When you work on something that only has the capacity to make you 5 dollars, it does not matter how much harder you work - the most you will make is 5 dollars.
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
when someone is straight forward and good at what he does best. People will always speak for them. For me I would say give Mr Brian a try and you will be happy you did
@Prof Bessembinder, you mentioned you had updated the list recently - where can we find it? It would be great to see if there has been an acceleration in how long it takes a superstar to achieve this status.
Most people definitely don’t realize that the majority of stocks lose money or gain less than a bank account would. It is very important to know what you are doing before making a large investment just like you would want to learn to operate a helicopter before flying one. It also makes it important to diversify, specially as a beginner yet most beginners have very concentrated portfolios.
You’ve just made the case for indexing. It doesn’t matter that you own all the losers. But it does matter if don’t own the 4% of super performers that deliver all the returns over t-bills. Indexing is the only strategy that guarantees you own all the super performers. That, and low cost, is the reason indexing outperforms the vast majority of stock pickers.
@@grantmaxted1160 I'm learning that. Haven't beat my S&P 500 index; my great picks in the wrong ratios NVDA, ABBV and my huge losses leave me at a wash. And I'm a hodler.
Here in the UK we have the option to choose Accumulation or Income share classes in funds or some etfs so dividends are automatically reinvested within the fund for Acc funds. Also a lot of platforms offer automated reinvestment of dividends for shares or income etfs etc
I think his finding is important. But, I think it has less practical impact than one might originally think. For example, if you get rid of small cap growth with weak profitability from the sample you will find a lot less donuts. This is a very easy thing to do and it makes it substantially easier to build reasonable portfolios.
Similar to how you are taught that a maximal sharpe ratio is good. When in reality the market will reward dynamically. Not just the assets that have had the maximal risk reward.
restoring diversification by rebalancing is how you get rid of excess gains. the guest just recommended investing behavior that runs counter to what his paper shows.
Big winners, Looking at over ten year data: Firm age, younger Higher R and D in prior decade Higher asset growth in prior decade ... Big winners, Looking at under ten year data: Rapid asset and cash growth and dividend growth
while home runs are a driver of long term returns, large cap, profitable companies purchased at valuations below long term averages generally provide a "good" return. Whether it beats the S&P500 index is another question. You will beat after tax returns on treasuries/bonds. You need 50-100 stocks to achieve the diversification. Ideally you also pay attention to the businesses of these 50-100 companies to identify relatively early the specific risk of that company/industry to be aware and prune that portfolio. Dividends are told to be tax inefficient as a mgmt capital strategy as they are "double taxed". Well, the market will reprice the security for companies pursuing this strategy and the investor can still buy at an efficient price for these dividend yielding stocks. Dividends do mitigate volatility risk. That is the way to buy and hold.
