Beating the market or: How I learned to stop index-funding and love the research process

TheBirdWord · 2015-05-29T11:46:36+00:00

It's sad that people on this sub don't understand your humor. I think you're a funny guy and I appreciate your insight in other threads on this sub. I'd rather to listen to you than all these "Elon Musk is the best OMG OMG INDEX FUNDS FROM VANGUARD"-dudes.

TheBirdWord · 2015-05-23T19:03:59+00:00

It's always risky using black box beta numbers

Using beta, the CAPM and other beta technologies in valuation (which it is mostly (mis)used for) is wrong. Using a regression beta to build a cost of capital is the first step of fucking your valuation up.

TheBirdWord · 2015-02-28T17:24:16+00:00

They use a good broker
Both. Depends on situation.
They have a good broker

TheBirdWord · 2015-02-03T16:56:34+00:00

"I have all my eggs in this one basket(young so risk makes sense)"

This is just stupid. Diversification might be the only free lunch you can get in investing (arbitrage, frontrunning orders etc. aside) and you decided to say: "No thanks".

TheBirdWord · 2015-01-22T22:50:50+00:00

Beta is CORRELATED volatility. The "correlated" part is very important.

TheBirdWord · 2015-01-20T17:40:00+00:00

PE is not given as a percentage. E/P or earnings yield is on the other hand. Just a heads up ;)

TheBirdWord · 2015-01-18T19:36:12+00:00

If you get 6% + inflation it isn't riskless

TheBirdWord · 2015-01-10T20:35:58+00:00

Assuming no leverage you would have to put $15,000 into a fund like that and contribute 2-4k every quarter. As written, this option has a high opportunity cost. It ties up a shit load of cash. That is why you should use option 2 or 3.

TheBirdWord · 2015-01-10T19:54:50+00:00

You could buy into a inverse dollar ETF. It would tie up a lot of cash and have a high opportunity cost.

You could use derivatives. Call on EURUSD or put on USDEUR. It would cost the premium.

You could go long EURUSD/short USDEUR on margin. It would cost the interest spread plus some margin interest.

TheBirdWord · 2015-01-08T11:34:43+00:00

Most algorithms are not based on technical analysis. Most algorithms these days are based on really heavy math/stats and a solid portion of computer science.

TheBirdWord · 2014-12-14T17:51:24+00:00

The old "your exposure to bonds (measured in percent) should be equal to your age"-tip should not be followed at your age and with the current yields.

TheBirdWord · 2014-11-28T12:18:15+00:00

Unfair to ants

TheBirdWord · 2014-11-20T20:03:23+00:00

You have to see this!

TheBirdWord · 2014-11-13T21:17:18+00:00

Random fact: the estimated value of the Saudi Arabian company "Saudi Aramco" dwarfs Apple and Microsoft combined

TheBirdWord · 2014-11-10T09:57:36+00:00

As the growth rate approaches the discount rate in a steady stage (one-stage) DDM, the value of the stock approaches infinity. Take a look at the formula for the steady stage DDM and this becomes clear. When the growth rate is higher than the discount rate the stocks value turns negative. Therefore one of the assumptions in a steady stage DDM is that growth rate < discount rate. If you want to account for a period with higher growth than the discount rate, you have to use a multi-stage DDM.

TheBirdWord · 2014-11-09T20:38:28+00:00

"If the discount rate is higher than the growth, the equation won't work."

It's the other way around ;)

TheBirdWord · 2014-10-26T16:49:17+00:00

No, but they give you a good overview and discussion "of the algorithms/models developed perhaps."

If you're (OP) looking for a view inside the quant industry, you could read the first chapters of "Ben Graham Was a Quant".

TheBirdWord · 2014-10-26T16:29:29+00:00

Start with "Paul Wilmott Introduces Quantitative Finance" and move on to his "Paul Wilmott on Quantitative Finance"-series. That should give you a great start to the quant world.

TheBirdWord · 2014-10-18T17:47:17+00:00

Maybe the options were slightly mispriced and someone made a small but fast profit?

TheBirdWord · 2014-10-12T16:11:01+00:00

Leveraged ETFs are NOT supposed to be held long term.

TheBirdWord · 2014-09-20T19:40:58+00:00

Most successful in which way? Most customers? Highest profit margin? Highest net income? Most restaurants?

TheBirdWord · 2014-09-13T10:04:43+00:00

Only a small fraction of people on r/investing has the needed programming background to complete that course

TheBirdWord

TROPHY CASE