Something that is not mentioned: The psychological burden when you check your portfolio multiple times a day.
It can become an addiction akin to sports betting. Your mind is constantly occupied by the market and how it’s going. It takes a heavy attention toll on anything other you want to focus on.
I have learned my lesson. I buy the index and look at my portfolio 1-2 times a year and focus my mind on other things.
Annie Duke has a great book "Thinking in Bets" where she talks about being a professional poker player.
One of the things she hammers on is that just knowing how much/often you win isn't the important part because you can win despite making dumb choices and lose despite making great choices.
The key thing is being able to make the best decision based on the limited information you have, take the consequences (good or bad), and then reset and do it again. This is relevant in poker, investment, or even our careers and a great ideal to reach for.
You don't have to trade against the firms, retail can make up the majority of some markets (e.g not on dark pools etc..), you just have to beat them and join the firms in taking their money. It's far more difficult than buying an index but it is not a scam just because it is hard and most people don't know what they're doing.
Edit to clarify: my portfolio is almost all index funds to clarify, and that is what you should do too, but I'm just saying it is entirely possible to trade and it is a skill. Something can be somewhat like gambling and yet still have elements of skill just like poker.
Unfortunately a lesson I had to learn for myself. Hopefully I can pass it on to the next generation, but I fear they'll have to learn it for themselves too. Don't pick individual stocks people, buy broad index funds at most.
I would have said this, but someone responded with a comment that stuck with me:
We’re on a forum of an incubator whose goal is investing in high risk startups to find the next unicorn. So there are probably people here who feel the same way about investing.
While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better.
It’s lower likelihood and not as repeatable, but for some people, that’s the strategy they want.
> While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better.
Most stocks suck:
> We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation.
> Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills. These results highlight the important role of positive skewness in the distribution of individual stock returns, attributable both to skewness in monthly returns and to the effects of compounding. The results help to explain why poorly-diversified active strategies most often underperform market averages.
And it's not always the same 2-4% of stocks: a stock may shoot up in value, and if you're holding it at that time to can capture that, but once it has already gone up it may perform average-to-poor going forward. At that point, if you're still holding on it, it will be a drag on your (average) returns.
I don’t disagree at all (I have no individual stocks, only indexes). The average retail investor doesn’t beat the market.
However, the top 10% of retail traders actually can generate consistent returns.[1]
Consider that MSFT has gone up 10x over the last ten years while the S&P has risen 4x. Ethereum has risen 2500x in that period. TSLA has risen 270x.
Not saying these returns are typical, but I can imagine that a highly aggressive retail investor could, with a few good trades and a lot of confidence, do incredibly well and end up with a life-altering amount of money. Obviously, the chances of both entering AND exiting the trades to capture all of that is low.
Again, not my style, but I respect those who want to place their bets.
> Not saying these returns are typical, but I can imagine that a highly aggressive retail investor could, with a few good trades and a lot of confidence, do incredibly well and end up with a life-altering amount of money. Obviously, the chances of both entering AND exiting the trades to capture all of that is low.
The problem is the existential question of knowing whether you are good (in absolute and relative terms) or not:
> For example, any competent basketball coach could tell you whether someone was skilled at shooting within the course of 10 minutes. Yes, it’s possible to get lucky and make a bunch of shots early on, but eventually they will trend toward their actual shooting percentage. The same is true in a technical field like computer programming. Within a short period of time, a good programmer would be able to tell if someone doesn’t know what they are talking about.
> But, what about stock picking? How long would it take to determine if someone is a good stock picker?
> An hour? A week? A year?
> Try multiple years, and even then you still may not know for sure. The issue is that causality is harder to determine with stock picking than with other domains. When you shoot a basketball or write a computer program, the result comes immediately after the action. The ball goes in the hoop or it doesn’t. The program runs correctly or it doesn’t. But, with stock picking, you make a decision now and have to wait for it to pay off. The feedback loop can take years.
> And the payoff you do eventually get has to be compared to the payoff of buying an index fund like the S&P 500. So, even if you make money on absolute terms, you can still lose money on relative terms.
And certainly don't buy individual stocks because of FOMO or day trading or some wishful thinking.
I pretty much only invest in indices except for rare small fun picks where I'm ok with losing. But over the years there were certainly times where this was a too conservative stance. My small bets have outperformed my conservative portion - by a lot. That said, those times were I am confident in those bets are rare, like a few times a decade.
