hazellend
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Sterling
Jul 31, 2019 6:39:55 GMT
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Post by hazellend on Jul 31, 2019 6:39:55 GMT
No offence, but it is well known now that the vast majority (? 95%) of traders underpeform. Trying to invest smart is a mistake. Keeping costs low is key. Most alternate strategies like hedging usually increase costs which can be significant over the long term. For example, If I switched from my one all world ETF holding to active management, my costs would increase by about 10k per year every year. I'll just stick with the vanguard all world unhedged ETF for the next 20 years. My costs from trading and holding will be minimal, and I am confident I will outperform most traders over the long term. If the all world goes down 50%, sure it is a loss, but I will still be buying through any downturn.
One assumption I make, is that the market will go up a lot over the long term > 20 years, but there is no guarantee.No offence taken but the whole world can't be passive. If people want to buy an ETF, a trust, Microsoft, a commodity or an interest rate, someone has to make a market in them. These markets are made by traders. You can't lump everything into some huge passive catch all structure that everyone is long of, at some point in the equation there are people making decisions. I've tried to invest smart and so far I have beaten my index (global large caps) by around 30%. Of course I may have just been lucky but if it's a mistake I'll take it. I am grateful to all the stock pickers and traders for making the market but I think we are a long way off everything being passive. The more passive the market becomes the easier it should be for active managers to outperform then the money will flow back to active. And yes, most outperformance is due to luck although I guess there are a few who do it from skill. Unless you are scouring company reports, going to all their meetings and have specialist inside info I don’t see how it’s possible to know something that’s not priced in
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r00lish67
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Post by r00lish67 on Jul 31, 2019 7:15:11 GMT
I would recommend measuring your wealth in more than one currency. I measure it in GBP (since this is where I currently live and where most of future liabilities are), AUD since this is where I might live (given where my partner is from) and USD (since this is still the global reserve currency). Looking in GBP alone is going to create an illusion of wealth. GBP is at a 35 year low against a basket of other currencies. Looking at that number in USD is currently a better metric and more realistic. Albeit in I'm sure in far less sophisticated terms, I started doing this in 2016 too. I don't have any other fixed base, so stick with USD. It'll be pretty ugly at the moment, but no point sticking your head in the sand.
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r00lish67
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Post by r00lish67 on Jul 31, 2019 7:33:17 GMT
No offence taken but the whole world can't be passive. If people want to buy an ETF, a trust, Microsoft, a commodity or an interest rate, someone has to make a market in them. These markets are made by traders. You can't lump everything into some huge passive catch all structure that everyone is long of, at some point in the equation there are people making decisions. I've tried to invest smart and so far I have beaten my index (global large caps) by around 30%. Of course I may have just been lucky but if it's a mistake I'll take it. I am grateful to all the stock pickers and traders for making the market but I think we are a long way off everything being passive. The more passive the market becomes the easier it should be for active managers to outperform then the money will flow back to active. And yes, most outperformance is due to luck although I guess there are a few who do it from skill. Unless you are scouring company reports, going to all their meetings and have specialist inside info I don’t see how it’s possible to know something that’s not priced in and bringing this round to Sterling again, I run with the assumption that the same is true with currency. It's easy to say Sterling's drop was foreseeable, but in reality the politics behind it could have gone much more smoothly (could it have gone any worse?) - no-one knew how that was going to play out. So now, we sit 'twixt a No-Deal world of (at least short term) dollar parity and the alternative of Corbyn / Lib Dems / god knows what type of coalition. No wonder people aren't keen on GBP!
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james100
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Post by james100 on Jul 31, 2019 9:07:27 GMT
IMHO No-Deal was Plan A all along. An extreme minority of very wealthy individuals and their hangers-on threw bundles of cash at an incredibly smart marketing campaign designed to stir up the absolute worst of the collective British psyche and deliver their dream...sterling crash, disaster capitalism, wealth transference. Dominic Cummings wrote an interesting article a while ago: blogs.spectator.co.uk/2017/01/dominic-cummings-brexit-referendum-won/And here we have good old Nige, former "commodities" (it was gold) trader, lamenting the sad fate of GBPUSD on referendum night. Possibly weeping into his wallet alongside arch-hedgie Crispin Odey who donated £873K to support Brexit and Arron Banks (donated £8.4M), the beneficiary of gold mines or whatever from the Russian government who was so terribly nice and supportive in liberating us from the pesky shackles of our EU-allies.
