sd2
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Sept 5, 2019 20:13:57 GMT
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Post by sd2 on Sept 5, 2019 20:13:57 GMT
I know I sound like a broken record on the subject but I wish people would stop abusing the ratios (PE etc.).
Either use them properly or don't bother at all.
Grrr.....
Rant over.
Worth looking the broker score on Hargreaves Lansdowne and the 5 year profit. Tell me what you think
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sd2
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Sept 6, 2019 8:38:38 GMT
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Post by sd2 on Sept 6, 2019 8:38:38 GMT
Worth looking the broker score on Hargreaves Lansdowne and the 5 year profit. Tell me what you think
Naïve at best.
I happen to have a suitable tool infront of me at the moment, so let's do a quick and dirty check shall we ?
So we've narrowed down the FTSE100 to 56 shares.
Looking at the %Price Change over one year, 24 of 56 (42%) were negative. (I can't show you the result list becuase its a professional tool and various legal people would probably get quite upset and start mumbling about licensing).
So in other words you might as well toss a coin. Gives you roughly the same chance of picking a winner.
Equity screening has its uses. But its not a fast path to riches, you still need to take the output of the screener and do some donkey work.
This generally involves two things if you are going to do it properly:
1) Subjective valuation - the company's "story" and your SWOT analysis of the business.
2) Objective valuation a.k.a. funadmental analysis (i.e. correct calculation and interpretation of values such as P/E, NAV/SOTP, P/Book and embedded value)
Looking at the analyst consensus (or broker score as you call it) might give you a very vague clue about the objective valuation.
But the subjetive element is still yours.
Just becase the numbers appear to say "yes", doesn't necessarily mean "now" is the right time to buy.
Finally bear in mind that certain sectors of shares are more tricky to value than others. And the financial sector (of which insurance is a component) is absolutley one of them.
feel free to expand on that and offer me alternative shares. If we have a recession I will be buying investment trust. They always fall further than there underlying value Quite often ludicrously so.
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hazellend
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Post by hazellend on Sept 6, 2019 9:36:19 GMT
sd2
If you want to be given answers on a plate or need someone to hold your hand, I suggest you find a decent broker and get yourself an advisory or discretionary account there.
I don't know you, your personal circumstances, your appetite for risk.
I don't want to be on the receiving end of mouthy abuse if I tell you I like the look of X, Y & Z and then you go put too much money on it and then have the audacity to come back here and complain that whilst X went up, Y & Z went down.
The choice is simple my friend:
(a) Learn how to invest properly and DIY with an execution-only account and be fully responsible for your own destiny; or
(b) Break out the wallet and pay someone trustworthy to help you
Or, for those that want to just beat 90% of amateur and professional active investors, just buy a low cost index tracker Wallstreet, you clearly seem to be a very intelligent investor and from what you say may beat the market, but it just isn’t going to work for the vast majority of people.
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hazellend
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Sept 6, 2019 11:56:39 GMT
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Post by hazellend on Sept 6, 2019 11:56:39 GMT
Or, for those that want to just beat 90% of amateur and professional active investors, just buy a low cost index tracker Wallstreet, you clearly seem to be a very intelligent investor and from what you say may beat the market, but it just isn’t going to work for the vast majority of people.
(a) "Low cost index trackers" are the not the panacea (b) One of the primary issues with index trackers is they require the discipline and commitment to serious long-term. There is an implied obligation to be prepared to watch the index go up, down and sideways for 10 years. There's not much point buying an index tracker, seeing the index drop six months later and then panic selling your way out.
For people looking for results on a shorter (but still sensible) timeframe (e.g. 6+ months to a couple of years), then their time would be well spent learning how to reasearch and then poking around the mid-caps of this world where you can take sensible risks (as opposed to nano-caps or small-caps which can amount to speculative gambling, or the large-caps which are researched to death by every man and his dog).
I definitely agree with point b) Index trackers are for buy and hold. Trading in and out is not much different to stock picking. Who needs short term results though? Aren’t most people saving for retirement ?
