Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: CommanderCricket who wrote (109304)	9/14/2008 10:02:30 AM
From: chowder	Respond to of 206222

>>> Hah, it's rare for me to hold more than 6 stocks and suspect many here would think I'm nuts (and stupid) for not being better diversified. <<< Not at all! Especially in a bull market. When I had my Series 6 license, I studied every style of investing known to fund managers. I used to have access to that information. The best performers in a bull market were the focus funds, those that held very few positions and bought large positions in those few positions. The only funds that outperform the focus funds in a bull market are sector funds ... if that sector is in vogue at the time. Growth and Value, when diversified, do not outperform the focus funds, or didn't the years I had access to that information. Your style is akin to the focus funds. You focus on just a few good ideas. If people think about it, you can come up with 2 or 3 good ideas. Nearly difficult to come up with 50 or 100 good ideas. The more you own, the more you gravitate to the median. You become an index fund. My research showed that 5 or 6 really good ideas is what it takes to outperform the markets consistently and that means you buy size in your best ideas! Good job. Congratulations!

To: CommanderCricket who wrote (109304)	9/14/2008 11:11:53 AM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 206222

How does 34% growth per year sound since 1995 sound using the above strategy. Sounds great :O) I've taken to being more focused on fewer stocks also and more liquid. I cannot say I have anywhere near your consistency though Since 99 when I first dipped my toe into the market I've had from -25% to +125% years ... I'm trying to lose the beta in my PF.. I'm limited still wrt options etc for protection.. since most of my PF is in non taxable accounts.. That's starting to change now.. BTW the worst years were in the middle mostly .. That's when I deluded myself into thinking I knew a lot more than I did ;o) TBS

To: CommanderCricket who wrote (109304)	9/14/2008 6:25:44 PM
From: pppp	Respond to of 206222

How does 34% growth per year sound since 1995 sound using the above strategy. The current rolling 5 year average is 44% a year and the numbers keep getting better since I quit the day job. At first blush 34% seems way to high but it isn't when you add in 3 years where I more than doubled the value of the portfolios. 2003 and 2004 were by far the best years COMMANDER, Congratulations! tks for so many worthwhile posts. Keep beating market & posting. dcamigo

To: CommanderCricket who wrote (109304)	9/15/2008 4:02:39 PM
From: Wyätt Gwyön	14 Recommendations Read Replies (3) \| Respond to of 206222

How does 34% growth per year sound since 1995 sound using the above strategy high growth is very strongly correlated to risk. it is much easier psychologically to take big risks with a small PF, or if one is quite young, since there is not so much to lose and more time to earn it back through savings. with increasing PF size, it eventually becomes impossible to replace PF through savings, so safety is naturally a higher priority. but making that switch in mentality, from gambler to steward, is not easy. i was leveraged 800-1000% most of 1999. the next year i was 100% equities without leverage for most of the year. a couple years later i rarely went above 50% equities. now rarely above 35%. but there are other problems with a larger PF--we don't live in a simple world anymore, where you can trust that the dollar will be worth something in the future. therefore, it's hard (for me at least) to regard most bonds as a no-brainer. heck, we are now even seeing spreads blow out on USTs to record levels. verily i say unto you, there is no place to hide. me personally, i have a real hard time holding USD, especially since Paulson et al decided to nationalize the GSEs. so, i split my "cash" between JPY and teh shiny. however, my costs being in USD this inevitably leads to "tracking error" and one must be prepared to ride out the bumps. If you've have the time to daily monitor positions and are comfortable with research, you can generate fantastic returns holding only 4 - 5 stocks i like holding a small number of stocks myself, mainly due to laziness and also because i only like large-cap high-dividend-paying energy cos, so the pool is limited -g-. but, i have no illusions that the market can be easily beaten forever. for all the people who think they are smarter than the market, you have not accomplished what Bill Miller accomplished. he beat the market 15 years in a row running a large mutual fund. if anyone could have confidence in his future prospects for beating the market, it would be him. if past were prologue, this guy would be the safest bet. but he underperformed SPX in 2006 (breaking his streak) and is down around 30% YTD (and that's before today's shellacking). as a result, his fund has now UNDERperformed the SPX over the past decade. moral of story: you can beat the market fairly consistingly, or even very consistently, for a long time, only to have your ass more than handed to you over a short time period and there goes the early retirement. so, we should try to keep some humility as active investors. personally, i consider it a fool's errand and a mug's game, but i'm doing it nonetheless. why? because i think peak oil changes everything. i think active investing is probably a bad idea in a steady-as-she-goes world, where there is steady 3-4% real growth in US GDP (honest GDP, not the fake kind put out by our govt; cf. shadowstats), but if one assumes peak oil is real then real GDP will start to contract, which is bad for just about every non-energy company in the SPX. also, with all of our financials troubles in the US, one has to wonder how long USD and other paper currencies will retain value. i have no idea whether it will be better in the long run to do the active investing thing, but regular passive indexing has not done very well this decade, while doing "obvious" things like going long energy, gold, and shorting ABX/CRE/financials have done well, though with plenty of hiccups. it's almost been TOO easy to do well this decade. either there are WAY too many morons running professional money (and thus leaving low-hanging froot to us amateurs), or we live in lucky times. in any case, i don't trust it to continue. although it hasn't happened to me yet this decade, i expect to get hammered one of these years. it's unnatural for something like energy strategy to win every year.