Two Plus Two Older Archives  

Go Back   Two Plus Two Older Archives > Other Topics > The Stock Market

Reply
 
Thread Tools Display Modes
  #31  
Old 11-06-2005, 02:50 PM
rockrock rockrock is offline
Junior Member
 
Join Date: Jun 2005
Posts: 2
Default Re: Another book question

[ QUOTE ]
[ QUOTE ]
To outperform, you need either inside information or access to the trading desks at the big brokerage houses.


[/ QUOTE ]

Why do you think that access to trading desks is going to help you with long term investments?? Specifically, what information do you think those traders possess that gives them an edge in long term investing? (I will note that knowledge of order flow does give them an advantage in short term trading)

[ QUOTE ]
Fama and French have a bunch of Nobel prize winning economists they run around with who say the same thing,

[/ QUOTE ]

Fama is also the director of research of Dimensional Fund Advisors, Inc., an investment advising firm with $69 billion under management Obviously, they have convinced a few people that they can beat the indexes [img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

Straw man!!

DFA website plainly states "Market efficiency is at the core of Dimensional's investment philosophy."

These funds are only available through a network of financial advisors (a discussion for another day) but the funds are all PASSIVELY MANAGED and widely regarded to be the finest mutual funds in the world. Some investors will pay an advisor just to have access to the funds (although its against DFA practices and they will withdraw fund access from advisor if they find out).

Vanguard and some of the ETFs offer similar advantages but DFA are the obligatory shiznit.

More info on what makes them so great here
Reply With Quote
  #32  
Old 11-06-2005, 03:03 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Scottsdale, Arizona
Posts: 224
Default Re: Another book question

[ QUOTE ]
More info on what makes them so great here

[/ QUOTE ]

Merton and Scholes are on the board? After their involvment with the Long Term Capital Management disaster, who would let these academics advise anyone on investing?
Reply With Quote
  #33  
Old 11-06-2005, 03:10 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Scottsdale, Arizona
Posts: 224
Default Re: Another book question

[ QUOTE ]

There are huge value funds run by people that have read this book. Dodge and Cox, the myriad vanguard value funds, fidelity, t rowe, americamn, oakmark, blah blah blah.

The information in the book is useless for the individual investor because too many people with too much money know are familiar with the techniques.


[/ QUOTE ]

Value techniques have been well known since the 1930's. It hasn't stopped talented value investors from beating the market.

This is because technique is only a portion of what you need. You also need patience, and judgement. That's what separates the best from the laggards.
Reply With Quote
  #34  
Old 11-06-2005, 03:12 PM
rockrock rockrock is offline
Junior Member
 
Join Date: Jun 2005
Posts: 2
Default Re: Another book question

[ QUOTE ]
[ QUOTE ]
More info on what makes them so great here

[/ QUOTE ]

Merton and Scholes are on the board? After their involvment with the Long Term Capital Management disaster, who would let these academics advise anyone on investing?

[/ QUOTE ]

This is one of the most (if not the most) highly respected mutual fund companies (along with vanguard).

There were a lot of people involved with LTCM and their demise. I hardly think the blame lies at their feet.
Reply With Quote
  #35  
Old 11-06-2005, 03:56 PM
FishHooks FishHooks is offline
Senior Member
 
Join Date: Mar 2005
Posts: 596
Default Re: Another book question

HIJACK
Reply With Quote
  #36  
Old 11-06-2005, 05:48 PM
DesertCat DesertCat is offline
Senior Member
 
Join Date: Aug 2004
Location: Scottsdale, Arizona
Posts: 224
Default Re: Another book question

[ QUOTE ]

There were a lot of people involved with LTCM and their demise. I hardly think the blame lies at their feet.

[/ QUOTE ]

Yes, it does. Merton and Scholes were founding partners of LTCM (along with John Meriwether) and actively planned LTCM's strategies. They actively solicited investors for LTCM. They don't deserve all the blame, just a huge portion of it.

If they were trying to prove that academics can't beat the market without taking excess risk, they were a huge success. Of course, Buffett knows how, which is why he declined to invest in LTCM.

And after reading my other replies, I guess you realized your Efficient Market mantra was out of date and just plain wrong, which is why you don't have any real response.
Reply With Quote
  #37  
Old 11-06-2005, 07:14 PM
Sniper Sniper is offline
Senior Member
 
Join Date: Jun 2005
Posts: 704
Default Re: Another book question

[ QUOTE ]
The average investor is competing with literally hunderds of billions of dollars seeking seeking to buy value stocks (and all other kinds of stocks as well).


[/ QUOTE ]

Individual investors are far more nimble than large funds can ever hope to be. Individual investors can take risks that funds can't.

Don't forget, the guys running these funds also don't have crystal balls, they are just individual investors with alot more money to work with and a larger support system, which gives them the disadvantage of higher costs to do what you can do rather cheaply, with only an investment of your time.

If you can identify the same opportunites as these funds do, before or slightly after they identify them, you will be very rich very quickly by riding their buying [img]/images/graemlins/wink.gif[/img]

[ QUOTE ]
How delusional and arrogant to think could do better.

[/ QUOTE ]

It is not arrogant, or delusional to think that an individual investor willing to put in the time, can and will outperform mutual fund managers... in fact, it is fairly close to a sure thing.

I personally know many long term investors that outperform the indexes, and I actively trade with many short term traders that are absolutely killing the markets!

My knowledge is based in reality, not some theoretical argument by someone who wrote a book [img]/images/graemlins/wink.gif[/img]
Reply With Quote
  #38  
Old 11-06-2005, 07:18 PM
Sniper Sniper is offline
Senior Member
 
Join Date: Jun 2005
Posts: 704
Default Re: Another book question

[ QUOTE ]
The big brokerage houses have "black boxes" generating amazing trading profits (see Goldman blowout quarter for example).

[/ QUOTE ]

I thought your arguing about long term investment methodologies... now you refer to GS Quarterly trading results generated by short term trading???
Reply With Quote
  #39  
Old 11-06-2005, 07:28 PM
Sniper Sniper is offline
Senior Member
 
Join Date: Jun 2005
Posts: 704
Default Re: Another book question

[ QUOTE ]
HIJACK

[/ QUOTE ]

Sorry Fish, but I hope you can see value in the discussion.

Certainly seeing DesertCat and myself clearly on the same side of this has to be worth it [img]/images/graemlins/wink.gif[/img]

As we've both said, investing or trading is not so easy that everyone can do it successfully; but, if you devote the right amount of time, energy and skill to whatever methodology you choose, you can be successful!
Reply With Quote
  #40  
Old 11-06-2005, 10:17 PM
FishHooks FishHooks is offline
Senior Member
 
Join Date: Mar 2005
Posts: 596
Default Re: Another book question

No it fine, I like a good discussion as much as anyone else. You guys allready gave me the advice I asked for, I just messing around with the hijack post.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -4. The time now is 04:02 PM.


Powered by vBulletin® Version 3.8.11
Copyright ©2000 - 2021, vBulletin Solutions Inc.