Why I Hate the Stock Market - Page 8
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Thread: Why I Hate the Stock Market

  1. #71
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    In 2015 S&P/TSX earnings yield was 2.8%. Me thinks that XIU paying 2.8% is not a "scam".

    If someone is charging 0.5% mer for XIU then it is a scam. Because XIU charges 0.18%. And XIC charges 0.06%.


  2. #72
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    Quote Originally Posted by gibor365 View Post
    I always win at rouletta or black jack when playing with "paper money" , never with real ones
    I have a 100% success rate when playing roulette with real money. Played once - in Monte Carlo. Bet on my age at the time, except with all the excitement I got it wrong by 1 year. And won.

  3. #73
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    Because XIU charges 0.18%. And XIC charges 0.06%.
    Who knows, maybe except MER, there are some very well "hidden" fees

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  5. #74
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    Quote Originally Posted by james4beach View Post
    Good point. We all know the theory, but implementation is very difficult.

    I like the permanent portfolio, myself. I'm sold on the methodology. In December 2008, this would have required that I sell a bunch of my gold and bonds -- the two assets that saved my butt -- and aggressively buy stocks just when they are the scariest. Would I really have carried through with this? (It's what the permanent portfolio methodology demands...)

    I hope I could, but I think this illustrates the challenge with sticking to a method. It's also why paper results always look so much better than what someone achieves in reality.
    It also illustrates that index, permanent portfolio, stock picking or allocating income a manager .... the challenge is there.


    OTOH, having sold some before the stock fell and bought a bunch Dec 2008 through June 2009 - I know I did and profited from it. I also skipped the "losses are too much, everything must be sold to be moved into GICs" that a co-worker did then regretted.


    Cheers

  6. #75
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    Quote Originally Posted by gibor365 View Post
    I'm just sure, that I wouldn't be able to do it ... Probably I would be able to add JNJ, MO or FTS, but sell a lot of bonds in order to buy crushing indexes?! No way....
    Thought you were a stock picker which would mean you'd be buying individual stocks (which is what I did).

    James is an indexer so I suspect he go the "No Way" route for stocks and buy indexes.
    The lack of mention of buying indexes suggested the permanent portfolio is more recent but I don't know.



    Quote Originally Posted by Oldroe View Post
    And that's about my memory. 3 to 6 etf's isn't a history.
    Not sure what you are looking for ... I am at 17 years with XIU so to me that's history.

    If the newer ETFs truly follow the same index, with no discretion for the manager and reasonable fees - being unpopular then dissolved or sold off are the reasons I can think of that one's performance would differ from XIU.


    Quote Originally Posted by mordko View Post
    Quote Originally Posted by Oldroe View Post
    And I read that XIU pay's 2.8 % where the rest of the div. money going. Seems like a .5 mer is a scam.
    In 2015 S&P/TSX earnings yield was 2.8%. Me thinks that XIU paying 2.8% is not a "scam".
    Personally, where one likes the index ... being charged 2.5% for the index is more the scam to me.


    Cheers

  7. #76
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    Quote Originally Posted by mordko View Post
    In 2015 S&P/TSX earnings yield was 2.8%. Me thinks that XIU paying 2.8% is not a "scam".

    If someone is charging 0.5% mer for XIU then it is a scam. Because XIU charges 0.18%. And XIC charges 0.06%.
    Only 2.8%? what seems to be the problem? Why pay those fees year after year just to have those cyclical dogs in there and a lower yield?
    We can not know things as they are in themselves, but only as they appear to us.

  8. #77
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    Quote Originally Posted by Eclectic12 View Post
    Thought you were a stock picker which would mean you'd be buying individual stocks (which is what I did).

    James is an indexer so I suspect he go the "No Way" route for stocks and buy indexes.
    The lack of mention of buying indexes suggested the permanent portfolio is more recent but I don't know.


    Not sure what you are looking for ... I am at 17 years with XIU so to me that's history.

    Cheers
    What did 17 years wuith xiu get you? 20 - 30 % ?
    We can not know things as they are in themselves, but only as they appear to us.

  9. #78
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    Quote Originally Posted by none View Post
    For me, my strategy is to engage in the method that maximizes the probability of ending a time period with the most amount of money - i.e expected value is maximized (in a statistical sense). To me, all the research for this points to indexing. Of course, there will be those that roll triple 6's a few times in a row that you will hear from loudly, those that roll a lot a snake eyes.... not so much.
    Yes expected value is the bees knees. But there are two expected values at play: One based purely on the investment, and the other that is based on the investment interacting with an investor's behaviour. I argue that the latter one is the reason why most people should index and the former is why others do other things and do better not based upon luck.

