I completely agree with this. This is key to keep track of the market, right now we've experienced a historical moment in the markets in my opinion, something that will change the game forever, however, at the same time, some basic things always remains the same. So we have to be always opened to ideas and knowledge to really do this for a living.
Welcome.....Show Me The Money. A few thoughts: "......however, the only way to beat the SP500 is to time market, and that, in the long term, is very very risky, if not suicidal, unless you are very informed and educated in terms of both fundamental and technical analysis." My simple opinion....which is backed up by the vast majority.....nearly the totality.....of the academic research.......is that market timing DOES NOT work and therefore is NOT the key to beat the SP500, especially over the long term. LIKEWISE....Technical Analysis is also proven to NOT work by the academic research........and.....in my opinion has NOTHING to do with beating the general averages. There are.....however......people like Peter Lynch that have beaten the SP500 over a significant time period. Under his leadership.......Fidelity Magellan........ earned an annualized return of 29.2% during his time running it, more than twice what the S&P 500 earned during that time. He ran Magellan for 13 years. He outperformed the S&P 500 for all but two years. He outperformed the market by a mind-boggling 13.4% per year annualized. I DO DISCOUNT his performance.......somewhat........since it ONLY covers 13 years........1977 to 1990. I consider that a LONG TERM time period.....but also.......consider that a short enough time period that his results COULD be due to shorter term events or factors that WOULD NOT translate to achieving the same returns over a longer time period. What we are seeing with all the erratic and volatile market conditions......much of it being caused by the current day-trading FRENZY....... is EXACTLY what we saw with the day-trading FRENZY in the late 1990's. My opinion is that the current "new normal" will simply turn out......like all the previous "new normals"........to be the "old normal" when looked at through HINDSIGHT and TIME. My opinion is that the ONLY people that MIGHT beat the SP500 over at least 20 or more years will be those that follow a combined VALUE and GROWTH and MOMENTUM (with emphasis on the growth and momentum side) strategy using Fundamental techniques. In my opinion........to beat the SP500 over 20 or more years ......it is ABSOLUTELY necessary to capture the big gains produced by recognizing and substantially investing in those companies that are ONCE IN A LIFETIME business models. Companies like Microsoft, Amazon, Google, Nike, Costco, etc, etc. To do this requires MUCH MORE than being able to crunch Value or Growth data and numbers. It requires a RARE and partly INTUITIVE connection to and appreciation of marketing, business management, product line, psychology, human behavior, etc, etc. This is what people like Peter Lynch EXCEL at as investors and what separates them from all the other good analytical investors. It is all about being able to see and have the guts to invest in HIGH MOMENTUM.....ICONIC......and LONG TERM DOMINANT COMPANIES.......at a time when they are in their early to medium years. I also believe it also REQUIRES the ability and personality to be able to invest in a very concentrated fashion. I STRONGLY AGREE with Warren Buffett when he talks about the average investor KILLING or at least hindering their returns by DIVERSIFYING themselves to death. The above is........EXACTLY how and why........"I" have been able to BEAT the SP500 over a very long time. If you took out the returns that I have from being a very early investor in Costco, Starbucks, Microsoft, Nike, etc, etc, and a medium term investor in companies like Google, Amazon, etc, etc, I would DEFINITELY NOT be beating the SP500. BUT.......REALLY REALLY BIG BUT........beating the SP500 should NOT be the average investors goal. The goal should be capturing or nearly capturing the same level of gains as shown by the general unmanaged Indexes over the long term......20 or more years. Even that is a very difficult......but realistic.......goal. If you come within 1-2 percentage points.....you will ACHIEVE LONG TERM financial security and WEALTH. Now as to: "we've experienced a historical moment in the markets in my opinion, something that will change the game forever,......" To me, this is just saying we are in yet another......."new normal". Personally I dont believe we have seen ANYTHING change in the slightest. I dont see ANY historical moment in the markets right now other than the fact that we are experiencing a VOLUNTARY shut down of the entire economy due to a virus. This situation will be OVER in about 6-8 months. As a 45+ year investor, NOTHING going on now is any different than I have seen at times in the past. BUT.....as I said......WELCOME.....feel free to post your thoughts and portfolio and results. We have a good group of people on this thread and the TomB16 thread and ALL the threads on this forum. We ALL have our own style.........but we have one thing in common.........we are investors and we want to MAKE MONEY to secure our futures and family. We are ALL interested in investing ENOUGH to lurk or post on an investing message board. That makes us a very small, select, segment of the entire population.
