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Thread: Investment Thread - For all your money needs

  1. #301
    Quote Originally Posted by wfudkn View Post
    Right now we have about a year's worth of cash based on our current (employed) spending levels and need to do something with a chunk of it. Looking into a couple of funds, though I may just be safe with it and put it into some of the same stocks I'm already in (or similar ones) that pay decent dividends. Can't decide.
    Wouldn't put a dime into either choice right now. Unless of course it was AAPL, or a few others. On the whole though, almost every equity fund or stock that I have seen or follow is substantially overbought and has very weak technicals and lots of pressure on their fundamentals (as hinted to last week and the week before). I'd sit on the sidelines unless you want to make a play on VIX shooting through the roof or this market of ours having a large sell-off over the coming quarter. Other than that, I would sit very tight and be elated to earn 0% in a bank account than lose 25-30% in what I see to be a very shaky equity market.

  2. #302
    Also, send me a PM if some of you want to remain anonymous and have any personal questions. Happy to answer them in kind...

  3. #303
    VIX has been killing it since you brought it up here. Up 30% in the past week. It's almost like you know what you're talking about.

  4. #304
    Quote Originally Posted by SkyDivingDeacon View Post
    Wouldn't put a dime into either choice right now. Unless of course it was AAPL, or a few others. On the whole though, almost every equity fund or stock that I have seen or follow is substantially overbought and has very weak technicals and lots of pressure on their fundamentals (as hinted to last week and the week before). I'd sit on the sidelines unless you want to make a play on VIX shooting through the roof or this market of ours having a large sell-off over the coming quarter. Other than that, I would sit very tight and be elated to earn 0% in a bank account than lose 25-30% in what I see to be a very shaky equity market.
    When you refer to technicals are you referring to support and resistance, or something else? Just wondering if you could elaborate on that part of it as I've been schooled to avoid technical analysis at all costs, and so I have very little understanding of it.

  5. #305
    Quote Originally Posted by HuskyDeac View Post
    VIX has been killing it since you brought it up here. Up 30% in the past week. It's almost like you know what you're talking about.
    Dumb luck

  6. #306
    Quote Originally Posted by DEACisGO View Post
    When you refer to technicals are you referring to support and resistance, or something else? Just wondering if you could elaborate on that part of it as I've been schooled to avoid technical analysis at all costs, and so I have very little understanding of it.
    Support and resistance are basic components, but small ones (right now). They tend to lag pretty much everything else that matters and just reaffirm what has already happened (which can help lend credibility to other technicals, and forward looking fundamentals for that matter, but just after the fact). However, they do become very important if you're looking to rebalance a portfolio; just not *when* you should rebalance a portfolio. Make sense?

    I'll elaborate in as concise a way as possible, but first, you've been schooled to avoid technical analysis at all costs? Are you basically just a passive strategy/random walk/efficient market theory/hypothesis/Efficient Frontier/Markowitz subscriber?

    There's nothing wrong with that, but I think some of it is complete garbage (as do many, many other well respected economists/analysts/asset managers, etc...

    Elaborate on that first and then I'll hit you with what I have.
    Last edited by SkyDivingDeacon; 04-10-2012 at 03:03 PM.

  7. #307
    Quote Originally Posted by SkyDivingDeacon View Post
    Support and resistance are basic components, but small ones (right now). They tend to lag pretty much everything else that matters and just reaffirm what has already happened (which can help lend credibility to other technicals, and forward looking fundamentals for that matter, but just after the fact). However, they do become very important if you're looking to rebalance a portfolio; just not *when* you should rebalance a portfolio. Make sense?

    I'll elaborate in as concise a way as possible, but first, you've been schooled to avoid technical analysis at all costs? Are you basically just a passive strategy/random walk/efficient marke hypothesis/Efficient Frontier/Markowitz subscriber?

    There's nothing wrong with that, but I think some of it is complete garbage (as do many, many other well respected economists/analysts/asset managers, etc...

    Elaborate on that first and then I'll hit you with what I have.
    I've learned to value individual companies and indices, form portfolios to try to beat benchmarks, etc... based on fundamental analysis (DCF, comparable company/transactions, ratio analysis, visits to a business to see operations and meet management, etc). And of course this all takes place while I am continuing to analyze general economic changes and determine which geographies and industries will do best with these changes. I believe that mispricings will, in the medium term, move towards the intrinsic value. I've been told by professors, CFA material, and professional mentors that technical analysis has no merit, studies don't support technical analysis for valuation and can't accurately predict price movements. As I've come to believe, I think there is merit in combining both technical and fundamental analysis, but that is more a random idea I have, as I don't even know enough to be dangerous on the subject.

    ETA: I think modern portfolio theory is fine for most people, and from that perspective the passive investor can minimize risk/return without having a lot of information/skill. However, I like to actively manage, and believe that given all the "noise" and "chickens without heads" in the equity market, there are mispricings to be found. Mispricings can occur for a long list of reasons, but behavioral/technical reasons seem to come into play more than I thought.
    Last edited by DEACisGO; 04-10-2012 at 04:09 PM.

  8. #308
    Quote Originally Posted by DEACisGO View Post
    I've learned to value individual companies and indices, form portfolios to try to beat benchmarks, etc... based on fundamental analysis (DCF, comparable company/transactions, ratio analysis, visits to a business to see operations and meet management, etc). And of course this all takes place while I am continuing to analyze general economic changes and determine which geographies and industries will do best with these changes. I believe that mispricings will, in the medium term, move towards the intrinsic value. I've been told by professors, CFA material, and professional mentors that technical analysis has no merit, studies don't support technical analysis for valuation and can't accurately predict price movements. As I've come to believe, I think there is merit in combining both technical and fundamental analysis, but that is more a random idea I have, as I don't even know enough to be dangerous on the subject.
    Ahh, got it. Well put and I fully support your approach (and use it myself).

