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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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 Posted: Thu Oct 18, 2007 8:22 am Post subject: Stock talk |
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I don't know how many people are interested in discussing gambling on the markets instead of poker. I converse on this subject with RocketPlayer from time to time and thought I would take the pulse of the rest of y'all.
I've had some money invested in the Chinese market, which has been on an insane heater to end all heaters. Matthew's China (MCHFX) is up 93% YTD and 142% in the last 12 months. It had two corrections of 15% of so during that run, but recovered almost immediately. I'm also in iShares FTSE/Xinhua China 25 Index (FXI) which is up slightly less with a bit less volatility.
There have been a number of news stories describing the insane bubble inside China as every paperboy in the country is buying shares (and there aren't that many stocks available to trade). I feel sure that this bubble will explode violently at some point, but I hate to walk away too soon. Smart people like AAlan Greenspan agree with this assessment.
Today will be a big down day for these issues, since the underlying stocks fell sharply overnight. Of course, they were up almost 10% in one day yesterday, so the blow is cushioned somewhat. This could represent a good time to buy or a warning that sky is about to fall. One never knows which. |
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rocketplayer
Sugar Daddy
Joined: 17 Jan 2005
Posts: 2743
Location: The market is a nightmare but I'm in cash!
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| Posted: Thu Oct 18, 2007 8:48 am Post subject: |
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4% down today but Hang Seng was up a bit. Just a normal day in that market isn't it?
In all seriousness, I suggest anyone interested to learn how to read charts of stocks (most of William O'Neil's books are the best IMHO) and watch for a blow out top in this market.
http://www.amazon.com/How-Make-Money-Stocks-Winning/dp/0070480176 |
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torch
Drunken Songmaster
Joined: 06 May 2004
Posts: 3458
Location: Centreville, VA
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| Posted: Thu Oct 18, 2007 8:49 am Post subject: |
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I've always liked the idea of treating the stock market like a bookie: if you are doing the same thing as most people, the house is likely going to win.
Buy on bad news. Sell on good news.
I love hasty generalizations. |
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torch
Drunken Songmaster
Joined: 06 May 2004
Posts: 3458
Location: Centreville, VA
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| Posted: Thu Oct 18, 2007 8:52 am Post subject: |
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Ok, seriously now...
I would love to talk randomly about things like this on a more regular basis, as I've queried before.
What are your thoughts on Random Walk Down Wall Street? |
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Bullajami
Uber Squid
Joined: 03 Sep 2004
Posts: 8838
Location: Mrs. Bull's Doghouse
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| Posted: Thu Oct 18, 2007 9:23 am Post subject: |
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| I am interested in penny stocks. Does anyone know a good penny stocks newsletter? |
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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| Posted: Thu Oct 18, 2007 9:30 am Post subject: |
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I was just talking about Malkiel's concepts with Suited last night, specifically his idea that you should just buy and hold index funds. You won't outperform the market, but you will be sure to do no worse. I even agree with him that many professional investment managers consistently do worse than the market and should be avoided.
Having said that, I believe that an educated investor can outperform the market on a consistent basis. In a way, a guy like Malkiel reminds me of those who say that you should never play poker because gamblers can never win. The point of ITH is that an educated and careful gambler can be a long-term winner. The point of my investment strategy is that I think I can be a long-term winner by careful stock picking and educated trading. If I was advising my grandmother, I'd tell her the same thing Malkiel says, put your money in index funds and close your eyes. If I'm advising people like most of us at ITH, who are brighter than the average bear and willing to do the homework, I'd say that you can do better. The danger is just like it is in poker. It is not enough to be smart, you have to do the work to get the education. Just like in poker, you can get good short-term results and delude yourself into thinking you are a winner.
My approach to investing has been much like my approach to poker. We took a relatively small amount of our portfolio (referred to in our house in the pre-poker days as my "gambling fund") and I meticulously tracked the performance of my hand-picked investments against the S&P 500. Year in and year out, my investments outperformed the broader market. As time went on, my "gambling fund" grew faster and our collective faith in my ability to pick stocks and funds grew and we have put more and more of our investment dollars in self-directed accounts.