I HATE to focus on.....TESLA. BUT....it is fun to play short term GUESSING games with this company. Here is one possible take........my semi-negative take......... on the next month or two for this company and all the young Robinhood day-traders that buy and sell it. 1. They MISS their profit numbers when earnings are reported. 2. There is a selling frenzy for a few days to a week or so. 3. As the doom and gloom sinks in that they are NOT going to be in the SP500 the speculative short term trading ramps up. 4. Waves of short term daily buying and selling escalate. 5. The SP500 committee decides to accept the stock into the SP500 ANYWAY as an exception to their guidelines. The committee does have the power to do this with important companies that should realistically be included. 6. The stock skyrockets on the news. 7 The stock continues to go up as all the index funds and other funds buy in. 8. The BIG swings in price and all the volatile trading evaporates as the inclusion in the Indexes and broad ownership stabilize the stock for the long term. 9. The MANIA in the stock as a crazy day-trading vehicle is over and at this point buying the company as an investment is a business decision for investors. As an alternative....my positive take is..........they make their profit number, go into the SP500 and after the BIG short term GAINS we settle into numbers 8 and 9 above. It will DEFINITELY be fun to watch what happens on July 22 and in the weeks that follow.
I seriously wouldn’t know what the near future holds for Tesla. It’s easy to forget just HOW MANY haters and people that want this company to fail there are out there. MANY. last year you would’ve been a laughing stock if u suggested getting into Tesla. I remember telling 2 guys at my gym, who’s opinion I respect highly, last year, that I’m gonna get into the stock market and buying Tesla and EBay. They both IMPLORED me NOT to get into stocks based on those picks. The talk of the town then was BOEING. This seems sooooo long ago since all it took was one good earnings report to shoot that stock to space (pun intended) I still have scars from all the negative talks about Tesla that I refuse to buy more. But if this was an APPLE or AMAZON I prolly would’ve piled up more shares in the past year.
I bought the hell out of Tesla last year, during the height of the media smear campaign, and mentioned it on Stockaholics. I don't recall a round of "kudos" from the membership. We still had people explaining to us that electric cars were pie in the sky and don't really work. Meanwhile, CNBC was bringing Bob Lutz out of memory care every two weeks to declare that Tesla was dead, they just didn't know it yet. The whole point of value investing is to find a good company that has been undervalued due to ignorance. I was super happy to onboard a significant quantity of Tesla but I had no idea, at the time, it would turn out nearly this well. I thought it would hit $1000 in 10 years, a 5x gain for me. I make no claims of being a guru or having more intellect than anyone else. I've done well by looking for companies that are: honest, hard working, and smart; in that order. Once these companies are found, I value them as best I can and look to buy them below my value price.
I guess I never really said kudos, but I've followed your posts the whole time and enjoyed reading your insight. You've definitely been far ahead of the curve of most on your belief in Tesla.
Thank you for being a generous person, T0rm3nted. I don't know a lot but happened to feel I had a decent understanding of Tesla. There are only three times I can recall, in 40 years of investing, I've had such a clear buy signal.
Tesla is dangerously going too high. Nobody believes more in Tesla and their mission/vision than I do. But the price its now absurdly high. It will go down, and will go down very hard, at least at mid term. The real question is how long the short-term skyrocketing trend will last. Once Tesla hits bottom, then will slowly (or not) recover to be then the stock that it is mean to be
"I bought the hell out of Tesla last year, during the height of the media smear campaign, and mentioned it on Stockaholics. I don't recall a round of "kudos" from the membership." WELL......that is because you dont pay as well as I do TomB16. BUT.....you do deserve "kudos" you have been right all along in your buying and confidence in the company to date. In fact.......YOU.......are the primary person that got me looking at the stock. So....THANK YOU. I finally got to look at the market results and my portfolio today. I was once again TOTALLY out of touch today. I have been pushing to wrap up a research paper that I have been working on. When the virus shutdown started in mid February, I decided to try to research a particular painting that I own. I ended up putting 350-400 hours over 5 months into this project researching old newspaper articles on Newspapers.com as well as other materials all over the internet, University libraries, Museum archives, books, articles, reference works, exhibition catalogs, etc, etc, etc. All I knew going into this project was the date......1927......and of course the subject matter of the painting. Nothing else was known. I now have completed a 38 page, footnoted, research paper documenting the name of the painting, it's provenance, and an exhibition history of 8 exhibitions. I have been able to document that this was a very significant painting by this particular artist. It was an absolute miracle that I was able to find this much information on an "unknown" painting that is nearly 100 year old. I will provide this information to select galleries, museums, auction houses, as well as one center for the study of this particular type of art. I want to try to make sure that all this information is not lost to history in the future. My other.......alternative motive.........in doing this research is to increase the value of this painting by documenting it as a very significant painting by this artist. This painting was not cheap when I bought it about a year ago.......but......it was significantly undervalued. That will not be the case anymore. Anyway I finally got a chance to look at the markets. ALL red in my account today but the dollar loss is pretty minimal considering. I ALSO lost out to the SP500 today by .19%.
