Investing General Discussion

Gravel

Gravel

Mr. Poopybutthole
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Sanrith Descartes said:
My opinions - Indexing works. Picking stocks is gambling. Bond yields suck at the moment. "High yield" bonds arent high enough to justify the risk.
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Indexing is boring.

People don't want boring. They don't want the easy answer.

If it's as easy as indexing, it doesn't "feel right." So people pay other people tons of money to "manage" their money for a 1-2% fee, for worse results. Or, they think they know better, and either try to market time or day trade or invest in something highly speculative. These people occasionally get wins, but also almost always come out behind.

If someone doesn't want to index in the face of all evidence that it's the best option (by a mile) for your average investor, that's on them.
 
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Sanrith Descartes

Sanrith Descartes

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Gravel said:
Indexing is boring.

People don't want boring. They don't want the easy answer.

If it's as easy as indexing, it doesn't "feel right." So people pay other people tons of money to "manage" their money for a 1-2% fee, for worse results. Or, they think they know better, and either try to market time or day trade or invest in something highly speculative. These people occasionally get wins, but also almost always come out behind.

If someone doesn't want to index in the face of all evidence that it's the best option (by a mile) for your average investor, that's on them.
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I agree 99%. I leave the 1% because there are some folks who can individually beat the index returns. Actual money managers cant consistly, but the individual is willing to make decisions because he is all in while the manager is protecting his year end bonus.

Indexing really is boring. It's like grinding mobs. There is that allure of doing a dungeon for max xp and loot drops, but the reality is in most cases the actual sp is worse due to travel time, prep time, wipes, afk's etc. But grinding is just boring.
 
Sanrith Descartes

Sanrith Descartes

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Locnar said:
Why no talk on gold as another option?
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I will trade gold but wont invest in it. Given a choice between holding dollars or holding gold I will choose dollars. One reason is while dollars can be manipulated, the manipulation is minor compared to what can happen in the gold market. Other reason is I never have to worry about my dollars losing 10% of their buying power overnight.
 
Blazin

Blazin

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Gurgeh said:
I guess those ~$5B haven't been lost for everyone... That's the kind of shit we'd need data as to who was holding the shares when it crashed.
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Robinhood accounts , only dumb retail would have thought the company was of any value. People with low dollar accounts chase the stupidest shit. We probably could save a lot of people from themselves by making sub $15/share low market cap stocks off limits to traders with less than a few hundred thousand .
 
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Gurgeh

Gurgeh

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Blazin said:
Robinhood accounts , only dumb retail would have thought the company was of any value. People with low dollar accounts chase the stupidest shit. We probably could save a lot of people from themselves by making sub $15/share low market cap stocks off limits to traders with less than a few hundred thousand .
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Probably some individuals thought they could make some quick buck on it, as its price should have increased if they joined an MSCI index, but this article Bloomberg - Are you a robot? says Vanguard and other managers of ETF buying. So it mght also be "cautious" investors who lost money. Or maybe just Vanguard & others, and not ETFs owner, but somehow I doubt it.
 
Blazin

Blazin

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They are forced to buy when they have funds that track an index and its forced to sell when it leaves , nobody at vanguard is even looking at it.

the scam here is likely that with the help of retail that I’m talking about they were able to get the valuation high enough for it to be added and if that was their plan.

there are definitely professional shops working the retail crowd on penny stocks non stop On trading forums.

I would like to see a rule that brokers are forced to show new sign ups what percentage of their customers loose money. I’m willing to wager that on sub$30k accounts with certain brokers it’s over 75%
 
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Gurgeh

Gurgeh

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Blazin said:
They are forced to buy when they have funds that track an index and its forced to sell when it leaves , nobody at vanguard is even looking at it.

the scam here is likely that with the help of retail that I’m talking about they were able to get the valuation high enough for it to be added and if that was their plan.

there are definitely professional shops working the retail crowd on penny stocks non stop On trading forums.

I would like to see a rule that brokers are forced to show new sign ups what percentage of their customers loose money. I’m willing to wager that on sub$30k accounts with certain brokers it’s over 75%
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This shit has been around forever and I don't think many people lose sleep over greedy idiots losing money.

What I'm wondering here is a more elaborate scam in which regular investor are losing money. Someone manipulate a stock into indexes, triggering a massive buying of it, they are now able to sell their shares as much as they want at the manipulated price, people start looking 'wtf is that shit' and the stock collapses and get out of indexes. It's already happened twice with Chinese stocks this year. And in both cases I suspect the losers aren't mostly gamblers but regular ETF owners with a long term strategy.

I don't suppose we'll see it happening many more times, as it is a relatively simple one, but I fear we'll see an increasing number of market manipulations specifically targeting ETF.
 
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Sanrith Descartes

Sanrith Descartes

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If there is a way to scam the system, people will always be looking for it. Fraud is the world's 2nd oldest profession.
 
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P

Poster

Lord Nagafen Raider
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Yeah, if you're buying HK-listed penny stocks, you're a moron.

Pretty good overview of what happened with ArtGo below. Tightly held/thinly traded penny stock gets manipulated to a price/market cap where it gets picked up into the indices, ETFs/funds buy to adjust for inclusion in the index, the price skyrockets, then plummets when the indices rightfully correct their error.

www.bloomberg.com

You Only Want the Good Stocks in the Index

Also quality voting, WeWork cold feet and Tesla’s truck.
www.bloomberg.com www.bloomberg.com
 
sadris

sadris

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EMLmhTqUcAAOQD6.png:small
 
sleevedraw

sleevedraw

Revolver Ocelot
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Fogel said:
Translate this to english please, thanks
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It's a shitty double-axis graph, but basically the implications seem to be:
  • that the CAPE ratio inversely correlates with how well the S&P performs (high CAPE correlates with low S&P performance), and
  • because CAPE was high in 2018, S&P return will be low in 2018 (or going forward).

Some people say that rising CAPE can signal impending recession, but it wasn't deliberately designed as such.
 
Khane

Khane

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Some people also say that Humans love patterns and find them even when they aren't there.

"Hey let's shut off the squiggly red line around 2006 but still pretend this is somehow consequential"
 
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