Financial Advisors

[stinkypete]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I just ordered it based on the fact that you said other people said it was good. Reading books is +EV no? Even if you only get one good idea from it, thats a pretty sick deal for $20.

[/ QUOTE ]

if you consider that you could have instead used that time to read a book with 3-5 good ideas, it's not such a sick deal for $20 anymore is it?

[/ QUOTE ]

read them both?

[/ QUOTE ]

most people don't have enough time to read everything they would want to read.

[snowbank]

ike,

imo your interview with them only needs to last 1 question:

"Do you make the majority of your income from your investments, or off your commissions selling to people like me?"

Although they won't come right out and directly say it, the answer will be the latter 99% of the time. Those are the people I would not hire.

[meditate89]

Dcifr- I didn't see you wrote equities in one of your first posts until I re-read it... anyways,

I think we pretty much have the same viewpoint and have just articulated it differently.

To sum up :

If you believe that the market is efficient, and Price=Value at all times, it would be ridiculous to try to time your purchase for reasons previously stated- expectation + time value of $

If you DON'T believe that the market is efficient, and you are somewhat smart/motivated, it would be ridiculous to purchase index funds at any price. After all, it would be quite a chore to value an index fund =) And much much more importantly because I'd rather own a select few very mispriced assets.
I understand why someone who accepts that EMT is BS would still buy index funds though- they're lazy/have no knowledge of mkts+ no desire to learn/ etc.

[meditate89]

I didn't mean to bash index funds so hard in that last post, they can be very very useful for people who just don't have the time / effort to put into investing

I would definitely recommend one up on wall street to newer investors as it's an easy read- Lynch understands his audience well; the American public. And therefore he doesn't use many big words, lays out the concepts in an easy to understand manner.
Dcifr- you'd be lucky to get 1 good idea, but your opp cost is prob 3 hrs of your time, and you already have the book- its not like you have to read the whole thing cover to cover. (this means I voted "2")

[DcifrThs]

[ QUOTE ]
Dcifr- I didn't see you wrote equities in one of your first posts until I re-read it... anyways,

I think we pretty much have the same viewpoint and have just articulated it differently.

To sum up :

If you believe that the market is efficient, and Price=Value at all times, it would be ridiculous to try to time your purchase for reasons previously stated- expectation + time value of $

If you DON'T believe that the market is efficient, and you are somewhat smart/motivated, it would be ridiculous to purchase index funds at any price. After all, it would be quite a chore to value an index fund =) And much much more importantly because I'd rather own a select few very mispriced assets.
I understand why someone who accepts that EMT is BS would still buy index funds though- they're lazy/have no knowledge of mkts+ no desire to learn/ etc.

[/ QUOTE ]

you've cut the issue in a way in which we now disagree.

i believe the market is not efficient. but i'd still hold passively invested index funds WHILE also allocating capital to bet on those market inefficiencies.

the issue is that i wouldn't invest in MANAGERS (mutual funds, currency managers, FI managers etc) since they tend not to be able to beat the markets over long term.

i'd simply optimize my portfolio FIRST cutting it up into alpha and beta pieces (money i'd want actively managed, by me in this case, and money that i simply want to allocate to collect risk premia from holding broad based market index funds).

i the world of asset management isn't cut into those who believe the efficient market hypothesis and those who don't. i don't believe in it yet i would still want to invest in index funds to collect the risk premia. i do this because i believe that over time, risky assets transfer that premium to their holders and it is a guarantee.

actively betting on market inefficiencies, however, is different and zero sum the amount of money you should allocate to that depends to what degree and extent you feel the markets (or hedge fund managers or whatever managers or yourself) are beatable by that money being there (information ratio assumptions).

do you see the distinction?

Barron

[gull]

[ QUOTE ]
also, does anybody want to comment on my discussion with meditate89?

am i still the only one who feels that way about the distinction between active and passive investment management?


[/ QUOTE ]

I agree that stock picking and market timing are active strategies even when over very long periods of time. Active does not equal high turnover. The distinction you're talking about between passive and active seems very logical and sensible to me.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
also, does anybody want to comment on my discussion with meditate89?

am i still the only one who feels that way about the distinction between active and passive investment management?


[/ QUOTE ]

I agree that stock picking and market timing are active strategies even when over very long periods of time. Active does not equal high turnover. The distinction you're talking about between passive and active seems very logical and sensible to me.

[/ QUOTE ]
whew, nice to know i'm not nuts!

can those who disagree present a dissenting opinion w/ rational thoughts behind it?

thanks,

Barron

[d0nkaments]

I had 4 internships in the past.. one of which was financial advisor. I hated it the most.

[jaydub]

[ QUOTE ]
[ QUOTE ]
Read "A Random Walk Down Wall Street"

http://www.amazon.com/Random-Walk-Down-W...6699&sr=8-1

[/ QUOTE ]

everybody keeps saying to read this book...it doesn't look THAT attractive to me and i'd rather work on other things.

can you guys help me decide how basic/complex boring/interesting this book is??

thanks,

Barron

[/ QUOTE ]

Wow, you haven't read this book?

Really, just wow, I have no advice as to whether or not you should read it. I'll just say you talk a lot of [censored] for someone who hasn't even read random walk but hey maybe you're familiar enough with the concepts and have read similar academic papers and such.

J

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Read "A Random Walk Down Wall Street"

http://www.amazon.com/Random-Walk-Down-W...6699&sr=8-1

[/ QUOTE ]

everybody keeps saying to read this book...it doesn't look THAT attractive to me and i'd rather work on other things.

can you guys help me decide how basic/complex boring/interesting this book is??

thanks,

Barron

[/ QUOTE ]

Wow, you haven't read this book?

Really, just wow, I have no advice as to whether or not you should read it. I'll just say you talk a lot of [censored] for someone who hasn't even read random walk but hey maybe you're familiar enough with the concepts and have read similar academic papers and such.

J

[/ QUOTE ]

thats the issue, J.

i've dealt directly with the maths behind the efficient market hypothesis. i've derived these concepts from first principles.

how much value does this book hold for somebody like me???

so far, fromt he poll, it seems that i should just keep doing what i'm doing and eventually read the book when i have time.

Barron