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#11
03-07-2007, 02:51 PM
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Re: how many hrs/week of work needed to beat the S&P500?
Outperforming the s&p is extremely difficult. You will definitley not do it if you will be getting your info from cnbc, wall st journal or any mass financial publication, because once you hear or read about it, it's too late to get involved.
The key to investing in stocks if youre looking to outperform what the wall street bigs are doing, is do your own research on more of the obscure small/midcap companies. Peter Lynch tells the story of how his wife would come home and tell him that the store is out of Leggs pantyhose again, all the women buy them. That told Peter something, and sure enough Leggs was a big winner for him. For me, when I was in school my mailbox was always stuffed with junkmail. I was so frustrated I called the company, Advo systems, to ask them to get me off the list. This was no easy task, as I had to get the right phone numbers and departments. I soon realized how big the company was, and how profitable it could be. I bought the stock at 4 and sold a year ;ater at 10. Smith Foods, in school I had never seen a supermkt like Smiths, gourmet foods, drycleaning, banking , pharmacy etc..It was alwasypacked regardless of what time you went there. A year later I saw a prospectus for their IPO, though I wasnt able to buy on the offering price, I still be bought the day it opened and sold less than a year later IRC doubling my investment. So my advice is, look for these companies (diamonds in the rough),educate yourself enough to know how to read a balance sheet and weigh prospects, and invest accordingly. Good luck! 
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#12
03-07-2007, 06:13 PM
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Re: how many hrs/week of work needed to beat the S&P500?
[ QUOTE ]
[ QUOTE ] "So, I think it's very easy to beat the S&P 500, with the same or less risk by looking at other asset classes of stocks, and it does not require any individual stock research." can you reccomend some reading to this effect? [/ QUOTE ] Yes. Anything about asset allocation. The IFA website linked to above has a good but very thorough introduction to it. [/ QUOTE ] I agree. IFA's book "Index Funds: The 12-Step Program for Active Investors" is good. You can buy it from Amazon or download the PDF (I think still for free). The Four Pillars of Investing is my favorite book. -Tom
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#14
03-07-2007, 07:31 PM
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Re: how many hrs/week of work needed to beat the S&P500?
You have to realize Buffett himself thinks about investing 24/7, even when he is not doing active research. Finite numbers of hours are what is advertised by brokerages and "experts". The problem is, when Jim Cramer / Walter Schloss tells you to study x number of hours a day, he is basing it off his own intellectual and information processing abilities. x number of hours may be enough for him to get the understanding he advertises, but its only b.c he already has tremendous bkacground. Unless you are already a financial expert, you literally have to be in love with it and think about it 24 hours a day until you become one.
Pretty similar to getting very good at poker - the reason most people don't is not intelligence, they simply say "Ok I've done poker / investing for 3 hours, time to go drink some Budweiser". In poker, this is what most people do and its fine b.c the game is very easy - you can still make 50k/year or whatever. Investing is a tougher game with much less "fish". I firmly believe any world-class poker player / investor is either still completely obsessed with it, or was obsessed for an extended period in order to get to worldclass. Then they just start cruising along and telling people how easy it is, especially if they can sell books doing it, making not only revenues, but at the same time reseeding the fish pool with overconfident newbs.
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#15
03-07-2007, 07:37 PM
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Re: how many hrs/week of work needed to beat the S&P500?
[ QUOTE ]
[ QUOTE ] Outperforming the s&p is extremely difficult. [/ QUOTE ] Are you serious? (By the way, I am being serious asking this.) [/ QUOTE ] He may or may not be serious, but he's wrong.
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#16
03-07-2007, 09:50 PM
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Re: how many hrs/week of work needed to beat the S&P500?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Outperforming the s&p is extremely difficult. [/ QUOTE ] Are you serious? (By the way, I am being serious asking this.) [/ QUOTE ] He may or may not be serious, but he's wrong. [/ QUOTE ] I think it is extremely easy to beat the S&P 500. However, I have never had money to invest (until recently). I'm off to a decent start, but will find out over the next few years if my ideas I have been studying for the last several years have any truth behind them.
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#17
03-07-2007, 11:44 PM
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Re: how many hrs/week of work needed to beat the S&P500?
This is the worst advice EVER
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#18
03-07-2007, 11:51 PM
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Re: how many hrs/week of work needed to beat the S&P500?
If you seriously spent 1 hour per week researching the stocks you own, you would be surprised at home much of an "expert" you became on the company.
For example, I own Garmin. Now, I did a little research into the company, but over the 6 months that I have owned the stock I learned TONS. Literally, I know of all of their product lines, what they expect to sell the most of, where they are concentrating efforts, margins, etc. If you want to compete and "beat" the game, you need to be at least as educated as the top players - just like in poker. Think about what an edge you would have if you could peak at a player's cards once in a while. This is what it means to have superior knowledge. An if you stick to it, you will have more knowledge than most brokers since you are concentrating on 5-10 stocks, and they need to read about MUCH more and will have no time to do the extensive learning that you have done.
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#19
03-08-2007, 01:21 PM
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Re: how many hrs/week of work needed to beat the S&P500?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Outperforming the s&p is extremely difficult. [/ QUOTE ] Are you serious? (By the way, I am being serious asking this.) [/ QUOTE ] He may or may not be serious, but he's wrong. [/ QUOTE ] Yes, I am serious, and no, I am not wrong. 75% of the funds out there do not outperform the s&p (managed by the top people on Wall st.) yet you think it is not too difficult to have a greater return. Please explain.
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#20
03-08-2007, 01:42 PM
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Re: how many hrs/week of work needed to beat the S&P500?
[ QUOTE ]
Yes, I am serious, and no, I am not wrong. 75% of the funds out there do not outperform the s&p (managed by the top people on Wall st.) yet you think it is not too difficult to have a greater return. Please explain. [/ QUOTE ] Simple - they're not trying to outperform the S&P. You're considering solely reward without thinking about risk, whereas in the real world both are important to a fund manager. This myth that mutual fund managers are dolts too stupid to buy one of everything is just that - a myth.
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