Author Topic: New To Investing Thread  (Read 327219 times)

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Offline steve dave

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Re: New To Investing Thread
« Reply #625 on: October 18, 2013, 09:45:33 AM »
just randomly pound out 4 letters (all the 3 or less letter ones will be boring) until you find one that is actually a valid symbol. apparently that one is some sort of indian cotton company or something. I say go for it.

Offline Emo EMAW

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Re: New To Investing Thread
« Reply #626 on: October 18, 2013, 10:00:43 AM »
Whenever I have extra cash I buy KSU.  All day err day.

Offline Brock Landers

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Re: New To Investing Thread
« Reply #627 on: October 18, 2013, 10:36:42 AM »
Whenever I have extra cash I buy KSU.  All day err day.

Dunno, they seem small-timey for a railroad stock.


Offline Emo EMAW

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Re: New To Investing Thread
« Reply #628 on: October 18, 2013, 11:34:45 AM »
Daily chart tho

Offline sys

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Re: New To Investing Thread
« Reply #629 on: October 19, 2013, 11:06:06 AM »
the turnover ratio comparison on the first page is horribly flawed at best and totally misleading at worst.

yeah, that was stupid. could have been targetting that poriton of the write up at complete dumbasses though.

i don't know how you came to the conclusion that the ratio is flawed.  i didn't see any information on how that data were compiled or the ratio calculated, so i don't see how that conclusion could be derived based on the information within the pdf itself.

as regards to the dumbasses.  while far be it from me to suggest rich people and financial services providers can't be dumbasses, the investment vehicle is not readily available to small retail investors.  it designed for managed money and 1%ers (i accept, though, that the commentary is probably not intended solely, perhaps even principally, for their investors).

regarding the misleading, i don't think you understood the reason those data were presented.
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Offline Rams

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Re: New To Investing Thread
« Reply #630 on: October 19, 2013, 11:50:50 AM »
you can't compare the turnover ratio of individual equities to that of a fund.  the turnover ratio of a fund (mutual fund, etf, managed portfolios like Horizons, hedge funds, etc.) relates to how often the individual holdings in the portfolio itself are turned over.  in other words how frequently are they buying and selling stocks within the portfolio.  the turnover ratio of an individual equity, as it states in the commentary, is the proportion of outstanding shares traded each year.  comparing the 2 doesn't make any sense.  it's apples and oranges. furthermore, they seemed to have used the individual equity definition of turnover ratio and applied it to the etf's.  that's either incredibly stupid, thoroughly confusing, completely disingenuous, or all three. 

I suppose their analysis of international etfs hold water, but I'm not sure people invest in those funds thinking that they're participating specifically in the rise in local demand.  if that's the reason you're buying a country specific etf, then I guess that's good information.

The points they make on market-value weighted indices are good ones, but not ground-breaking.  the idea of equal-weight indices is as old as etfs themselves.

finally, the graph at the end comparing the performance of what I assume is their flagship investment strategy to that of the S&P 500 is laughable.  the S&P 500 is made of 500 of the largest, most widely held corporations in the U.S. their index appears to be made up of companies that have very large insider holdings.  while their are very good reasons to believe that closely held companies make for superior investments, they are also usually incredibly small (most likely micro-caps).  as companies grow larger, the proportion of insider ownership obviously declines.  I think this goes without saying, but obviously micro-cap companies in general are going to perform much better over a long period of time than larger corporations. they are, however, much more volatile in the short run...as you can clearly see from the graph.  a fair comparison would be their index vs. the most prominent index that contains stocks of equal market cap (russell 2000?)
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Offline sys

