No Toodlez...Originally Posted by Securitized
No Toodlez...
On tour 500 for the hour
Thank you :) I had actually forgotten all about this thread and completely missed your post.
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I like the above approach. A little spin on it would be to use the earnings multiple rather than the share price as a buy/sell target. With higher future earnings, many past stock prices might never be revisited. Sometimes a stock appears expensive but it is actually cheap when factoring in the current or future earnings.
I'll be here if you change your mind. The first half hour is free so that means it's all upside and no downside.
What active money managers don’t want you to know is that none of them outperform the market in the long run. Plus, those that perform the best charge high fees, so the gains normally accrue to the managers, not the investors.
Your best bet are index funds managed by Vanguard. They offer the lowest fees in the market, and portfolios that track most of the major indices.
James
Loving life in Austin
Most money managers don't outperform the market, but some do, like myself. Your index fund recommendation is true for the overwhelming majority of people. However, there's a few people out there who can outperform the major indices as stock pickers. With the right temperament and fundamentals, it's actually quite easy to outperform the major indices. On another note, beware of the current ETF situation related to distorted values that I described in post #12 above.
Especially the SO pussy... or lunch!
I should of studied Finance in college instead of taking Engineering before making a switch majors my sophomore year.
I have 0 faith in the market and sooner or later if the way our government keeps spending we will be bound to an economic crash.
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Engineering is actually a better major than Finance because engineering involves deeper problem solving.
Stocks on average grow about 10% a year, based on a typical 10-year period. With U.S. historical inflation at around 3%, that leaves a stock investor a 7% real return over the long term. Compare this return to a bank savings account.
Out of control government spending is likely to cause further deterioration in the purchasing power of the dollar. This means items such as certain commodities or high-demand products will be much more expensive in the future than today. With that conviction, one can choose to buy things that he or she believes are likely to go up in price in the future.
Financial chaos such as an economic crash will result in a transfer in wealth. Most fortunes are made during economic crashes and financial panics because investors can buy quality assets at prices far below their intrinsic value. After the panic settles, the undervalued assets appreciate to higher prices more in line with their appropriate values and this is when the fortunes are made. For instance, compare home prices and the S&P 500 between March 2009 and 2018.
Pretty sure he meant Bissy...
All this market clatter and nobody witty enough to make a joke about chasing Alpha...
Wait, what?
That is why a Bollinger Band analysis can help you. Never rely on single factors when investing, money or time, or anything else...
LOL! Chasing alpha, catching beta.
Anyone serious about investing should read these two books.
https://www.amazon.com/dp/B000FC12C8...ng=UTF8&btkr=1
https://www.amazon.com/Random-Walk-D.../dp/0393330338
And don’t trust anyone that tells you that they can consistently beat the market.
James
Loving life in Austin
My goal is to catch nothing from this site, including beta...
Alpha and beta, like technical analysis in its totality, is useless "magic" over the long term. It uses previous prices to try to predict future prices, which it does correctly about 50% of the time. Technical analysis is basically rubbish when used by itself but it provides a great distraction for the middle class who dream of becoming rich someday and it's wonderful for brokerage firms who collect all those commissions from frequent trading done by college educated white collar retail investors who are too smart for their own good. Smart people make some of the worst investors because they think they "should" already know how to invest just because they're so educated and intelligent. For instance, Sir Isaac Newton lost a fortune in the stock market.
If you flip a coin, calling heads as up and tails as down, and you plot the ups and downs on a chart, the chart will look like a typical stock chart. Fundamental analysis is the only real way to win out over the long term.
Warren Buffett and Peter Lynch didn't use technical analysis to make their fortunes. In fact, I can't think of a single legendary stock investor who used technical analysis as their primary approach.
Those books (Intelligent Investor and Random Walk...) are good but they are only a piece of the overall puzzle. Actually, it's an insult to Benjamin Graham to put Random Walk in the same category. I reject efficiency theory though, which is what Random Walk preaches. Basically, it says that there are no stocks priced incorrectly and that all stock prices take into account all knowable information. Intelligent Investor says that stocks should be purchased below their intrinsic value. Intelligent Investor and Random Walk essentially contradict each other because according to Random Walk, all stocks would be priced correctly.
Last edited by Securitized; 08-17-2018 at 12:59 AM.
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