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February 25th, 2018, 23:14
Originally Posted by you View Post
that only works if you invest AFTER the crash. If he throws a bunch of money into index funds TODAY and then the crash occurs in 6 months… At least in the USA the index is inflated.

As for your article those are horrible returns. If he had turned 6K into 1million over 30+ years then it would have been almost ok (as a reference i had xxxx 20 years). However, for his total investment of 128K and given the length of the investments he had absolutely horrible returns.

However, if you are happy with those returns AND the overly trump inflated market still allows you those sort of returns then follow caddy advice. My concern is that (at least in USA) things have been warped with complete lack of oversight the past year and htere is the potential (not a given) of a massive crash in the next 6 to 18 months.

No clue how (or if) this will impact the global markets.
Yes, we know they were horrible returns, because the point of the article was he was investing at the worst possible times. But we are talking about relativity here, my friend. Tell me how much of that $128,000 he lost in the end, when he retired? Even with his "poor" returns, he still beat close to 9/10 mutual funds over the long term.

And even by your example, someone were to invest all their money right now, and the market crashed in a few months, you wait it out. Look at this example:



That little red circle marking the blip on the graph is the "awful scary" 2008 financial crisis (it would be even more impressive if I had up to 2018 on there). Even the Great Depression on that graph would give you a decent return if you "only" invested a few thousand just before, as a young adult, and then retired 40 years later. But realistically, who's going to invest a few thousand dollars for their retirement during their entire 40 working years? You max out your contribution limits every year. You max out your tax returns, you put away funds monthly, you use side gigs and windfalls to fund your retirement.

The US stock market isn't like in Canada, where if 1 big company dissolves, then you loose 70% of the market, unless you're under the impression that the S&P 500 somehow only counts for parts of companies within the continental US. It reflects the world as a whole. The Trump argument, just isn't a strong argument. Every year, financial advisors that get paid on their ability to sell you a long term under performing mutual fund have a new excuse about why index funds are a bad idea. They've been doing it for decades now, and most of them still can't beat the market. It's a joke.

Also, to add to above, this is also why you invest part of your investment in the international market as well as bonds (if you're in Canada, it's a bit of US, International and Canadian indexes as well as bonds).
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March 12th, 2018, 23:24
An example for those who find it hard to make decisions about their life?: Mike Merrill, The man who sold shares of himself.What drove a man to give 633 investors complete control over his major life decisions?.
This week, we caught up with Mike Merrill, a man who sold shares of himself to investors and let them control his life.
The value of the shares has gone up (start at 1 dollar):
https://kmikeym.com

The questions he has been asking his shareholders:
https://kmikeym.com/questions
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March 23rd, 2018, 08:24
I'm new in investing, but I think it' could be a good strategy. I always check new companies at database https://datapo.com/en/ to reduce the risks. It's one of the largest databases of companies and it offers the latest unpdated info about companies. I belong to the generation that believed in the axiom "Trust but verify".
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March 23rd, 2018, 17:33
Originally Posted by eva89 View Post
I'm new in investing, but I think it' could be a good strategy. I always check new companies at database datapo to reduce the risks. It's one of the largest databases of companies and it offers the latest unpdated info about companies. I belong to the generation that believed in the axiom "Trust but verify".
Knowing a company's value doesn't reduce the risks. A company's value is already reflected on its market price, and can change with one bad fart. The only way someone has any control over reducing risk is diversification and time.
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March 23rd, 2018, 18:11
Knowledge can help, being familiar with the people that run the organization and their products can assist you in planning and maintaining a healthy portfolio, and never forget the all dominating factor known as sheer luck. With that being said, being persistent, giving proper time for both positive and negative transitions to occur will usually pay off well, and above all else, don't give up. Do not quit. It usually takes time, but your money enjoys working for you!!
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March 23rd, 2018, 19:17
Originally Posted by Carnifex View Post
Knowledge can help, being familiar with the people that run the organization and their products can assist you in planning and maintaining a healthy portfolio, and never forget the all dominating factor known as sheer luck.
Luck indeed. And it depends on how that knowledge is being used. For example, if you're in Edmonton, investing in a great local oil and gas company will be great until it isn't. With the way energy is moving, are you hedging it with a proper renewable energy company? Are you getting the best trade costs? How often are you buying shares and re-balancing the portfolio? Are you taking interest, trade wars (and actual wars), tax rates, inflation, economic recession (both narrow and broad market), liquidity, company credit limits, etc into account? What about the length of time before you cash out those shares and retire? The closer you get, the less volatile you want those investments. Again, the market share price is already reflective of the company, so doing research on the company, is wasting time in most cases. The only exception to this is if you're a investing genius like Warren Buffet, meaning you know that a company is undervalued in it's infancy. Considering most full-time professionals that manage other's portfolios in the consisting of 8 to 10 digit territory STILL don't beat the market over the long term in over 90% of cases, why do an exponentially HUGE amount of work, when passive investing will statistically get you better returns over time, with about an hour of work PER YEAR.
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March 23rd, 2018, 21:36
The best investors that I've known in my life seems to make a habit of betting against the welfare of others. I tried it once myself, made a pretty penny but never did it again. If you think about investments carefully enough and know how to forecast, you can usually predict where the money can be made.
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March 24th, 2018, 00:09
Originally Posted by Carnifex View Post
The best investors that I've known in my life seems to make a habit of betting against the welfare of others. I tried it once myself, made a pretty penny but never did it again. If you think about investments carefully enough and know how to forecast, you can usually predict where the money can be made.
That's because they aren't actually investors. They're non-fiduciaries. The ones making loads of cash from the stock market, aren't actually investing in the stock market. They're making others buy the shares, and taking their cut by "advising" you. Here's some examples:

