[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y ] [Search | | Home]

Why does /biz/ hate value investing?

This is a blue board which means that it's for everybody (Safe For Work content only). If you see any adult content, please report it.

Thread replies: 39
Thread images: 5

Why does /biz/ hate value investing?
>>
You are literally gambling
>>
File: 1473729752730.jpg (7KB, 200x194px) Image search: [iqdb] [SauceNao] [Google]
1473729752730.jpg
7KB, 200x194px
>>1695712
/biz/ doesn't want to work. it wants fast returns to live off. I wish there were more real entrepreneurs and inventors here. fuck, I wish I was more entrepreneurial. I'm guilty of taking the safe property + index fund route as much as my parents. hopefully I won't end up broke like them too

>>1695714
https://www.merrilledge.com/article/growth-vs-value-investing-two-approaches-to-stocks
>>
>>1695723

>muh fundamentals

Cried the wageslave as he spun the roulette wheel
>>
File: twoweeks.jpg (51KB, 1280x720px) Image search: [iqdb] [SauceNao] [Google]
twoweeks.jpg
51KB, 1280x720px
>>1695777
you don't know what the fuck you're talking about m8
>>
>>1695778

Muh fundamentals muthafuka
>>
>>1695712
because value investing is grandpa-tier.
/biz/ wants fast money now
>>
I don't like it because I only learned modern portfolio theory and school and cant be fucked to understand a new form of finance
>>
>funds managers fail
>even if you manage to outperform the market by 3% pre-tax consistently, Its not worth the time at all unless you have 7-digit sums to invest
>>
Value investing is great, but not to the exclusion of growth investing or diversification into other assets or markets (real estate, internationals, alternatives). There's no* evidence that value investing outperforms a broadly diversified portfolio that includes other investment styles.

>There's actually some evidence that small-cap value stocks can outperform over long-term periods without adding additional risk as compared to a traditional portfolio composition. The research is relatively new and still being developed. But it looks promising enough that some committed Bogleheads (myself included) are strategically overweighting into small-cap value with a portion of their portfolio.
>>
>>1695712
Because trips
>>
they all jealous of Buffet's wealth. And they prob think day trading is a viable career
>>
Is it still worth buying into index funds at the moment even with how high the market is?
>>
>meme investing strategies
>>
>>1696152
the index fund strategy kinda hinges on buying consistently regardless of market conditions
>>
File: s4e04-24.jpg (307KB, 960x720px) Image search: [iqdb] [SauceNao] [Google]
s4e04-24.jpg
307KB, 960x720px
Because /biz/ is full of lazy, instant gratification seeking millenials. Not only that, but what ever approach they use it has to be something that the "normies" don't know about, because other wise it doesn't feel like the social outcast isn't finally getting their revenge on the world.
So getting a job is out.

And that leaves cryptos, day trading, anything that involves working from home, gay camming, or scamming whichever side of politics they don't belong to ("stoopid SJW landwhales" "Stoopid /pol/tards") makes more sense than, ya know, buying an asset with low risk revenue potential at a bargain price
>>
>>1696000
chequed
>>
>>1695712
>getting rich slowly unironically
>>
>>1696205
That's pretty spot on.
This board cracks me up, because I day/swing/position trade myself. Of course, I've got not only a large enough amount of capital that it can be profitable (massive leverage, huge dividends), but I've also got about 50x that much stashed in "value investing".
On one hand, I'm sometimes tempted to defend it (because it's all I do, work-wise), but I usually don't, because without enormous resources (which are almost nonexistent here), it's a really bad idea.
>>
Because they are poor. Poor people don't have a clue how money works.
>>
>>1695712

Unless you're buying something below its intrinsic value (i.e. cash equivalent/short term equities, even book values in most cases are useless metric), and there's enough liquidity to guarantee unlocking that value successfully, value investing in general is essential glorified gambling.

The moment you place your bet, and it is a directional bet almost 100% of the time btw, you can do nothing but hoping your perceived value and market value converge. Sure, if you do enough research the odds of success are better, but you're still HOPING you will be right eventually, and also be right relatively soon so the returns are worth a damn. Think about that for second, what's the difference between what you're doing and gambling? IIRC the academic definition of investing is safety of principle + adequate returns, but in reality there's no guarantee of the safety of principle in the market place no matter how value oriented you are. But of course the same reasoning applies to technical analysis approach as well, no one is fundamentally better than the other, and as market info permeates increasingly fast, both approaches will gradually lose their discernible edge.

In the financial market the only area that can be considered as "investing" is statistical arbitrage or any other arbitrage opportunities in a liquid market (high frequency trading can be looped in as well).
>>
>>1697308
>value investing in general is essential glorified gambling
I don't see how you can credibly call any form of long-term investing "gambling" when the market has a proven inherit positive bias. Stocks aren't a flip of the coin, in the long run. They represent companies that operate in an economy that function in a society. When that economy and that society are growing and thriving -- as has been the case in modern markets for centuries -- the stock gets lifted too.

A roll of the dice is gambling. A roll of loaded dice is something altogether different. Until you learn that stocks are inclined to go up in the long run, you'll never really understand the markets at all.
>>
>>1697334

You do know shorting stock can be considered "value investing" too right?

I also hope you realize that economy doesn't just always grow, and valuations always front run the fundamentals. There were and will be periods of deleveraging hence the bear markets, those suckers can last as long as 25-30 years. Just because the market on the 100-year plus scale has a long bias does not mean it also has a long bias in you and most people's investment horizons.

Your points disprove nothing what I said about value investing. In order for your investment to make money the market value needs to converge to your perceived fair value. Yes you did your research and think it's clearly mispriced but does that exert any influence on the actual price convergence? No, not one bit, no matter how sure you are.

