Comments on: Advisors on the Financial Crisis http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/ Helping you invest and prosper Sat, 11 Feb 2012 19:27:54 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Lewis http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-162961 Lewis Thu, 23 Oct 2008 16:30:16 +0000 http://www.canadiancapitalist.com/?p=1346#comment-162961 To help alleviate the effects of recession, National Education Foundation (NEF), the national nonprofit digital education leader, offers, on a first-come first-served basis, a Million Scholarships to Students, Teachers and Employees of Schools, Colleges, Gov, Nonprofits and Corporations. Take any of the 3,000 High Quality, “Best-of-the-Web,” IT, Business, Project Mgmt, Math, Science, SAT, ACT Courses and Certifications. To apply, visit www.cyberlearning.org/scholarships. Start taking courses rightaway! Or call 703-823-9999 To help alleviate the effects of recession, National Education Foundation (NEF), the national nonprofit digital education leader, offers, on a first-come first-served basis, a Million Scholarships to Students, Teachers and Employees of Schools, Colleges, Gov, Nonprofits and Corporations. Take any of the 3,000 High Quality, “Best-of-the-Web,” IT, Business, Project Mgmt, Math, Science, SAT, ACT Courses and Certifications.
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]]> By: Comment on Advisors on the Financial Crisis by Congratulations to … | advisordebts.com http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-162461 Comment on Advisors on the Financial Crisis by Congratulations to … | advisordebts.com Wed, 22 Oct 2008 06:08:13 +0000 http://www.canadiancapitalist.com/?p=1346#comment-162461 [...] Re­ad m­o­re­ he­re­ [...] [...] Re­ad m­o­re­ he­re­ [...]

]]> By: Congratulations to the Starbucks Gift Card Winners This Sunday | Credit Card Information http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-160491 Congratulations to the Starbucks Gift Card Winners This Sunday | Credit Card Information Mon, 13 Oct 2008 06:01:36 +0000 http://www.canadiancapitalist.com/?p=1346#comment-160491 [...] Capitalist spots an advisor who ecohoed my coworker’s advisor in saying that those who get out of stocks are the people that will never get back until it’s [...] [...] Capitalist spots an advisor who ecohoed my coworker’s advisor in saying that those who get out of stocks are the people that will never get back until it’s [...]

]]> By: Canadian Capitalist http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159536 Canadian Capitalist Tue, 07 Oct 2008 17:06:31 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159536 Dave: The reason why just buying the S&P 500 and holding it is a "gold standard" is that it is easy for an average investor to replicate for minuscule cost. Market timing, on the other hand, entails transaction costs, bid-ask spreads, capital gains etc. After accounting for these, does a strategy still beat the market? And if it does, why should it continue to beat the market in the future? Most strategies fail the first test. The few that seem to have worked in the past have a habit of not working any more. Why? The markets are adaptive systems. If I knew of a strategy that had a history of beating the market, I would adopt it. So would you. As would many other participants to the extent that what seemed a sure thing isn't any more. I have no idea what MKL and LUK are. BRK would be a good bet to outperform the S&P 500 as long as Buffett and Munger are around. But Buffett himself values BRK based on its intrinsic value as opposed to market value. If you can value if you are paying a reasonable price for BRK, then of course, you should invest in it. Dave: The reason why just buying the S&P 500 and holding it is a “gold standard” is that it is easy for an average investor to replicate for minuscule cost. Market timing, on the other hand, entails transaction costs, bid-ask spreads, capital gains etc. After accounting for these, does a strategy still beat the market? And if it does, why should it continue to beat the market in the future?

Most strategies fail the first test. The few that seem to have worked in the past have a habit of not working any more. Why? The markets are adaptive systems. If I knew of a strategy that had a history of beating the market, I would adopt it. So would you. As would many other participants to the extent that what seemed a sure thing isn’t any more.

I have no idea what MKL and LUK are. BRK would be a good bet to outperform the S&P 500 as long as Buffett and Munger are around. But Buffett himself values BRK based on its intrinsic value as opposed to market value. If you can value if you are paying a reasonable price for BRK, then of course, you should invest in it.

]]> By: Dave in Kanata http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159400 Dave in Kanata Mon, 06 Oct 2008 23:41:31 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159400 I agree with Brendan that I got lucky. It was actually this site that got me to read the book Juggling Dynamite. Between that book and the writings of people like Satyajit Das (among others), I changed my overall strategy and I got out. Now I am sitting on cash and ready to dollar-cost my way in. Though I agree that Mutual Funds are for suckers, I am not as convinced as many of you that (therefore) the “gold standard” strategy is a mechanical, shoot for the average one - albeit superior to 90% of mutual funds. My next lucky move, for the equity portion of my portfolio, is to - over the next several quarters - load up on BRK, MKL, and LUK and let them take care of my equity portfolio, including rebalancing (by the way, I have significant BRK which I did not and will not sell). These guys are the top, proven, long term value investors of whom you speak. Someone please tell me why this isn't a better, less risky strategy than just indexing the whole market. (Yes, I know MKL has a large position in BRK). I agree with Brendan that I got lucky.