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Re: New To Investing Thread
« Reply #631 on: October 19, 2013, 01:10:08 PM »
you can't compare the turnover ratio of individual equities to that of a fund.  the turnover ratio of a fund (mutual fund, etf, managed portfolios like Horizons, hedge funds, etc.) relates to how often the individual holdings in the portfolio itself are turned over.  in other words how frequently are they buying and selling stocks within the portfolio.  the turnover ratio of an individual equity, as it states in the commentary, is the proportion of outstanding shares traded each year.  comparing the 2 doesn't make any sense.  it's apples and oranges. furthermore, they seemed to have used the individual equity definition of turnover ratio and applied it to the etf's.  that's either incredibly stupid, thoroughly confusing, completely disingenuous, or all three.

they stated what they were comparing and why, so i don't see how it could be considered confusing or disingenuous.  stupid is in the eye of the beholder - it made sense to me.  without trying to be too condescending, i think you probably simply didn't realize the point being made, or it would have made sense to you as well.

if any part was confusing or extraneous, it was the inclusion of the "average domestic equity mutual fund" among the data.  the comparison of the etfs to the individual equities logically follows and supports the point being argued.



I suppose their analysis of international etfs hold water, but I'm not sure people invest in those funds thinking that they're participating specifically in the rise in local demand.  if that's the reason you're buying a country specific etf, then I guess that's good information.

The points they make on market-value weighted indices are good ones, but not ground-breaking.  the idea of equal-weight indices is as old as etfs themselves.

i don't think they ever present themselves as breaking new ground.



finally, the graph at the end comparing the performance of what I assume is their flagship investment strategy to that of the S&P 500 is laughable.  the S&P 500 is made of 500 of the largest, most widely held corporations in the U.S. their index appears to be made up of companies that have very large insider holdings.  while their are very good reasons to believe that closely held companies make for superior investments, they are also usually incredibly small (most likely micro-caps).  as companies grow larger, the proportion of insider ownership obviously declines.  I think this goes without saying, but obviously micro-cap companies in general are going to perform much better over a long period of time than larger corporations. they are, however, much more volatile in the short run...as you can clearly see from the graph.  a fair comparison would be their index vs. the most prominent index that contains stocks of equal market cap (russell 2000?)

the graph you're discussing doesn't present the results of any of their investment vehicles.  it present the results of an index (that they created, to be sure) of equities with high insider ownership vs the s&p 500.  certainly you could present it against other indices besides the s&p 500, but there is nothing deceitful in choosing a large cap index.  the avg weighted market cap of the equities in their index appears to be 17 billion.  in the s&p 500 it is 28 billion, in the russell 2000 it is 1.6 billion (not sure i pulled apples to apples numbers due to weighting, but i think the general size range is a fair comparison).
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Offline sys

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Re: New To Investing Thread
« Reply #632 on: October 19, 2013, 04:33:14 PM »
was looking into the horizon kinetics people a little more and saw that they do offer mutual funds under a different subsidiary (or parent, dunno, seems pretty convoluted).  so, my point about how they don't market their ideas to retail investors was not accurate.
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Offline Catchacold

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Re: New To Investing Thread
« Reply #633 on: October 20, 2013, 11:11:34 AM »
Whenever I have extra cash I buy KSU.  All day err day.

Dunno, they seem small-timey for a railroad stock.



Up over 200% since I bought some.  :party:

Offline Rams

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Re: New To Investing Thread
« Reply #634 on: October 20, 2013, 12:42:36 PM »
was looking into the horizon kinetics people a little more and saw that they do offer mutual funds under a different subsidiary (or parent, dunno, seems pretty convoluted).  so, my point about how they don't market their ideas to retail investors was not accurate.
I was just looking at their explanation of the ISE wealth index.  it seems to be an index they tout as as an "inside ownership" index.  but some of their sample holdings from the sales piece I saw listed companies like google, viacom and news corp...all of which have insider ownership at approximately 0% (when you round to the nearest percent).  so I'm not really sure what their angle or strategy is, but it seems to be that of investing in companies with very wealthy founders with recognizable names.  I certainly don't understand what the reasoning behind that is, but I guess everybody has their own weird strategy that they think works, so whatever.