    Let's set up a quick example. Suppose an investment has a 90% chance of returning $100 and a 10% chance of returning nil. The EV of the investment without regard for investor behaviour is is (0.1 * 0) + (0.9 * 100) = $90.

    Now let's put "fears a loss more than values a gain" into play. Suppose the investor triple fears the loss situation and so effectively assigns it a 30% probability. As the probabilities must by definition sum to unity, by implication he also assigns the other positive outcome a 70% probability. Now the EV of the investment WITH regard for investor behaviour is is (0.3 * 0) + (0.7 * 100) = $70.

    So this particular security happens to be trading down one day as the fear of the loss situation starts to take hold in the marketplace and he sells me the security for $80. As far as he is concerned, he got $80 for a $70 EV stock and is happy. As far as I am concerned, I got a $90 EV stock for $80 and am also happy.

    The thing is which investor is more likely going to have more money over 20 or 30 years?

    I am sure someone much smarter than me can model this idea and actually estimate how much better over a lifetime of investing a strictly rational investor will do as compared to a fear biased investor. james4beach? none?

    I have a very fine 15 year return record and it is I have come to believe based upon exploiting this truth. I have stunningly bad times as discussed here in say February 2016, and stunningly good times. But the long term average going back at least 15 years is well above TSX.

    Consider TECK.B. Many won't go anywhere near resources for fear based reasons, the sector is cyclical and volatile. The thing is, they miss a truth that it makes no sense for a large century old company that makes long term useful things to range between $60 and $4 or $5 in a 1 or 2 year period not once, but TWICE. I don't know if TECK.B has a long term intrinsic value of say $20 or $30, but am quite sure it is neither $60 nor $4. I have not and do not ever intend to read a TECK.B annual report. Whatever is the summary numbers presented by TDDI is as far into things as I need to see. A good 5 minutes invested there. Maybe a few hours of reading reports and analysts over the past few years, mostly for entertainment value. I began buying at around $24 late 2014 IIRC and the last buy was under $5 early 2016 for an ACB of just under $10. In total, what a stunning mismatch between my EV on this one, and that of many others. I made a great amount of money not because I am smarter than others but because I am lucky enough to not be fearful and have a more realistic take on EV. If I were smarter, I'd skip the $24 buys on down and start out at $5 around the local minima price.

    This is why I like stocks. if I were an index investor, how much excess returns can be made if I am trying to exploit it's wanderings up and down of 10 or 20%? If my EV estimate is out by 10% points, well that can mean being on the wrong side of actual EV. Things are much clearer in a situation like TECK.B. If I stick a finger in the air and come up with EV of $20, then buying more at $5 to get an ACB at $10 works nicely as does selling at various points between $12 and $34. Yes, selling at $12 was a poor move from an EV point of view. However it made sense from a portfolio weight point of view at the time.

    Just to be clear, I have never in my life sat down and calculated an EV for a stock. I just make use of the fact that there is one out there and use the idea in the abstract.

    hboy54

  10. #79
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    Quote Originally Posted by Pluto View Post
    What did 17 years wuith xiu get you? 20 - 30 % ?
    Less than some of my individual buy / holds, more than some bad moves or timing issue ... more than GICs.

    I am eclectic after all.


    The part I was answering was the idea that ETFs are new to Canada / less than ten years old.


    Cheers


    PS

    Using buy & hold where the buy was in 2000 & the sell was 20 April 2017, for Compound Annual Growth Rate I get:

    XIU ... 3.97%

    Selected top index stocks range from 13.46%, a bunch seem clustered around 8% and the outliers are -100%.
    Last edited by Eclectic12; 2017-04-21 at 03:09 PM. Reason: added PS

  11. #80
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    Quote Originally Posted by Pluto View Post
    What did 17 years wuith xiu get you? 20 - 30 % ?
    Since inception in late 1999 (a little over 17 years), XIU returned 7.16% per year.

    $10,000 in XIU back then would have grown to $33,700

    I don't understand where you guys are getting these low figures for XIU.
    http://quote.morningstar.ca/QuickTak...&culture=en-CA
    https://www.blackrock.com/ca/individ...x-60-index-etf


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