Liberal Forum

R.Suave » 21 Dec 2023, 2:45 pm » wrote: ↑

21 Dec 2023, 2:45 pm

No, cretin.

Just post a mean and variance for the asset class...

NO QUESTIONS DICK SUCKER!

https://i.pinimg.com/originals/be/10/d3 ... fb8c8a.gif


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R.Suave » 21 Dec 2023, 3:58 pm » wrote: ↑

21 Dec 2023, 3:58 pm

Post the highlight.

NO QUESTIONS DICK SUCKER!

https://i.pinimg.com/originals/be/10/d3 ... fb8c8a.gif

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R.Suave » 21 Dec 2023, 4:27 pm » wrote: ↑

21 Dec 2023, 4:27 pm

You think it takes long to get the measure of your **** posts...

NO QUESTIONS DICK SUCKER!

https://i.pinimg.com/originals/be/10/d3 ... fb8c8a.gif


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Cannonpointer » 22 Dec 2023, 12:23 am » wrote: ↑

22 Dec 2023, 12:23 am

NO QUESTIONS DICK SUCKER!

https://i.pinimg.com/originals/be/10/d3 ... fb8c8a.gif

 

You're not setting a good example for me. I'm very impressionable.  
 

Tempest62 » 21 Dec 2023, 12:20 pm » wrote: ↑

21 Dec 2023, 12:20 pm

No. I was awhile back and now I’m completely out and will stay that way. After the DOW implodes I will be back in.

Are you like Elon musk and predicting  a crash. Cause that isn't going to  happen. 

R.Suave » 21 Dec 2023, 3:52 pm » wrote: ↑

21 Dec 2023, 3:52 pm

I have.

You refused to define "recently", but insist that however long that is, you've figured out public capital markets...and declare them "rigged".

These markets differ from the lottery in that outcomes aren't entirely random....we understand this because ALL investable asset classes demonstrate mean and variance of return (though these are not necessarily "constant"), it is the foundation of portfolio construction. Cause now covariance and correlation matter.

Portfolio variance = w12σ12 + w22σ22 + 2w1w2Cov1,2

This stuff is so **** far over your head, peasant..

I have a slightly tangential view…

I understand what you’re saying, but the timeframe used to determine reliable E[X] and SD values is so high that I feel the only “real” solution is for someone to become knowledgeable in finance themselves. 

For example, if someone bought the peak in 1969 and held until today vs if someone bought in 1983 and held until today, the person who bought in 1983 is going to be better off but only slightly based on CAGR since the time frame (40+ yrs) canceled a lot of the noise. 

Not everybody wants to (or can) wait that long. 

If someone were 50 yrs today and wanted to retire in 20 years and didn’t have a lot saved up, it’s an entirely different story compared to someone who started DCA in their 20s.

To that 50 yr old I would not advise DCA into SPY / VOO today (or “buying and holding until retirement”) because the technical charts suggest a massive bear market (8-14 years) coming in the later half of this decade, spanning most of the 2030s. A 70-80% wipeout of the total market cap peak to trough is not out of the question.

If that 50 yr old wants to retire before 65 they’d better find employment in some ultra-lucrative field that’s in high demand and/or succeed in entrepreneurship (or get lucky somehow…)…because the stock market isn’t going to save them.

R.Suave » 21 Dec 2023, 2:03 pm » wrote: ↑

21 Dec 2023, 2:03 pm

You're welcome for Livermore.

But the point remains.

Rebalancing makes sense, but every time you believe you know something better than the market, you are "actively managing"...in the realm of publicly traded equities, selection has fared as described.

 

Not really.  If you set out on a plan to create a portfolio that proportionally invests in the NASDQ top 10 stocks by price performance, then re-ballancing is part of the formula.  Your are not acting on your "beliefs" about what the market will do. You are periodically buying and selling stocks to fit your model.  Yes, you are actively managing, but no, you are not acting upon any belief as to what you think the market will do at any given time.
 

R.Suave » 21 Dec 2023, 2:03 pm » wrote: ↑

21 Dec 2023, 2:03 pm

You’re Better Off Going All In on Stocks Than Bonds, New Research Finds

 https://www.bloomberg.com/news/articles ... w-research

Though I know it will drive many insane, I will confess to having been involved in developing the marketing of just such a solution for a while...
 

I've always felt that bonds are far more of a "rigged game" than stocks.  For several reasons:

• First, the FED is always toying with interest rates and bond purchases/sales to facilitate some "public agenda". You just don't happen to know what that agenda will be.
• Second, many bonds are convertible, so companies are hedging their debt structure on an option to cancel it if the deal gets "too good for you".
• Third, the total returns on Microsoft corporate bonds (or any blue chip company) are abysmal compared to returns on their equity.