> That gives slightly better than the inflation rate ( Canada ).
What do you mean? Over the last year any one of the index funds I'm in has beat inflation by a factor of five, some beat inflation by an order of magnitude. My worst performer is an iShares world fund, which generally has more temperate gains, clocking in at 10% YoY.
Looking at Canadian indices such as $VCN, it's the same story.
If you're in Canada you almost certainly want to diversify from Canadian indices. US markets have tended to outperform.
Indices can return >20% one year and -10% other years. I think OP is talking recently, not over 30 years. Over the long term indices like the S&P 500 tend to have a real return of 6-7% ...
That's the biggest problem I have with the recommendation to buy indices as if indices grow at >8% annually is an natural law.
Many (most) indices of countries in the world performed way less than 8%. US performed exceptionally well over almost a century so people are starting to take it as a natural law. If I buy US index, I'm still putting a directional bet on US stock market performing at an exceptional rate.
One can buy "all-in-one" index-of-index funds that have all US equities, all EU, etc. In Canada (which sub-thread stated with), see VEQT or XEQT (100% equities), VGRO/XGRO (80/20), VBAL/XBAL (60/40), VCNS/XCNS (40/60).
You can probably find an 'asset allocation' fund in most countries; e.g., in the US:
My current employer is like this. A lot of external factors played into our favor and helped us make a lot of money, to the point where any internal decision making doesn't really move the needle in comparison. So whenever problems are pointed out, it's a hard sell because "we are so successful our C-suite are so good" when they didn't exactly do anything.
You don’t need to block all ads. Even stopping the bottom 50% cleans up the internet so much.
You know how to find an adblocker if you read HN. If you don’t want to use one, that’s your choice but it’s disingenuous to complain about blocking 100% of ads.
If one has time, a few books I would highly recommend:
The Intelligent Investor by Ben Graham
Security Analysis by Graham and Dodd
Common Stocks and Uncommon Profits and Other Writings by Philip Fisher
The Little Book That Still Beats the Market by Greenblatt
Warren Buffett's annual letters
Actually, anything by Ben Graham or Joel Greenblatt is worth reading if one is interested in the investing world. I don't know if I'll ever invest enough time doing fundamental analysis and actively (value) investing but I am making my way through these just to understand value investing properly.
> Actually, anything by Ben Graham or Joel Greenblatt is worth reading if one is interested in the investing world.
Ben Graham in the last interview before he passed ("A Conversation with Benjamin Graham", Financial Analysts Journal, Vol. 32, No. 5 (Sep. - Oct., 1976), pp. 20-23):
>> In selecting the common stock portfolio, do you advise careful study of and selectivity among different issues?
> In general, no. I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors.
More recent analysis has many things that imply the EMH is weak if it exists at all.
2008 at it's core is a rather good example that the market was not efficient at all, as was the dot com bubble. And then you have the behavioural side where investors are not rational such as meme-stocks. Even COVID was a good example. It was clear to most value investors for instance that Zoom was over-priced, when you had teams already included in your bundle, and that school wasn't going to stay remote forever. The failure of MOOCs in the previous decade proved that. There are many examples like these.
If markets are not efficient, that means prices do not reflect the information available about various financial instruments (e.g., stocks). So if information is not being properly disseminated and processed, it means it should be easy to swoop in and outperform The Market™:
This is how some folks (see The Big Short) were able to make a killing leading up to the GFC: they properly processed the information and traded on it.
And yet if you look at something like the SPIVA reports, yes there are some funds that may outperform the market in a single year, but the numbers drop quite quickly for being able to outperform over 3/5/10/15/20-year horizons.
If you personally believe markets are not efficient, and prices are not accurate, then perhaps you should take up day trading. (I am not sure anyone is saying markets are perfectly efficient, or efficient-ish all the time: certainly not Fama or French, who won the Nobel for work on the topic; shared with Shiller).
I have read both The Intelligent Investor or Security Analysis and I can't say there is any value - no pun intended - in reading both these books. Most of these methods are arcane. It just seems that people in value investing circles like to hype these book up just because Buffett got his start by reading these books. Under Munger things have turned -
> A great business at a fair price is superior to a fair business at a great price.
Philip Fisher and Peter Lynch's books are much better read.
That said, as the article says in a bull market when markets are going up it is difficult to know if your value picks are actually great. In bear markets no one wants to touch undervalued companies.
