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I have no lost sleep for retail investors who confuse speculation with investment. That’s their money and they do can as they wish. It’s the forced buy in by f

by koolba 8y ago

I have no lost sleep for retail investors who confuse speculation with investment. That’s their money and they do can as they wish. It’s the forced buy in by funds and pensions that I don’t like. Many are dictated by objective formulas like top N by market cap which may lead either Uber or Lyft to be included quite quickly. Biggest preventer for either may be the “four recent quarters of profitability” requirement. Depending on the IPO and crash timing, this could be a bad one.

wbl 8y ago
Active vs. Passive over the 20th century shows that active management doesn't work for the customer.
- pmart123 8y ago
  That actually is factually misleading. Active has greatly outperformed in foreign securities net of fees: https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902122 https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902... In domestic markets, active management has not out-performed net of fees, but there are bad people in every profession: https://www.nb.com/pages/public/global/insights/the-overlooked-persistence-of-active-outperformance.aspx https://www.nb.com/pages/public/global/insights/the-overlook... You also have to remember these statistics only look at mutual funds and most of the best investors don't offer mutual fund products. Passive investing should work for many investors. I think fees though are a bigger culprit though than active vs. passive.
  - wbl 8y ago
    You linked me to a study that eliminated the bottom quarter retrospectively. I too can make money if you let me ignore all my losing trades.
pmart123 8y ago
Twitter was just added to the S&P 500 this year. Facebook wasn't added until 2013. https://www.reuters.com/article/us-sp500-facebook/facebook-to-join-sp-500-idUSBRE9BA1AQ20131211 https://www.reuters.com/article/us-sp500-facebook/facebook-t... The chances of Uber getting into a major index quickly is very remote. On the bright side, Uber has a CFO now :). I doubt many institutional investors will be forced to buy the stock. It will be interesting to see what percentage Uber tries to float though.

by koolba 8y ago

wbl 8y ago

Active vs. Passive over the 20th century shows that active management doesn't work for the customer.

pmart123 8y ago
That actually is factually misleading. Active has greatly outperformed in foreign securities net of fees: https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902122 https://www.ft.com/content/d93100ca-acf4-11e6-9cb3-bb8207902... In domestic markets, active management has not out-performed net of fees, but there are bad people in every profession: https://www.nb.com/pages/public/global/insights/the-overlooked-persistence-of-active-outperformance.aspx https://www.nb.com/pages/public/global/insights/the-overlook... You also have to remember these statistics only look at mutual funds and most of the best investors don't offer mutual fund products. Passive investing should work for many investors. I think fees though are a bigger culprit though than active vs. passive.
- wbl 8y ago
  You linked me to a study that eliminated the bottom quarter retrospectively. I too can make money if you let me ignore all my losing trades.

pmart123 8y ago

Twitter was just added to the S&P 500 this year. Facebook wasn't added until 2013. https://www.reuters.com/article/us-sp500-facebook/facebook-to-join-sp-500-idUSBRE9BA1AQ20131211 https://www.reuters.com/article/us-sp500-facebook/facebook-t... The chances of Uber getting into a major index quickly is very remote. On the bright side, Uber has a CFO now :). I doubt many institutional investors will be forced to buy the stock. It will be interesting to see what percentage Uber tries to float though.