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.
Indexing depends on active management to allocate capital; thus the two are parts of an ecosystem. The question is what is the equilibrium for the two, in the sense of stable shares of the market? We're not there yet, but at some point we will be.…
Standards have slipped, so more people get degrees. Consider: http://www.huffingtonpost.com/2013/08/12/1912-eighth-grade-exam_n_3744163.html
Nick de Peyster
Undervalued Stocks
My understanding is that real estate rehabbers hope to make 15%-18% profit margins on each flip. If they can complete the flip in 4 months the annual rate of return could be as high as 45%-54%. Problems happen when the market stalls out as the car…
Monte Carlo simulations have their role in planning, but even the best Monte Carlo simulation is limited by the extent to which the inputs accurately capture the range of likely future outcomes. Garbage in, garbage out.
Nick de Peyster
Undervalued…
Institutions call this "asset-liability matching" and it is at least 30 years old. I am not certain how this would apply to individuals. For example, what happens to your plan if you have an unplanned medical expense?
Nick de Peyster
Undervalued …
I think this is a question of follow through. If his tweets are followed consistently with action then political risk would seem to be high. If his tweets are him blowing smoke, then I would expect the market to figure it out and ignore them.
Nic…
Re profiting from the wall, instead of the obvious plays maybe one should look at the second- or third-order beneficiaries. E.g., real estate plays that might benefit, companies that might benefit from less Mexican competition, etc.
Nick de Peyster
"Some guys were much better than others at the forecasting game. Identifying this small elite group provides a useful service to us amateur investors." I disagree. One should expect some to appear to do well strictly due to chance.
Nick de Peyste…
The attraction to the stronger dollar doesn't make any sense to me, because it tends to make our exports less competitive and thus reduce GDP growth.
Nick de Peyster
Undervalued Stocks
I suspect he is trying to replicate Renaissance Capital's success. However, the more crowded the strategy becomes, the less likely it will remain profitable.
Nick de Peyster
Undervalued Stocks
Make your own cards. People will appreciate them much more. You can take a nice family photo and have cards printed up, or insert the photo into a generic card.
Nick de Peyster
http://undervaluedstocks.info
If you think it's bad now, just wait until the robots make serious inroads into the labor force. Yes there will be new jobs installing and repairing robots, but not nearly as many as those lost in the first place.
Nick de Peyster
http://undervalue…
You tell me what happens and I'll tell you which is the better investment. Seriously, why is this a binary choice? What about diversification?
Nick de Peyster
http://undervaluestocks.info/
In my experience, policy considerations (real or rumored) tend to be less important for future asset returns than valuation and momentum.
Nick de Peyster
Undervalued Stocks
In the current environment, 4% will require taking risk. You will have to decide which risk is worth it: credit risk, interest rate risk, currency risk, call risk, etc.
If taking risk is not appealing, what about reducing living expenses?
Nick d…
Tough choices for Mr. Trump and America: if trade grows the overall pie but suppresses the incomes of unskilled and semi-skilled labor who must compete with workers in the third world, do we reverse course and try the opposite? Or do we try some o…
In a 2014 paper, AQR noted the role of low-cost leverage in Buffett's returns. Not certain why that was left out in the article. http://www.econ.yale.edu/~af227/pdf/Buffett's Alpha - Frazzini, Kabiller and Pedersen.pdf
Nick de Peyster
http://unde…
High inflation is a great challenge. But with demographics and debt levels the way they are, is high inflation likely to be a problem soon?
Nick de Peyster
http://undervaluedstocks.info/
I think you have to weight the amount of desirable factor exposure against the expense ratio. It is difficult to do this without a lot of very expensive data. More than a few style ETFs are designed to maximize revenue for the investment adviser r…
I think it takes about five years to master the technical aspects of investing, assuming one has a good syllabus. The psychology aspect of investing is much harder and may be impossible to fully master. An advisor may or may not be able to help wi…
"If you have a time horizon of 5 years or longer, you should actually hope for a rising rate environment. You’ll be better off for it in the end."
I think that would depend a lot on what kinds of bonds you own right now. If you own bonds with a re…
In my experience, bad habits first are a result of not understanding the drivers of investment returns. Those bad habits can be fixed through training. The difficult-to-fix habits are the ones caused by behavioral bias and heuristics.
Nick de Pey…
