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#31
07-18-2007, 02:00 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
I went on the same search, the best I could find was this description from Sklanksy: "In a nutshell, it says that if you think there is a great deal, out there, buying or selling, stocks or options or mink coats or whatever, you better curb your enthusiam unless you can explain why people are (presumably erroneously) taking the other side." [/ QUOTE ] Thanks, that is more than I found and consistent with what appears to be implied in all of the discussion. I initially thought this could be an interesting topic but now it seems to essentially be like any efficient markets discussions which generally devolve into arguments about definitions. (And I think the basic idea here is ultimately the same one behind the efficient markets hypothesis.) 
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#33
07-19-2007, 01:00 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
Ken Fisher does go way overboard on the marketing. Does that necessarily mean he's a poor investor?
I know his book Super Stocks was one of the first stock market books I read and it made a big impression on me. These guys independently and consistently rate him as one of the best forecasters they follow: "He has been clear and consistent with his guidance. His speculations about the magnitude and/or direction of future changes in the overall market are right about 72% of the time, a very good track record." http://www.cxoadvisory.com/gurus/fisher/default.asp
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#34
07-19-2007, 01:59 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
Ken Fisher does go way overboard on the marketing. Does that necessarily mean he's a poor investor? [/ QUOTE ] No, the fact that his funds trail the market makes him a bad investor. [ QUOTE ] I know his book Super Stocks was one of the first stock market books I read and it made a big impression on me. [/ QUOTE ] Never read it, but I've read many investing books that had a big impression on me when I didn't know anything about investing. Now I realize most of them were worthless, or plain wrong. Can't tell you if his book is in or out of those categories. [ QUOTE ] These guys independently and consistently rate him as one of the best forecasters they follow: "He has been clear and consistent with his guidance. His speculations about the magnitude and/or direction of future changes in the overall market are right about 72% of the time, a very good track record." http://www.cxoadvisory.com/gurus/fisher/default.asp [/ QUOTE ] Nobody has a good track record forecasting the market over long periods. Not publicly, at least. The analysis you point to is short term (only 6 years) and can be very easily biased, or cheated. But most importantly, if his calls are so prescient, how come his funds aren't killing the market?
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#35
07-19-2007, 04:12 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
He could be a poor bottom-up investor and a good market timer. Or he could be good at both or horrible at both. It’s not easy to tease it out of the data.
A large % of the $40 billion+ of accounts that Fisher is running are with a balanced mandate. How does one say a balanced portfolio is outperforming or underperforming really? If the market goes up it will more than likely underperform and if the market goes down it will more than likely outperform. He used to claim (still does?) that in the long run he beats the market(I’d love to see the data he uses because if the long run is long enough, then it would be almost impossible to beat the market headsup with a balanced approach). But I'm sure the data can be massaged to make him look like a genius or an idiot. I would disagree with the statement that no one has a good track record forecasting the market over long periods. But it’s almost impossible to prove. Most investors have their market timing exposure commingled with their investment picking exposure. So one that is considered a great investor may just be a great market timer via cash exposure, beta-tilting the portfolio etc and vice-versa. And six years can be a lifetime if the sample size is high enough or nothing if it’s not. More than one hedge fund has computer algorithms that many times a day can certainly forecast where markets are going in the next few seconds and have been able to do that for many many years. Warren Buffet correctly sold everything 1970ish and bought everything 1974ish. Everyone goes on about how great his market timing was and that’s only two trades in a 5 year period. A casual look at the history of the Fisher comments shows he was bearish in early 2000, nailed the bottom in 2002 and has been bullish since then. So one could say it was very much Buffett-like. [img]/images/graemlins/smile.gif[/img] And if, adjusted for market exposures, he still underperformed the market then he could well be an extremely bad stock picker as his timing was spot on for that period at least. So from all of the above I agree that it can’t really be proved that he’s a great timer. But it can’t really be proved he’s horrible either. And by one popular guru measure he’s done ok at it. The only reason I’m defending him is that he has always been willing to public views that are often actually contrarian to the popular view makes him one of the few pundits I’ll at least check in on every several months. Good point on the book. I do think it was a good book when it came out 25 years ago but it’s subpar now. Similar to my view on the Seth Klarman book “Margin of Safety” that goes for $1,000 on Ebay. Sorry for the ramble.
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#36
07-19-2007, 08:04 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
For someone like Sklansky it's not about playing pokermore or anything like that, it's just about generating hits on his site and selling books . When people are on sick downswings or afraid the poker industry will go down then you can sometimes capitalize on sentiment that is completely out of whack with what any reasonable analysis will tell that the poker industryis worth. So you post a lot, you play some cards , and once in awhile you see something out of whack so you post your blinds, then give up your button to go bet the ponies and then you go back to the game. [/ QUOTE ] [img]/images/graemlins/tongue.gif[/img]
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#37
07-20-2007, 04:27 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
stock market is not a zero sum game [/ QUOTE ] Short term trading is a Zero Sum Game. Longer term investing can be viewed... As a Zero Sum Game where the pot grows 10%/year.
