tag:blogger.com,1999:blog-2875915890415125655.post4807052746225961172..comments2023-05-18T10:37:34.608+01:00Comments on <a href="http://www.retirementinvestingtoday.com">Retirement Investing Today</a>: Snakes and LaddersRetirementInvestingTodayhttp://www.blogger.com/profile/03088383743670046657noreply@blogger.comBlogger31125tag:blogger.com,1999:blog-2875915890415125655.post-67824183956006441332018-02-19T14:11:27.515+00:002018-02-19T14:11:27.515+00:00"No - I don't back myself to pick the act..."No - I don't back myself to pick the active investments to outperform the market . I pay someone to do it for me - but I give them quite a hard time with my quest for information , evidence , strategic thinking and links to articles and access to their own research"<br /><br />Ahh, I think the penny is dropping on the zero-sum argument? I'm reminded of the Upton Sinclair quote,The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-27927333266255539942018-02-19T11:56:28.968+00:002018-02-19T11:56:28.968+00:00Haha - writing is hard! Thats why I'm rarely s...Haha - writing is hard! Thats why I'm rarely surprised when smart people take a long time to write books, and am completely perplexed when not so smart people bang out amazon e-books at a rate of a several per day.The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-61689081317119256692018-02-19T09:23:53.268+00:002018-02-19T09:23:53.268+00:00A speadsheet is something is use occasionally but ...A speadsheet is something is use occasionally but really something for wealth, assets and key discretionary expenses would probably focus my mind. I will buy a laptop a get on it...no really, I will. My work laptop is great but I need to start my independence from work. <br /><br />Cash is king for me today but you know my 'off set' position with mortgages so I can afford a 5% drop never Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-74414274598260881382018-02-18T18:05:05.785+00:002018-02-18T18:05:05.785+00:00Hi RIT and The Rhino ( and anyone else who's s...Hi RIT and The Rhino ( and anyone else who's still there ) . No - I don't back myself to pick the active investments to outperform the market . I pay someone to do it for me - but I give them quite a hard time with my quest for information , evidence , strategic thinking and links to articles and access to their own research .I think you can probably believe that ( about the hard time ! )stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-21138412612848687352018-02-18T16:45:08.379+00:002018-02-18T16:45:08.379+00:00"I doubt I will convince anyone with this pos..."I doubt I will convince anyone with this post as my powers of articulation are also woeful. One of the key reasons I don't write a blog."<br /><br />It hasn't stopped me... English grammar and articulation have never been my strong point. I think I can spell ok though. Learnt that by rote.RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-30408249721497991242018-02-18T16:21:08.224+00:002018-02-18T16:21:08.224+00:00When you're wrong as often as I am it does bec...When you're wrong as often as I am it does become a cause for concern.<br /><br />Is it possible for all active fund s to outperform the market? Yes but only if those active fund are a sub set of all market participants.<br /><br /> Is it possible for all market participants to outperform the market? No, that is impossible. As for every transaction there is both a buyer and a seller meaning The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-71339595681041914272018-02-18T14:03:07.669+00:002018-02-18T14:03:07.669+00:00"...it does not help clarify what investing i..."...it does not help clarify what investing is all about". You are right that this is definitely what is important. Getting the best total return for a given risk profile.<br /><br />With this in mind do you back yourself to pick the active investment/s that is/are going to outperform the market for the next 40 years? I know I don't and that's why I diversify across countriesRetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-7348987677719394292018-02-18T13:56:29.234+00:002018-02-18T13:56:29.234+00:00"They have assumed that a fund that disappear..."They have assumed that a fund that disappears must be classified as a failure." Thanks for that, most interesting and food for thought. You can't just include survivors either, as you suggest, as a simple thought experiment would give outperformers a better chance of survival so would skew the data in the other way.<br /><br />Another thought experiment though. I'm a RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-38490902537170589392018-02-18T13:42:22.244+00:002018-02-18T13:42:22.244+00:00But your " zero sum " then only applies ...But your " zero sum " then only applies to the one pension fund in question and also only the one OEIC in question . Don't you see how ridiculous that argument is ? It doesn't mean anything , it does not help clarify what investing is all about - it is irrelevant.stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-69254301962559473352018-02-18T13:36:23.904+00:002018-02-18T13:36:23.904+00:00Hi RIT - just had a quick look at the Morningstar ...Hi RIT - just had a quick look at the Morningstar link .<br /><br />The results look impressive - in fact so impressive they are almost " too good to be true "<br /><br />How has this come about ?<br /><br />The charts are based on a judgement of success . Admittedly they declare on what basis they judge success but I think their methodology is flawed ( leading to the squewed results )<stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-78637215744928781692018-02-18T13:35:29.966+00:002018-02-18T13:35:29.966+00:00"what about all the pension funds , life insu..."what about all the pension funds , life insurance companies , IT's , companies themselves , hedge funds and private equity owning the underperformers" They can only be trackers (inc pseudo trackers) or active. As far as I'm aware there is no other investment type in this category. The sum of all of them are the market.