    Saying techincal analysis has no merit, though is a big stretch in my opinion but there are camps for everything and the CFA material (are you a CFA or any Level in the CFA curriculum by the way) touches on both.

    The CFA gives you everything you need to go down one path or the other, and the Institute itself is more academically minded than practically. You have CFA's that only employ active management, and you have CFA's that swear by Vanguarding and think Boyle is a God. As such, you're going to have credibility lent to both sides of the equation. I'm with you, though in thinking that they can be mixed in proportion to one another, and that's where I think Technical Analysis is a wonderful approach. For example, are options a form of technical or fundamental analysis? I'll argue to the death of me that they are by design, purely technical as they are an 'option' on an underlying security. They derive their value from something else, so they can't by themselves have any fundamentals, right? Options don't have earnings reports or hire people like traditional companies do, but many of the same people that are index-only, passive investment style managers tend to follow what options do and think that they're part of the process in evaluating the fundamentals of a company and its stock. I think that's inherently wrong.

    To that end, you can analyze everything you want to about an index, a company, an economic trend, etc... and still pick a stinker of an ETF, Stock, Bond, etc...My question is, why is that? If you know everything about a company, and can see that it has great prospects and excellent fundamentals and favorable economic conditions for its particular sector, why do so many of them do so poorly?

    If you spend a little bit of time understanding variance swaps and other things like MACD, RSI and some other basics and then spend a hell of a lot of time understanding options, I think you (not you personally, just the universal 'you') will have a competitive edge when you go about constructing a portfolio and monitoring it over time. As I've said before, I don't follow one side or the other. I've had QQQ in client portfolios for the last 4 years or so and haven't touched it (and probably won't) but I've also implemented individual equities like Bank of America last November, or something like VIXY a couple of weeks ago. I just think there's a better way to do it if you take the time to take nuggets away from both sides and combine them into something you enjoy and stay committed to.

    And the other thing that bothers the hell out of me is that a lot of these indexers and academics point to the 30 years leading up to the second Millenia. Well hell, if you put 10,000 companies on a dart board and threw 100 darts at them, 99 out of your 100 darts would have landed on a company that did exceedingly well during that time. Thus was born, over a number of decades, this idea that an index is impossible to beat. I too think that is inherently wrong if you're willing to do a little research and not subscribe fully to one side or the other. Stay contrarian...

  9. #309
    I had never thought of options that way (fundamental vs technical), but you make a great point. To answer your question, I passed the CFA Level 3 exam last summer and am wading through the final administrative deliverables to get the charter (I have admittedly dragged my feet as there was no immediate need for a charter after I finished). What specific sections of the CFA curriculum do you think best help to understand technicals? Behavioral finance, quant, and derivatives (now that you mention it) come to mind.

    Relative to how you view it, my thought of technical analysis is overly specific in that I just picture someone looking at a chart of historical prices to figure future movements. And to answer your questions of how the best companies can do very poorly in the market, my answer would be market "noise", which for example could be buy/sell algorithms, activity from large funds that have specific investing rules, Jim Cramer. Technicals play a big part in how the market moves when I think about it from that perspective.

  10. #310
    Not sure how it will affect the stock price, but the Attorney General is expected to announce an anti-trust lawsuit against Apple for price fixing. No movement yet.

  11. #311
    Quote Originally Posted by HuskyDeac View Post
    Not sure how it will affect the stock price, but the Attorney General is expected to announce an anti-trust lawsuit against Apple for price fixing. No movement yet.
    Good catch. I think it's only for their e-book division, though, so I would be shocked, absolutely shocked if it affects the company's bottom line, growth plans, earnings, etc... much less affect its stock. AAPL is going to be a $1K stock. Book it

  12. #312
    Quote Originally Posted by SkyDivingDeacon View Post
    Good catch. I think it's only for their e-book division, though, so I would be shocked, absolutely shocked if it affects the company's bottom line, growth plans, earnings, etc... much less affect its stock. AAPL is going to be a $1K stock. Book it
    Agreed, I just thought it might take a hit short term. I hadn't heard it was only their e-book division though. Not that big a deal I suppose.

  13. #313
    Quote Originally Posted by SkyDivingDeacon View Post
    Good catch. I think it's only for their e-book division, though, so I would be shocked, absolutely shocked if it affects the company's bottom line, growth plans, earnings, etc... much less affect its stock. AAPL is going to be a $1K stock. Book it
    seems they will need quite a turn around to get to 1000$ after getting pounded the last several days.

  14. #314
    Quote Originally Posted by deacs1995 View Post
    seems they will need quite a turn around to get to 1000$ after getting pounded the last several days.
    This mini-correction was inevitable, I think. Does not appear to be anything stopping AAPL long term. I think they hit $1000 in next 5 years for sure.

  15. #315
    Rough few days, but AAPL is bouncing back today.

  16. #316
    Quote Originally Posted by deacs1995 View Post
    seems they will need quite a turn around to get to 1000$ after getting pounded the last several days.
    Oh, ye have little faith

  17. #317
    What fund or ETF carries a lot of Apple?

  18. #318
    The Pumpfaker Juice's Avatar
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    If i want to throw some money into doing a little stock trading online, what should i use? I am probably only going to throw $2k into this at most. Tradeking?

  19. #319
    Quote Originally Posted by Juice View Post
    If i want to throw some money into doing a little stock trading online, what should i use? I am probably only going to throw $2k into this at most. Tradeking?
    I use Tradeking. $4.95 per trade is the lowest I found. They're real easy to use and the one time I needed customer service they took care of the problem in 5 minutes. Those in the know will probably have a much better idea for you though.

  20. #320
    i use tdameritrade.. 9.95/trade

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