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Message
re: COLONEL - YOUR ANSWER
Posted on 2/11/09 at 5:42 pm to Colonel Hapablap
Posted on 2/11/09 at 5:42 pm to Colonel Hapablap
I could not agree more. Black Swan changed my perspective on everything, especially the debunking of models based on the bell curve. My local library, pretty good one, has it. They also have a system to reserve books and they will call me when it's my turn to get the book. I think this is common practice these days?
1
Posted on 2/11/09 at 5:45 pm to Rivers
yeah, mine does that. It also keeps the jackass who has it from continually renewing it. 
Posted on 2/11/09 at 6:00 pm to Cold Cous Cous
CousCous, got buy it you jew, its like $14 (I did).
Posted on 2/11/09 at 8:28 pm to amsterdam
quote:
I want to point out again that I have said repeatedly how unfair the challenge was to him
On that point, I agree but for different reasons. As I stated earlier, when you have 10000+ choices compared with only a couple of hundred (if that), and the averages are reasonably close, then the best of the larger universe will beat the best of the smaller one.
The Colonel's challenge is not the correct one. My challenge would be to find a set of funds that was highly regarded ten years ago, and compare how they did vs. a comparable index.
BTW, I realize you may have a different method of evaluating fund managers than various publications, but of course I have no idea which funds you thought were good ten years ago so I can't test that.
Along those lines though I'll point out that if you are advocating following a manager and not just a fund, then you will likely run afoul of the Peter Lynch problem. Lynch beat the usual indexes by a small amount for a long time, something very unusual. Then ... he retired. Magellan has never been the same since.
He passed the baton to someone he thought could do just as well, which is telling.
Posted on 2/11/09 at 8:47 pm to Colonel Hapablap
quote:
brah, you claimed you could find funds that would consistently run rings around an index. You posted them. I took a screen snapshot of that post and will post it on Jan 1 of every year for the next few years to see how your picks do. I don't know what "unfairness" you're talking about.
*That* is the right test. His pick could still win out, it happens sometimes, but I'd rather draw to an inside straight.
Don't give amsterdam too hard a time, most customers wouldn't know one thing from another and some of them would insist on active management or pull their account, believe it or not! And like I said, active management usually doesn't absolutely suck either, basically it costs a little extra for no benefit.
But when I was doing this full-time for paying clients I found exactly *two* plays that were better than average bets. Two. It is a very hard game and unless you're managing a billion or so it's hard to justify paying for an active manager. Then, maybe.
The two?
1) One time I was trying to sell a mortgage-backed pass through. Someone at Goldman bid 92 1/4 for 2 million bonds (I had 1 to sell). I knew he'd made a specific mistake reading his Bloomberg (I'll spare the details) and called up someone else, who was willing to sell at the correct price of 92. So I bought 1 million at 92 and sold it to Goldman for 92 1/4. Free money.
2) When AMD was being sued by Intel for copyright infringement on the 386 processor code, the world basically wouldn't touch AMD for fear they'd lose. No analyst would recommend them (except for Goldman's star analyst, but he was very senior and could do this). Everyone was afraid of liability if they recommended AMD and lost money for their clients. I was too - but bought a big chunk for my own account at 8 1/2. Sold at 30. After AMD lost the suit. No big deal, by then Pentium was out.
Posted on 2/11/09 at 8:54 pm to bkh62
quote:
If I know of a mutual fund that has beaten VTSMX for 9 out of the last 10 years and has a 10-year average return of 11.57% vs. -1.86% 10-year average return for VTSMX, should I buy it?
Maybe. Maybe not. There are other choices out there too, it's a big world out there. And it is really, really hard to tell sometimes what's really going on.
For example - has your fund manager stayed there the entire ten years? Is this also true of VTSMX? There are many such questions without easy answers.
Posted on 2/11/09 at 9:17 pm to foshizzle
quote:
Along those lines though I'll point out that if you are advocating following a manager and not just a fund, then you will likely run afoul of the Peter Lynch problem
I think the manager involved is critically important, and your absolutely right about the supposed returns. You can have a 10 yr number where the current manager has been there for 3.
