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This guy says there's no excuse in 2015 for passive inv

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This guy says there's no excuse in 2015 for passive investing because of the tools the average man has at his disposal.

I know I'll sound like an idiot here, but isn't capturing 99.9% of average returns by passively tracking, an acceptable result?

It doesn't make sense that most people with non-finance day jobs would beat the market, they would be beating people who watch stock prices 12 hours a day.

https://www.youtube.com/watch?v=uGntbreUnc4
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>>984338
If you invest your savings in an index fund and match the market average then you will be doing better than 99.9% of active day traders so yes it does make sense unless you're willing to put in a massive amount of effort and time in the hopes of consistently beating the market which you have a very small chance of. So for the average joe or someone who doesn't want to dedicate their life to figuring out how to trade it makes a lot of sense to stick your funds in an index fund instead of having and portfolio manager that doesn't know what they're doing achieve subpar returns and take out fees.
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https://www.tastytrade.com/tt/shows/you-gotta-be-kidding-me/episodes/biggest-misconceptions-around-passive-investing-11-13-2015
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>>984752
r u chinese?
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>>984752
are u chinese?
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>>984338
>It doesn't make sense that most people with non-finance day jobs would beat the market, they would be beating people who watch stock prices 12 hours a day.
Most people WITH finance day jobs don't beat the market. 98% of professional money managers can't beat a simple Vanguard index over five years, once you deduct their fees. We're talking about people with MBAs from Ivy League schools, nearly infinite resources and research, teams of analysts, and as much capital as they choose to deploy.

There is simply NO evidence that intelligence, skill, education, experience, time, research, resources, or effort has ANY effect on your performance in the markets.

So what accounts for the "superstar" managers or people with gaudy returns? Luck, luck, and a bit more luck. That's just how statistics work: the existence of a lucky outlier doesn't mean that 98% don't fail.

https://www.dimensional.com/famafrench/essays/luck-versus-skill-in-mutual-fund-performance.aspx

So don't listen to bloggers or media types who have a financial interest in getting you to trade the way that makes them money. Don't listen to the Chinese daytraders who lie about their returns and try to make themselves feel better about their failures by getting you to make the same mistakes.

Invest the way that makes YOU money: low-cost long-term highly-diversified buy-and-hold.
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>>984825
It's a little different managing 500-1000 million usd than 100k lol.

With capital under 1m you can make 100-200% annually, year after year. Not with daytrading tho.
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>>984830
>With capital under 1m you can make 100-200% annually, year after year.
This is some shitty meme pushed by active traders who have no academic or scientific evidence to counter the towers of studies proving that trading is a failed strategy.

If its so "easy" (as you claim) to beat the markets (by 100-200%, lol) with small amounts of capital, then we would expect to find that ALL professional money managers would beat the markets by at least a small margin, since they can all elect where and how to deploy their capital. And yet all professional money managers do not beat the markets, regardless of how much capital they invest.

If you have some credible research to back up your claims, bring it. If you have some academic support for your allegations, cite it. But don't sling around dank bullshit, hyperbolic fabrications, and third-hand anecdotes and expect anyone to believe you.

http://www.cbsnews.com/news/s-p-spiva-midyear-2014-active-versus-passive-scorecard-active-underperforms-again/

http://www.zerohedge.com/news/2013-04-29/wall-street-rentier-rip-index-funds-beat-996-managers-over-ten-years

https://www.youtube.com/watch?v=SwkjqGd8NC4

https://www.youtube.com/watch?v=zqa-jSuXmYw
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>>984830
plz show how to make 100% off of 100k. I always hear this but I never see it. The only people I've ever seen double their accounts are kids with like 5k accounts they just opened who gamble their money and somehow win one year.
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>>984338
Came here to say I think this guy shills too hard sometimes but the website has some really good stuff if you lurk enough. I built my strategy off shit on there and at the current rate I should end up around 30% return with expected losses not including monthly compounding. Spend like an hour a week tops lol. literally selling otm puts
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>>984839
>pleb tier investor
If you're only making 8% returns I feel bad for you son. I got 99 problems but trading ain't one.
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>>984825
I don't lie about my returns iHaz,
right now down 20%. Thanks chipotle speculation. And I rarely daytrade. Most of my investment is options premium selling.