also, you're right.  I clearly don't understand what their point was with the turnover ratio information.  they seem to be pointing out that high frequency trading is responsible for most of the pricing in the market (no crap) and that the largest etfs that track the s&p have the highest frequency of trading (again, no crap).  I just don't really understand what their point is. what point were they trying to make?
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Offline sys

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Re: New To Investing Thread
« Reply #635 on: October 20, 2013, 01:40:58 PM »
what point were they trying to make?

that a significant, and growing, proportion of equity transactions are being driven by index tracking vehicles, in which transactions are driven by things like inflows, outflows, weighting, etc., and in which the underlying value of the equity being bought and sold is not a consideration for at least one party in the transaction.
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Offline Rams

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Re: New To Investing Thread
« Reply #636 on: October 20, 2013, 03:04:59 PM »
what point were they trying to make?

that a significant, and growing, proportion of equity transactions are being driven by index tracking vehicles, in which transactions are driven by things like inflows, outflows, weighting, etc., and in which the underlying value of the equity being bought and sold is not a consideration for at least one party in the transaction.
ok.  so what?  are they implying that equities held by large index funds (ie. companies in the s&p 500) are completely misvalued because of this?  if so, that's a pretty dumb argument.
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Offline kim carnes

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Re: New To Investing Thread
« Reply #637 on: October 20, 2013, 03:09:44 PM »
i own this fund that is co-managed by an EMAW stud.  50% return YTD.

http://www.google.com/finance?q=bufox&ei=GDhkUsjMMoyOlAPFqAE

Offline sys

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Re: New To Investing Thread
« Reply #638 on: October 20, 2013, 03:28:43 PM »
ok.  so what?  are they implying that equities held by large index funds (ie. companies in the s&p 500) are completely misvalued because of this?  if so, that's a pretty dumb argument.

you are really reaching on trying to argue against their thesis.  they're just pointing out what they consider a potential source of distortion in the marketplace.  it doesn't have to lead to a "complete misvaluation" to be an interesting point to consider.

again, as regards to dumb, that's in the eye of the beholder.  i didn't find it to be dumb at all.  completely the opposite, in fact.
"experienced commanders will simply be smeared and will actually go to the meat."

Offline kim carnes

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Re: New To Investing Thread
« Reply #639 on: October 20, 2013, 10:11:44 PM »
ok.  so what?  are they implying that equities held by large index funds (ie. companies in the s&p 500) are completely misvalued because of this?  if so, that's a pretty dumb argument.

you are really reaching on trying to argue against their thesis.  they're just pointing out what they consider a potential source of distortion in the marketplace.  it doesn't have to lead to a "complete misvaluation" to be an interesting point to consider.

again, as regards to dumb, that's in the eye of the beholder.  i didn't find it to be dumb at all.  completely the opposite, in fact.

I agree and have thought of this myself.  It's important to remember that I'm considered a genius in some circles. 

Offline sys

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"experienced commanders will simply be smeared and will actually go to the meat."

Offline 06wildcat

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Re: New To Investing Thread
« Reply #641 on: December 27, 2013, 07:19:23 PM »
http://islandia.law.yale.edu/ayres/Life-Cycle%20Investing%20Working%20Paper.pdf

The average working schlub can be bothered to take an hour or two a month to do retirement planning, especially in their 20s and 30s, they're never going to understand leverage let alone do it properly.

My mortgage broker had a hard time understanding why I put down 5 percent and took the PMI hit (they wouldn't allow a bridge loan) of about $650 per year when the other 15 percent could be parked in a medium-yield utility stock and earn about $1,000. And no, the added interest costs aren't really a factor since PMI will be retired in 3 years from principal payments and asset appreciation and the 30-year rate is low enough inflation will make any difference trivial by then.

Offline kim carnes

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Re: New To Investing Thread
« Reply #642 on: December 27, 2013, 07:31:25 PM »
http://islandia.law.yale.edu/ayres/Life-Cycle%20Investing%20Working%20Paper.pdf

The average working schlub can be bothered to take an hour or two a month to do retirement planning, especially in their 20s and 30s, they're never going to understand leverage let alone do it properly.

