Stock investment resources

Yes it is. Lots more life lessons than just investing. He is a genious! At 92 still so sharp and knowlegable!

 

Another article from Warren Buffet. Worth reading: http://www.tilsonfunds.com/superinvestors.pdf

Key takeaways are: buying stocks with a margin of safety: the gap between price and value ( I assume easy to find during crashes) and the difference between volatility and risks

 

I am in the middle of listening to this book recommended by Charlie Munger - Influence - Robert Cialdini

 

He's a self taught polymath. First time I heard his stuff on human misjudgement i was like "yes! I do that!". On age, I think with the brain it's about use it or lose it...a few of these old Yanks are still very sharp. Buffett, Bogle, Ellis, Malkiel all still in good mental shape.

 

Good stuff. Once done with that get onto "fooled by randomness".

 

Yes, I have been reading stuff on that site for many years on and off. I like Canadian financial blogs / forums because there is great participation and importantly Canada and Australia have a lot in common.

The portfolios are very much along the lines of Boglehead and very similar to how an Aussie would implement same. That is, the Vanguard product available in Australia and Canada is not as diverse as in the US.

 

Problem is winning in the market nowadays is a totally different ballgame compared to many years ago. It's gotten dramatically harder which I think even Buffet has stated.

Ellis does a great job of explaining why in some of his articles, videos and books. I think it was discussed earlier in this thread.

 

Yep. Re Buffett, the game has moved on. Look at what 3G is doing with Heinz and the acquisition of Precision Castparts. These are long term cost out / roll up and wide moat near monopoly business ownership stories respectively..more than stock investments. However, this is significantly due to the curse of size, but also what Ellis talks about....which is kind of the investment industries dirty little secret (one of many!)

 

Here is some discussion that might get some thinking about dividend investing vs total return investing.

Dividend Misunderstandings & Only Spend Return - Bogleheads.org

Kind of the other side of the coin. Personally I believe that there is something to be said for taking some earnings out of the play money pool for corporate managers...but, high payout isn't the road to growth.

There is plenty more discussion on this over there.

 

Both worth a listen ;

Podcast 3: A Hedge Fund Manager Comes Clean | Canadian Couch Potato

Podcast 4: Charles Ellis and the Index Revolution | Canadian Couch Potato

 

Global Stock Market Valuation Ratios




Also see

Long-Term Stock Market Expectations

 

MY MONEY CHARTS THAT CAN CHANGE YOUR LIFE FOREVER!
July 14, 2017
Published: Friday, July 14, 2017

As the old saying goes: “A picture paints a 1,000 words”, and as I usually write about a thousand words in Weekend Switzer, I thought I’d shoot for a thousand this week by showing you the charts that could change your money life, forever!

I showed this to my young producer, Charmaine, who works on my On The Money programme for the Talking Lifestyle radio channel in Sydney, Melbourne and Brisbane.

Charmaine has $4,000 to invest. After listening to our show for nearly a year, she wants to build her wealth. Ah, the power of influence! And she has been lucky because she’s been paid to listen and learn how to get rich!

Feast your eyes on this chart from the mob at Vanguard. It’s an oldie but a goodie. It shows what happens to $10,000 invested in 1970 if it’s slammed into say an ETF, such as IOZ or STW, which buys stocks in our top 200 companies and puts them into one ‘stock’ called an exchange traded fund or ETF.

This chart shows that if any dividends from that $10,000 are re-invested and the whole pile of money is allowed to roll like chips on black or red at the casino. However, there’s one difference — you always get a return in the shape of dividends.

..................Continues on link

 

Thanks to @austing!

From Bill Bernstein: Efficient Frontier

Lump sum or DCA:

According to Bill in this youtube clip: Lump sum investing beats DCA, although for psychological reason (insurance agaisnt a market crash) you can DCA in 6-12 months. More than that you would not benefit from DCA as you don't have full capital invested to benefit from market gains etc (my words, not his)

On asset allocation:

He suggested in his book The Intelligence Asset Allocator to put 25% each on: US large cap, US small cap, International, Short term bonds.

index as much as you can, he recommended Vanguard.


@austing and @Il Falco : Buffet and Charlie are both agaisnt the morden porfolio theory from my reading, Bill advocates this approach? what would you think?

 

Read his more recent Adult Investor series that I posted about elsewhere.

 

I finished reading this book today: The Ages of the Investor: A Critical Look at Life-cycle Investing (Investing for Adults Book 1) eBook: William J Bernstein: Amazon.com.au: Kindle Store

Well worth reading. Summary:

• Young people, in general, should invest more aggressive than they do
• There are 3 cycles: beginning: more agressive, middle (40-55) and end: much more conservative. Harder to transition into and from the middle cycle
• Rules for asset allocation: 'age equal bonds' ie. 30 year old: 70/30 stock/ bond; 'rule of 110': addition of 10% stock; leverage-early; Fama-French: Small Cap Value stocks
• Investing a lump sum up front reduces sequence risk ( risk of makets going up then go down over the cycle ie. it is better to experience 20 consecutive years of negative returns then experience 20 consecutive years of positive returns, than the other way around. However lump sum investing also maximise risks: Therefore the continuum between lump sum investing and DCA/VA is simply a journey from high risk/high return to low risk low return. Periodic investing provides real downside protection in bad states of the world, at the cost of producing inferior returns relative to lumpsum investing.

Much much more...

 

I think in this regard that the vast majority of people should listen to Bernstein. I'm probably a bigger BRK fan than anyone here, but one needs to understand the context of Buffets / Mungers comments on MPT/EMH. These theories are not bullet proof, but they are better than pretty much everything else. I actually think that their comments on diversification are usually taken out of context (these are in arguments / discussion between investment managers / academics) which can lead to very damaging outcomes for individual investors. After all, Buffet has endorsed indexing for a long time now - for individual investors.

 

Just finished reading this on Moneysense, a spicy alternative

Are you ready for the Hot Potato?

 

For those interested in a total return approach to retirement here's a well considered strategy from the Couch Potato. Note GIC = Term Deposit. Would need to consider tax implications depending on structure used:

A better way to generate retirement income

 

Been doing a little reading recently. Taleb, Fooled by Randomness. Absolutely brilliant. A must for all investors be it stock or property imho.

Dr. William Bernsteins "Rational expectations". Probably for more advanced readers and its Bernstein so you'll find a lot of charts, formula and stats. Very good.

Benjamin Roth's "the great depression, a diary" which i am only about a quarter through....its a very unusual book. Small town lawyer with a natural curiosity records the day by day happenings in the early 1930s. Fascinating read. Very interesting to read first hand accounts of what happened with stocks, bank accounts, real estate etc. really personalises the great depression. I think most investors should read this so they know what has, and can happen (inevitable at some point).

 

A great book, if you can get hold of it is "Margin of Safety by Seth A Klarman" and chances are you'll get your money back after you read it.