Great episode! Very interesting. I tell ya, I’m basically a “caveman trader”. “Me buy stock. Me buy low. Sell stock high. Me bank roll.” So I like listening to these professional, sophisticated viewpoints - gets me thinking. Is there such a thing as “speculating” on the S&P? Feels more “prospecting”, when you have a good understanding of fiscal and government policy, in the end.
Valuations also evolve over time. Companies innovate and reinvent themselves. They add new products and services. Valuation models built in a spreadsheet cannot capture this value, especially if there are no cashflows to model! Amazon is a great example. The analysis changed as soon as AWS was launched or as soon as Prime was launched. And part of a stock's value is the call option on future innovation. Paying 100x Apple's current earnings in 2001 could easily have been rationalized as a premium worth paying for whatever new products and services Steve Jobs would invent over time.
Would love to debate how fundamentals matter to high frequency traders making thousands of trades in a single session for pennies. A significant portion of the market is a game of computerized warfare based on colocation servers, dark pools and arbitrage.
Sorry, but the argument of the active management is not precise enough, though in context it is correctly understood. the issue is not the amount of active managers, but the reason why so few are left. 50 years ago there also less active managers overall, but the competitive process has made it so that "weaker" leave and you get the freeriders. Also, among the active you will get very capable individuals that win or lose on chance more than anything else and this is especially true for benchmark "aware" managers.
Thank you for the content!! All we need is the right advice on how to invest in crypto and we will be set for life, made $68,000 profit from trading last month regardless of how bad it gets on the economy
I remain eternally grateful to Emily Wright for her efforts that got me to this point Finally paid off my mortgage and all my debts, what more could I' ve asked for. She changed my life for good