The bulk of our assets are in a 401(k) fund with limited investment options and tied up in equity in our house, but substantially all of the rest of our investments are now self-directed and I remain confident that I will significantly outperform the index funds. Since May (the last time I rebalanced completely and reset my on-line portfolio tracker), I'm up 9.1% and the S&P 500 is up 3.0% in that same time window. The delta between my results and the index is not always so large, but I've always had better results than I would have following the advice of guys like Malikiel (and my very first investment guru, Andrew Tobias). |
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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| Posted: Thu Oct 18, 2007 9:36 am Post subject: |
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| Bullajami wrote: | | I am interested in penny stocks. Does anyone know a good penny stocks newsletter? |
Rocket knows a lot more than I do about newsletters, but I wouldn't pay anything for any of them until I read their review in Hulbert which is sort of the sportsbook review of the newsletter world. I've always avoided the penny stocks. I mostly invest in ETFs and selected mutual funds with a handful of individual stocks thrown in when I think I understand the company better than the market at large (mostly tech stocks and companies in my field). |
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toffeeboy
Joined: 01 Jul 2005
Posts: 349
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| Posted: Thu Oct 18, 2007 10:17 am Post subject: |
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I have to be honest, I wpuldn't invest in China due to their very dodgy human rights record. That said, my pension funds has fared a lot poorer due to my ethical stance  .
I'm currently reviewing my funds (can't be having individual shares at this moment in time) as my personal pension is performing way off. Any suggestions (excluding countries such as Turkey, Russia etc ) would be gratefully received. |
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Primitive
Odin Incarnate
Joined: 02 Aug 2004
Posts: 1886
Location: Oslo
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| Posted: Thu Oct 18, 2007 10:20 am Post subject: Re: Stock talk |
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| nsidestrate wrote: | I've had some money invested in the Chinese market, which has been on an insane heater to end all heaters. Matthew's China (MCHFX) is up 93% YTD and 142% in the last 12 months. It had two corrections of 15% of so during that run, but recovered almost immediately. I'm also in iShares FTSE/Xinhua China 25 Index (FXI) which is up slightly less with a bit less volatility.
There have been a number of news stories describing the insane bubble inside China as every paperboy in the country is buying shares (and there aren't that many stocks available to trade). I feel sure that this bubble will explode violently at some point, but I hate to walk away too soon. |
Hmmm
About 10 years or so ago I put some money into a fast rising south-east Asia fund (mainly Thailand). Situation looks very similar. Heed the warning. I didn't  |
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rocketplayer
Sugar Daddy
Joined: 17 Jan 2005
Posts: 2743
Location: The market is a nightmare but I'm in cash!
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| Posted: Thu Oct 18, 2007 10:46 am Post subject: |
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| Bullajami wrote: | | I am interested in penny stocks. Does anyone know a good penny stocks newsletter? |
  
Didn't we go this route once already Bull?
Last edited by rocketplayer on Thu Oct 18, 2007 10:51 am; edited 1 time in total |
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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| Posted: Thu Oct 18, 2007 10:46 am Post subject: |
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| toffeeboy wrote: | I have to be honest, I wpuldn't invest in China due to their very dodgy human rights record. That said, my pension funds has fared a lot poorer due to my ethical stance .
I'm currently reviewing my funds (can't be having individual shares at this moment in time) as my personal pension is performing way off. Any suggestions (excluding countries such as Turkey, Russia etc ) would be gratefully received. |
Other foreign indexes that I have been especially happy with include Australia (EWA) and iShares Pacific ex-Japan (EPP). In the highly speculative arena, Brazil (EWZ) might be worth a look. Sweden looked good for a while, but has turned into a bit of a bust.
I just bought into HIINX (Harbor International Inv) who claim that it "invests primarily (no less than 65% of total assets) in common and preferred stocks of foreign companies that have market capitalizations in excess of $1 billion, including those located in emerging market. It will invest in a minimum of 10 countries throughout the world. The fund focuses on companies located in Europe, the Pacific Basin and emerging industrialized countries whose economies and political regimes appear more stable and are believed to provide some protection to foreign shareholders."