If you watch the video I posted. You're free to invest passively. But you reduce fees drastically by doing it yourself, vs paying some middleman to take all your risk. If you did this passively, all you'd have to do is re-balance once a month max.

Like you said trade the way that makes YOU money.
For high earners with limited time like yourself its by far the best way to invest.

>no evidence
Warren buffett exists. I'd count that as evidence. The odds against are significantly lower than the odds for.
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>>984853
>I don't lie about my returns iHaz
I don't know who you are, I've never seen you make any claims about your returns, and I don't know why you think I singled you out. I gather from your post that you count yourself as a trader of some sort. I'm sorry to hear that, but I suspect you'll learn better within a year or two.

>For high earners with limited time like yourself its by far the best way to invest.
This is another stupid meme trotted out by the active trading crowd. The implication is that small traders or traders with enough time or energy can beat the markets. However, the evidence proves otherwise.

The fact remains that there is NO evidence that putting in time, effort, or hours (all quantifiable inputs) results in any improvement in investment returns (also quantifiable). Its not like its hard to test this, and it has been tested over and over. I've given at least five citations in this thread alone. Instead, the active traders give us lies, fabrications, and anecdotes.

>Warren buffett exists.
1. Warren Buffett is no more an active trader than you or me. His company, Berkshire Hathaway (in which I am an investor) specializes in strategic and value-oriented M&A transactions. If you took the time to actually read the 10K or 10Q's from the company (freely available) you'd see that investing activity makes up only a de minimus portion of BRK's income.

2. Even if Warren Buffett were a successful active trader, or even if you cite some other example, all it proves is that statistical outliers exist. Which is as expected mathematically, and which I ALREADY stated above (>>984825).

(If you want to keep this discussion on a civil level, I do ask that you at least give the courtesy of reading what I write.)

>>984843
>If you're only making 8% returns I feel bad for you son.
Coincidentally, I just today calculated my fund returns in response to a question from another anon. In case you're curious, my 10 year CAGR is 20.32%.
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>>984853
ARE YOU CHINESE OR NOT BRO
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>>984839
You're a hedge manager and lose 50% a year, while index rises 10% and you are straight looking jail time 20-30 years. That's how it is. So 99% of fund managers just follow what others do, it's much safer. You don't really get more clients or money by outperforming, but you lose clients if you underperform. You underperform few years other funds, your career is over.
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>>984338
this guy is interesting but dodgy

don't invest in anything you don't understand, if you don't understand black scholes or how it is related to some investment vehicle someone is pitching just admit you're a dumbass and don't get it
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>>984923
>You're a hedge manager and lose 50% a year, while index rises 10% and you are straight looking jail time 20-30 years
what kind of law means you go to jail for being shitty at your job
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>>984923
>You're a hedge manager and lose 50% a year, while index rises 10% and you are straight looking jail time 20-30 years
This doesn't happen unless there is fraud. Excessive risk taking, while unethical, is not illegal.
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>>984932
>what kind of law

the kind of law you have a queue of prosecturos knockin your door each with a different lawsuit once you've ruined 10k peoples lives kek they make all kinds of funky stuff up
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>>984939
what hedgefund has 10k clients?
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>>984954
and FYI hedgefunds go bust all the time and no one goes to jail for it
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Why do you guys kick and scream against growth index funds?
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>>984825
>There is simply NO evidence that intelligence, skill, education, experience, time, research, resources, or effort has ANY effect on your performance in the markets.

you could maybe say that about some value investor or someone who's taken some big macro bets... in those instances the sample size of trades is still relatively small

not so true for systematic hedge funds constantly applying their models and taking short term positions in multiple markets - if they didn't have an edge they'd not exist - fact is the likes of Renaissance Technologies do exist
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>>984956
Hedge funds aren't terrible they are just for lazy fags who don't know what the hell else to do and don't have any financial knowledge
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>>984867
Sorry for the insinuation Mr. Haz. Who were you talking about?