So, you end up taking on a lot of hidden risk with bonds with very little upside to compensate you for this risk. Bonds aren't always a "bad investment" - they're just better off being used as a hedge investment.  Not 50/50 or even 30/60 portfolios.

Skans » 27 Dec 2023, 12:29 pm » wrote: ↑

27 Dec 2023, 12:29 pm

Not really.  If you set out on a plan to create a portfolio that proportionally invests in the NASDQ top 10 stocks by price performance, then re-ballancing is part of the formula.  Your are not acting on your "beliefs" about what the market will do. You are periodically buying and selling stocks to fit your model.  Yes, you are actively managing, but no, you are not acting upon any belief as to what you think the market will do at any given time.

that proportionally invests in the NASDQ top 10 stocks by price performance, then re-ballancing is part of the formula. 

That list would change every day. Price performance is relative...You'd be in the most volatile corner of the NASDAQ...

Skans » 27 Dec 2023, 12:35 pm » wrote: ↑

27 Dec 2023, 12:35 pm

I've always felt that bonds are far more of a "rigged game" than stocks.  For several reasons:

• First, the FED is always toying with interest rates and bond purchases/sales to facilitate some "public agenda". You just don't happen to know what that agenda will be.
• Second, many bonds are convertible, so companies are hedging their debt structure on an option to cancel it if the deal gets "too good for you".
• Third, the total returns on Microsoft corporate bonds (or any blue chip company) are abysmal compared to returns on their equity.

So, you end up taking on a lot of hidden risk with bonds with very little upside to compensate you for this risk. Bonds aren't always a "bad investment" - they're just better off being used as a hedge investment.  Not 50/50 or even 30/60 portfolios.

Not true...

1) no one knows, hence no advantage

2) I doubt convertibles are a large portion of the publicly traded US debt market. A convertible is not necessary to call. Any bond or preferred can attach a call feature.

3) Microsoft MUST pay you the full amount of the principal...your stock can go to zero.
 

LowIQTrash » 21 Dec 2023, 2:05 pm » wrote: ↑

21 Dec 2023, 2:05 pm

So you do equity deals/below market value private deals to take control of (mainly private) firms, replace their C suite with those aligned with your “vision,” and then collect the monies?

Because that’s what the Oracle actually does.

“Buy and hold” stocks is just what he tells the peons because

1) they don’t have enough monies
2) they would probably suck at what he does even if they had $100M in play monies

Well, first of all, that is not all the Oracle actually does. Just as an example look at Berkshire's AAPL holdings -$161,660,496,650.  I believe his next biggest holding is Occidental Petroleum.  Yes, he acquires the occasional company to put under his umbrella, but that's nothing compared to his share 160 Billion in Apple. 

So, Warren actually does buy positions in good public companies and (generally) holds onto them.  Yes, he has the ability to go in and buy out smaller private companies too.  So, buy Berkshire A or B shares.
.
 

R.Suave » 27 Dec 2023, 12:38 pm » wrote: ↑

27 Dec 2023, 12:38 pm

That list would change every day. Price performance is relative...You'd be in the most volatile corner of the NASDAQ...

So?  There are ETFs that do exactly this. And, overall, they have been rather successful.  It is essentially what QQQ does.
 

R.Suave » 27 Dec 2023, 12:57 pm » wrote: ↑

27 Dec 2023, 12:57 pm

Not true...

1) no one knows, hence no advantage

2) I doubt convertibles are a large portion of the publicly traded US debt market. A convertible is not necessary to call. Any bond or preferred can attach a call feature.

3) Microsoft MUST pay you the full amount of the principal...your stock can go to zero.

Ok, then a lot of the bonds that appear to be "good deals" will have call features. 

As for Microsoft - it doesn't "HAVE" to pay you your principal.  If it ever finds that it is in the red and can't make debt payments it will go into bankruptcy, then you could lose your principal.  Maybe not, but could.  I believe that GM bondholders in the 2009 Chapter 11 lost nearly everything.  Well, they got a 10% stake in GM going forward.  Also, bondholders lose value when interest rates rise.  Then their **** bonds trade at a discount.


 

Skans » 27 Dec 2023, 1:52 pm » wrote: ↑

27 Dec 2023, 1:52 pm

Ok, then a lot of the bonds that appear to be "good deals" will have call features. 

As for Microsoft - it doesn't "HAVE" to pay you your principal.  If it ever finds that it is in the red and can't make debt payments it will go into bankruptcy, then you could lose your principal.  Maybe not, but could.  I believe that GM bondholders in the 2009 Chapter 11 lost nearly everything.  Well, they got a 10% stake in GM going forward.  Also, bondholders lose value when interest rates rise.  Then their **** bonds trade at a discount.

