to suck Buffet's dick" stamped shirts.
Faggots think they're smart just because they keep you're money frozen.
It's like stop masturbating so that you, maybe, some time in the future have a mind-blowing masturbation section.

[Anonymous No.895906]

>>895869
>This guy cucked the whole financial sector.
>All mutual funds today are gladly walking around with "I love to suck Buffet's dick" stamped shirts.
>Faggots think they're smart just because they keep you're money frozen.
>It's like stop masturbating so that you, maybe, some time in the future have a mind-blowing masturbation section.

tell us more...why do you think mutual funds are bad?

[Anonymous No.896031]

>>895841
Value investing takes time, and $1000 is a ludicrous sum.

>if I knew all my ratios, balance sheets...

Value investing is an art, not a science.

>>895869
Zero relationship between Buffett and mutual funds.

[Anonymous No.896090]

>>895841
With just that initial grand? No chance. If you're 18, you'd need a 78% yearly return. That's just not happening.

You need to add capital to have any sort of a chance. You're simply starting with too little.

And that's been an issue for me too. I got huge gains since the financial crisis but the amount I could invest at the time was so little as to be sort of insignificant in the whole scheme of things.

[Anonymous No.896116]

>>895841

well how fucking old are you now

also probably not likely

[Anonymous No.896220]

>>895841
I don't know about pure Buffet value investing. Those days are probably over. You're better off just buying a small, sleek and portable kitchen appliance with easy pre-set buttons that'd heat up your Mexican tortilla chips to that classic restaurant-style warmth, that could easily be tucked away in a cabinet.

[Anonymous No.896276]

>>895841
You never invest setting goals like "multi millionaire". The billionaires didn't set out to get rich, they like the sport of it.

Value investing is the hardest IMO because you are relying on fundamentals and a business plan that will survive for decades. Value traps are the landmines of the DOW, stepping in one can keep you in a painful no growth hold for years. If you dabble, do your research and go beyond the prospectus and technicals

[Anonymous No.896289]

>>895906
The lazy man's way to risk management.

Learn to portfolio rebalancing for fuck sake.

[Anonymous No.896312]

>>895841
121% net annual returns for 12 years. Good luck bro.

Warren Buffett and his partner Charlie Munger are some of the most ridiculous people on earth investing wise. They are constantly running REAL numbers on investment opportunities to add to their investment farm. They are meticulous professionals that analyze
good buys from all the angles both within and without their supporting framework. They have largely handed over the reigns at berkshire hathaway. It would be prudent to understand their method, its pros and cons and compare it to various other methods Bearing in mind that they are masters of their craft and execute on a technical level to a pristine degree in largely not retail transactions.

[Anonymous No.896456]

>>895841
No OP, it doesn't. A simple moving average crossover (aka 2 squiggly lines on a chart) can outperform the benchmark by a long shot, with more than 1/3 of the drawdown. Buffett preaches value investing to accomodate the mentally lazy goyims' needs. But if your IQ is slightly above 90 you will soon realize that learning to code basic algos is immensely more profitable
>pic related, this is what usually put muh value investing memebois on suicide watch
>>896031
>Value investing is an art, not a science
BHAHAHAHAHAHA

[Anonymous No.896459]

This is /biz/ where retards on this board confuse investing with trading. Like this moron.>>896456
They're two completely different things. With day and swing trading you'll lose all your money. Most trader posters on /biz/ never post their 1099. With investing it comes long term. Mutual funds are dead. This is the reason why index funds are spewed by /biz/ and other ETFs. To assure your retirement. You open a retirement account. Simply writing a "simple" algo code won't suffice. Its a sure way to spot a /biz/ poster with no financial engineering education. 80% of traders lose all their money within five years. 100% by 10-15 years. You lose your money. Trading works if you work as an institutional trader. Like investing, the market always take a shit. With trading you're exponentially adding more risk.
Source: Algo trader for a big bank.

[Anonymous No.896466]

>>896459
Oh for fuck's sake dude. Is there some meme books where all you fags get your sources? Anyway. No you are not an algo trader and if you are, you just code iceberg algos for institutionals. Maybe.

You are not a trader, otherwise you would know that whenever you create a trading system you are supposed to backtest it and define an equity loss threshold even before you set up your trading account. Hence the "you can lose everything" meme is just what it is. A meme.

