Would there be any interest in a POA investment club?

denverpilot said:
You forgot guns, trucks, radios, towers, barns, tractors, and boats. So I think the plan, as written, is fatally flawed. ;)
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And women. Don't forget women. Some of those are more expensive to maintain than airplanes.
 
Two things will grow money:

1. Time
2. Cojones

The more time you have, the less "testicular fortitude" you need.
 
Gerhardt said:
It looks like we have about a grand in pledges. Now, what to buy?
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I'm not going to argue that, but my original thought never had anything to do with anyone putting up any money. My idea was merely an exchange of information.
 
I humbly offer my services as Chief Investment Advisor for this new club.
I will not even charge for my services.

The way it works is easy; I will tell the club when I am buying. The club sells at that time, and is sure to always come out ahead!
 
MIFlyer said:
I participate in some investment/money boards.

Beyond supporting the recommendation to just buy and hold low cost index funds (and average 8-11%/year with no worries), if you're really interested, i'd take yourselves over to a money board. MOds, hope this isn't a no no to link to another board, but ymam.proboards.com is pretty fantastic. there are people talking about all kinds of investment and other financial matters.

Frankly, i would talk about planes here, but since most of us here are sharing real identities, i'd recommend you set up a different name on an investment board and talk to folks there.

That said, the real advice is that if you want 2-5% returns and an ulcer, you should chase a "great investment" and try to pick stocks and get out of the market when "the end of the world" happens ever 15 years or so and buy in when the market is "hot"

If you want 8-11% and no ulcer, unfortunately, you'll have a very boring investing life where you buy VTSMX or something similar, put a dedicated amount in it every month/year, and look at your statement every 3-5 years.
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VTSMX over 15 years is at just over 4%. Didn't even keep up with inflation.

http://performance.morningstar.com/fund/performance-return.action?t=VTSMX&region=usa&culture=en-US

Just sayin'.

Tomahawk674 said:
They said the Trump would have been better off putting his inheritance in the market. The S&P did better than his real estate ventures. But what fun is that? ;)

PS: my ventures into 2-3 day trading made me $35. Woohoo!
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Before or after fees and taxes? ;)
 
denverpilot said:
VTSMX over 15 years is at just over 4%. Didn't even keep up with inflation.

Just sayin'.

Before or after fees and taxes? ;)
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That doesn't include dividends.
You also cherry picked the the timeframe, gold companies and annuity salesmen do this also.
My return has been much greater than the total markets, not because I'm a genius, but because I was buying 15 years ago, and 13 and 6 years ago...it's called dollar cost averaging.
 
teejayevans said:
That doesn't include dividends.
You also cherry picked the the timeframe, gold companies and annuity salesmen do this also.
My return has been much greater than the total markets, not because I'm a genius, but because I was buying 15 years ago, and 13 and 6 years ago...it's called dollar cost averaging.
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What was the annualized RoR of the dividends? They'd need to be at least 4% every year for over a decade to make your statement reality.

Quickly scanning the current portfolio held by that fund, there's a number of large cap non-dividend stocks in there. They'd not contribute to any meaningful dividend going forward.

Just refuting your claim of purchasing "without worry" and always making 8-11% on this broad of an index. You might, you might not. It tracks the broad market and it has relatively low fees, so that helps. But it's long term record is not what you claimed.

Save the snarky commentary about gold salesmen for someone who gives a ****. I'm not selling anything here, YOU did. I'm not pushing anything, certainly not gold or insurance. You're pushing a broad index fund in a bull market. That's pretty much as cliche' as it gets.

Convince me. What was the RoR on the dividends over the same time period?

(I only picked 15 years because it is long term and happens to show up on Morningstar charts which was a simple and reasonable place to link to that people have heard of. Pick a longer term number if you like. 2008-Present is a standard market Bull run, and that's all this thing does. It doesn't have any tricks up its sleeves. It can't. It's an index fund.)

This thing appears to regularly underperform the S&P.

Let's see the dividend numbers.
 
denverpilot said:
What was the annualized RoR of the dividends? They'd need to be at least 4% every year for over a decade to make your statement reality.

Quickly scanning the current portfolio held by that fund, there's a number of large cap non-dividend stocks in there. They'd not contribute to any meaningful dividend going forward.