My mortgage broker had a hard time understanding why I put down 5 percent and took the PMI hit (they wouldn't allow a bridge loan) of about $650 per year when the other 15 percent could be parked in a medium-yield utility stock and earn about $1,000. And no, the added interest costs aren't really a factor since PMI will be retired in 3 years from principal payments and asset appreciation and the 30-year rate is low enough inflation will make any difference trivial by then.

lol, you showed them you sly son of a gun

Offline WonderMeal

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Re: New To Investing Thread
« Reply #643 on: December 28, 2013, 09:09:53 PM »
The Best Financial Advice I Ever Got (or Gave) by the WSJ:
http://online.wsj.com/news/articles/SB10001424052702304244904579276963442898436

For anyone new to investing, read the article linked above.

Quote from: John C. Bogle, founder of Vanguard Group
The best way to own stocks is to own an index fund.

Quote from: Jane Mendillo, chief executive of Harvard Management Co., the university's endowment

"Take the long-term view" was the best advice I ever received. If you take the long-term view, you will see things others miss. Nearly everyone thinks about next month, next quarter. Jack Meyer, who ran [the] Harvard endowment for 15 years, taught me that when you think about multiple years or even decades you see opportunities to create value others might not see, and you make different judgments today as a result.



Offline 06wildcat

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Re: New To Investing Thread
« Reply #644 on: December 29, 2013, 06:39:22 PM »
http://islandia.law.yale.edu/ayres/Life-Cycle%20Investing%20Working%20Paper.pdf

The average working schlub can be bothered to take an hour or two a month to do retirement planning, especially in their 20s and 30s, they're never going to understand leverage let alone do it properly.

My mortgage broker had a hard time understanding why I put down 5 percent and took the PMI hit (they wouldn't allow a bridge loan) of about $650 per year when the other 15 percent could be parked in a medium-yield utility stock and earn about $1,000. And no, the added interest costs aren't really a factor since PMI will be retired in 3 years from principal payments and asset appreciation and the 30-year rate is low enough inflation will make any difference trivial by then.

lol, you showed them you sly son of a gun

My basic point is asking average investors to use leverage is theoretically a good idea, in practice it would not end well. Debt is a fantastic tool to build wealth with, it's also a good way to remain poor forever.

Offline ben ji

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Re: New To Investing Thread
« Reply #645 on: January 02, 2014, 11:52:13 AM »
Anyone have any suggestions on a Excel Template with most of the retirement planning formula's already embedded?

I usually use the different financial calculators on the web but it would be easiest to have everything in one place.

Offline sys

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Re: New To Investing Thread
« Reply #646 on: January 02, 2014, 12:20:07 PM »
like, what are you looking for?  i can't help you find one (and wouldn't, if i could), but i'm curious as to what you want.  i have a hard time imagining what use one could serve.
"experienced commanders will simply be smeared and will actually go to the meat."

Offline steve dave

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Re: New To Investing Thread
« Reply #647 on: January 02, 2014, 12:29:02 PM »
Anyone have any suggestions on a Excel Template with most of the retirement planning formula's already embedded?

I usually use the different financial calculators on the web but it would be easiest to have everything in one place.

Quote from:  .xlsx
        A                    B              C
1 what I have / % to goal / what I need
-----------------------------------------
2 pud amount /  =A2/C2    / huge amount

Offline sys

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Re: New To Investing Thread
« Reply #648 on: January 02, 2014, 12:30:58 PM »
what I have / % to goal / what I need
-----------------------------------------
pud amount /  =A2/C2    / huge amount
[/quote]

you still have to answer my question, benji.
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Offline Dr Rick Daris

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Re: New To Investing Thread
« Reply #649 on: January 02, 2014, 12:33:18 PM »
like, what are you looking for?  i can't help you find one (and wouldn't, if i could), but i'm curious as to what you want. 

 :lol: sys is an absolute treasure