I wonder how many people picking individual stocks these days were investing in 2007 or better yet 2000/2001. Everyone was a genius stock picker in 1998/1999 also.
Unless you're a full time quant with a high deflated sharpe ratio you have no business making trades. It's not an investment to speculate on unpredictable price, that's called gambling, as Eugene Fama explained. Investments yield income. A stock buyback is not better than a dividend.
The main thing current bull markets make you feel is far less subsidized by the government than you really are.
There are a lot of people playing at being upper middle class right now, living large paycheck to large paycheck, and they don't realize that the people whose lifestyles they're emulating are getting money for nothing. If the layoffs start getting deeper i.e. if AI takes off OR if AI does not take off, they'll be at the food banks in a year.
We'll see what happens in society when the comfortable middle class that makes all of the demands in our political system gets halved.
Sounds like all the crypto geniuses, who are actually lucky guys, but could have been considered the dumbest idiots if cryptos had followed their natural course (being worthless).
The successful crypto bros are mostly either issuers or crooks. That way they escape the natural tendency of all crypto other than Bitcoin and Ethereum to go down.
Makes sense. The whole point is to invest before the market goes up. If the market goes up after you invested, you did it right.
Works in roulette too, I'm told, so sometimes illegal gambling sites will try to get people addicted by rigging their first few bets to always win.
Are people really not smart, though? Buying into a market that's going up, and continues going up, is simply correct timing, is it not? It's only half the equation, of course.
Something that is not mentioned: The psychological burden when you check your portfolio multiple times a day.
It can become an addiction akin to sports betting. Your mind is constantly occupied by the market and how it’s going. It takes a heavy attention toll on anything other you want to focus on.
I have learned my lesson. I buy the index and look at my portfolio 1-2 times a year and focus my mind on other things.
You just did it in the wrong order:
1. Buy the index
2. Check your portfolio multiple times a day
Now it's less like gambling and more like being entertained looking at your fish tank.
1) buy the index (and maybe some bonds)
2) find the friend, colleague, or housemate who’s a degenerate market gambler
3) let their Hot Picks and Levered Options serve as your fish tank.
Complete with the roller coaster of (their) emotion!
Just put 5 bucks on the skins, it’s just as entertaining and a lot cheaper.
I present the Waterluvian Investment Strategy:
1) buy the index
2) set up monthly deposits into it
3) forget it exists
4) get an annual report
5) try to feel smart, only foiled by the fact that it was 11pm and you didn’t know where your money was
6) GOTO 3
I had the same problem so i just built a custom dashboard that only updates my portfolio once a day (at 6:00 am)
Annie Duke has a great book "Thinking in Bets" where she talks about being a professional poker player.
One of the things she hammers on is that just knowing how much/often you win isn't the important part because you can win despite making dumb choices and lose despite making great choices.
The key thing is being able to make the best decision based on the limited information you have, take the consequences (good or bad), and then reset and do it again. This is relevant in poker, investment, or even our careers and a great ideal to reach for.
I included a small blurb on my 2021 reading list: https://caseysoftware.com/blog/my-reading-list-2021
Index funds and small investments in things that are still early that you believe in / care about are the way to go.
Day trading and dabbling in $GME, shitcoins, post-2023 NVIDIA, individual stocks, etc. are all bubbles.
Day trading is a scam. Trading firms are more than well-positioned to eat retail's lunch, every single time.
You don't have to trade against the firms, retail can make up the majority of some markets (e.g not on dark pools etc..), you just have to beat them and join the firms in taking their money. It's far more difficult than buying an index but it is not a scam just because it is hard and most people don't know what they're doing.
Edit to clarify: my portfolio is almost all index funds to clarify, and that is what you should do too, but I'm just saying it is entirely possible to trade and it is a skill. Something can be somewhat like gambling and yet still have elements of skill just like poker.
Unfortunately a lesson I had to learn for myself. Hopefully I can pass it on to the next generation, but I fear they'll have to learn it for themselves too. Don't pick individual stocks people, buy broad index funds at most.
I would have said this, but someone responded with a comment that stuck with me:
We’re on a forum of an incubator whose goal is investing in high risk startups to find the next unicorn. So there are probably people here who feel the same way about investing.
While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better.
It’s lower likelihood and not as repeatable, but for some people, that’s the strategy they want.
> While the average outcome of indexes is probably better, the best case outcome of an individual stock is probably better.