Just refuting your claim of purchasing "without worry" and always making 8-11% on this broad of an index. You might, you might not. It tracks the broad market and it has relatively low fees, so that helps. But it's long term record is not what you claimed.

Save the snarky commentary about gold salesmen for someone who gives a ****. I'm not selling anything here, YOU did. I'm not pushing anything, certainly not gold or insurance. You're pushing a broad index fund in a bull market. That's pretty much as cliche' as it gets.

Convince me. What was the RoR on the dividends over the same time period?

(I only picked 15 years because it is long term and happens to show up on Morningstar charts which was a simple and reasonable place to link to that people have heard of. Pick a longer term number if you like. 2008-Present is a standard market Bull run, and that's all this thing does. It doesn't have any tricks up its sleeves. It can't. It's an index fund.)

This thing appears to regularly underperform the S&P.

Let's see the dividend numbers.
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Ok. Maybe my idea of a POA investment board where we could have fun exchanging information wasn't such a good idea.
Sigh.
 
JOhnH said:
Ok. Maybe my idea of a POA investment board where we could have fun exchanging information wasn't such a good idea.
Sigh.
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I saw a meme somewhere about telling people your ideas and them stealing your dreams....yes, POA is the worst of dream stealers.
 
denverpilot said:
What was the annualized RoR of the dividends? They'd need to be at least 4% every year for over a decade to make your statement reality.

Quickly scanning the current portfolio held by that fund, there's a number of large cap non-dividend stocks in there. They'd not contribute to any meaningful dividend going forward.

Just refuting your claim of purchasing "without worry" and always making 8-11% on this broad of an index. You might, you might not. It tracks the broad market and it has relatively low fees, so that helps. But it's long term record is not what you claimed.

Save the snarky commentary about gold salesmen for someone who gives a ****. I'm not selling anything here, YOU did. I'm not pushing anything, certainly not gold or insurance. You're pushing a broad index fund in a bull market. That's pretty much as cliche' as it gets.

Convince me. What was the RoR on the dividends over the same time period?

(I only picked 15 years because it is long term and happens to show up on Morningstar charts which was a simple and reasonable place to link to that people have heard of. Pick a longer term number if you like. 2008-Present is a standard market Bull run, and that's all this thing does. It doesn't have any tricks up its sleeves. It can't. It's an index fund.)

This thing appears to regularly underperform the S&P.

Let's see the dividend numbers.
Click to expand...


First I don't know who you think you are responding to, I did NOT say some of the stuff you attributed to me.
Now as Joe Friday would say, here is the facts:
Using the U.S. inflation calculator the cumulative inflation since 2000 is 38.4%
VTSMX has grown 42.1%, not counting dividends which today pay out about 1.96%, this obviously changes as stock prices change.
Whether is beats the S&P is meaningless, that just shows the S&P has had a good run since the dot.com bubble busted.
Personally I don't like that's it's market weighted, I never recommend it, I was just corrected the misinformation like it would need to have a 4% dividend rate and it didn't do better that inflation.
This is why a POA investment club is a bad idea.
 
denverpilot said:
VTSMX over 15 years is at just over 4%. Didn't even keep up with inflation. ... Before or after fees and taxes? ;)
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Actually that is a total return number, so includes dividends. But it doesn't matter. Here is the guarantee you get with index fund investing:

You will get returns that are higher than the vast majority (70-80%) of the professional money managers for whom the chosen index is the benchmark. Example, if you are buying a large cap index, you will beat most of the actively managed large cap funds.

You can come at this analytically as follows: The market is professional money managers, so the average performance of the market has to be the average performance of professional money managers. Further, the returns that the money managers deliver to their clients are guaranteed to be lower than the average market return due to fees, transaction costs, bid/ask spreads, etc. A Nobel Prize winning economist explains in slightly more detail: http://web.stanford.edu/~wfsharpe/art/active/active.htm

There is also a mountain of statistical evidence that this is true. Reading the biannual S&P SPIVA ("S&P Indexes vs Active Funds") reports is an easily digestible approach to seeing this.

So, you say: "I won't use an average manager. I'll use a superior manager." Easy to say, impossible (statistically) to do. Again, S&P to the rescue with their reports on "Manager Persistence."

