We have gone over that and you keep using the same old saw. I already proved to you if I invested all my money today I would beat you.
You are a single investor so you are comparing yourself to the wrong people. Maybe if you compared youself to individual investors you might find yourself wanting. When you compare yourself to a jockey with a bag of cement on his saddle of course you will beat him. Hawkwin and I both were back in before the high so I have to believe you are below mediocre.
That’s not the race we’re in. Are you going to beat me over a 20 or 30 year time frame with the same or less volatility? It’s Long-term Buy & Hold, I’m not paying any attention to 1 to 5 year results, or 50% market sell offs (I keep the next 10 years of personal spending requirements out of the market, so I don’t need to sell anything in a downturn.
intercst
Dear Intercst,
Very premature.
The fireworks have not gone off yet. Congress might punt in July when the debt ceiling needs to be lifted but…sheesh…
ipsofactso NUTS!
I’m pretty sure most people stopped listening to Moody’s after the 2008 crash.
intercst
Dear Intercst,
I knew a John Smith. Yes I did.
He saved during the great depression and as a dog face in WW II. He worked two or three jobs. He bought stocks and bought more.
At age 88 in 2009 his GE tanked to $7 or a bit less per share. He suddenly needed a pacemaker. He was a wreck.
Be prepared.
I can’t say because I thought we were talking index investing but you keep changing the bar. Then you say oh no I invested in single stocks so now we have to take that into account. Next time you will say I am a growth investor can you beat me now. What exactly am I supposed to beat you at? Give an investing strategy that you are following that I can gauge against. If it is index funds than I can guarantee you I will beat you.
Dear Andy,
Dividend income aside…the lack of earned income is a problem.
Mine is not that high. I am an artist. But artists have second acts.
Game development, I want to become institutional money. If I was I would not care about down turns. Other than WEB’s strategy to know when to raise money and when to enter the markets.
That back and forth with funds is missing in this hold till death do us part.
Leap I have no problem with any way you want to invest your money. I have no problem with anyone and the way they invest. But let’s be realistic. I have been doing this for decades and when someone tries to tell me they have the holy grail I have to laugh. Index investing is fine if you do not want to put the time in, but in my experience, if you put the effort in. Growth investing will kill index investing every time.
Think of “growth investing” (or any other kind of investing) like counting cards in Blackjack at a casino. Only a small percentage of people have the capability to be successful at card counting. And if the casinos catch you doing it successfully, they’ll ban you. It’s safe to assume that a tiny fraction of blackjack players have been banned for successfully counting cards in blackjack.
An index fund is a way to beat 95%+ of the people attempting to win at blackjack in the casino of the stock market. Stock market players as group can only can only get the investment return of the index. If you are beating the index, you have to be taking money from another player who is trading individual stocks. Investors who are holding an index fund, by definition are getting the return of the index minus a few basis point expense ratio. You are not taking any money from index fund investors. You’re only harvesting gains from other individual stock pickers and market timers who believe they can win at the game. And competing with the Goldman Sachs of the world who likely have better information than you do.
Large institutional players like Goldman Sachs, etc. have information that you don’t have and they pay for order flow from retail houses to harvest a portion of the bid/asked spread for their own account. You have the same odds of beating Goldman and the S&P 500 return over the long run as a card counter.
Maybe you have been successful in growth investing as you claim (and beaten the index), if so, congratulations. But if I can beat 95%+ of the people making the attempt by buying the index and doing nothing, that’s an attractive low-risk, low-effort strategy. Some would even call it a free lunch. {{ LOL }}
intercst
Probably about the same percentage of early retirees that were as lucky as you.
Just judging from the early retirement forums, people who retired early with index funds over the past couple decades are now sitting on boatloads of money.
As an index fund investor, I approve of that statement.
But that isn’t reflective of the OP’s success.
That is very dangerous right now. Because Walmart was told to just eat it, the Boss was told to Shut UP, and the Swifties have been insulted again. Decision making you can’t bank on.