You could still lose money. Might want to hold back on the appreciation for a bit .... lol! Also, I completely understand that my Tesla fortunes are a combination of deep study, knowledge, and luck. I have no pretence of it having been a sure thing. The point I was trying to make is it's important to do your own research and have confidence when people are telling you to stop posting because you're a moron. Sometimes, they are the moron. My post came off as "I told you so". That's unfortunate because that was not the thought process behind it. I'm proud to march to my own drum, good and bad, and feel fortunate to have caught some good luck in this particular case.
I take Cramer with a can of beer. Would not waste good beer in a bottle. The show is for entertainment. It is television. Some of his advice is good. He is like most of us. He makes mistakes also. Do your own research. Hey a 2nd opinion. What if you went for a meeting with a wealth manager, and he had props, sound effects, and raised his voice while wildly flailing his arms during the consultation?
"You could still lose money. Might want to hold back on the appreciation for a bit .... lol!" YEAH.....that is why my position is TINY.......very tiny. BUT......if I lose money it will be ALL your fault. The EV industry will shake out over the next 10-30 years. It is totally unknown what the end result will be. "My post came off as "I told you so". I did not see it that way. Seemed low key and factual to me........perhaps a little tongue in cheek. Nothing wrong with having a little bit of fun while posting. Markets seem to be trying to figure out what to do today.
A go nowhere day for the markets today. EXTREMELY tiny loss today........but......bigger loss to the SP500 by .34%. The fact that Justice Ginsberg has metastatic pancreatic cancer.......again........I suspected she had it all along with her various hospitalizations with flimsy reasons given........means the ELECTION is going to be RAMPED up even more. It is going to be INSANE and that insanity is NOT going to be good for the economy or investors. My non-tech holdings are propping me up this week. That is EXACTLY what they are supposed to do along with their dividends. DOW year to date (-6.54%) For this week +2.29% SP500 year to date (1.19%) For this week +1.25% Actually the averages did better than I thought. The week seemed kind of sloppy and go-nowhere......but......the weekly gains in the Dow and SP500 EXCEED what I expected.
There is MUCH that is TELLING and PREDICTIVE in this little article: U.S. passive stock funds back in demand as investors seek steadier returns https://finance.yahoo.com/news/u-passive-stock-funds-back-133503841.html (BOLD is my opinion OR what I consider important content) "(Reuters) - U.S. passive equity funds have started to witness inflows after a two-month hiatus as investors flock to rising equity markets, but prefer shadowing indexes to picking stocks. Data from fund research firm Refinitiv Lipper showed passive equity funds, which are mutual funds that mirror stock indexes, attracted $860 million in June, after a combined outflow of $24.5 billion in the previous two months. On the other hand, active funds where fund managers promise selective stock investing to beat index performance, witnessed sharp outflows in every month in the first half of this year. Analysts said June marked a return to the long-term trend, in which passive funds attract a larger proportion of equity investments compared with active funds. Passive funds outperformed active funds in terms of price returns during 9 of the past 10 years, the data showed. "While markets are swiftly recovering from the COVID-induced drawdown, the cash which rushed to the sidelines has a tendency to find its way back into the market in the easiest and most fluid manner possible: passive," said Michael White, portfolio manager at Picton Mahoney Asset Management. "There is massive pent-up demand and ample liquidity furnished by both monetary and fiscal policy," he said, referring to liquidity from stimulus measures as lockdown restrictions to curb the spread of the new coronavirus are gradually eased. According to Lipper data, money market funds attracted $988.3 billion in the first half of this year, while equity funds saw an outflow of $171.7 billion. The demand for passive funds has also been driven by the narrow stock-market rally, with investors favoring well-established large-cap stocks which are already part of the major stock index, analysts said. The market-cap weighted benchmark S&P 500 index <.SPX>, which allocates more weighting to the performance of large-cap stocks, has recovered most of its first-quarter losses and is just down 1% for this year. On the other hand, the equal-weighted S&P 500 index <.SPXEW1>, which weighs all stock constituents equally, is still down 10% so far this year. With large-cap stocks boosting indexes, some analysts expect the demand for active funds to flag further in coming months. "Given the manner that the stock market, and therefore passive funds, have rebounded quickly, it forces investors to question their allegiance to active managers," said Matt Ahrens, chief investment officer at Integrity Advisory. "The one time these higher-cost managers are supposed to really offer a benefit is when the market is volatile, and many failed to perform." "Market leaders like Microsoft, Apple, Facebook and Amazon continue to power the market higher, and given their weightings in passive investments, they make it nearly impossible for active managers to keep up. I expect we'll continue to see market inflows to passive investments, especially in stocks." MY COMMENT May lessons and important date that will impact the next 6-12 months here. 1. There is lots of money siting on the sidelines that is starting to come back into stocks and funds. 2. Active managers have NOT been able to outperform passive funds for 9 of the past 10 years. The.........in my opinion....DUMB argument.....that active managers will do better in volatile or erratic times is unproven and I would predict TOTALLY WRONG. If any group of investors shows classic herd behavior during any crisis.......it is the professionals. 3. Equal weighted Index Funds......in my opinion, NOT something I would EVER be interested in. When I own an index fund I want to benefit from the momentum of the BEST stocks in the fund. I INTENTIONALLY want the holdings to be weighted. Over time the most successful companies will........"weight"......... to the top of the list. This.....to me.....is the primary way that Index Funds stay relevant to current market and economic conditions driving the markets. It allows investors to participate in CURRENT economic trends and upward momentum. 4. As USUAL.......investors, are 2-3 months behind in their BEGINNING to come back into the markets. AND......this is ONLY the begining. It will take YEARS for many investors to come back into stocks and funds. This will......of course......KILL long term returns for those investors. This ALSO shows that there remains a TON OF MONEY.........(investing term of art).......on the sidelines waiting to come back into stocks and funds in the future........a positive thing.
