Stock investment resources

An excellent article but gee I never cease to be amazed at the extents investors will go to in order to smooth “capital volatility”. I admit to being a simpleton but living off the natural yield (income) of the portfolio frees me from having to worry about all this complexity.

Although it does require a sizable portfolio I’m inclined to agree with Jack Bogle in that investors need to stop looking at price (with it’s scary volatility) and get back to the portfolio’s cashflow. That is shares for their dividends and bonds for their interest.

Personal view only off course.

 

Continuing on with the “factor” theme:

Retail investors can invest like institutions - Cuffelinks

 

Yes I found that interesting also.
There has been very little discussion of factors on this forum, other than the mention of VVLU. Mixed views on boggleheads, but still mostly they mention small and value and even then it seems less and less.

I do wonder if at a time when CAPE ratio's are so high, if it would be safer to tilt a little towards value, since the last time PE ratio went insane (in the US) was in 2000 and the more you tiled towards value then, the less of a pulp you got beaten to by that market.

 

FREE 470 page book:

A Template For Understanding BIG DEBT CRISES - RAY DALIO (2018)

Summary and link to free book below:

Dalio’s key filters for identifying a bubble

 

really enjoyed this one...

Howard Marks — How to Invest with Clear Thinking (#338)

 

Terrific @Anne11

I hadn't seen this one before. He's a very easy bloke to listen to. He also looks good for someone in his low 70's.

I enjoyed his book "The Most Important Thing" and came across this (2015) memo to his clients online today that refers to second level thinking...............

https://www.oaktreecapital.com/docs/default-source/memos/2015-09-09-its-not-easy.pdf?sfvrsn=2

 

I reread the book ‘How much is enough’ and the book mentions the 4 elements of investing:

Quality
Value
Diversification
Time

 

Here's another from Howard Marks. Tim Ferriss interviews him on his podcast. Start at 4 min 30 sec in to skip the prelim ads. Howard Marks is incredibly easy to listen to.


Howard Marks — How to Invest with Clear Thinking (#338)

 

Great presentation on Index Investing including the theme of simplicity and the long complex journey some investors take before discovering it. Unfortunately there are many who never get it.

Virtual Boglehead Meeting #8: Education of an Index Investor by Rick Ferri

Q & A Session:

(Laughed at the comment by a women who sat with the wives of their investor husbands attending a three day Boglehead conference. They couldn’t understand why it took three days for their husbands to understand something so simple.)

 

Thanks for sharing @Nodrog

If I'm honest, I'm probably not much beyond stage 3... that damn step 4 is harder than it looks

 

He he ain’t that the truth. The road to simplicity is a complex one.

Struth, it must be time for some home brew to allow me to get greater insight into this. Uuuummmm Beer Meditation.....

 

How would you tilt towards value @Anthony Brew

 

Leonard Mlodinow vividly demonstrates how our lives are profoundly informed by chance and randomness and how everything from wine ratings and corporate success to school grades and political polls are less reliable than we believe.

By showing us the true nature of chance and revealing the psychological illusions that cause us to misjudge the world around us, Mlodinow gives us the tools we need to make more informed decisions. From the classroom to the courtroom and from financial markets to supermarkets, Mlodinow's intriguing and illuminating look at how randomness, chance, and probability affect our daily lives will intrigue, awe, and inspire.

 

It's just a wondering thought, but as CAPE ratios are high, I wonder whether a higher tilt towards value would help in a similar way to the way I believe it did in 2000 when P/E went nutso before it crashed back to earth, yet I believe value stocks barely registered a blip. So my thoughts wonder to whether tilting with some proportion in VVLU like 30% of the portfolio in an attempt to reduce some possibility of high P/E stocks plummeting might help.
There are definitely some big holes in this though, for instance the assumption of what CAPE *should* currently be going forward is pretty much a guess until it's hindsight. And secondly that value stocks didn't crash because they also missed the crazy run-up.
So all in all I have no idea. I was wondering if people smarter than me had any idea, but it looks a whole lot like there is no consensus, most likely because it's just unknowable. I guess I answered my own question - find an AA I can stick to, stay the course, and go have a nap instead.

 

@Anthony Brew, who knows, it's all been about growth but the pendulum may swing back in favour of value again, it has done so in the past

Propertychat Clicky Link

Value, Growth or Both

 

@Redwing, yeah I remember reading that post of yours.
But I always come back to the same conclusion with timing the market - that I accept the fact that I have absolutely no ability whatsoever to do it, and it is far more likely that whatever I do will actually screw it up more likely than help me.

Much like that video where the guy compared novice tennis players to professional tennis players. A professional tennis player wins by actually aiming for a very specific shot because they have the skills to make it a high percentage of the time. If a novice player did that, they would lose 90% of the time by missing and hitting it out. A novice wins by instead going for easy shots just to avoid hitting it out because avoiding screwing up will result in a higher chance of winning for the novice.

I could swing the racquet aiming at market timing of value shares, but there's too high a chance I will whack the ball over the fence.

 

Anton on Money Talks with Peter Switzer, Monday 17th September | Investors Mutual Limited

Kerr Neilson of Platinum and Anton Tagliaferro of IML (QVE) interviewed by Switzer.

Always good to listen to Anton even though you basically know what he’s going to say!

 

Charles Ellis' paper "The Loser's Game" uses that tennis analogy for investing Professional tennis is a "winner's game" in that the victor wins by skillfully scoring more points. But amateur tennis is a "loser's game" in that the victor simply wins by not losing. The winner doesn't win by superior skill but simply by making fewer mistakes.

 

I enjoyed this one interesting view on both indexing and factor investing..

The investment sea change. Value is out, growth is in and passive keeps beating active. Financial thought leaders James Grant and Jason Zweig weigh in.

VALUE INVESTING UNDER PRESSURE AND THE PRESSURE TO GO PASSIVE

 

The Worst Kind of Bear Market