Most stocks suck:
> We study long-run shareholder outcomes for over 64,000 global common stocks during the January 1990 to December 2020 period. We document that the majority, 55.2% of U.S. stocks and 57.4% of non-U.S. stocks, underperform one-month U.S. Treasury bills in terms of compound returns over the full sample. Focusing on aggregate shareholder outcomes, we find that the top-performing 2.4% of firms account for all of the $US 75.7 trillion in net global stock market wealth creation from 1990 to December 2020. Outside the US, 1.41% of firms account for the $US 30.7 trillion in net wealth creation.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3710251
> Four out of every seven common stocks that have appeared in the CRSP database since 1926 have lifetime buy-and-hold returns less than one-month Treasuries. When stated in terms of lifetime dollar wealth creation, the best-performing four percent of listed companies explain the net gain for the entire U.S. stock market since 1926, as other stocks collectively matched Treasury bills. These results highlight the important role of positive skewness in the distribution of individual stock returns, attributable both to skewness in monthly returns and to the effects of compounding. The results help to explain why poorly-diversified active strategies most often underperform market averages.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447
And it's not always the same 2-4% of stocks: a stock may shoot up in value, and if you're holding it at that time to can capture that, but once it has already gone up it may perform average-to-poor going forward. At that point, if you're still holding on it, it will be a drag on your (average) returns.
I don’t disagree at all (I have no individual stocks, only indexes). The average retail investor doesn’t beat the market.
However, the top 10% of retail traders actually can generate consistent returns.[1]
Consider that MSFT has gone up 10x over the last ten years while the S&P has risen 4x. Ethereum has risen 2500x in that period. TSLA has risen 270x.
Not saying these returns are typical, but I can imagine that a highly aggressive retail investor could, with a few good trades and a lot of confidence, do incredibly well and end up with a life-altering amount of money. Obviously, the chances of both entering AND exiting the trades to capture all of that is low.
Again, not my style, but I respect those who want to place their bets.
[1] https://www.bus.umich.edu/pdf/mitsui/nttdocs/coval-shumway2....
> Not saying these returns are typical, but I can imagine that a highly aggressive retail investor could, with a few good trades and a lot of confidence, do incredibly well and end up with a life-altering amount of money. Obviously, the chances of both entering AND exiting the trades to capture all of that is low.
The problem is the existential question of knowing whether you are good (in absolute and relative terms) or not:
> For example, any competent basketball coach could tell you whether someone was skilled at shooting within the course of 10 minutes. Yes, it’s possible to get lucky and make a bunch of shots early on, but eventually they will trend toward their actual shooting percentage. The same is true in a technical field like computer programming. Within a short period of time, a good programmer would be able to tell if someone doesn’t know what they are talking about.
> But, what about stock picking? How long would it take to determine if someone is a good stock picker?
> An hour? A week? A year?
> Try multiple years, and even then you still may not know for sure. The issue is that causality is harder to determine with stock picking than with other domains. When you shoot a basketball or write a computer program, the result comes immediately after the action. The ball goes in the hoop or it doesn’t. The program runs correctly or it doesn’t. But, with stock picking, you make a decision now and have to wait for it to pay off. The feedback loop can take years.
> And the payoff you do eventually get has to be compared to the payoff of buying an index fund like the S&P 500. So, even if you make money on absolute terms, you can still lose money on relative terms.
* https://ofdollarsanddata.com/why-you-shouldnt-pick-individua...
And certainly don't buy individual stocks because of FOMO or day trading or some wishful thinking.
I pretty much only invest in indices except for rare small fun picks where I'm ok with losing. But over the years there were certainly times where this was a too conservative stance. My small bets have outperformed my conservative portion - by a lot. That said, those times were I am confident in those bets are rare, like a few times a decade.
The temptation is always there though. I have several stocks that produced life changing gains.
If you do want to dabble in individual stocks, keep it as a small percentage of your portfolio that you’re willing to lose.
> Don't pick individual stocks people
We are in the industry, and perhaps we indeed know better.
> buy broad index funds at most
That gives slightly better than the inflation rate ( Canada ).
> That gives slightly better than the inflation rate ( Canada ).
What do you mean? Over the last year any one of the index funds I'm in has beat inflation by a factor of five, some beat inflation by an order of magnitude. My worst performer is an iShares world fund, which generally has more temperate gains, clocking in at 10% YoY.
Looking at Canadian indices such as $VCN, it's the same story.