> Time money experience etc...
You're right. There is no consistent way to predict the markets. By far my biggest drawdowns were directional bets. Its always a 50 50 bet.
I think you'd find a lot in common with Mr Sosnoff and his mathematical approach to options.
The only difference is the core philosophy required to reach statistical validity, of trade small trade often. which is nearly equivalent to index diversification as a risk management strategy, caveat higher trade fees. Vs built in slippage at a fund. as per video above >>984752

The only ways to win at this game are cost basis reduction, leverage and compounding.

The way I'm learning right now is black scholes options. I'll let you know by May.

https://www.tastytrade.com/tt/shows/market-measures/episodes/beating-the-best-05-22-2015

>Cagr
I looked up inflation since 05
According to the BLS you're down 1.46% in real terms. Compound Inflation between the two periods being 21.78%
If it was the case that your management fee was the lowest advertised 25 basis points. You'd have been paying that to achieve a net loss.
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>>984825
always fun to see your posts.
I just broke 100k net worth @ 29. not spectacular but its a good start i'd say
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People who say academics believe in efficient market theory do not seem to realize that even 50% of the academics disagree strongly with the theory. Heck, even warren buffet disagrees (and i dont regard him as a particularly great investor nowadays compared to the best hedge managers.)

And btw, even warren also mentioned that he could make 50-100% annual return if you just give him less money to trade lol.

These are the same people telling QE is creating inflaton and that inflation is caused by increase in money supply. Well, I guess that's why we are 4000 year low rates and have inflation too all time lows lol. I mean, this is the level these people think.
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>>984825
>There is simply NO evidence that intelligence, skill, education, experience, time, research, resources, or effort has ANY effect on your performance in the markets.

My fucking sides!!!
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>>984825
>Most people WITH finance day jobs don't beat the market. 98% of professional money managers can't beat a simple Vanguard index over five years, once you deduct their fees. We're talking about people with MBAs from Ivy League schools, nearly infinite resources and research, teams of analysts, and as much capital as they choose to deploy.
Hey junior: Whenever you get to eat at the adult table you'll learn about this:

"Out of 194 trading days through the end of September, Goldman Sachs earned at least $100 million from its trading division on 116 of them. The firm lost money from its trading activities on just one day during the three-month period ending in September, federal regulatory filings show. It made at least $50 million on four out of every five trading days.
The documents show just how much of a trading firm Goldman Sachs has become since the financial crisis mushroomed in September 2008. The firm generated about $4.5 billion in pre-tax earnings off trading and investments during the third quarter, compared to a $761 million loss in the same period last year.

http://www.huffingtonpost.com/2009/11/04/at-goldman-sachs-its-most_n_346260.html
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>>985028
The reason they're so profitable is HFT and manipulating the markets
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>>984825
There are plenty of traders and investors like warren buffet peter lynch jack bogle george soros etc that have managed to beat the market by a wide margin for decades even before they had access to the resources they have now the chances of their results being purely luck is extremely low.
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>>985028
One of GS's strategies is front running. Everyone knows they do it but they rarely get caught.
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>>984959
>not so true for systematic hedge funds constantly applying their models and taking short term positions in multiple markets
The infographic I posted above (>>984825) specifically looks at hedge fund returns, and reaches the same conclusion as every other academic analysis of active trading: it's a losing strategy. Again, I don't care if you can cite me a couple examples of funds that performed well for some period of time because (a) you didn't and couldn't know that particular fund versus all the others was the fund that would outperform, and (b) let's see how many of these winning funds can repeat that performance over five years, and then five more years, etc.

Every person on this board has a 30-50 year investing horizon. Picking a strategy that simply does not work in the long term is just shortsighted and stupid.

>>984991
>According to the BLS you're down 1.46% in real terms.
Let get this straight: I tell you that my fund balances have grown 20.32% every year for 10 years ... and you somehow think that inflation has eroded all that growth? Are you actually brain damaged?

