Data on novel participation by retail investors

[hooligan]

please excuse photo quality

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[hooligan]

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[AstuteShift]

FED maintaining its mandate to force the masses to speculate

Master Go players they are

[hooligan]

fourth chart is the wildest . would love some explication by anyone smarter than i ...

[SOL]

It's quite simple. We spoke of this years ago when we stated that the Fed woud force everyone and his grandma to speculate. Astute also mentioned this above. WHen covid came along and everyone was locked at home and with apps like robinhood that gamefy the trading experience it's become one big game. Before this bull implodes Margin debt could soar north of 4 trillion.

Now the crowd is addicted to trading but there is still a large swath of traders that are not actively trading and sitting on the sidelines. Then you have traders that are allowing mutual funds, or investment advisors to manage their funds. These chaps will eventually decide they can probably do a better job. And when rates hit zero, the last hold outs will jump in. So while the market appears insane there is still plenty of firepower on the sidelines.

This is why we labelled this market "the market of disorder", for there will be no order to anything, well at least for those relying on conventional tools

[Triplethought]

It's quite simple. We spoke of this years ago when we stated that the Fed woud force everyone and his grandma to speculate. Astute also mentioned this above. WHen covid came along and everyone was locked at home and with apps like robinhood that gamefy the trading experience it's become one big game. Before this bull implodes Margin debt could soar north of 4 trillion.

Now the crowd is addicted to trading but there is still a large swath of traders that are not actively trading and sitting on the sidelines. Then you have traders that are allowing mutual funds, or investment advisors to manage their funds. These chaps will eventually decide they can probably do a better job. And when rates hit zero, the last hold outs will jump in. So while the market appears insane there is still plenty of firepower on the sidelines.

This is why we labelled this market "the market of disorder", for there will be no order to anything, well at least for those relying on conventional tools

I don't think most people will decide "they can probably do a better job". I think most people still won't actively trade. The Vogel/Buffet message of buying an index of the S&P 500 and holding it is still strong out there. I also think it is still relatively good advice for long term retirement funds. Yet another recent article about passive index funds beating most money managers:
https://finance.yahoo.com/news/spiva-ac ... 24715.html

I still wonder if an AI could watch the markets and do a better job than humans at investing. It seems the technology should be there right now. However anyone who has trained an AI that is kicking butt picking stocks has an incentive to keep it to themselves. My guess is the big trading houses may have such things actively recommending stock picks.

[AstuteShift]

It's quite simple. We spoke of this years ago when we stated that the Fed woud force everyone and his grandma to speculate. Astute also mentioned this above. WHen covid came along and everyone was locked at home and with apps like robinhood that gamefy the trading experience it's become one big game. Before this bull implodes Margin debt could soar north of 4 trillion.

Now the crowd is addicted to trading but there is still a large swath of traders that are not actively trading and sitting on the sidelines. Then you have traders that are allowing mutual funds, or investment advisors to manage their funds. These chaps will eventually decide they can probably do a better job. And when rates hit zero, the last hold outs will jump in. So while the market appears insane there is still plenty of firepower on the sidelines.

This is why we labelled this market "the market of disorder", for there will be no order to anything, well at least for those relying on conventional tools

I don't think most people will decide "they can probably do a better job". I think most people still won't actively trade. The Vogel/Buffet message of buying an index of the S&P 500 and holding it is still strong out there. I also think it is still relatively good advice for long term retirement funds. Yet another recent article about passive index funds beating most money managers:
https://finance.yahoo.com/news/spiva-ac ... 24715.html

I still wonder if an AI could watch the markets and do a better job than humans at investing. It seems the technology should be there right now. However anyone who has trained an AI that is kicking butt picking stocks has an incentive to keep it to themselves. My guess is the big trading houses may have such things actively recommending stock picks.

Most trading houses that I know use extensive technical analysis systems, Fibonacci, Elliot wave theory etc. they program their models using these systems and very few, if any use mass psychology as the main indicator to play with the market

AI will fail pretty poorly at first with the market since it will try to win in the most rational way in a irrational market that is driven by emotions first and for most.

Also, many of these traders are just doing a job, some hate it and some love it and some are mentally deranged like economists.

