Thread: Rants and WTF are you talking about and Coronavirus!
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07-31-23 19:48 #11611
Posts: 6416
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07-31-23 17:16 #11610
Posts: 269Originally Posted by EscapeArtist [View Original Post]
The Buffetism that I had in mind with my example was that war is not necessarily bad for the stock market. I realize that isn't exactly an ism but people know that he has said it.
In regards to conventual wisdom, it says to subtract your age from 100 and the result is how much to put in stocks. Basically, "It is time in the market until you run out of time".
People who had long bonds per conventional wisdom had a drag on their return when the intention was the opposite. There were people that that seemed to easily see that coming and advised to get out of bonds.
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07-31-23 13:20 #11609
Posts: 1326LOL, post got out of hand and was a lot longer than expected.
Summary in response to time in the market-non sequitor comment:
Obviously if you can time the market and avoid the falls and only ride the highs, obviously in theory, then that's better than just sitting there taking punches and missing trains. But the point behind time in the market is that in reality, most investors will not be able to time the market better than just being in it consistently. Missed calls usually outweigh the good calls in the long run. The data amongst professionals show that over 80% get it wrong over a 20 year span and 90% of day traders actually take full on losses, much less just in comparison to the general market.
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07-31-23 00:04 #11608
Posts: 1326Originally Posted by BobNSuzy [View Original Post]
As to your specific points, I think you already made the counterpoint in your second post, "everything seems like a no brainer is retrospect. " Hindsight lets us make the comment "if you did this, then that. " The question is, how often can you get it right and not just get the prediction right, but to also time it right. For example, who knew exactly when to get out in 2022? Markets tanked in January, 2 months before first rate hike. At the time, conversation was around tapering and "transitionary" inflation due to supply chain possibly causing at 10% pull back with 3 rate hikes. We ended up getting sustained inflation, a 22% pullback, and 7 rate hikes in 2022.
Now as for something like investing in Europe during the war / energy crisis, well that's another Buffett-ism, "Be fearful when others are greedy and greedy when others are fearful," basically buy low sell high. But that's just an addition to the "time in the market" position as in practice, Buffett generally buys in a crisis but does not actually ever sell entire positions at peaks. He just finds the best opportunity to buy, not really buying and selling for the maximum amplitude in price fluctuations. Berkshire generally did its best in recessions and did not really outperform when everyone was winning.
And we're just talking about generalities of the market, not even getting into individual stocks where a random bad PR news story or one natural disaster causing a commodity shortage can tank your entire position.
I mean, what's the data say? Something like every year less than half of fund managers beat the market. That number gets even worse over time where something like less than 20% of managers beat the market over a 20 year span. And then there are the day traders and swing traders where every year, only 10% even make a profit.
I'm sure over time, we can all think of those trades where we caught a wave or got out at the right time. But we're probably not even aware of all the times that maybe we got out of a position and didn't even notice how much was left on the table if a stock rose after you got out. Or that stock you didn't buy that popped off. And most people, and especially males, are more prone to remember the good emotions leading one to be optimistic of future prospects. A gambler's mentality. Which leads me to my last point, emotion. Can you honestly say that you've left emotion out of all your trade decisions? Fear? Greed? Of course not, or else you would have gone all in during the Euro energy market drop. Same with American tech at the end of 2022. Did anyone actually think that Tesla and Facebook / Meta were going to stay at 25% of their all time highs?
All this is not to say that you couldn't profit a little extra by swing trading a percentage off the top of your positions to take advantage of some obvious overbought conditions or dollar-cost-average down some purchases when a price drop is artificial and temporary, but to use that as a general strategy as a non-professional when every year less than half of the professionals actually beat the market doesn't seem to be a great long term strategy to me. Maybe you'll make a good call and can even ride a couple positions and sectors for a 5 year tear but what are the chances that you catch all of those educated guesses over multiple decades? And if you actually beat the market over 25 years, would the difference even be enough to warrant the extra time you spent thinking and stressing that much about it?
All this coming from me, a guy who is often overly optimistic and has a gambler's mentality.
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07-30-23 21:01 #11607
Posts: 6686Originally Posted by BobNSuzy [View Original Post]
Ofcourse one has to also look at basic economic figures like equity, income, debt etc, but only so far.
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07-30-23 20:41 #11606
Posts: 6686Originally Posted by BobNSuzy [View Original Post]
Mistake number one is still not to listen to Pistons.
Another interesting stock at the moment is Shopify. But it might be smart to wait a bit considering further reduction in people's spending towards the end of the year. At some point it will be a fantastic case however. Timing will be tricky perhaps.
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07-30-23 19:49 #11605
Posts: 269As an example of how easy it can be to time the market someone could have just bought European stocks a year and some months ago. I realize people don't have the balls to do something like that but it would not have been that hard or risky. It is just a thought. I also realize the comment could be seen as insensitive and making light of a serious situation. I also realize I don't know what I am talking about when I say it. Everything seems like a no brainer in retrospect. Someone would be up 50% and all it would have taken is for someone to be a Warren Buffet fan and be familiar with his quotes.
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07-30-23 19:17 #11604
Posts: 269Originally Posted by EscapeArtist [View Original Post]
I can't argue with anything you said but if someone got out of an S&P index fund at the peak they are still ahead especially if they are earning 5 1/2% in three month T Bills. 5 1/2% is a lot for a risk free investment when the S&P pays less than 2%. I think there are some people who can do ok timing the market. They also say not to fight the fed. If someone just followed that advise it remains to be seen how that works out this time around.
The premise of the adage, "It is time in the market, not timing the market" is a non sequitor. They say you will miss out on the best days and show calculations of returns if someone would have been magically out on only the best days. Someone would actually do even better if they were magically out on the worst days. On average the stock market goes up instead of down so someone is better in it. That much is true but what they say is non sequitor.
It is all something to consider. It is not like I have never been in the stock market or have an interest in it. I don't really see how it stays up when the interest rates go from 0 to 6% in a year. But, I have an excuse considering that I am not a professional. It remains to be seen how someone will fare just by not fighting the Fed.
Now if you are talking about stock picking which is what this conversation is about, that is a different story.
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07-30-23 17:30 #11603
Posts: 1326Originally Posted by BobNSuzy [View Original Post]
https://stocknews.com/news/adbe-fb-m...-for-the-rest/
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07-30-23 02:04 #11602
Posts: 269Originally Posted by Pistons [View Original Post]
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07-29-23 04:52 #11601
Posts: 1326Originally Posted by Sirioja [View Original Post]
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07-27-23 00:04 #11600
Posts: 6686Originally Posted by BobNSuzy [View Original Post]
https://youtu.be/saqAYgWanwg
I was not aware of them (ab) using this potentiality before now so strong, but thought of it more as a backup plan. But this is a massive upside to the stock if they get it through!
The only downside is how this will hamper development of AI as a whole, in all of the world. But for Adobe shareholders it could mean access to alot of programming talents too! And could jettison them to be the next trillion dollar company for sure. But only if this goes through.
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07-24-23 21:52 #11599
Posts: 22216Originally Posted by EscapeArtist [View Original Post]
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07-24-23 12:30 #11598
Posts: 1326Jesus. The only endurance and stamina comes from his mouth.
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07-23-23 15:54 #11597
Posts: 22216Originally Posted by PaulInZurich [View Original Post]