A) You have $50,000. You put it in a mutual fund. (95% of mutual funds will lose to the market over 20 years or more. Let's say this is a great one, and is a unicorn that matches the market). Your total fees for this are "just" 2%. Forget about it for 30 years. When that 30 years is over, you have a quarter million dollars. Sounds nice right?

B) You have $50,000. You put it into a passive index fund with the lowest fees and forget about it for 30 years. When that 30 years is over, you have half a million dollars.

That 2% fee you paid in example A? That's now worth a quarter million dollars. From 1 person. From 1 trade. $250,000. Let that sink in.

You put up 100% of the capital, take 100% of the risk, and get 50% of the returns. It's basically a legal ponzi scheme, since you technically still make a profit. And guess what they do with that money they get from you? Example B.

Anyone can make money on the stock market. You can buy the bad mutual funds with stupidly high MERs and load fees, and still make money that will be higher than the interest in a savings account.

BEATING the market is an COMPLETELY different ballgame.
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March 24th, 2018, 00:31
Historically I double every 5 years. I can't predict if that will continue but that has been the historical rate since I started. I just switched over a chunk of my investment the last couple of years from old stocks to new stocks (old being companies that were good investment when I made them but i don't see future being as bright and new being …). However, I still have a chunk of cash left and I'm thinking i might try berk shares for the left over cash - and see how it does over the next 5 or 10 years and compare the results to my personal holding. However, whether I take that route or not I'm not investing anything for at least 30 days while I see what new crap trump throws at the market. As I've stated before I think the market is artificially inflated and it won't take much to trigger a correction. While I do not normally 'time' the market since I buy stock in 'companies'; obviously if I try berk then I will being effectively buying a mutual fund and i rather buy it a little lower than a little higher.
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March 24th, 2018, 06:45
@you, So your portfolio consists of just stocks? No funds or bonds? Also, wtf are berk shares?


Originally Posted by Caddy View Post
95% of mutual funds will lose to the market over 20 years or more.
Eh? Is that stat for real? It makes mutual funds sound like a pretty shitty investment.
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March 24th, 2018, 07:20
Yes just stocks. I hate bonds and mutual funds. Only exception is 401k. I can say that over 15 years working at current company my personal ira grew 2x to 3x faster than the 401k. The trick with companies is finding good small ones and holding the stock 10 to 20 years. Easy said hard to do. Been lucky twice will find out in 8 years if third time is also charmed.

Berk -≥ Berkshire

Originally Posted by JDR13 View Post
@you, So your portfolio consists of just stocks? No funds or bonds? Also, wtf are berk shares?




Eh? Is that stat for real? It makes mutual funds sound like a pretty shitty investment.
Last edited by you; March 24th, 2018 at 11:24.
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March 24th, 2018, 08:56
Originally Posted by JDR13 View Post
@you
Eh? Is that stat for real? It makes mutual funds sound like a pretty shitty investment.
Bingo. And even if an active mutual fund matches or slightly beats market performance, the higher fees will end up making it still worth less over the long term.