They don’t understand anything about themselves and yet try to rationalize the market. Hence why hedge funds are getting decimated

The old dinosaurs are going to get eliminated, experts really know nothing since they can’t see, hear or understand

[Triplethought]

Most trading houses that I know use extensive technical analysis systems, Fibonacci, Elliot wave theory etc. they program their models using these systems and very few, if any use mass psychology as the main indicator to play with the market

AI will fail pretty poorly at first with the market since it will try to win in the most rational way in a irrational market that is driven by emotions first and for most.

Also, many of these traders are just doing a job, some hate it and some love it and some are mentally deranged like economists.

They don’t understand anything about themselves and yet try to rationalize the market. Hence why hedge funds are getting decimated

The old dinosaurs are going to get eliminated, experts really know nothing since they can’t see, hear or understand

This comment may seem unrelated but when we quote how much up our portfolio is for last year do we calculate it with the "cash drag" or only for the money invested?? Suppose someone had 500K and decided to put 1/2 into Tactical investor stocks and 1/2 into cash due to the risk of the investment. A second person decided to put 70% into an S&P index fund and keep 30% in cash. A 3rd person puts the whole thing in safer Bonds and T-bills. These are reasonable scenarios because the S&P also has significant risk but arguably less because the entire S&P it is less risky than individual stocks.

Now we wish to compare these 3 investors returns. To be fair one would have to report the % increase last year on the WHOLE portfolio, not just the 50% put in Tactical investor plays (ie you calculate the returns WITH the cash drag). I suspect those who got above 200% returns are reporting on only the money they invested. And maybe that's fair if they are a 4th type of investor - the guy who puts 100% of his cash on the table and fully deployed into TI stocks. But I would submit a) he's taking too much risk b) he has no bullets for MOBO or FOBO events

[AstuteShift]

You can still generate those returns if you use leverage especially options since it reduces your cost basis compared to regular stock trading.

However risk is relative, noobies should not be in options, at least until the 3-5 year mark. Understanding how the market operates takes a while. Options can easily blow off your account and I don’t want anyone to experience that. I have seen a lot of traders go bankrupt from options

Also don’t forgot the right portfolio management, SOL suggests. His management style is very good and you always have some cash just in case for the big MOBO events.

Another thing is, we are spoiled here. Majority of investors think it’s impossible to beat the market, yet we are here generating double to triple digit returns.

[George1010]

Also don’t forgot the right portfolio management, SOL suggests. His management style is very good and you always have some cash just in case for the big MOBO events.

Another thing is, we are spoiled here. Majority of investors think it’s impossible to beat the market, yet we are here generating double to triple digit returns.

Astute you make a very salient point. Indeed we are spoilt here due to SOL's and his teams remarkable stock picking abilities. I know many traders that would be happy with 15% returns per year. Hell, even I would have been happy with 20% returns once an upon a time. So we need to keep those benchmarks in mind when we try to squeeze more profits.

This article seems to confirm what you stated earlier and these managers are getting hammered for the 11th year. We are indeed very fortunate to have stumbled up Sol and crew



Most active fund managers underperform the market for 11th straight year

In any given year, it's nearly impossible to predict what the market will do. Furthermore, it's incredibly difficult for an individual to put together a portfolio that generates market-beating returns.

According to new data from S&P Dow Jones Indices, 60.3% of large-cap equity fund managers underperformed the S&P 500 (^GSPC) in 2020. This marks the 11th straight year that pros lagged that benchmark.

Now, this isn't exactly news to many in the investor class. And thanks to people like Warren Buffett and Jack Bogle preaching the virtues of investing in cheaper, passively managed index funds, S&P estimates there are $11.2 trillion indexed to the S&P 500.

To be fair, many active fund managers aren't out to just beat the S&P 500 but are also trying to offer investors risk exposures that differ from what you get by mirroring the benchmark index.

For example, there are managers offering greater exposure to high-growth tech names like the FAAMG stocks. And they probably beat the S&P in 2020. Though, managers offering greater exposure to high-growth tech names like the FAAMG stocks have been lagging in 2021 to date.

https://finance.yahoo.com/news/spiva-ac ... 24715.html

[AstuteShift]

https://finance.yahoo.com/amphtml/news/ ... 24726.html

Ray Dalio is a complete nut case now, suggesting to buy stuff instead of saving and investing

These dinosaurs are going to get decimated

[Triplethought]

This article seems to confirm what you stated earlier and these managers are getting hammered for the 11th year. We are indeed very fortunate to have stumbled up Sol and crew


LOL that's the same article I linked to above