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- Kirk
- DanG_6
- Rande
- DanG_6
- Kirk
- Rande
- Will_L
- Kirk
- DanG_6
- Rande
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» Rande - Dan,
Dan,Thanks for the Hulbert update. Interesting, albeit not surprising, stats. I wish they would go one step further and in addition to accounting for additional risk also calculate after-tax returns based on turnover and distributions, etc. Doubt any of them beat the index on that basis.
And when it comes to newsletters, blind devotion, and guruitis in general, your Mr. Hulbert said it best himself:
Investors often develop a cultlike devotion to one investment guru or another. And when they do so, objectivity goes out the window. That isn't to say that the investors' psychological needs should be dismissed. After all, investing is an arena filled with uncertainty; it's only natural for people to seek approval and affirmation in such an environment. But it is hazardous to one's wealth to seek such psychological security at the price of objectivity. [Mark Hulbert in "Wearing Your Heart on Your Portfolio" from the NY Times(2/6/00)]
-- posted by Rande
» DanG_6 - Rande,
Yes, it would be interesting to see after-tax results of the "gurus". I would guess that if any of the market beaters before taxes are still market beaters after taxes, it would be the Prudent Speculator since he's pretty much a buy and holder. His only problem that I can see is that he's an avid margin user (he claims that the diversification margin provides decreases rather than increases risk--now that's a stretch!), which partially explains why his portfolio is 2 1/2 times as risky as the Wilshire 5000.-- posted by DanG_6
» Will_L - The New National Pastime? :)
An interesting note on stock trading and its perils. I think one of the U Cal authors is the same one that did the study that learned women do better than men in the equity market.http://www.money.com/columnists/updegrav...I think it also explains why I'm sure any newsletter writer wants to be on the "in thing"--ie trading. I'm quite familiar with what happens to horse racing when casinos arrive. Soon the number of people going to the tracks declines as the gamblers get much more action at the casino--with a hundred hands of Blackjack an hour-or gawd knows how many times they can pull a handle or push a button. Soon the allure of waiting and watching post parades and studying a program become "too slow" for the "get rich quick" crowd. So I think it is most likely with investors and their guru's now. The investors think they can "do better" than indexes and asset allocation decisions. The gurus have to give the illusion that they can help in that endeavor. So now the same folks that printed the tout sheets at the track probably are publishing "how to pull the handle on your way to riches" for the new "action" crowd. 
And so it goes.
-- posted by Will_L
» Kirk - Will
WillGood comments.
Sort of like a radio guy that used to get listeners with good advice to get mutual funds then changed with the market to "tune in next week to learn when I will tell you to sell the technology sector fund that I couldn't time a few months ago" or how he might even hire a trader to come entertain and delight at his website.
Just heard an analyst from John Hancock on CNBC telling why to sell Agilent... Clearly he has no idea of underlying business or reason stock went so high early in the year (pre spin-off there were few shares in circulation). With examples like that, I have to admit that I feel the indexers are fine for those that don't want to learn about the companies, but you really can outperform long term if you understand high technology and can seperate the crap in that interview from the truth.
-- posted by Kirk
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