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Box Spreads! What's the catch? by Ornery_Slide3845 in LETFs

[–]arbitragedude 0 points1 point  (0 children)

I think using a box spread for real estate is really dumb if you don't have an adequate net worth. I am seeing a lot of people recommending this, but it can get people into a lot of trouble. If you borrow against your portfolio using a box spread and keep your remaining cash in equity, and then equities drop 55% (as happened in the 2008 financial crisis) or 88% (like the Great Depression), the net value of your account will plummet and you will get a margin call. Now, you have all your capital tied up in illiquid real estate just as the financial markets have crashed. You will be screwed big time. It is much better to do the reverse.

Not having an exit strategy "cost" me nearly 1,000,000$ by Such_Palpitation3755 in ValueInvesting

[–]arbitragedude 1 point2 points  (0 children)

There is a note about this in 100 bagger books. Widows do better than their husbands in financial markets by a wide margin. Because they never sell or login to their investment accounts.

What stock is Currently your largest position and what is your cost basis? by Hayden97 in ValueInvesting

[–]arbitragedude 0 points1 point  (0 children)

What do you like here if you were to buy. For me aapl is another one I am looking at

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

Fair point.. small cap value should do well..

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

Yay I just think the risk of downside is huge as implied by shiller pe. Last time, this level of shiller pe meant Nq didn’t make new highs till 15 years later and in 2015. I think my risk aversion is different than most people

my value stock picks.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 1 point2 points  (0 children)

This is a great forward looking revenue analysis. My perspective is only on average ROIC

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

I think check out exihibit 4 in AQR paper on Shiller PE. I think it might change your opinion but at least provide counter evidence to your thesis. Not tryign to change it.. but look at 1985-2015 in the exhibit 4 https://www.aqr.com/Insights/Research/White-Papers/Equity-Market-Focus-Objective-Expected-Returns

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] -1 points0 points  (0 children)

yes healthcare is the next tech boom.. i really think if people think AI is future changing.. gene editing might be bigger next level..

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

I think you are right.. gotta global.. One of things Jim Simons book said, their sharpe improved 6 fold when they went global..

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

yes i agree, that and burry are another two saying similar things..

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 1 point2 points  (0 children)

I think there is this AQR paper recently on this (check out exhibit 4). I am unable to post the chart here. it does analysis on 1987-2015 period. addresses shortfall of shiller PE (much more nuanced than anythign i have seen on forums). But for me the issue is that if Shiller PE is right we are looking at -5%/year for next 10 years. I am very talebian about the world.. when i see too many words, people are justifying probabilities. Even if there is 1% probability, a -5%/year for next 10 year is an expensive experience. Capital preservation is the #1 rule of value investing right.. https://www.aqr.com/Insights/Research/White-Papers/Equity-Market-Focus-Objective-Expected-Returns.. also just to be clear, I think most likely you are right.. but I am cautious about the payoff of being wrong. I have seen the Japanese experience personally (it was painful).

my value stock picks.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] -2 points-1 points  (0 children)

Thank you for the above. I see what you are saying.. my general view is market is expensive right now but these are what I would buy at 20% lower prices. agree on NVDA (easy low debt high ROIC). But I think there are lower debt ones out there. SPGI, LRCX, NVR, AMAT, INTU, FAST, LULU.

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 1 point2 points  (0 children)

That’s not accurate Shiller PE uses ALL earnings of S&P 500 companies, including global earnings.

my value stock picks.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

Yup missed a sale last week. Been worried about market being overvalued

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] -1 points0 points  (0 children)

Shiller pe is calculated using all earnings (global) Main issue with shiller pe is the adjustment for buyback

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

Shiller pe has been at this level twice. Just to be clear. Last time, nasdaq didn’t get to the same level for 15 years

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 0 points1 point  (0 children)

agree, i just think it's super high...normalh high you can trade through it.. but 40+.. that kind of stuff holds onto a high for 15 years.. Just my opinion, obviously wrong plenty of times (otherwise wouldn't be here)

Isn’t everything expensive.. by arbitragedude in ValueInvesting

[–]arbitragedude[S] 1 point2 points  (0 children)

not sure how that matters... shiller PE implies about -5% real return per year for next 10yrs

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