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My Personal Finance/Investment Strategy My Personal Finance/Investment Strategy

09-14-2014 , 09:53 PM
There is zero chance that dogmoon makes a better risk adjusted return than the return of a general global asset class.
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09-14-2014 , 11:45 PM
Quote:
Originally Posted by dogmoon
I would take Berkshire over an Index for any time period because if we have a really bad collapse, the companies in Berkshire's portfolio, whether by owning outright or owning pieces, will outperform the garbage that will go to zero if the game ever played out in a fair way and some of the debt these unprofitable companies have comes home to roost.

Berkshire is far less at risk of a big plunge than crap indexes, that are filled with garbage. Those indexes aren't backed by what you think they are. Lots of bad companies in them. Not everyone will be able to get out when the crap hits the fan next time. Those stocks will plunge while Berkshire won't.

The time when people think an index is better than Berkshire is probably a time when the market is near a peak. I will call you a contrarian indicator with that statement, though I know that you are knowledgeable.
Index funds have outperformed the vast majority of active managers over the last number of decades. Funds with an army of guys with phd's who work round the clock can't beat the market over time but it sounds to me like you know exactly what you're talking about and you don't come across as a complete loser at all. What should we do with our $$$?

Last edited by _jimbo_; 09-14-2014 at 11:57 PM.
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09-15-2014 , 02:12 AM
I assume dogmoon is the latest incarnation of potleemit, aka dreddy.

If that turns out correct, and I'm 95% sure it will, I highly recommend you don't bother responding at all.

Last edited by Gonzirra; 09-15-2014 at 02:24 AM. Reason: EZ for me to remember because he sounds exactly like my busto father-in-law
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09-15-2014 , 09:25 PM
This will likely be my last finance post. Most, if not all of you, still do not understand what I am saying. It may indeed be the best course of action to put your HARD EARNED money into an index fund. But if you don't know why that is, and you are asking people on a message board about blindly putting money into a foreign index, and you are doing this at all-time market highs in one of the all-time yield chasing bubbles in history, then I advise you to hold cash and wait until the next time that stocks are THE WORST INVESTMENT IN THE WORLD.

All of the so-called experts missed out on getting huge amounts of money in at the lows in 2009. There will be a time when markets break down, and the breakdown will more likely than not have people running scared once again.

If you do some reading now, and at least have an understanding as to why you might want to index, then you will be better off than firing real money into an index at all-time highs. If, when you at least have an understanding of why you believe an index will outperform say, Berkshire Hathaway, or Exxon, or Proctor and Gamble, Kraft, or other powerhouses of the last 50 plus years, then go ahead and put your money into an index that will include a bunch of garbage.

Your worst case scenario is that down the road you decide to index and the markets are higher than they are now. Well, if that happens you will still be in a better position because you will actually be doing something with your money that you understand.

You can listen to people who suggest putting your money in at the all-time highs if you want. If you do that, and the market has a nice correction, you won't like the feeling. Everybody hates cash right now, as they are all chasing yield. You have a whole world economy that is filled with people who cannot stand to get zero percent interest on their savings and money market accounts. This is how you get to market extremes.

When this thing turns it will be pretty ugly. You will need cash in order to make some great buys when the prices are much lower. All of the Wall Street experts were fully invested at the top in 2007, and many of them were begging investors for more money so they could buy at the lows. As it turned out, they had to sell beaten down holdings in order to buy other beaten down holdings, and that is why there are close to zero stories out there of someone who held cash because he knew the market was phony, then got the money in near the lows. People may have held through the lows, but very few got in at the lows.

There are similar bad decisions in the system right now. In 2007, all of the bad decisions had been made, yet the Dow was at 14,000. It dropped from 14,000 to 6,500 in just over a year on poor decisions that were made between 2004 and 2006, mainly. Right now the system is full of individuals and groups who just love to buy high.

It will end badly, and most of these posters will disappear. This time around it is likely that there will be a multi-year slog, or even collapse, once there is a huge correction. Most people have been brainwashed into being true believers, and I expect they will be buying way too early on this long downturn.

No more finance posts from me.
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09-15-2014 , 09:57 PM
Oh so you are just another top caller who has been wrong over and over in your predictions. The facts don't lie. The major central banks are increasing quantitative easing programs, while America is slowly winding it down. The truth is we are experiencing record corporate profits, record growth, record share buybacks, record dividends, a 0 interest rate environment that will remain historically extremely low for years to come, a strengthening dollar pushing foreign investors into US securities, and an economy that is seeing moderate growth since the financial crisis. This all justifies a market to keep moving higher, and it is entitled to do so. Things don't have to get more expensive for it to keep going higher and you are naive for thinking otherwise. If companies keep increasing profits, revenue, and growth, it's pps can rise while any valuation multiple you want to use stays the same.

Will a correction come at some point? Undoubtedly. Will it be a massive crash? Unlikely. Are you going to time that correction and subsequent move higher perfectly? Absolutely not.
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09-16-2014 , 12:34 AM
Not worth it DF. His entire schtick is "you people are all idiots" mixed with extreme Warren Buffett worship. Pretty sure that was the same guy who said he was one of the top financial people in the world or something to that effect.
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09-16-2014 , 12:16 PM
Quote:
Originally Posted by dogmoon
No more finance posts from me.
1. Index funds beat an index of active mutual fund managers, hedge funds by wide margin.

2. http://www.multpl.com/shiller-pe/ markets might be overvalued, but so is the dollar which loses 6-10% of value every year.

3. Would you rather own a piece of every business in your home town, including terrible businesses, or would you rather own a group of those businesses that were owned by the most successful businessman in your town's history?

Most of the "successful" businessmen are like Ackman, Romney, Buffet, and Jobs. If you own companies by these clowns, Ackman may take out a hugh insider warrant position in Borders and watch it go bankrupt, you might be a successful investor in HCA or HNZ before jerks Buffett and Romney think they are gods and can use majority rule to take away the shares of the small investors, then you got a clown like Jobs who got lucky after being fired. Let along the massive fees these successful businessmen charge. I much rather own a company that is losing sales and has negative earnings in the bad part of town as they can improve.

4. http://www.cnbc.com/id/102004254

Last edited by steelhouse; 09-16-2014 at 12:27 PM.
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09-16-2014 , 02:30 PM
Quote:
Originally Posted by DickFuld
Will a correction come at some point? Undoubtedly. Will it be a massive crash? Unlikely. Are you going to time that correction and subsequent move higher perfectly? Absolutely not.
Well put. Anytime I talk to a market timer I'm just going to quote this post

*add in something about consequences of taxes even if you "have a tiny edge" and how that will wipe the edge out completely plus some...and that sums up my feelings perfectly*
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