You have other funds with guys like Saul Pannell, Jim Gilligan, damn near the enitre American Funds and Templeton teams who can back that number b/c they were 10 years ago or longer
This post was edited on 2/11/09 at 9:22 pm
Posted on 2/11/09 at 9:26 pm to foshizzle
quote:
brah, you claimed you could find funds that would consistently run rings around an index. You posted them. I took a screen snapshot of that post and will post it on Jan 1 of every year for the next few years to see how your picks do. I don't know what "unfairness" you're talking about.
I would love for you to make that post. It would only strengthen my argument over time.
FWIW I know you guys think I scoured the fund universe and cherry picked those funds, but I swear to God it was literally the first 12 I thought of.
Posted on 2/11/09 at 9:32 pm to kfizzle85
quote:
CousCous, got buy it you jew, its like $14 (I did).
Dude if I had $14 I could get like 8,000 shares of Sirius stock.
Posted on 2/11/09 at 10:00 pm to Cold Cous Cous
I hear you man, you know I'm just busting your balls. Personally, I prefer to put my money in more predictable avenues (Knicks over 107). I put 100 on it.
Posted on 2/11/09 at 10:25 pm to amsterdam
quote:
I know you guys think I scoured the fund universe and cherry picked those funds, but I swear to God it was literally the first 12 I thought of.
Can't speak for anyone else, but I didn't know what criteria you used. I do think the Colonel's challenge wasn't the right one and you would have been quite right to cherry pick.
I would offer to set up an escrow fund (surely there are some attorneys on this board?) and see what happens after ten years. What deters me is not fear of loss, but fear of contingencies not planned for (what if I die next year? what if a chosen fund closes in 2015? etc.) And dealing with all possible contingencies isn't worth the trouble.
So pick your own portfolio. I still believe the major benefit a financial consultant can offer involves offering basic financial advice tailored to an individual's retirement goals. That's a fine thing. A portfolio of index funds isn't *that* much better than a portfolio of actively managed funds - but does usually offer a better result. But that is a different question. Most joes just want to avoid losing their nest egg.
Posted on 2/12/09 at 7:12 am to foshizzle
quote:
I still believe the major benefit a financial consultant can offer involves offering basic financial advice tailored to an individual's retirement goals
Well said
quote:
I do think the Colonel's challenge wasn't the right one and you would have been quite right to cherry pick.
Again I agree. Ive been blasted by some for using the last 10 years to prove my point. If I could get ahold of the 2019 numbers I would use them instead. He challenged me to show something that could trounce an index. I should him 12 that just did. Other than showing future returns I dont know how else to answer the question.
Posted on 2/12/09 at 10:25 am to amsterdam
quote:
Again I agree. Ive been blasted by some for using the last 10 years to prove my point. If I could get ahold of the 2019 numbers I would use them instead. He challenged me to show something that could trounce an index. I should him 12 that just did. Other than showing future returns I dont know how else to answer the question.
One novel approach would be to actually pay attention to the research you were presented with.
Posted on 2/12/09 at 10:59 am to Tiger JJ
I hope your not talking about the research you present. I do not call that research, I call that finding a source somewhere that backs your pov.
Posted on 2/12/09 at 12:35 pm to amsterdam
quote:
I hope your not talking about the research you present. I do not call that research, I call that finding a source somewhere that backs your pov.
Right. Peer-reviewed, academic studies with long bibliographies and primary source listings do happen to "back my POV", primarily because it's right.
Posted on 2/12/09 at 2:34 pm to amsterdam
quote:
I hope your not talking about the research you present. I do not call that research, I call that finding a source somewhere that backs your pov.
Wow.
Posted on 2/12/09 at 2:46 pm to coolpapaboze
My point coolpapa is that I have just as much, if not more, research that backs my pov as well.
Posted on 2/12/09 at 2:54 pm to amsterdam
quote:
My point coolpapa is that I have just as much, if not more, research that backs my pov as well.
OK. How about linking us to just 3 independent, peer-reviewed studies that support your position.
Posted on 2/12/09 at 3:02 pm to amsterdam
Generated by whom? Sell side analysts? How about something objective, I'd love to see it.
Posted on 2/12/09 at 3:15 pm to Tiger JJ
Jersey, now that I know your an atheist Id rather debate you on that
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