No...because a call feature discounts the value of a bond, and it will be priced accordingly. The PV of the cash flows are adjusted for the probability of the call being exercised.

If MS goes bankrupt, you will be in line for any residual value, behind loans, taxes and wages

Skans » 27 Dec 2023, 1:45 pm » wrote: ↑

27 Dec 2023, 1:45 pm

So?  There are ETFs that do exactly this. And, overall, they have been rather successful.  It is essentially what QQQ does.

No....it's an equal weighted INDEX product....it includes all the issues in the associated index...specifically the top 100 large non-financial companies.

 

R.Suave » 27 Dec 2023, 2:01 pm » wrote: ↑

27 Dec 2023, 2:01 pm

No...because a call feature discounts the value of a bond, and it will be priced accordingly. The PV of the cash flows are adjusted for the probability of the call being exercised.

If MS goes bankrupt, you will be in line for any residual value, behind loans, taxes and wages

I understand all  of that, but disagree that:

• the call feature is accounted for in the value of the bond.  It is largely ignored and is not fully quantified into the value of the bond.
• while bonds come before equity in a bankruptcy, there is no guaranty that bond holders will get their principal back.  No insurance.  No FDIC.  No personal guaranties of the top 10 shareholders in the company.  And, that's what I was addressing - your comment that a bondholder will always get his principal back. 

My only point here is that I do not feel that bond investments take into consideration all risks and therefore the interest rates are too low.  For example, Occidental Petroleum bonds which were issued 6/2021 and have a maturity date of 11/30/2025 only pay 5.5% interest.  They are trading down -4.4% from their issuance.  Today's 5-year T-Bills are being auctioned at a medium yield of 3.7%, but have far less risk than do Occidental Pet. Bonds do.  How much risk are you willing to take on for a mere 180 basis points?
 
 

R.Suave » 27 Dec 2023, 2:15 pm » wrote: ↑

27 Dec 2023, 2:15 pm

No....it's an equal weighted INDEX product....it includes all the issues in the associated index...specifically the top 100 large non-financial companies.
 

I said that the re-balancing is essentially what QQQ does.  Not that QQQ's model is limited to the top 10 NASDQ performers.
 

Skans » 27 Dec 2023, 2:25 pm » wrote: ↑

27 Dec 2023, 2:25 pm

I said that the re-balancing is essentially what QQQ does.  Not that QQQ's model is limited to the top 10 NASDQ performers.

They HAVE to do so to remain "equal weighted"....but it's not "top performers" it's a static roster with occasional substitutions.

Skans » 27 Dec 2023, 1:37 pm » wrote: ↑

27 Dec 2023, 1:37 pm

Well, first of all, that is not all the Oracle actually does. Just as an example look at Berkshire's AAPL holdings -$161,660,496,650.  I believe his next biggest holding is Occidental Petroleum.  Yes, he acquires the occasional company to put under his umbrella, but that's nothing compared to his share 160 Billion in Apple. 

So, Warren actually does buy positions in good public companies and (generally) holds onto them.  Yes, he has the ability to go in and buy out smaller private companies too.  So, buy Berkshire A or B shares.
.

The reason he’s able to buy that many shares of Apple in the first place is due to his private deals.

As for your examples, IIRC he made a private deal with the OXY investors and bought a large stake at below market price (kind of like what he did in 2017 or whatever - he got a 25% discount to market value on BoA shares). 

Trying to mimic the Oracle is like…slapping together a roughshod phone, painting it with Apple’s logos and brand colors, and then wondering why you don’t have a company with a trillion dollar market cap.

 

Skans » 27 Dec 2023, 12:35 pm » wrote: ↑

27 Dec 2023, 12:35 pm

I've always felt that bonds are far more of a "rigged game" than stocks.  For several reasons:

• First, the FED is always toying with interest rates and bond purchases/sales to facilitate some "public agenda". You just don't happen to know what that agenda will be.
• Second, many bonds are convertible, so companies are hedging their debt structure on an option to cancel it if the deal gets "too good for you".
• Third, the total returns on Microsoft corporate bonds (or any blue chip company) are abysmal compared to returns on their equity.

So, you end up taking on a lot of hidden risk with bonds with very little upside to compensate you for this risk. Bonds aren't always a "bad investment" - they're just better off being used as a hedge investment.  Not 50/50 or even 30/60 portfolios.

Imagine saying this in 2000 and then buying Microsoft stock instead of bonds…you’d be underwater for 13 years. And that’s assuming you didn’t sell and take the loss like 98% of people would 

Recency bias at its finest