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Sept 6, 2019 12:29:44 GMT
Post by Deleted on Sept 6, 2019 12:29:44 GMT
"Aren’t most people saving for retirement ?"
I think wallstreet's point and mine would be, we don't know what people are saving for.
My view remains, educate yourself first, get to understand your mind-state in relationship with money and then work out what to buy.
I think pushing trackers on people, or any other single investment, who have not followed any of the above path feels wrong. Like offering a baby a razor blade to play with.
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hazellend
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Sept 6, 2019 12:34:21 GMT
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Post by hazellend on Sept 6, 2019 12:34:21 GMT
"Aren’t most people saving for retirement ?"
I think wallstreet's point and mine would be, we don't know what people are saving for.
My view remains, educate yourself first, get to understand your mind-state in relationship with money and then work out what to buy.
I think pushing trackers on people, or any other single investment, who have not followed any of the above path feels wrong. Like offering a baby a razor blade to play with.
Agree. Everybody needs to assess their need, willingness and ability to take risk. However, if somebody wants to invest for the long term in equities the evidence is overwhelmingly in favour of index trackers over stock picking. That is not my personal opinion, it’s simple, evidence based fact.
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Sept 6, 2019 13:38:32 GMT
Post by Deleted on Sept 6, 2019 13:38:32 GMT
"That is not my personal opinion, it’s simple, evidence-based fact."
We've had this discussion before and I don't think we will resolve this issue today. I suspect if you don't know what you are doing and have very little time to educate yourself then what you say is true, that is "the evidence supports what you say". Certainly, if you randomly invested in a portfolio of assets then an index tracker would be better. Yes, I agree. However, if you have the time and the education it is not hard to beat the index tracker.
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Post by propman on Sept 6, 2019 13:58:55 GMT
"That is not my personal opinion, it’s simple, evidence-based fact."
We've had this discussion before and I don't think we will resolve this issue today. I suspect if you don't know what you are doing and have very little time to educate yourself then what you say is true, that is "the evidence supports what you say". Certainly, if you randomly invested in a portfolio of assets then an index tracker would be better. Yes, I agree. However, if you have the time and the education it is not hard to beat the index tracker. Apologies if going over old ground, but if that is the case, why do so few fund managers manage it?
I am probably over cautious, but while I can find companies likely to beat the market, they encompass a not insubstantial tail risk. As a result, especially after factoring in the more expensive dealing costs I would face for the amount I would be prepared to invest, I am not convinced that these gains would not be cancelled or exceeded by some of these less than likely tail risks crystallising. My limited experience is that mi-caps are difficult to get clear information on and hence investments are made based on assumptions. Some have subsequently been shown to have been acting in ways that would not have been anticipated and so invalidating the reasons for the investment.
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hazellend
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Sept 6, 2019 14:07:30 GMT
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Post by hazellend on Sept 6, 2019 14:07:30 GMT
"That is not my personal opinion, it’s simple, evidence-based fact."
We've had this discussion before and I don't think we will resolve this issue today. I suspect if you don't know what you are doing and have very little time to educate yourself then what you say is true, that is "the evidence supports what you say". Certainly, if you randomly invested in a portfolio of assets then an index tracker would be better. Yes, I agree. However, if you have the time and the education it is not hard to beat the index tracker. Apologies if going over old ground, but if that is the case, why do so few fund managers manage it?
I am probably over cautious, but while I can find companies likely to beat the market, they encompass a not insubstantial tail risk. As a result, especially after factoring in the more expensive dealing costs I would face for the amount I would be prepared to invest, I am not convinced that these gains would not be cancelled or exceeded by some of these less than likely tail risks crystallising. My limited experience is that mi-caps are difficult to get clear information on and hence investments are made based on assumptions. Some have subsequently been shown to have been acting in ways that would not have been anticipated and so invalidating the reasons for the investment.
. Fund managers get paid regardless of how well they do (with as few exceptions). Same as financial advisors. Simple answer: they do it for money. Your money.