Sure, managers (including you) can get lucky and you can get lucky picking a professional manager, but the odds are unquestionably against you. Though the investment press and the active managers try to hide these facts from you, they are irrefutable. Do the research for yourself.

Now ... back to VTSMX: IMO MIFlyer was a little optimistic promising 8-11%, since the total return of the market over most of a century is less than that. But what he can guarantee is that you will beat most professionals who invest in the total US stock market. (Incidentally the Russell 3000, a fairly representative total market index, returned 4.42% during the period 10//2/2000 through yesterday. Index funds will always return slightly less than their tracked indices, but it's a tiny amount compared to the costs of an active manager.)

Now, moving from middle school to high school: The proven way to get superior returns is with asset allocation strategies. At it's simplest, this means buying assets whose returns are negatively correlated or uncorrelated. "Negatively correlated" means, for example, that in a two-asset portfolio one asset goes down whenever the other goes up. This is the essence of "modern portfolio theory," which is far beyond the scope of a pilot board.

There are many relevant articles out there. Here are a few:
http://www.forbes.com/sites/rickferri/2014/03/24/3-to-1-odds-favor-index-investors/
http://money.usnews.com/money/blogs...-reasons-to-add-index-funds-to-your-portfolio
http://www.nytimes.com/2014/07/27/y...r-way-you-might-beat-a-stock-picker.html?_r=0

Responding to the OP's original concept, the unstated premise was that it is possible for an active manager to "beat the market" if he can get enough good ideas and advice. Setting aside the question of whether good ideas and advice are obtainable on the internet, the statistics say that this is very unlikely to work. It took me maybe 20 years and cost me a lot of money before I figured this out. My point in posting is to discourage others from following me on this path.

Oh, and spare me the chest thumping stories of how many years you have outperformed the market. Even a monkey flipping coins will get a run of seven heads once in a while. If you're a lucky monkey, good for you. Before you do too much chest-thumping, however, read Taleb's Fooled by Randomness.
 
When I got out of college, I had a spare $15,000. I started to put it in Apple stock. OSX was gaining traction and I thought the new iPod thingy was neat, except it didn't work with Windows. It was $13/share. I bought a truck instead.

I passed on the Google IPO thinking "What do they sell?"

I did pretty good with Facebook, not so hot with zynga.
 
bartmc said:
When I got out of college, I had a spare $15,000. I started to put it in Apple stock. OSX was gaining traction and I thought the new iPod thingy was neat, except it didn't work with Windows. It was $13/share. I bought a truck instead.

I passed on the Google IPO thinking "What do they sell?"

I did pretty good with Facebook, not so hot with zynga.
Click to expand...
Yeah, It's all about luck. I know a couple of lucky monkeys who made a lot of money in Apple and consequently consider themselves to be investment geniuses.
 
what I had envisioned when I read this thread title was something like this:

everyone submits their 10(?) stock picks by Monday morning, 9amEST. then whoever has the most gains by EOD or EOW wins, I dunno, a happy ending? and bragging rights, of course. but, mostly a happy ending.
 
eman1200 said:
what I had envisioned when I read this thread title was something like this:

everyone submits their 10(?) stock picks by Monday morning, 9amEST. then whoever has the most gains by EOD or EOW wins, I dunno, a happy ending? and bragging rights, of course. but, mostly a happy ending.
Click to expand...
That is kind of what I had in mind too, or at least part of it. Some discussion about those stock ideas would have been part of it. But now I realize it would be like all the other threads and turn into a prick measuring contest.
 
Nate's response about VTSMX, like most posts made of 1 minute's worth of Google-Fu to win an internet argument, is only narrowly correct. I don't believe he intended to cherry pick, but that still was the net result (along with a hint of confirmation bias;)). A person who bought a fixed dollar amount of it one time, 15 years ago, would have received the 4.5% annualized return.

