Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
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The Difference Between A Prediction And A Probability
Ted made a terrific find here. The Link talks about the distinction between a prediction and a probability in a clear, understandable manner. Understanding that distinction should make us better investors.
Ted's referenced article also provides a Link to an earlier work by the author that talks about equity market's fat-tails. This also is an important distinction to understand. Here is the Link to that excellent piece:
This article demonstrates the shortcomings of assuming a Normal (Gaussian) curve for the distribution of equity outcomes.
The author wisely concludes that " In reality, the best we can do as investors is to understand and accept the fact that fat tails are an inherent part of the game. As an investor, you need to expect the unexpected and be prepared for multiple outcomes. As such, diversification in terms of asset class and strategy is your best defense in dealing with uncertainty and fat tails."
Another obvious investing decision tactic is to use the actual data (as given in the referenced article) rather than a theoretical Gaussian curve when assessing risk and real world probabilities.
Please examine the data summarized in both superior articles. It will be time well spent.
I am not an expert on the Laffer curve. I know less about tax dynamics than about the equity marketplace, which translates into not very much whatsoever.
The Laffer curve is just a simple model. It is definity not a " fact". Over the years, data have been collected that examines its vitality and usefulness. Here is a Link to a discussion of its history:
The opening comments in the referenced discussion clearly defines the proposed generic Laffer curve and its shortcomings: " the Laffer curve is a representation of the relationship between rates of taxation and the resulting levels of government revenue. Proponents of the Laffer curve claim that it illustrates the concept of taxable income elasticity—i.e., taxable income will change in response to changes in the rate of taxation."
Again, please don't assume that a proposed model is an "alternate fact". It is not! The proposed candidate model is an attempt to simplify and understand the mechanisms that drive what is being modeled. Some models succeed, most fail and are discarded. In the economics world, I suspect even successful models will need frequent adjustments and revisions as the dynamic economics change.
What is the difference between a proclamation and an indictment?
I just think the English language (at least) has enough words. Dunno why we want to keep adding words/phrases. If Brexit saves ink instead of Britains exit from EU, then BS saves space over Alternative Facts.
News media creates words / harps on utterances to get page views. People see something "new" and want to "know" about it. And now they are experts. Like in my world it is "Cloud Computing" - one of the most idiotic unnecessary term that does not need to exist.
By the way, Pension Partners is one of the most BS companies on earth. They first did a surprise attack on people with ATACX which is still standing, but then every one stood up as Brothers in Arms against BROTX, which is now toast. They do BS very well and for a while I was suckered into both fund in my IRA. Then I had an experience about manager investment in their own funds. I sold promptly.
These are the last people on earth I want to receive explanations of any kind. It's like asking Assad to explain human rights.
Thanks so much for your informative and direct comments. Your comments leave little uncertainty about your position on the matter. That.'s goodness.
I have read several articles from the Pension Partners organization. In general, I found that those articles offered sound albeit rather conventional investment advice. Since I consider myself an amateur investor I learn from most articles of that type.
Awhile ago, I did briefly consider the Pemsion Partners' fund offerings for inclusion in my portfolio. I quickly rejected the idea because of high costs and a limited performance record. Reviewing the current Morningstarr data on these funds makes me either a minor genius or just lucky. Lucky is the likely answer.
Those funds are a double barreled disaster with continuing high fees and poor performance.
But that doesn't mean their articles are worthless. It is not uncommon for folks to properly talk the talk, but fail to walk the walk. Execution and planning are two distinct functions. Good execution includes a timing component that escapes even the most intelligent investor. Investor returns are not a good measure of investor IQ.
So I will continue to read the Pension Partners articles while I continue to not invest in their mutual fund products. That's not totally wacky!
Thanks again for your contribution to this discussion.
Comments
Ted made a terrific find here. The Link talks about the distinction between a prediction and a probability in a clear, understandable manner. Understanding that distinction should make us better investors.
Ted's referenced article also provides a Link to an earlier work by the author that talks about equity market's fat-tails. This also is an important distinction to understand. Here is the Link to that excellent piece:
https://pensionpartners.com/fat-tails-and-expecting-the-unexpected/
This article demonstrates the shortcomings of assuming a Normal (Gaussian) curve for the distribution of equity outcomes.
The author wisely concludes that " In reality, the best we can do as investors is to understand and accept the fact that fat tails are an inherent part of the game. As an investor, you need to expect the unexpected and be prepared for multiple outcomes. As such, diversification in terms of asset class and strategy is your best defense in dealing with uncertainty and fat tails."
Another obvious investing decision tactic is to use the actual data (as given in the referenced article) rather than a theoretical Gaussian curve when assessing risk and real world probabilities.
Please examine the data summarized in both superior articles. It will be time well spent.
Best Wishes
Does this mean that the Laffer Curve is an alternate fact?
Thanks for reading my post and for replying.
I am not an expert on the Laffer curve. I know less about tax dynamics than about the equity marketplace, which translates into not very much whatsoever.
The Laffer curve is just a simple model. It is definity not a " fact". Over the years, data have been collected that examines its vitality and usefulness. Here is a Link to a discussion of its history:
https://en.m.wikipedia.org/wiki/Laffer_curve
The opening comments in the referenced discussion clearly defines the proposed generic Laffer curve and its shortcomings: " the Laffer curve is a representation of the relationship between rates of taxation and the resulting levels of government revenue. Proponents of the Laffer curve claim that it illustrates the concept of taxable income elasticity—i.e., taxable income will change in response to changes in the rate of taxation."
Again, please don't assume that a proposed model is an "alternate fact". It is not! The proposed candidate model is an attempt to simplify and understand the mechanisms that drive what is being modeled. Some models succeed, most fail and are discarded. In the economics world, I suspect even successful models will need frequent adjustments and revisions as the dynamic economics change.
Best Wishes
I just think the English language (at least) has enough words. Dunno why we want to keep adding words/phrases. If Brexit saves ink instead of Britains exit from EU, then BS saves space over Alternative Facts.
News media creates words / harps on utterances to get page views. People see something "new" and want to "know" about it. And now they are experts. Like in my world it is "Cloud Computing" - one of the most idiotic unnecessary term that does not need to exist.
By the way, Pension Partners is one of the most BS companies on earth. They first did a surprise attack on people with ATACX which is still standing, but then every one stood up as Brothers in Arms against BROTX, which is now toast. They do BS very well and for a while I was suckered into both fund in my IRA. Then I had an experience about manager investment in their own funds. I sold promptly.
These are the last people on earth I want to receive explanations of any kind. It's like asking Assad to explain human rights.
Thanks so much for your informative and direct comments. Your comments leave little uncertainty about your position on the matter. That.'s goodness.
I have read several articles from the Pension Partners organization. In general, I found that those articles offered sound albeit rather conventional investment advice. Since I consider myself an amateur investor I learn from most articles of that type.
Awhile ago, I did briefly consider the Pemsion Partners' fund offerings for inclusion in my portfolio. I quickly rejected the idea because of high costs and a limited performance record. Reviewing the current Morningstarr data on these funds makes me either a minor genius or just lucky. Lucky is the likely answer.
Those funds are a double barreled disaster with continuing high fees and poor performance.
But that doesn't mean their articles are worthless. It is not uncommon for folks to properly talk the talk, but fail to walk the walk. Execution and planning are two distinct functions. Good execution includes a timing component that escapes even the most intelligent investor. Investor returns are not a good measure of investor IQ.
So I will continue to read the Pension Partners articles while I continue to not invest in their mutual fund products. That's not totally wacky!
Thanks again for your contribution to this discussion.
Best Wishes
I guess if you have the time, you can use it however you want.