At the lower volatility and risk end of the spectrum, I've been long PID (PowerShares International Dividend Achievers Portfolio) which has been a steady performer over the last year or so.
At the moment, I'm pretty focused on non-US markets. This is partially due to the weakness of the dollar and partially due to the extended run of most of the "foreign" (to me) exchanges. |
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rocketplayer
Sugar Daddy
Joined: 17 Jan 2005
Posts: 2743
Location: The market is a nightmare but I'm in cash!
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| Posted: Thu Oct 18, 2007 10:50 am Post subject: |
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| nsidestrate wrote: | | Bullajami wrote: | | I am interested in penny stocks. Does anyone know a good penny stocks newsletter? |
Rocket knows a lot more than I do about newsletters, but I wouldn't pay anything for any of them until I read their review in Hulbert which is sort of the sportsbook review of the newsletter world. I've always avoided the penny stocks. I mostly invest in ETFs and selected mutual funds with a handful of individual stocks thrown in when I think I understand the company better than the market at large (mostly tech stocks and companies in my field). |
ARRRGGGG, Hulbert while an ok piece of info is really not an end all source for reliable reviews, at least in my personal opinion.
I personally represented a newsletter in their fight with Hulbert on how they valued his newsletter picks. Hulbert refused to follow the rules that the newsletter put down in how and when to sell issues. This went on for months and left me realizing that basically Hulbert )and his reps) did not care if their info was accurate or not in this case. |
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rocketplayer
Sugar Daddy
Joined: 17 Jan 2005
Posts: 2743
Location: The market is a nightmare but I'm in cash!
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| Posted: Thu Oct 18, 2007 10:52 am Post subject: |
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| nsidestrate wrote: | | toffeeboy wrote: | I have to be honest, I wpuldn't invest in China due to their very dodgy human rights record. That said, my pension funds has fared a lot poorer due to my ethical stance .
I'm currently reviewing my funds (can't be having individual shares at this moment in time) as my personal pension is performing way off. Any suggestions (excluding countries such as Turkey, Russia etc ) would be gratefully received. |
Other foreign indexes that I have been especially happy with include Australia (EWA) and iShares Pacific ex-Japan (EPP). In the highly speculative arena, Brazil (EWZ) might be worth a look. Sweden looked good for a while, but has turned into a bit of a bust.
I just bought into HIINX (Harbor International Inv) who claim that it "invests primarily (no less than 65% of total assets) in common and preferred stocks of foreign companies that have market capitalizations in excess of $1 billion, including those located in emerging market. It will invest in a minimum of 10 countries throughout the world. The fund focuses on companies located in Europe, the Pacific Basin and emerging industrialized countries whose economies and political regimes appear more stable and are believed to provide some protection to foreign shareholders."
At the lower volatility and risk end of the spectrum, I've been long PID (PowerShares International Dividend Achievers Portfolio) which has been a steady performer over the last year or so.
At the moment, I'm pretty focused on non-US markets. This is partially due to the weakness of the dollar and partially due to the extended run of most of the "foreign" (to me) exchanges. |
Sure sure sure and where pray tell did you find such an outstanding list of buys?
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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| Posted: Thu Oct 18, 2007 11:33 am Post subject: |
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| rocketplayer wrote: | Sure sure sure and where pray tell did you find such an outstanding list of buys?
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You have definitely had an influence on my thinking. I was already long on internationals before you turned me on your favorite newsletter, but I'll absolutely give you at least 50% of the credit. Of course, that will mean you get 90% of the blame if it goes badly. |
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nsidestrate
Suited's Love Monkey
Joined: 26 May 2004
Posts: 22457
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| Posted: Thu Oct 18, 2007 11:35 am Post subject: |
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| rocketplayer wrote: | | ARRRGGGG, Hulbert while an ok piece of info is really not an end all source for reliable reviews, at least in my personal opinion. |
Well, I agree in part. It is sort of like Morningstar's ratings. There are flaws, but it is better than nothing (most of the time). I think finding an independant source is especially important if you are going to mess about with penny stocks, since that arena is so rife with swindlers and thieves. |
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