4 ms·

I'm not defending asset managers but your argument sounds specious: you only need to pick an asset manager once, whereas you need to pick stocks every day or se

• nostrademons 11y ago
  You only need to pick a stock once too. Or at most, once per several years. If you're trading stocks every day you're doing it wrong. And you have a lot more information available about stocks than you do about fund managers.
  • TheLogothete 11y ago
    Are you serious? You need a PORTFOLIO of stocks. It is an ONGOING effort.
    • tormeh 11y ago
      Nah. Depends on whether you're in it for the average or the variance. If you're in it for the average you might as well pick an index fund.
      • TheLogothete 11y ago
        Don't start with this condescending "nah" when you are going to make a qualification after that and exclude the very case we are discussing here.
        • tormeh 11y ago
          Sorry, didn't know it had condescending connotations.
    • nostrademons 11y ago
      You need an information advantage to pick stocks. You need to have some reason to believe you have information that the rest of the market does not (or that the rest of the market is ignoring), which lets you better estimate the future profits of the company. And then you compare that against the market price, and if the market is being irrational, trade. If you have this, you can get by with a very small portfolio, often just a handful of stocks. And the only ongoing effort is to periodically re-evaluate whether the market has caught on to the information advantage that you're trading on. You do need to continue to keep informed, but daily trading is ridiculous. If you do not have this, you will lose your shirt regardless of how much you diversify.
      • TheLogothete 11y ago
        >You need an information advantage Yeah, exactly my point. You need to spend >20 hours to research a single company and will chose to invest in 1 out of 10. Those are the optimistic numbers. So 5 stocks is 1000 hours. How many hours to learn how to do your due diligence? How many hours per month, every month to keep an eye on what is going on and optimize if necessary?
        • jyu 11y ago
          The information advantage is when you know something that's true that most people haven't yet realized to be true, often accredited to Peter Thiel. Examples from the past: - Smartphones > dumb phones (invest in AAPL) - more dollars spent with online ads than TV and Print (invest in GOOG) - cloud computing is better than managing your own servers (invest in AMZN) - eating Chipotle is a better option than McDonalds (invest in CMG) These information advantages are not necessarily gained by spending many hours of research, but a side effect from every day living and working. Will a research analyst realize the impact of a scalable computing API more than engineers that relies on it for their careers? A future example: If you're a programmer using Github for every job in the past 10 years, maybe buying Github stock if it IPO's wouldn't be so bad.
          • TheLogothete 11y ago
• deleted 11y ago
  [deleted]
• hkmurakami 11y ago
  Until the head asset manager you "hired" effectively retires and hands the reins to youngins without ever telling you what went down. I've seen this happen many times.
• fsloth 11y ago
  "you need to pick stocks every day or several times a day." The usual advice for beginners is to revise ones portofolio between long intervals, say, once per year, record the specific reasons a purchase or sale was done, and progress with patience and not running after the market. Stocks with dividens provide an interest to ones investment regardless how their price evolves in day trading.