Decades ago, during one of our anti-Communist lectures in school, we were told how the Soviets maintain a zero inflation rate: products are withdrawn from the market, then replaced by a “new model” that is either decontented, or higher priced, or both, but it isn’t “inflation” because it’s a “new model”, thus not comparable with the previous model.
I took delivery of a new fridge today. A Whirlpool, but Hecho en Mexico. I would expect the Mexican built fridges to be hard to come by, in the future. While the high line models, that Whirlpool builds in the US, will be in abundant supply. The 30cuft one, I bought for $650 may not be available. But a 30cuft stainless steel model, with french doors, and ice and chilled water available through the door, will be available, at $1799. Is that “inflation”?
Steve
Dear Steve,
You are leaving out my assumption of economies of scale.
You should leave the assumption out until corporate taxes rise.
Check your math! The stock (1800 shares, was 900 before the split in 1997 and 450 before the previous split) is worth about $1,362,000. The basis is $11.65 a share (split adjusted), so $20,970 total. Because the dividend is so low, you advise selling the shares, and putting the proceeds into a bond at 4.3% (let’s say a treasury bill). So why don’t we do the math together, okay?
Sell 1800 LLY at $1,362,000
Subtract basis of $20,970
Long term capital gain is - $1,341,030
Tax due (at 23.8% on almost all of it) is - $319,165.14
Now put the remaining ~$1M into that bond you mentioned. It’s earn about $43,000 a. year. It’ll take over 7 years JUST to earn back the amount that had to be paid in taxes!!! That means that you net ZERO for over 7 years effectively. ZERO is less than 0.82%, isn’t it?
Nobody ever said that timing doesn’t work. Those people who can time the market accurately enough over the decades will do very well. The only thing that anyone has ever said is that the vast majority of people can’t do the timing accurately enough. Not only that, but the vast majority of fund managers (of funds that can choose when and how much to invest) ALSO can’t do the timing accurately enough.
We’re lucky to have 3 people (@buynholdisdead @Hawkwin @Goofyhoofy ) here on this board that can do the timing accurately enough, but the remaining few hundred cannot.
Mark you are pedantic. I didn’t advise a bond, I said they paid more interest because he was bragging he was getting a dividend on it. If you think a dividend of .83% is good than you are crazy also.
Where have you been? Intercst has said that all the time.
Only because they are hobbled by rules like they have to stay invested at all times. Go through all the rules of all the fund managers and then tell me how many are actually able to time the market according to their rules.
Show me an article that says the vast majority of people can’t do the timing accurately enough. Just one article that states that. Not an article that states that most people who invest in mutual funds can’t do it, not most people that invest in index funds can’t do it. I want an article that states the vast majority of people can’t do the timing accurately enough. You guys seem to think that people need to time the very top and the very bottom to time the market but what you don’t realize is that even if someone gets just 1% bettter a year than you do that over a lifetime that can be a much bigger return.
I see this upsets you because you have been told all your life you can’t do things and you believed it.
Fund managers are very restricted. They are not permitted to go to cash or even get out of their asset class in most cases.
Apparently they can if that is their field.
By Chen and Liang:
Abstract:
This paper examines whether self-described market timing hedge funds have the ability to time the U.S. equity market. We propose a new measure for timing return and volatility jointly that relates fund returns to the squared Sharpe ratio of the market portfolio. Using a sample of 221 market timing funds during 1994–2005, we find evidence of timing ability at both the aggregate and fund levels.
Timing ability appears relatively strong in bear and volatile market conditions. Our findings are robust to other explanations, including public information-based strategies, options trading, and illiquid holdings. Bootstrap analysis shows that the evidence is unlikely to be attributed to luck.
DB2
Here you go.
see page 11 at this link:
https://www.spglobal.com/spdji/en/documents/spiva/spiva-us-year-end-2023.pdf