Certainly, value investors like me or anyone who believes in the WBI as an indicator are either out of the market or holding back reinvestment. As of Februrary 2020, there was record money on the sidelines so I doubt that has changed in the last few months.
I was thinking about the Tesla........recent run up in price. It REMINDS me of the early days in Microsoft. The difference is that Microsoft.......like most stocks back than......would do stock splits when its share price got up into the $100-$125 or above range. Here......as a vague comparison.......is the stock split history for Microsoft: Sept 21, 1987 2 for 1 April 16, 1990 2 for 1 June 27, 1991 3 for 2 June 15, 1992 3 for 2 May 23, 1994 2 for 1 Dec 9, 1996 2 for 1 Feb 23, 1998 2 for 1 March 29, 1999 2 for 1 Feb 18, 2003 2 for 1 The MAJORITY of the BIG gains in Microsoft occurred between the years 1990 and 1999. In......very lose.......general terms.....the stock was gaining about 100% or more between each split. From April of 1990 to March of 1999 MSFT split seven times. THIS is what the EXPLOSIVE GROWTH in Microsoft looked like back than. For comparison to TESLA.........I cant remember the exact date that I first purchased MSFT......whether I got in on the April 16, 1990 split of if my first split was in June of 1991. I BELIEVE I purchased after the April 16, 1990 split. I scraped together ALL liquid cash that I could at that time without having to cash anything in. The amount was $80,000 and that purchased 1000 shares. I than rode the stock till some time in 2002. So my initial shares with splits grew to about 36,000 shares ..........in about........EIGHT YEARS. Microsoft was the Tesla of its time back than in terms of explosive growth. So......using those general numbers.........$1000 invested in Microsoft before the June 1991 split would have grown to.........about..........$45,000 after the March 1999 split........about a 9 year time frame. As a.......general comparison here is the gain on $1000 invested in Tesla: "Tesla’s stock surged a whopping 23% on Tues. Feb 4, 2020, pushing its market value up more than 3,600% since the electric-car maker first sold stock in 2010. Its current share price is hovering at around $950. If you invested back then when the initial public offering’s price per share was just $17, your investment would have paid off. Nearly a decade later, a $1,000 investment in Tesla made in 2010 would be worth more than $36,000 as of Feb. 4, 2020, according to CNBC calculations. By comparison, a $1,000 investment in the S&P 500 would have earned a total return of just over 281% over the same period." Add in the gains in Tesla since Feb of 2020 to today and that is your comparison to Microsoft in their GLORY DAYS.
looking back is nice. i remember not buying apple stock in 1997 - considering it a to big risk. same with facebook 2012. investing in Google in 2004 would have paid off too. studying coming IPO's is important - but a lot of work. so what are the starting Apple's, Amazon's, Microsoft's, Samsung's and Google's right now?
What do you guys think about Ray Dalio All Weather investment system? I have about 15% of my portfolio invested that way and yes it does lower the risk and volatility but the returns are not over 8% annually.
Another interpretation of this could be that business owners are retiring and getting into fixed income index/trust funds. I literally had this discussion with my wife a couple of weeks ago. We have properties and a business that generates us approx 5% of the properties worth. Operating this for almost 2 decades and going through such heavy weight disasters like 9/11, 2008, heck even superstorm sandy, and now this, really made me think about selling everything and investing in a fund that will generate me approximately the same kind of return with much less worries or stress. The loss of revenue for most business owners in the past quarter has probably led them to the same debate and im willing to bet that some have done just that - sell their properties/businesses and invest in those funds.