But that's not how most people invest. Some will have signed up to have the distributions automatically be reinvested into the fund, some (like MIFlyer suggested) continue to buy a certain amount every month, and some let their emotions carry them to buy more when things look great and sell out when they can't take the pain when things suck. This is dollar-weighted return, and for undisciplined investors, these returns are even less than what's shown on these mutual fund glossy sheets (see Aleph Blog posts: I, III, IV, V, VI - couldn't find part II in under a minute :D)

Also, see this for how bad the "average investor" is: http://www.ritholtz.com/blog/2015/01/asset-class-returns-vs-the-average-investor/

I believe the long-term (i.e. > 10 years) average returns for the S&P are in the neighborhood of 10%, so VTSMX's 4.5% return teaches us something else very important: that the price you pay for an asset (and its earnings stream) greatly determines the returns you get. Overpay, and you don't look so good. Underpay, and you look like a genius. However, I don't agree with MIFlyer's assertion that you'll have "no worries" with VTSMX. You'd have to suffer through some very large drawdowns that will seriously test your will. Better keep the Mylanta close by.
 
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eman1200 said:
what I had envisioned when I read this thread title was something like this:

everyone submits their 10(?) stock picks by Monday morning, 9amEST. then whoever has the most gains by EOD or EOW wins, I dunno, a happy ending? and bragging rights, of course. but, mostly a happy ending.
Click to expand...

JOhnH said:
That is kind of what I had in mind too, or at least part of it. Some discussion about those stock ideas would have been part of it. But now I realize it would be like all the other threads and turn into a prick measuring contest.
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End of day/week? The original post was about "investing." Judging stock-picking acumen over such a short time is nothing more than gambling or luck.

I'll tell you how these "stock-picking" contests are won though: pick from the sub-$5 stock lists. Every day, you'll see those in the top % winners (and losers) on Yahoo Finance.
 
rpadula said:
End of day/week? The original post was about "investing." Judging stock-picking acumen over such a short time is nothing more than gambling or luck........
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Ya. It's called "just for fun".

And a happy ending, of course.
 
A POA investing thread!?

:popcorn:

Guys, guys! You should get into stock ABC and fund XYZ. They're as safe as slipping with full flaps and as sure as Geico's dead-sick landings.
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Yup, I'm sure it would lead to really productive discourse.
 
I don't know the first thing about investing and I think it'd be a fun and informative exercise. With internet dollars of course.
 
Keep things simple while at it, no need to clutter up tax time. That means do most of it inside a 401k, IRA or similar. Not that Uncle Sam won't be snooping around for a cut when they see the opportunity.
 
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airdale said:
Now ... back to VTSMX: IMO MIFlyer was a little optimistic promising 8-11%, since the total return of the market over most of a century is less than that.
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And that's *exactly* what I said. It's an *index* fund with low fees. It will match the market.

All the rest of the things you posted, I did not say. Nor argue. All are readily available in investing books at the public library.

You may have mistaken me for someone else.

The OP of VTSMX also claimed I put words in his mouth. Read carefully. I did NOT say he said anything.

Folks gotta learn how to read literally, and not read what they want to see, before a text based investment thread is ever going to work here...

I got a kick out of being called a "manager" though. That was the most impressive fiction you manufactured out of thin air. Where did you get that from?
 
denverpilot said:
... Folks gotta learn how to read literally, and not read what they want to see ...
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Agreed. Look in the mirror, take a deep breath and read:

Easy, buddy. The post had nothing to do with you and no references intended to do so.

The only reason I quoted your post is that you correctly contrasted the VTSMX return with the 8-11% number from MIFlyer. I thought that was a good starting point for a realistic discussion of what one can expect from index funds. And, as you obviously agree, it ain't 8-11%.

OK?

Edit: Re-reading I can see that it would be easy to interpret the "you" personally. It was meant as a general reference to any reader. Sorry.
 
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I read this book recently: http://www.goodreads.com/book/show/4887219-retire-early-sleep-well

It was a succinct intro for me.


airdale said:
Actually that is a total return number, so includes dividends. But it doesn't matter. Here is the guarantee you get with index fund investing:

You will get returns that are higher than the vast majority (70-80%) of the professional money managers for whom the chosen index is the benchmark. Example, if you are buying a large cap index, you will beat most of the actively managed large cap funds.

You can come at this analytically as follows: The market is professional money managers, so the average performance of the market has to be the average performance of professional money managers. Further, the returns that the money managers deliver to their clients are guaranteed to be lower than the average market return due to fees, transaction costs, bid/ask spreads, etc. A Nobel Prize winning economist explains in slightly more detail: http://web.stanford.edu/~wfsharpe/art/active/active.htm

There is also a mountain of statistical evidence that this is true. Reading the biannual S&P SPIVA ("S&P Indexes vs Active Funds") reports is an easily digestible approach to seeing this.