<br /><br />So if a pension fund underperforms a RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-82641679446179666302018-02-18T13:14:17.501+00:002018-02-18T13:14:17.501+00:00Thanks RIT . Which example are you referring to ? ...Thanks RIT . Which example are you referring to ? I have mentioned quite a few - so which one is the relevant one for your Q " who owns all the underperforming companies " I am assuming it may be the example I quoted of all the Active funds ( OEICS ) outperforming the relevant index . If it is that - what about all the pension funds , life insurance companies , IT's , companies stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-87443439750027713322018-02-18T11:30:58.053+00:002018-02-18T11:30:58.053+00:00Agree trackers are not all the same but provided t...Agree trackers are not all the same but provided they track whatever index they are supposed to track less expenses then I'm happy to call them a tracker. If they are missing out companies of an index then provided they declare this as their index and measure themselves against it then I'm good with them being a tracker. So the FTSE100 minus Carillion tracker is a valid tracker RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-60509428534096491142018-02-18T11:14:51.010+00:002018-02-18T11:14:51.010+00:00The price of an individual company is at any point...The price of an individual company is at any point reached by the " market makers " pricing that company so as to trade it ( they don't make any money if no one is buying or selling ) So if the view is bearish on a company and sellers outnumber buyers the market makers will reduce the price so that at some point buyers are attracted back into trading as they view the company as stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-41317317566073418532018-02-18T11:01:21.498+00:002018-02-18T11:01:21.498+00:00First of all - trackers are not all the same . Som...First of all - trackers are not all the same . Some try to replicate the composition of the index exactly - others miss out some companies ( espec small ones ie those that only have a small representation in the overrall index performance ), others " sample " the companies that make up the index and others use derivatives . Then these so called trackers start to deviate from the index stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-82920059468278460542018-02-18T10:21:40.285+00:002018-02-18T10:21:40.285+00:00Your comment about the spreadsheet that’s your com...Your comment about the spreadsheet that’s your companion on the FIRE journey made me smile. <br />I have a whole herd of spreadsheet friends so I totally get what you mean :)Mrs Smelling Freedomhttp://www.smellingfreedom.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-3469288918942649882018-02-18T10:06:15.591+00:002018-02-18T10:06:15.591+00:00Who owns all the underperforming companies? They&...Who owns all the underperforming companies? They're the ones who are making up the zero sum game in the market. If it's not the active funds (as you say they all own the outperformers) it must be individuals who by definition must be holding more underperformers (as the number of total shares are a finite number in the market) and because of this are then active investors.<br /><br />I RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-42481216429714982002018-02-18T00:39:45.251+00:002018-02-18T00:39:45.251+00:00http://www.ftserussell.com/research-insights/educa...http://www.ftserussell.com/research-insights/education-center/how-are-indexes-weightedstringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-45497789668193480542018-02-18T00:21:40.336+00:002018-02-18T00:21:40.336+00:00Don't worry about being wrong sometimes RIT an...Don't worry about being wrong sometimes RIT and The Rhino - it happens to most of us at some time.<br />Sorry about the FT link - I am able to gift up to 20 articles a month but I think that has to be to an individual each time . The article was about additional fees that are added to active and passive funds without them being declared - I will post the Title and Author shortly.<br /><br />Istringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-242020449709895452018-02-16T10:30:23.218+00:002018-02-16T10:30:23.218+00:00I'm never particularly happy with being wrong
...I'm never particularly happy with being wrong<br /><br />That FT link is pay-walled<br /><br />My thoughts on the subject are in line with TIs:<br /><br />http://monevator.com/is-investing-a-zero-sum-game/<br /><br />http://monevator.com/is-active-investing-a-zero-sum-game/<br /><br />maybe you're talking about something a bit more sophisticated or nuanced? We may never know as you don&#The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-36170552535049248402018-02-15T16:20:55.265+00:002018-02-15T16:20:55.265+00:00Hi RIT - The Rhino seems to agree with you . To my...Hi RIT - The Rhino seems to agree with you . To my way of thinking you are both wrong but you seem happy with that.<br /><br />RIT - I saw this in the FT and thought it would be right up your street. Hope you can see the comments section as well.<br /><br />https://www.ft.com/content/dc59dd6c-068f-11e8-9650-9c0ad2d7c5b5stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-59246474724001525592018-02-14T11:23:21.358+00:002018-02-14T11:23:21.358+00:00@SV - i think it's pretty well understood that...@SV - i think it's pretty well understood that out or under performance of a market via active trading is zero-sum. I don't think there's a huge amount of confusion over what the term market means? I think RIT is on the money here. It's not quite clear what you're getting at?The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-41658417442691742062018-02-12T13:19:01.032+00:002018-02-12T13:19:01.032+00:00Hi RIT and others ( apologies for the ROT - must ...Hi RIT and others ( apologies for the ROT - must have been thinking of Robot )<br /><br />I think there are serious flaws in 2 of your concepts.<br /><br />Firstly - what is " the market ". Honestly - this is a fairly useless term as it will conjure up a huge number of different things to each individual . What do YOU mean by the term market ? Equities? Bonds ? Cash ? Forex ? Gold/Oilstringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-22781876720187438112018-02-11T14:26:59.586+00:002018-02-11T14:26:59.586+00:00I'm not sure I follow stringvest. All investo...I'm not sure I follow stringvest. All investors in a market are the market. Therefore, any investor (whether in an active fund or owning directly) who beats the market by £1 must have somebody on the other side who has under performed by £1 (excluding expenses).<br /><br />In your example of active funds not holding a mega cap that subsequently collapses surely on the other side of that areRetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-59689248660074319802018-02-11T13:50:56.005+00:002018-02-11T13:50:56.005+00:00Sorry to disagree ROT - but it is not a zero sum g...Sorry to disagree ROT - but it is not a zero sum game. However - it seems to be a fairly wide spread belief that it is .<br /><br />Obviously trackers and etf's score with their low costs - over years that all adds up . So a real tracker / index fund will out-perform a quasi- tracker active fund . But as far as " zero sum game " is concerned you could have a huge number of truly stringvestnoreply@blogger.com