Why would you put on a trip when your financial knowledge is so obviously rudimentary? Common convention is to use a trip only when you have specialized knowledge or experience relevant to their board and the topic at hand. Otherwise, you're just being an attention whore.

>>984994
Congrats. Keep it up and stay the course.

>>985028
You really have no idea how Wall Street works, huh?

>>985035
>names four "superstar" investors that he claims beat the markets with trading
>two of them don't trade and actually recommend index investing
>that leaves 2 "winners" out of the millions of people who try to beat the markets
You really have no idea how statistics work, huh?
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>>985079
>Otherwise, you're just being an attention whore
Coming from you that is hilarious.
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>>984338
>This guy says there's no excuse in 2015 for passive investing because of the tools the average man has at his disposal.
For some mysterious reason, I originally read your post as you saying "My mother says there's no excuse in 2015 for passive investing..."
Holy fuck, what's my brain doin' tonight, /bitz/?
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>>985033
GS is a small HFT player if they are still even in the game.

HFT makes chump change compared to most other trading businesses in absolute terms. HFT works because of the low human and capital requirements
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>>985079
Sorry you right. I've never used the term before, and had to review the implications of the calculation. I've only synthesized it before. Never knew the explicit term. Thanks for the education.
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>>984352

>If you invest your savings in an index fund and match the market average then you will be doing better than 99.9% of active day traders

Site your sources mah bro science man
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>>984338
don't know who this guy is but he looks like a massive faggot so i'm going to assume he's wrong
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>>985264
Right? His face bothers me so much. He looks so punchable.
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>>985264

He's a very successful investor and developed ThinkOrSwim. Such a massive faggot.
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>>985079
iHaz I'm not gonna lie, from being on /biz/ and reading a lot of your posts and seeing you post proof of yourself, I'm taking the lsat tomorrow (already was but after reading about your experiences in BigLaw I'm interested in getting into a top 14 school. I currently am an assistant at a small firm as well) and looking to get a 170+ (not unreasonable given my usually standardized test track record), and am going to put about 80% of my savings in an index fund after some more specific research.

Just wanted to shed some positive light in this stronghold of negativity.
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>>984991
Are u chinese
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>>985277
>proof
I just snorted. You really are basing your life choices from some random namefaggot on a Lithuanian snake charming board? That's amazing.
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>>985290

This. Showing charts of your "proven returns" and e statements can be faked with a right click, inspect element. Can't believe people fall for these keks.
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>>985290
>>985294
Not basing my life off, exactly.

I was already at a law firm, and was already signed up for the lsat. From some of my family friends in corporate lawyer positions and then having a few chats with him I decided to maybe take that more seriously.

Then with the index funds I just read about the concept here a while back, did my own independent research, and verified it myself.

So, fake or not, he's spreading a message, people can verify it for themselves or not, and then act as they see fit. It's not like I'm blinding buying and S&P, I've been looking around at different options for a while. I have a stable life I'm just looking for a low risk boost and perhaps a more lucrative career.

Really all that needs to happen on 4chan is to be introduced to ideas that you might not have been before (not like I hadn't heard of this stuff but was more keen to look into it after).

Have a good one guys.
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>>985277
>I'm taking the lsat tomorrow
Good luck man. Thinking back to my LSAT makes me feel old ... that was a long time ago. I hope everything goes well.

>>985302
>Really all that needs to happen on 4chan is to be introduced to ideas that you might not have been before (not like I hadn't heard of this stuff but was more keen to look into it after).
Bingo. I never ask people to take my advice at face value, or to blindly copy what I do. I try to point out good ideas (and explain WHY they're good ideas), and yeah, I make fun of bad ideas.

But at the end of the day, you have to make your own decisions.
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>>985277
>looking to get a 170+ (not unreasonable given my usually standardized test track record)
Your post made me curious about my own score, which I hadn't thought about in a long time. The scale was different back then, but 98th percentile was good enough to get into four T14 law schools (fuck you Harvard & Yale). If you get that 170+ you should be in great shape. Good luck.
Thread posts: 48
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