So, you say: "I won't use an average manager. I'll use a superior manager." Easy to say, impossible (statistically) to do. Again, S&P to the rescue with their reports on "Manager Persistence."

Sure, managers (including you) can get lucky and you can get lucky picking a professional manager, but the odds are unquestionably against you. Though the investment press and the active managers try to hide these facts from you, they are irrefutable. Do the research for yourself.

Now ... back to VTSMX: IMO MIFlyer was a little optimistic promising 8-11%, since the total return of the market over most of a century is less than that. But what he can guarantee is that you will beat most professionals who invest in the total US stock market. (Incidentally the Russell 3000, a fairly representative total market index, returned 4.42% during the period 10//2/2000 through yesterday. Index funds will always return slightly less than their tracked indices, but it's a tiny amount compared to the costs of an active manager.)

Now, moving from middle school to high school: The proven way to get superior returns is with asset allocation strategies. At it's simplest, this means buying assets whose returns are negatively correlated or uncorrelated. "Negatively correlated" means, for example, that in a two-asset portfolio one asset goes down whenever the other goes up. This is the essence of "modern portfolio theory," which is far beyond the scope of a pilot board.

There are many relevant articles out there. Here are a few:
http://www.forbes.com/sites/rickferri/2014/03/24/3-to-1-odds-favor-index-investors/
http://money.usnews.com/money/blogs...-reasons-to-add-index-funds-to-your-portfolio
http://www.nytimes.com/2014/07/27/y...r-way-you-might-beat-a-stock-picker.html?_r=0

Responding to the OP's original concept, the unstated premise was that it is possible for an active manager to "beat the market" if he can get enough good ideas and advice. Setting aside the question of whether good ideas and advice are obtainable on the internet, the statistics say that this is very unlikely to work. It took me maybe 20 years and cost me a lot of money before I figured this out. My point in posting is to discourage others from following me on this path.

Oh, and spare me the chest thumping stories of how many years you have outperformed the market. Even a monkey flipping coins will get a run of seven heads once in a while. If you're a lucky monkey, good for you. Before you do too much chest-thumping, however, read Taleb's Fooled by Randomness.
Click to expand...
 
airdale said:
Edit: Re-reading I can see that it would be easy to interpret the "you" personally. It was meant as a general reference to any reader. Sorry.
Click to expand...


That's what it was. I am usually very careful about the "you" pronoun in public posts. "You" can usually be replaced with "one" to make it clear if "one" is responding personally or to the assembled crowd. :)
 
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slight thread hijack: My high school daughter has $100,000 virtual account to buy stock. the object is largest gain in 75 days!

Anyone have suggestions for a QUICK gain potential?

(should I start a new thread?)
 
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Badger said:
slight thread hijack: My high school daughter has $100,000 virtual account to buy stock. the object is largest gain in 75 days!

Anyone have suggestions for a QUICK gain potential?

(should I start a new thread?)
Click to expand...
Throw darts at a list of under $5 stocks (as previously recommended), pick one. Buy $99,990 worth plus use the extra $10 to buy a nice rabbit's foot.

In this case, diversification is your enemy. Use darts to pick five stocks and the losers will dull the thrill of any winners. There is math behind this, but I am too lazy to work it out and type it in here.
 
airdale said:
Throw darts at a list of under $5 stocks (as previously recommended), pick one. Buy $99,990 worth plus use the extra $10 to buy a nice rabbit's foot.

In this case, diversification is your enemy. Use darts to pick five stocks and the losers will dull the thrill of any winners. There is math behind this, but I am too lazy to work it out and type it in here.
Click to expand...

sounds like a winning (or losing) plan. It'll let her sharpen the dart and throw!
Thanks
 
Badger said:
slight thread hijack: My high school daughter has $100,000 virtual account to buy stock. the object is largest gain in 75 days!

Anyone have suggestions for a QUICK gain potential?

(should I start a new thread?)
Click to expand...

If you don't mind some sphincter clenching I would say have a shot at VAG right now. :rofl:

Yes, I'm kinda serious, and no I'm not investing! hehheeeee
 
I can't find any company with VAG as ticker?
 
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