Berkshire Hathaway that @you is talking about is kind of unique. They are a multinational holding company, that have their hands in many industries all over the world (from Coca-Cola to Apple). Because of that, they are basically their own mini stock market. They are also one of the very select few stocks that have performed well over a long period of time. As of right now, just 1 share will cost over a quarter of a million dollars.
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March 24th, 2018, 09:55
Originally Posted by Caddy View Post
Berkshire Hathaway that @you is talking about is kind of unique. They are a multinational holding company, that have their hands in many industries all over the world (from Coca-Cola to Apple). Because of that, they are basically their own mini stock market. They are also one of the very select few stocks that have performed well over a long period of time. As of right now, just 1 share will cost over a quarter of a million dollars.
That's nuts. So you basically have to already be a millionaire to be able to afford their stock.
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March 24th, 2018, 11:22
No not at all. There is a cheaper version berk.b which is around 192 a share as of today. Note that berk.b has lower voter rights but for small retail investor votes are not a big deal. Also note that warren buffet is quite old; while he has set up an orderly path for change of control when he dies and he has express confidence that things will continue it is something to be aware of if you invest. last but least (if this matters to you) he has good morals (or at least publicly has express good morals). I have passed over certain companies (most notably msft and appl) because I dislike how they do business.
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The reason I'm concern about the current market is Trump is introducing instability and uncertainty which the market generally dislikes. While my investment style is mostly immune to local up/downs if you are investing naively then this can have a big impact on you. Buying on a peak can result in 5 years of lost investment. Yes over 30 years it doens't matter but if you have a 1 or 2 year timeline.
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In my case I'm looking for small companies that I think will become big companies. It might take 10 years (which is a reasonable timeline for myself). So it doesn't really matter much if I buy when the company is 50million or 80million if it manages to grow to 10B (yea I would make 20x instead of 13x which is a big difference) but overall it works out. The problem with my investment style is that if i make a mistake it is also likely that I could suffer 80% to 100% loss in the investment. As I said I've been looking that most of the large investments have worked out but i'm sure one of these days I will kick myself and wish I had taken my 5% from T.
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March 24th, 2018, 18:05
Ya, you don't have to pay full price for that share. I was just illustrating where they're at as a company. There's many funds that will just take a small bite of that share.

One thing to note, is even though Warren Buffet is still the CEO of Berk, even he will recommend that the average investor invest in passive index funds.
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May 7th, 2018, 21:00
Investing in a real estate always sounds like one of the best ways of becoming rich for me. For example there are many special cool investment programs for foreighners in EU. Greece that was almost bankrupt few years ago has much better sutuation in its economy because of foreign investments in the real estate:
Foreign investments in Greek real estate are actively growing. According to Ekathimerini, in 2017 they reached a historic high with estimates putting the total amount at 503 million. According to the Bank of Greece, the total value of transactions among foreigners in the Greek real estate market was 86.5% higher than in 2017 than in 2016, and the total value of transactions concluded in January 2018 was 205% higher than in January 2017.
from here https://tranio.com/articles/local-an…el-for-greece/
So you can really buy a house in Greece and in few years the price would rize, you can sell it ans so on… or invest on the development level. There are lots of variants you just neet to have some money to start
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May 8th, 2018, 00:08
Or borrow the money, if you are gutsy.
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May 8th, 2018, 01:12
Originally Posted by Thrasher View Post
Or borrow the money, if you are gutsy.
There's a few strategies for this.

Some people do this with property with low interest mortgages and sub-prime loans or a HELOC, as long as their interest payments are far below the market average of 7%.

Another strategy i've seen is to sign up for no interest or payment cards that will allow you a free cash advance for 90 or 180 days. You can put this into the market or GIC for 3 to 6 months, then pull them out and pay off the balances and keep the investment interest. This is pretty risky though. NOT recommended. Especially when there's so many "gotchas" to their contracts.

There are some ways that you don't actually have to borrow money, but instead reap huge tax savings to use for extra investment income (if you're in Canada, see The Smith Manoeuvre and RRSP HBP for real estate), but you really have to know what you're doing. And if that's the case, you're probably not on rpgwatch for your financial advice.
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May 8th, 2018, 01:31
There are two things I avoid:
real estate (I know many people who make a ton of money on real estate but I find it too risky for myself).
I NEVER borrow money to invest; best way to go bankrupt is borrow money to invest and then have things go south (or worse).
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Sort of like running a company - never over-extend to the extent that a raining day causes bankruptcy.
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May 8th, 2018, 02:11
Originally Posted by you View Post
There are two things I avoid:
real estate (I know many people who make a ton of money on real estate but I find it too risky for myself).
I NEVER borrow money to invest; best way to go bankrupt is borrow money to invest and then have things go south (or worse).
-
Sort of like running a company - never over-extend to the extent that a raining day causes bankruptcy.
Well I didn't borrow money, but when I moved I could have paid for my new house with the sale of the old apartment, about the same amount of money. Instead I got a low interest mortgage for the new house and put the money of the sale in the stock market.
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