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bg
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Post by bg on Jul 31, 2019 9:57:21 GMT
No offence taken but the whole world can't be passive. If people want to buy an ETF, a trust, Microsoft, a commodity or an interest rate, someone has to make a market in them. These markets are made by traders. You can't lump everything into some huge passive catch all structure that everyone is long of, at some point in the equation there are people making decisions. I've tried to invest smart and so far I have beaten my index (global large caps) by around 30%. Of course I may have just been lucky but if it's a mistake I'll take it. I am grateful to all the stock pickers and traders for making the market but I think we are a long way off everything being passive. The more passive the market becomes the easier it should be for active managers to outperform then the money will flow back to active. And yes, most outperformance is due to luck although I guess there are a few who do it from skill. Unless you are scouring company reports, going to all their meetings and have specialist inside info I don’t see how it’s possible to know something that’s not priced in You obviously believe in completely efficient markets! What I learn't from trading professionally is that markets aren't fully efficient. The market price is made up of all market participants views, smart or stupid (plus other factors of course). The market level is the average of all these views, if you want the average then sure go for passive. A good example of this is when Trump got elected (similar for the Brexit vote). The initial knee jerk reaction was a sell off as people who didn't really understand the impact Trump would have on asset prices. They panicked and sold. Of course over the coming weeks the market corrected (great for the likes of me) but if the market had been truly efficient the adjustment would have been made instantly on the open after the election. The information was all out there but the market got it wrong. The biggest lesson I learnt in all my years trading is to back your own view. You can't get it right all the time but when you are wrong you only have yourself to blame. The worst feeling is having a strong view and not backing it as others say you are wrong. Make a decision and own it. I don't trade individual stocks (in general) I like to buy trusts that follow my macro themes: technology, an ageing population, switch to green energy and the increase in living standards in East Asia. Of course these trends are somewhat in the price but not significantly enough in my view (based on what I said above). This is my view and I'm prepared to back it and can only blame myself if I'm wrong. Of course your view is passive and good luck to you with that. In the long term being invested in equities will pay off and a passive tracker beats a bad fund hands down.
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hazellend
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Sterling
Jul 31, 2019 10:29:58 GMT
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bg likes this
Post by hazellend on Jul 31, 2019 10:29:58 GMT
I am grateful to all the stock pickers and traders for making the market but I think we are a long way off everything being passive. The more passive the market becomes the easier it should be for active managers to outperform then the money will flow back to active. And yes, most outperformance is due to luck although I guess there are a few who do it from skill. Unless you are scouring company reports, going to all their meetings and have specialist inside info I don’t see how it’s possible to know something that’s not priced in You obviously believe in completely efficient markets! What I learn't from trading professionally is that markets aren't fully efficient. The market price is made up of all market participants views, smart or stupid (plus other factors of course). The market level is the average of all these views, if you want the average then sure go for passive. A good example of this is when Trump got elected (similar for the Brexit vote). The initial knee jerk reaction was a sell off as people who didn't really understand the impact Trump would have on asset prices. They panicked and sold. Of course over the coming weeks the market corrected (great for the likes of me) but if the market had been truly efficient the adjustment would have been made instantly on the open after the election. The information was all out there but the market got it wrong. The biggest lesson I learnt in all my years trading is to back your own view. You can't get it right all the time but when you are wrong you only have yourself to blame. The worst feeling is having a strong view and not backing it as others say you are wrong. Make a decision and own it. I don't trade individual stocks (in general) I like to buy trusts that follow my macro themes: technology, an ageing population, switch to green energy and the increase in living standards in East Asia. Of course these trends are somewhat in the price but not significantly enough in my view (based on what I said above). This is my view and I'm prepared to back it and can only blame myself if I'm wrong. Of course your view is passive and good luck to you with that. In the long term being invested in equities will pay off and a passive tracker beats a bad fund hands down. Obviously our paths have been different and there are many roads to Dublin. 2 points, I have learned to NOT back my view, the market doesn’t care or agree with what I think for some reason. Also, most active investors massively underperform the average in pursuit of outperforming. It’s just not worth it to me. I was once very active, at one time I used to research and invest in junior miners/oilers almost exclusively lol. Finally, I like the simplicity and minimalism of my one ETF portfolio. I have almost 7 figures all in vanguard all world etf.
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corto
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Post by corto on Jul 31, 2019 11:01:27 GMT
>> I have learned to NOT back my view, the market doesn’t care or agree with what I think for some reason. No you haven't learned that. You push that same view on us all the time and you don't seem to like if people don't buy it. You also attempt to back your view in the rest of your post in contrast to what you claim. .. why, please, would **the market** care about what you think anyway? Because you have almost 7 figures in it?