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#38
07-20-2007, 05:17 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
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People talk about how great Warren Buffett is in evaluating the true value of a stock with public knowledge only. [/ QUOTE ] The idea that Warren Buffett is using "public knowledge only"... is naive. Buffett and all market insiders... Like Wall Street firms, Exchanges and ECNS and their traders... Have access to additional information... Or get it much faster... Than what is provided by the mainstream media. Everybody always straddles the "insider trading" laws... And crossing them has an overwhelmingly positive risk profile... Millions in profits versus a likely slap on the wrist. [ QUOTE ] Put another way, suppose Buffet was presented with 100 randomly chosen, mid or large cap stocks, who's names were withheld from him. But not the financial and other technical information that "homework doers" use. He has to come up with his opinion of the right price for them based only on this information. The stocks that have present day prices that are more than ten percent away from Buffett's picks are checked up on in three years. Adjusting for the upward bias of stocks, who do you think will be closer in their prediction, Buffet or the market? I'd be shocked if Buffet was the favorite and even shocked if he disagreed with me. [/ QUOTE ] This is correct. Buffett would get random results under this scenario... Because "comprehensive knowledge" gained from mainstream sources... Has ZERO value in efficient markets. Actually, "comprehensive knowledge" has NEGATIVE value... Because insiders are systematically cheating you all the way up the food chain. It's worth noting that over the last 10 years... Buffett has exactly matched the market averages. His ancient investment returns from the 60s and 70s... When Buffett took huge risks with much smaller capital... Dramatically inflate his "current numbers". Market manipulation is rampant. http://www.marketwatch.com/news/story/tr...6E63005F808A%7D Soros is a good example. He was a master at manipulating markets... Using poorly regulated offshore entities.
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#39
07-20-2007, 05:48 PM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
[ QUOTE ] People talk about how great Warren Buffett is in evaluating the true value of a stock with public knowledge only. [/ QUOTE ] The idea that Warren Buffett is using "public knowledge only"... is naive. Buffett and all market insiders... Like Wall Street firms, Exchanges and ECNS and their traders... Have access to additional information... Or get it much faster... Than what is provided by the mainstream media. [/ QUOTE ] Yea, a guy who's investing locals money solely from Omaha, Nebraska, before there was an internet, fax machines, blackberries, was profiting solely from "inside information"? You don't know what you are talking about. [ QUOTE ] Everybody always straddles the "insider trading" laws... And crossing them has an overwhelmingly positive risk profile... Millions in profits versus a likely slap on the wrist. [/ QUOTE ] No doubt there are people who match this description, but it's far from "everyone". Hyperbole much? [ QUOTE ] [ QUOTE ] Put another way, suppose Buffet was presented with 100 randomly chosen, mid or large cap stocks, who's names were withheld from him. But not the financial and other technical information that "homework doers" use. He has to come up with his opinion of the right price for them based only on this information. The stocks that have present day prices that are more than ten percent away from Buffett's picks are checked up on in three years. Adjusting for the upward bias of stocks, who do you think will be closer in their prediction, Buffet or the market? I'd be shocked if Buffet was the favorite and even shocked if he disagreed with me. [/ QUOTE ] This is correct. Buffett would get random results under this scenario... Because "comprehensive knowledge" gained from mainstream sources... Has ZERO value in efficient markets. Actually, "comprehensive knowledge" has NEGATIVE value... Because insiders are systematically cheating you all the way up the food chain. [/ QUOTE ] Buffett has clearly documented his investment techniques. They don't involve insider information and if he's getting cheated he must really be crushing the market to have paid that "tax" and still beat the markets so badly. [ QUOTE ] It's worth noting that over the last 10 years... Buffett has exactly matched the market averages. [/ QUOTE ] Uh, he's beat the market eight out of the last ten years. Do you get any facts right? [ QUOTE ] His ancient investment returns from the 60s and 70s... When Buffett took huge risks with much smaller capital... Dramatically inflate his "current numbers". [/ QUOTE ] Everyone's outperformance is greater with smaller portfolios. When you've been outperforming over 50 years without using significant amounts leverage, you've been doing it with small and large portfolios, and with minimal risk. [ QUOTE ] Market manipulation is rampant. http://www.marketwatch.com/news/story/tr...6E63005F808A%7D Soros is a good example. He was a master at manipulating markets... Using poorly regulated offshore entities. [/ QUOTE ] Soros and Buffett are totally different characters. But I don't even think you understand Soros. Why don't you start posting facts instead of character assassination?
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#40
07-21-2007, 12:08 AM
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Re: More On The Dubious Value Of Comprehensive Knowledge- Part One
[ QUOTE ]
Yea, a guy who's investing locals money solely from Omaha, Nebraska, before there was an internet, fax machines, blackberries, was profiting solely from "inside information"? You don't know what you are talking about. [/ QUOTE ] You are a very trusting soul... how quaint. If you think you are playing with the same information... As Warren Buffett... then words fail me. http://finance.yahoo.com/q/bc?t=5y&s...l&c=%5EDJI That's 5 years... dead even. Welcome to my ignore list.
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