As of October 2025, in the previous 30 Years, the Vanguard FTSE Canada All Cap Index (VCN.TO) ETF obtained a 8.72% compound annual return.
~2x better than the official inflation over the same 30 years. I don't see the factor of five or order of magnitude. Also those gains are taxable.
If you're in Canada you almost certainly want to diversify from Canadian indices. US markets have tended to outperform.
Indices can return >20% one year and -10% other years. I think OP is talking recently, not over 30 years. Over the long term indices like the S&P 500 tend to have a real return of 6-7% ...
That's the biggest problem I have with the recommendation to buy indices as if indices grow at >8% annually is an natural law.
Many (most) indices of countries in the world performed way less than 8%. US performed exceptionally well over almost a century so people are starting to take it as a natural law. If I buy US index, I'm still putting a directional bet on US stock market performing at an exceptional rate.
One can buy "all-in-one" index-of-index funds that have all US equities, all EU, etc. In Canada (which sub-thread stated with), see VEQT or XEQT (100% equities), VGRO/XGRO (80/20), VBAL/XBAL (60/40), VCNS/XCNS (40/60).
You can probably find an 'asset allocation' fund in most countries; e.g., in the US:
* https://investor.vanguard.com/investment-products/mutual-fun...
There are also (more dynamic) 'target date' funds, where the bond allocation increases over time.
Yeah, and those have underpermed historically and it's definitely not recommended by most people.
> Yeah, and those have underpermed historically […]
Huh? Underperformed what, exactly? A globally-diversified portfolios of stocks have underperformed …a globally-diversified portfolios of stocks? …tech stocks? …consumer staples? …utilities? …Treasuries?
1/3/5/10/20-year annualized returns are available at:
* https://canadianportfoliomanagerblog.com/model-etf-portfolio...
> […] and it's definitely not recommended by most people.
Again: huh? Who is not recommending index funds for most people? And what is recommended "by most people" if not index funds?
> If you're in Canada you almost certainly want to diversify from Canadian indices. US markets have tended to outperform.
If you buy "all-in-one" VEQT/XEQT (100% equities) you are buying an index funds of index funds: all Canadian equities, all US equities, EU, etc:
* https://canadianportfoliomanagerblog.com/model-etf-portfolio...
* https://canadiancouchpotato.com/model-portfolios/
If you don't want 100% equities, there are VGRO/XGRO (80/20), VBAL/XBAL (60/40), VCNS/XCNS (40/60), etc.
I disagree - I was a value investor for a number of years from the Ben Graham/Buffett school of thought.
But the last 5 years or so - with the ramp up in tech stocks, I know enough people who've done really well with indidividual stock picking.
In fact there was a paper out that said 10% of retail investors can consistently beat the market - it's a mixture of skill, discipline and luck.
My current employer is like this. A lot of external factors played into our favor and helped us make a lot of money, to the point where any internal decision making doesn't really move the needle in comparison. So whenever problems are pointed out, it's a hard sell because "we are so successful our C-suite are so good" when they didn't exactly do anything.
The google problem where every business line has to generate at least 10bn a year
I don’t know why websites even bother having text when it is this badly destroyed by advertising.
The question is why aren’t you using an ad blocker in 2025?
i haven’t found that block all ads. which do you recommend for ios and for chrome/safari on macos?
I don’t see any ads on the site with 1Blocker on iOS on the submitted article. It works the same on MscOS.
You don’t need to block all ads. Even stopping the bottom 50% cleans up the internet so much.
You know how to find an adblocker if you read HN. If you don’t want to use one, that’s your choice but it’s disingenuous to complain about blocking 100% of ads.
If one has time, a few books I would highly recommend:
The Intelligent Investor by Ben Graham
Security Analysis by Graham and Dodd
Common Stocks and Uncommon Profits and Other Writings by Philip Fisher
The Little Book That Still Beats the Market by Greenblatt
Warren Buffett's annual letters
Actually, anything by Ben Graham or Joel Greenblatt is worth reading if one is interested in the investing world. I don't know if I'll ever invest enough time doing fundamental analysis and actively (value) investing but I am making my way through these just to understand value investing properly.
> Warren Buffett's annual letters
Buffett says to buy index funds.
> Actually, anything by Ben Graham or Joel Greenblatt is worth reading if one is interested in the investing world.