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IFISAcava
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Post by IFISAcava on Jul 31, 2019 11:11:24 GMT
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hazellend
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Post by hazellend on Jul 31, 2019 11:48:03 GMT
>> I have learned to NOT back my view, the market doesn’t care or agree with what I think for some reason. No you haven't learned that. You push that same view on us all the time and you don't seem to like if people don't buy it. You also attempt to back your view in the rest of your post in contrast to what you claim. .. why, please, would **the market** care about what you think anyway? Because you have almost 7 figures in it? My view is to take no view. I’m not pushing it, just pointing out that the evidence is that only a tiny minority of people are likely to outperform. I do feel I know enough to try and help people who are obviously going to harm their savings trying to speculate.
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Post by captainconfident on Jul 31, 2019 12:49:32 GMT
I've taken a large position in Sterling, betting that Brexit does not go ahead. Beginning to be apprehensive about that but too late now. Anyway, I'm taking the long view.
This is also a bet on the Tories losing power and Corbyn not winning an election. This matters too because Sterling is not only depressed by the Brexit threat but by the unfunded spending promises as Johnson out Corbyns Corbyn. It all looks like deficit spending, adding to the budget deficit and National Debt. All signs of an incoherent macroeconomic policy and whereas the US can get away with that, Sterling is not a reserve currency so it's no wonder traders have been dumping it.
I was at university with Priti Patel, by the way. She was a total freak, an ultra-Thatcherite student FCS hack back then in 1983-4. Hilarious because there were under 3000 students at Keele at the time and the FCS branch just comprised her and a couple of bewildered Hooray Henries. Never once saw her in the Union bar.
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bg
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Post by bg on Jul 31, 2019 14:27:06 GMT
Never once saw her in the Union bar. What a joke. Is there any other reason to go to university?
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cwah
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Post by cwah on Jul 31, 2019 19:46:58 GMT
I've taken a large position in Sterling, betting that Brexit does not go ahead. Beginning to be apprehensive about that but too late now. Anyway, I'm taking the long view. This is also a bet on the Tories losing power and Corbyn not winning an election. This matters too because Sterling is not only depressed by the Brexit threat but by the unfunded spending promises as Johnson out Corbyns Corbyn. It all looks like deficit spending, adding to the budget deficit and National Debt. All signs of an incoherent macroeconomic policy and whereas the US can get away with that, Sterling is not a reserve currency so it's no wonder traders have been dumping it. I was at university with Priti Patel, by the way. She was a total freak, an ultra-Thatcherite student FCS hack back then in 1983-4. Hilarious because there were under 3000 students at Keele at the time and the FCS branch just comprised her and a couple of bewildered Hooray Henries. Never once saw her in the Union bar. I did as well... now I deerly regret...
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Post by propman on Aug 19, 2019 16:19:56 GMT
My view is to take no view. I’m not pushing it, just pointing out that the evidence is that only a tiny minority of people are likely to outperform. I do feel I know enough to try and help people who are obviously going to harm their savings trying to speculate. trying to react to news quicker than the market is, IMHO, a mugs game. Also you ned to consider the tails. It is far too easy to "take" a few percentage points return on a likely outcome, but often the consequence of the unlikely outcome is a huge loss. So taking these bets consistently will lead to losses. However there is money in contrarian investing. Traders need to show a return in a short timescale and are punished for wrong contrarian decisions much more severely to their rewards for such successful trades. As a result, a rational trader won't make large contrarian trades. Spot the situations where the odds are in your favour but the risk is too big for most traders and the market will increase the benefits of the trade. Picking such situations will usually mean macro themes such as BG said above.
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Sterling
Aug 19, 2019 18:43:23 GMT
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Post by Deleted on Aug 19, 2019 18:43:23 GMT
Look its simple, under Boris sterling will drop, under Corbyn sterling will drop. It is UK gov policy to drop sterling, it has been for 55+ years.
After 2021 recession it might drift up for a bit then down again. If you don't educate people (and we don't) then the currency will fall.
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hazellend
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Sterling
Aug 19, 2019 19:46:58 GMT
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Post by hazellend on Aug 19, 2019 19:46:58 GMT
Look its simple, under Boris sterling will drop, under Corbyn sterling will drop. It is UK gov policy to drop sterling, it has been for 55+ years. After 2021 recession it might drift up for a bit then down again. If you don't educate people (and we don't) then the currency will fall. But does it matter? Dropping sterling is good for a lot of reasons and nobody with money keeps a high allocation to cash as it is the riskiest long term asset.
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