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Sept 6, 2019 14:42:14 GMT
Post by Deleted on Sept 6, 2019 14:42:14 GMT
why do so many fund managers fail? Great question. Because they set up a fund to focus on say "Japanese Retail" then if they beat the Japanese Retail index they can claim they are doing well but if the Japanese Retail index is below the tracker index then they fail. They have to have these structures so that IFA and their ilk can sell a "style" of investing. I've listened to this nonsense from IFAs for years and they fail to focus on the critical, which is "show me the money". They prefer to compare your investments to an arbitrary index. They have gotten away with this for years because the people with the money don't have the time to call BS on it.
There will, of course, be times when the Japanese Retail index beats the Global Index, but ....not for many years now.
So the very structure of retail fund managers means that in a general global bull market (now 10 years old) most will fail. It's just maths. How do you know what will beat the index? That is where strategy and education comes in.
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hazellend
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Post by hazellend on Sept 6, 2019 14:56:36 GMT
How do you know what will beat the index? That is where strategy and education comes in. [/div][/quote] If strategy and education mattered then lots of intelligent people would beat the index. I’m sure there are a lot of hyper intelligent , educated people included in the 90% that fail to beat their index. The only vital strategy is choosing an asset allocation equity:gov bonds/cash that is right for the individual. Once you’ve done that you can just buy VG lifestrategy fund and do nothing for the next few decades
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Sept 6, 2019 15:44:06 GMT
Post by Deleted on Sept 6, 2019 15:44:06 GMT
[/div][/quote] If strategy and education mattered then lots of intelligent people would beat the index. I’m sure there are a lot of hyper intelligent, educated people included in the 90% that fail to beat their index. For sure, a lot of intelligent people lose money. But there does seem to be a barrier to education about money. I suspect it is partially the not invented here thing..."I'm an accountant so I understand money", partially those who understand how to make money don't have the skills or the wish to educate others and partially the "I'm bright how hard can it be?".
See also "I own a house so I know how to redevelop houses for money". Still, as I said, I doubt we will resolve this today. Have a great weekend.
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hazellend
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Sept 6, 2019 21:26:21 GMT
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Post by hazellend on Sept 6, 2019 21:26:21 GMT
Apologies if going over old ground, but if that is the case, why do so few fund managers manage it?
As @bobo said. Fund managers run funds. Funds have a defined remit. So as @bobo's example goes "Japanese Retail" means their investible universe is limited to "Japanese Retail". You also need to look at the documentation of the fund (e.g. does their remit permit use of derivatives or forex hedging ? both of those examples can esasily impact returns).
Then you need to go back to my objective vs subjective comment.
You can assume all fund managers are somewhat identical in terms of the objective. They've all got the same professional toolset, they all know how to do valuations properly and will have no problems knocking out a DCF or correctly interpreting ratios such as P/E.
The difference is in the subjective element.
The fund managers will read up on the companies. They will join conference calls with the company managmement in order to ask tough questions.
So, the answer is that if you are into buying funds. What you need to do is (a) look carefully at the fund documentation and (b) identify a quality fund manager and the team that surrounds them.
And yes, even if passive trackers are your thing, beware, not all passive trackers are created equally.
Yet even with their team of PhD analysts, conference calls, one on one meetings the vast majority of managers cannot beat their index after costs (expense ratios, fund churn). Funds do so badly that many of them don’t survive 10 years. site:ft.com Equity funds struggle to survive for more than a decade You do need to be careful with passive trackers. Avoid like ones that track robotics or don’t hold the physical securities. Stick with vanguard/ishares and you’ll be fine.
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Post by dan1 on Sept 19, 2019 17:32:21 GMT
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Post by Deleted on Sept 20, 2019 14:01:04 GMT
Except the core fees are about twice what you need to pay at Fidelity and even more than say ii or AJBell, plus nearly everyone else allows you to pool family capital to reduce over all rates. HL is just a very expensive way of doing a very simple thing.
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