Second, it's already implied that you never put all your money in trading accounts. But given the retardation level of this board, better pointing it out

Third, if you trade using long-medium term, your costs are cut to the bone. It's not daytrading, and don't even get me started on that. I have a fair amount of money, and 80% of my savings are currently spreaded in bonds and real estate. I would never put my savings in a index funds that has drawdowns i cannot control.

And no, nobody here is stupid enough to post his 1099 on the internet. I already proved you trading is profitable, and can consistetly outperform the benchmark. You instead spewed memes and said you are an algo trader. Which is something i highly doubt

[Anonymous No.896474]

>>896466
>>896466
You haven't proved shit. You just spew bunk opinions. And posting your 1099 with critical information blurred out is not hard. Also your simple view of algo trading at the institutional level shows you have no idea what you're talking about. The stats I posted are real, you can look them up. Individual traders fail. Only a rare, and I mean rare few survive. But eventually their greed catches up. Also no one investing in the real world uses money they need. They use money they can spend. But I know I'm talking to some snot nose college kid or neet. Also backtesting fails. That's what you should know. Nothing is perfect. This is how I know I'm talking to idiots. The market is not rational nor perfect. Your stop loss can be surpassed. I've seen this happened way too often. This is why trading works in my level. We use your money. I never use my money. The stop loss you have, if you know everything about trading like you say you do, then you would know you would hit that loss very frequently and have to resupply those margins. This is what the you can lose everything means. But you don't trade. That's how I know you're not a trader. You're a /biz/ NEET, masturbating to thought of trading and making dollaroos.I'm not stupid, like you and every other lazy moron in this board. Everything has a risk, and trying to control for everything shows me you're a failure. The riskiest thing you can do as a person is too play it safe. Which is what every "trader" I encounter on this board.

[Anonymous No.896492]

>>896474
This is why you use out of sample data. This is why you consider the worst case scenario for your equity curve. This is why you run Monte Carlo whenever you can.I have run extensive 20 years backtest. It took me one year to understand how institutionals use stop hunting algos to generate liquidity. I understand what you mean, and i will pretend you really work as a quant.

Anyway, i have several proprietary algoritms who can "see" where the institutional orders are. The levels in which these orders are placed, are the levels where your sneaky little algos can't get. And besides, as a swing trader i use a broker with an ECN access who scrambles and hides my orders (which are usually pretty large). I use leverage. I have been doing this for 4 years. I am an engineer. I just browse this board looking for new trading concepts and/or useful ideas to use.

Profitability for retail traders who have an ounce of brain is possible. The 95% who lose money is not a problem of mine. I have always treated trading like a business, not gambling. A basic algo can outperform the benchmark consistently, like i showed you. You simply spewed memes. I don't need to prove shit, since i'm not selling anything.

But i guess you are right, in a certain sense. The average investor can't handle volatility, uncertainty and using his own brain to make money. You also believe that a benchmark losing more than 56% of your money is a sound investment. I'd rather put the money under the mattress.

Anyway, tomorrow will be a fun day. Everybody will wake up and discover that the gravy train has stopped for good. No more free money from the FED. We'll see how good your index is

[Anonymous No.896494]

>>896474
Last note, you are not an algo trader. You are just a fag putting his burger flipping salary into an investing fund. You just looked up Investopedia before replying me, using big words you don't even understand so people don't find out how retarded you are. You don't even understand how margin/leverage works. You don't understand the concept of money management. It's ok, you are in good company.

But if you have a few thousands of bucks to throw away, and put memes and common sayings aside, and decide to get serious about trading, you will found out that this wonderful, rigged casino that finance is may be exploited without much effort, if you are not retarded.

I won't bother responding you again

[Anonymous No.896533]

>>896494
Different guy. I'm not a quant or a algo trader, and I'm actually quite retarded. But I'm sure you haven't had a 100% success rate. And if you are seriously leveraging up then you do realize that you're setting yourself up to get fucked in the ass big time sooner or later.

[Anonymous No.896535]

>>896533
>But I'm sure you haven't had a 100% success rate
My success rate is barely 25% actually. And i scale down my leverage as my account gets bigger. If your money management is sound, no amount of leverage can destroy you.