It was actually this site that got me to read the book Juggling Dynamite. Between that book and the writings of people like Satyajit Das (among others), I changed my overall strategy and I got out. Now I am sitting on cash and ready to dollar-cost my way in. Though I agree that Mutual Funds are for suckers, I am not as convinced as many of you that (therefore) the “gold standard” strategy is a mechanical, shoot for the average one – albeit superior to 90% of mutual funds.

My next lucky move, for the equity portion of my portfolio, is to – over the next several quarters – load up on BRK, MKL, and LUK and let them take care of my equity portfolio, including rebalancing (by the way, I have significant BRK which I did not and will not sell). These guys are the top, proven, long term value investors of whom you speak. Someone please tell me why this isn’t a better, less risky strategy than just indexing the whole market. (Yes, I know MKL has a large position in BRK).

]]> By: ETF2X http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159391 ETF2X Mon, 06 Oct 2008 22:03:50 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159391 Care to elaborate on your statement Aleks? Most of the commercial timing sites I have visited have their past signals posted. Care to elaborate on your statement Aleks? Most of the commercial timing sites I have visited have their past signals posted.

]]> By: Aleks http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159390 Aleks Mon, 06 Oct 2008 21:55:23 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159390 The thing about market timers is that they only tell you when they're right. The thing about market timers is that they only tell you when they’re right.

]]> By: Brendan http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159370 Brendan Mon, 06 Oct 2008 19:16:31 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159370 Dave in Kanata got lucky. Luck is not a good strategy. You are never "fully invested" anyways. Assuming you are an earner, you are periodically adding to your portfolio. And if you are not an earner, you periodically rebalance, which has the effect of buying low and selling high (since you are selling part of your overperforming assets, and buying some of the underperforming assets). Dave in Kanata got lucky. Luck is not a good strategy.

You are never “fully invested” anyways. Assuming you are an earner, you are periodically adding to your portfolio. And if you are not an earner, you periodically rebalance, which has the effect of buying low and selling high (since you are selling part of your overperforming assets, and buying some of the underperforming assets).

]]> By: gene http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159364 gene Mon, 06 Oct 2008 16:47:19 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159364 Good debate in the comments about market timing. Back to the original post, it sure is interesting that these mutual fund salespeople aren't contacting their clients. I hate to see my portfolio getting killed, and I've been doing this diligently for 15 years. I'm used to periodic declines. I can imagine that investors with less day-to-day interest are very distressed. If their "advisors" aren't there to help calm and advise them, are they really doing their job? Good debate in the comments about market timing. Back to the original post, it sure is interesting that these mutual fund salespeople aren’t contacting their clients.

I hate to see my portfolio getting killed, and I’ve been doing this diligently for 15 years. I’m used to periodic declines. I can imagine that investors with less day-to-day interest are very distressed. If their “advisors” aren’t there to help calm and advise them, are they really doing their job?

]]> By: ETF2X http://www.canadiancapitalist.com/advisors-on-the-financial-crisis/#comment-159361 ETF2X Mon, 06 Oct 2008 16:06:48 +0000 http://www.canadiancapitalist.com/?p=1346#comment-159361 NN: You have assumed incorrectly - I don't use TA. We agree that TA is pretty much useless. CC: I have made statements on my site about the fact that the models' performance is short since they are based on double exposure ETF's which have been around for only two years and therefore long term conclusions cannot yet be made. The investment strategy used by each investor should be one that the investor is comfortable with and you are clearly comfortable with buy-and-hold. That's fine. That's what works for you. Others have bought on the dips. In particular, a number of investors on another forum were happy to buy Canadian banks on the dips starting last fall. That hasn't turned out too well needless to say. From my experience, unless we are in a strong bull market, it helps to have a timer. There are times when it just doesn't make sense to be a buyer. I prefer to see an uptrend in place before I start buying stocks. Fred NN:
You have assumed incorrectly – I don’t use TA. We agree that TA is pretty much useless.

CC:
I have made statements on my site about the fact that the models’ performance is short since they are based on double exposure ETF’s which have been around for only two years and therefore long term conclusions cannot yet be made.

The investment strategy used by each investor should be one that the investor is comfortable with and you are clearly comfortable with buy-and-hold. That’s fine. That’s what works for you.

Others have bought on the dips. In particular, a number of investors on another forum were happy to buy Canadian banks on the dips starting last fall. That hasn’t turned out too well needless to say.

From my experience, unless we are in a strong bull market, it helps to have a timer. There are times when it just doesn’t make sense to be a buyer. I prefer to see an uptrend in place before I start buying stocks.

Fred

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