Ben Graham in the last interview before he passed ("A Conversation with Benjamin Graham", Financial Analysts Journal, Vol. 32, No. 5 (Sep. - Oct., 1976), pp. 20-23):
>> In selecting the common stock portfolio, do you advise careful study of and selectivity among different issues?
> In general, no. I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook "Graham and Dodd" was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I'm on the side of the "efficient market" school of thought now generally accepted by the professors.
* https://www.tandfonline.com/doi/abs/10.2469/faj.v32.n5.20
* https://www.jstor.org/stable/4477960
* https://www.bylo.org/bgraham76.html
Graham was also of the opinion that analysis is of questionable use even in 1976 (nevermind now, ~40 years later).
> 1976 ... ~40 years later
I think it would have been ok to say 50!
More recent analysis has many things that imply the EMH is weak if it exists at all.
2008 at it's core is a rather good example that the market was not efficient at all, as was the dot com bubble. And then you have the behavioural side where investors are not rational such as meme-stocks. Even COVID was a good example. It was clear to most value investors for instance that Zoom was over-priced, when you had teams already included in your bundle, and that school wasn't going to stay remote forever. The failure of MOOCs in the previous decade proved that. There are many examples like these.
If markets are not efficient, that means prices do not reflect the information available about various financial instruments (e.g., stocks). So if information is not being properly disseminated and processed, it means it should be easy to swoop in and outperform The Market™:
* https://en.wikipedia.org/wiki/Grossman-Stiglitz_paradox
This is how some folks (see The Big Short) were able to make a killing leading up to the GFC: they properly processed the information and traded on it.
And yet if you look at something like the SPIVA reports, yes there are some funds that may outperform the market in a single year, but the numbers drop quite quickly for being able to outperform over 3/5/10/15/20-year horizons.
If you personally believe markets are not efficient, and prices are not accurate, then perhaps you should take up day trading. (I am not sure anyone is saying markets are perfectly efficient, or efficient-ish all the time: certainly not Fama or French, who won the Nobel for work on the topic; shared with Shiller).
I have read both The Intelligent Investor or Security Analysis and I can't say there is any value - no pun intended - in reading both these books. Most of these methods are arcane. It just seems that people in value investing circles like to hype these book up just because Buffett got his start by reading these books. Under Munger things have turned -
> A great business at a fair price is superior to a fair business at a great price.
Philip Fisher and Peter Lynch's books are much better read.
That said, as the article says in a bull market when markets are going up it is difficult to know if your value picks are actually great. In bear markets no one wants to touch undervalued companies.
Thanks for the book recommendations. Do You mean "Ben Graham Was a Quant"? Can't seem to find the other title.
I wonder how many people picking individual stocks these days were investing in 2007 or better yet 2000/2001. Everyone was a genius stock picker in 1998/1999 also.
This is basically the entire thesis of Fooled by Randomness by N. N. Taleb.
Day Traders only exist because of this. Bull markets allow them to exist.
Unless you're a full time quant with a high deflated sharpe ratio you have no business making trades. It's not an investment to speculate on unpredictable price, that's called gambling, as Eugene Fama explained. Investments yield income. A stock buyback is not better than a dividend.
>A stock buyback is not better than a dividend.
It often is, for a variety of tax reasons.
The main thing current bull markets make you feel is far less subsidized by the government than you really are.
There are a lot of people playing at being upper middle class right now, living large paycheck to large paycheck, and they don't realize that the people whose lifestyles they're emulating are getting money for nothing. If the layoffs start getting deeper i.e. if AI takes off OR if AI does not take off, they'll be at the food banks in a year.
We'll see what happens in society when the comfortable middle class that makes all of the demands in our political system gets halved.
Sounds like all the crypto geniuses, who are actually lucky guys, but could have been considered the dumbest idiots if cryptos had followed their natural course (being worthless).
The successful crypto bros are mostly either issuers or crooks. That way they escape the natural tendency of all crypto other than Bitcoin and Ethereum to go down.
Makes sense. The whole point is to invest before the market goes up. If the market goes up after you invested, you did it right.
Works in roulette too, I'm told, so sometimes illegal gambling sites will try to get people addicted by rigging their first few bets to always win.
Are people really not smart, though? Buying into a market that's going up, and continues going up, is simply correct timing, is it not? It's only half the equation, of course.
Bear markets make michael burry feel smarter than he is
What's the obsession with Burry?
He just shorted Nvidia: https://news.ycombinator.com/item?id=45813734
Christian Bale played him in a Michael Lewis movie.