brty
I don't know that your reply will be
Expected by the masses.
Not why they'd want to hear.
Nice post..
One of the few that is loaded
With experience not theory.
This little underhanded line – probably not so much.
Haven’t you derailed enough threads at ASF?
Only positive and constructive posts in this thread please.
The bit about "there being no secret" in the article that you linked Oddson, is one of the moments of realisation that took me onto the next rung (of many - and I'm still near the bottom) of investment knowledge. It's simple and very sobering.
This little underhanded line – probably not so much.
Haven’t you derailed enough threads at ASF?
Only positive and constructive posts in this thread please.
One of the few that is loaded
With experience not theory.
Hi V,
The fact I found very sobering was that most active money managers underperform the market in the long run, this is probably why I think so much about investment strategy. I read with great interest about the Permanent Portfolio (thank you for that tip), Bogleheads, High Yield Portfolios and extreme saving.
An investor who is comfortable with equity exposure has only three choices:
1. Disciplined saving and averaging into an Index Tracker type portfolio over the course of their lifetime. Many great investment minds recommend this and it requires a couple of hours a year.
2. Disciplined saving and averaging into a simple value or momentum type portfolio (e.g. high yield large caps). A couple of hours a year to manage.
3. “Stock pick”. 10000 hours to find their profitable way
What interests me is has anybody applied approach 2 successfully? There are endless academic studies but what interests me it is how somebody applied it on the ASX over the long term.
Also has anybody just created a random portfolio of a dozen stocks and rebalanced at appropriate periods (taking into account taxation and expenses). To date I have read about a cat, five year old kids, and a pig farmer that beat the professionals – what next a monkey with darts? Or perhaps a chicken that pecks the stocks from the newspaper listing?
Does everybody believe in the “illusion of control” and not accept there is some randomness to it all?
I suppose my main point is do I actually need to spend 10,000 hours. Cannot I get a 2% excess return over the market just by applying a simple system? 2% over 20 years makes a difference between the choice of Merc or a Lexus as my vehicle to get me to golf during my early retirement (fingers crossed).
Cheers
I once had a light bulb moment.... Constructive enough?
I believe that investing is no different to anything else that you will ever do in life - your actions are part of a dynamic system, full of reactions, obstacles, triumphs and defeats. I don't think you can be profitable long-term without accepting the reality that you are not fully in control. Without fully understanding this realisation I think it would be hard to put in place risk assessment / parameters / portfolio rules and everything else that helps you to do everything possible to avoid permanent loss (and therefore continue to be).Does everybody believe in the “illusion of control” and not accept there is some randomness to it all?
I don't like arbitrary cliches like the "10,000 hour rule" - quantity as opposed to recognisable quality - there can be a large difference! Theory is not the same as practice either - do you count actual market experience as opposed to textbook research in the 10,000 hours? Do you play football games only after you have trained for 10,000 hours? Are you better at something after doing 10,000 hours theory and no actual practice? An arbitrary goal with no qualification of what, how, where, when, why is useless to me. For most there is no gaurantee that 10,000 hours would achieve much at all - because they go about it the wrong way, haphazard and without motivation.I suppose my main point is do I actually need to spend 10,000 hours. Cannot I get a 2% excess return over the market just by applying a simple system? 2% over 20 years makes a difference between the choice of Merc or a Lexus as my vehicle to get me to golf during my early retirement (fingers crossed).
Cheers
Yes - there is a good collection of interesting experiences and musings building in here now.It’s a shame there is no appreciate button in ASF
Some great posts
Kudos this time to Bill M.
Yes - there is a good collection of interesting experiences and musings building in here now.
Also has anybody just created a random portfolio of a dozen stocks and rebalanced at appropriate periods (taking into account taxation and expenses). To date I have read about a cat, five year old kids, and a pig farmer that beat the professionals – what next a monkey with darts? Or perhaps a chicken that pecks the stocks from the newspaper listing?
While i agree with other members here that many people wont be able to outperform, I think the main thing is that by being involved you meet many people and come across other potential opportunities.
McLovin,
In 30+ years a lot has changed, ...
That's the ideal, robusta. So much easier when you really love what you do. There are clearly many here who have a similar fascination, especially those who favour a FA approach..
Guess it is a bit like anything in life, if you are motivated and enjoy what you are doing the chances of success are that much better. From my personal experience while I have not been investing long enough for any results to be meaningful, I think investing is the best game I have ever played. So much to learn, so many permutations, part science part art and the chance of earning a decent reward for your efforts... What else would I want to do with my spare time?
I hope you won't mind my also responding to this, as well as brty.I'd be interested in hearing how much your strategy/thinking has changed over the past 30 years. Does what you do today bare any resemblance to what you did when you were starting out? Have you slowly built on your knowledge or have you had complete changes of direction through your investing life?
Yes, my attitude also.I am waiting for further growth (the cream on the cake) to liquidate some of my riskier positions in order to buy less riskier ones so when the time comes that we may have another crash I won't lose very much money.
Two great points, Ves. Well described.I believe that investing is no different to anything else that you will ever do in life - your actions are part of a dynamic system, full of reactions, obstacles, triumphs and defeats. I don't think you can be profitable long-term without accepting the reality that you are not fully in control. Without fully understanding this realisation I think it would be hard to put in place risk assessment / parameters / portfolio rules and everything else that helps you to do everything possible to avoid permanent loss (and therefore continue to be).
I don't like arbitrary cliches like the "10,000 hour rule" - quantity as opposed to recognisable quality - there can be a large difference! Theory is not the same as practice either - do you count actual market experience as opposed to textbook research in the 10,000 hours? Do you play football games only after you have trained for 10,000 hours? Are you better at something after doing 10,000 hours theory and no actual practice? An arbitrary goal with no qualification of what, how, where, when, why is useless to me. For most there is no gaurantee that 10,000 hours would achieve much at all - because they go about it the wrong way, haphazard and without motivation.
A gifted, and equally motivated person may not need 10,000 hours. Successful people don't need to draw lines in the sand like that.
I'd like to see more attention focused on moving between asset classes as market conditions change. Perhaps people do this but it's not getting any mention at present because investment property in most cases offers such a poor yield and questionable capital gain.
Most of the discussion here has been related to shares. Bill has talked about his investment property which is working well for him alongside his share investments.
I'd like to see more attention focused on moving between asset classes as market conditions change. Perhaps people do this but it's not getting any mention at present because investment property in most cases offers such a poor yield and questionable capital gain.
Oddson, sorry Not V but sticking myin anyway.
For 2) to work there either has to be a ‘secret’ that only you can find and exploit or as the article indicates a deficiency that whilst know, still persists so that you can be contrarian enough to exploit it. I’m firmly with V on there being no secret (at least no enduring ones) – that just leaves enduring deficiencies in how humans act.
You may be able to implement a type 2 system with just a few hours work but can you identify the opportunities and stick to your guns in drawdown without a solid foundation.
The hours you mention in 3) are again the foundation – implementation takes very little time.
What is random in a small sample or in the short run can be predictable in a large sample or over the long run.
Cheers
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