Your loaded dice example is also garbage as that's a classic case of statistical arbitrage and not comparable at all to value investing. The statistical edge of a loaded dice is unlocked through many throws and most importantly is a sure thing aka arbitrage, a single throw can't unlock that edge. Your value investing approach simply cannot afford many trials to unlock your edge (if your fundamental research counts as edge) as it by definition has a longer investment horizon.

Look at it this way, the non-passive value investors, aka control investors like Bill Ackman who actually CAN influence the price convergence by controlling a company's management, can't even unlock the value all the time, doesn't that tell you how reliable the convergence is? And that's all you can hope to happen as a passive value investor once you place your bet. Yea totally different from gambling.
>>
>>1697468
>You do know shorting stock can be considered "value investing" too right?
If you're going with that definition, then you're just setting up a self-fulfilling example. Value investing in the classic sense NEVER relies on short-term market changes. The expectation is that the investment will find market value (and thus appreciate (or depreciate, if shorting)) but no one credibly believes that they they can predict the amount time necessary for the market to find fair value.

Shorting is, by definition, a short term strategy. Consequently, I eliminate shorting from the definition of value investing.

You're talking about nothing more than speculating. Speculation informed by research is still speculation.

So, no, shorting stock cannot be considered "value investing." That's called gambling.
>>
>>1697484

Your personal definition of value investing is irrelevant, and you will get laughed out of the room with that crap.

You do know vast majority of the value funds are long-short equity funds right? It's in the name for fucks sake.
>>
>>1697484
Also I'm very curious what your definition of "short term" is.
>>
>>1697504
>you will get laughed out of the room with that crap
Would that room be the basement of your mom's house? Because that's the only room in the world where some autist pretends that short-term leveraged stock speculation is "value investing."

>You do know vast majority of the value funds are long-short equity funds right?
You do know that the vast majority of actively managed funds underperform their benchmark index right?
>>
>>1697484
Top kek.
>>
>>1697308
It's based on the premise that eventually the market will reflect this value. I suppose it's possible tomorrow the market will go completely off its rockers till the end of time, which is an unlikely thing to happen.
>>
>>1695712
value investing is a jewish scam.
>>
>>1696329
whats the most fastest way i can learn to daytrde, i dont live in california
>>
>>1698950
You can really only learn by doing it, which can get expensive. You really do need a large amount of capital as well as no other need for the funds, otherwise you're crippling yourself before you even start. The people who half ass it, using needed funds or part timing it almost always fail.
The problem is that it's a very steep learning curve, and you can easily become chum for those who are more experienced and have more available capital. They can afford to sit back and ride the swings out, while you'll tend to panic and buy or sell at inopportune times. What's more, the static costs like commissions, fees, margin, and simple losses will eat a much larger percentage of small accounts.
>>
>>1699061
im looking at <1 hour holds
>>
>>1698933
if the market value is below the guaranteed liquidation value then yes, it will eventually reflect and you can take that to the bank; but the "values" in most cases are still subjective estimations and you just hope the market will eventually catch on much like what a gambler is hoping while watching the dice rolls, only difference is you're operating under the belief that you see things clearer than every single current bid and ask on that stock does, and eventually they all see what you're seeing and move the market towards your way.
>>
>>1699567
Yes both gambling and value investing has risk but the magnitude is completely different. In a dice game assuming double or nothing on two dice, if you bet a dollar and win you get $2 but you have a 35/36 chance of loosing. If you tried betting on every number you'd lose $34. Evidence shows the risk of the market misjudging or having completely different standards of valuation over a long period is nowhere near that. There are a number of simulated portfolios which show not only does following some standards of value investing protect your captial but has a healthy return. One of them

http://www.forbes.com/sites/investor/2012/12/18/ben-grahams-60-year-old-strategy-still-winning-big/#2769237a2cee

The value investor can also invest in other securities like bonds or treasuries which are independent of market value.
>>
File: 1468377230621.jpg (62KB, 1000x672px) Image search: [iqdb] [SauceNao] [Google]
1468377230621.jpg
62KB, 1000x672px
>>1695712

Value investing favors speculation in a false notion of agreed intrinsic worth.

Investing with real value allows you to hit your own numbers and nobody can ever take that away from you.

>blaming the market
>>
>>1699084
>I'm looking at <1 hour holds
Yeah, your hold time is irrelevant to the factors I've mentioned.
>>
>>1698950
I'm lost, what the fuck does I don't live in california mean? I live in california is there some sort of sick day trading club I can join?
>>
>>1701339
Maybe it's more popular here because being done at 1pm means you can do other shit with your day.
Just a guess.
Thread posts: 39
Thread images: 5


[Boards: 3 / a / aco / adv / an / asp / b / bant / biz / c / can / cgl / ck / cm / co / cock / d / diy / e / fa / fap / fit / fitlit / g / gd / gif / h / hc / his / hm / hr / i / ic / int / jp / k / lgbt / lit / m / mlp / mlpol / mo / mtv / mu / n / news / o / out / outsoc / p / po / pol / qa / qst / r / r9k / s / s4s / sci / soc / sp / spa / t / tg / toy / trash / trv / tv / u / v / vg / vint / vip / vp / vr / w / wg / wsg / wsr / x / y] [Search | Top | Home]
Please support this website by donating Bitcoins to 16mKtbZiwW52BLkibtCr8jUg2KVUMTxVQ5
If a post contains copyrighted or illegal content, please click on that post's [Report] button and fill out a post removal request
All trademarks and copyrights on this page are owned by their respective parties. Images uploaded are the responsibility of the Poster. Comments are owned by the Poster.
This is a 4chan archive - all of the content originated from that site. This means that 4Archive shows an archive of their content. If you need information for a Poster - contact them.