[Anonymous No.896540]

>>896494
>>896492
You won't bother responding because you don't want your talking about.
>I run 20 years of backtest
OH really? 20 years? That's stupid because I run the entire stock market history. I use computers that 1000 times faster than your and connection speed that faster than anything you can afford. Your whole post screams childish delusions. Its really funny you think institutional trading is shit. Because we make all the money, while you just pump the margins for me to steal. Go ahead and run away. I've met so many of you on this board. Who think they can beat the market and come off as a millionaire. I've yet to meet a rich individual trader.

[Anonymous No.896542]

>>896540
>I use computers that 1000 times faster than your and connection speed that faster than anything you can afford
>Go ahead and run away
Psht, nothing personnel kid

Btw are you the same faggot who stopped repling in the daytrader thread? Because you already outed yourself as a retard there, might as well continue the show here, eh?

[Anonymous No.896558]

>>896540
>OH really? 20 years? That's stupid because I run the entire stock market history.
> I use computers that 1000 times faster than your and connection speed that faster than anything you can afford.
>Your whole post screams childish delusions.

Can you stop the dick contest and useless bragging ? I'm also an algo quant. What you just said will not give you a big edge over what the other guy does. Who the fuck cares how fast your computers perform your tasks if a fool has coded the algos? Going fast is for HFT only. It's much more about quality than speed for algo development in my opinion.

I love reading shit in these posts, when some of you think they know the TRUE way things are when you most probably either lack experience, operate and think on hearsay only or have had a few good days and think you're the second coming of Christ.

Newsflash : if you make money, it's VERY DIFFICULT to say if it's thanks to your skill or just randomness.

Showing a back-tested algo means little to me, doesn't make it profitable since you obviously optimized it on past data. I can give you beautiful equity curves which crash in real life because the idea of the algo is fucking stupid and overfitted. Inventing a smart algo, that takes a lot of skill.

[Anonymous No.896561]

>>896558
You obviously missed the part where he says he is an institutional, that's where the real comedy is

[Anonymous No.896563]

>>896561
yeah, the whole story doesn't really add up. It feels like some kid spewing words and trying to impress people when he has not a big idea of what's what.

[Anonymous No.896766]

These threads actually interest me a lot. Do any quant/algo people have any book (or other) suggestions or advice for a finance student who wants to learn more about creating good algorithms and other topics on this kind of trading?

Also do you guys code your own algorithms? If so what language do you use?

[Anonymous No.897039]

>>896456
>Analyzing market trends in relation with events
>Analyzing a company's financial performance
>Analyzing a company's management performance
>Analyzing historical data to see how the company coped with it
>Analyzing economical impact on industry's activity
>Analyzing the impacts of different events on company's performance
>Analyzing the competitive advantage of different companies on the same industry
>"Bitch u ain go shit on me, jst put yo bots to buy when 12 ema crosses 200 ema"

You sound like someone I would trust with my money.

[Anonymous No.897670]

>>897039
I obviously don't trade like this. But a retarded MA crossover can easily outperform the benchmark, as a matter of fact. "Quantitative" value investing is something i can respect. Buying sympathy stocks like these pikers do, or even worse, investment funds, that's another thing

[Anonymous No.898173]

>>895841
I think it is very unlikely unless we enter a 2007/8/9 situation and companies like AIG tumble again (TBTF). OP you need a lot of capital or a stream of money (aka a job).

[Anonymous No.898188]

>>896456
Oh boy look at those trendline returns! There's no way active investing could beat those returns...no sir...oh wait...they can beat that in 3 years during a bear market.

[Anonymous No.898206]

>>897039
It sounds a lot like what Jeff Skilling used to say.

[Anonymous No.898208]

>>898173
Fuck AIG.

[Anonymous No.898680]

>>898188
Mine was just an example. Like i said, i don't use moving average to trade. Nobody does.I stick to the algos i have developed and give an eye to the fundamentals for the long term. That's it. This board advocates passive investing in indexes. Given the DD and the volatility of the benchmarks, it's pretty much a scam made legal. I have no quarrels with active management and with holding a portfolio who gets regularly rebalanced.

The problem with this board is that value investing is often confused with buying sympathy stocks.