Do you want to own the whole haystack [VTI] when someone has a blowtorch?

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Prettyfrtnt
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Do you want to own the whole haystack [VTI] when someone has a blowtorch?

Post by Prettyfrtnt » Fri Apr 03, 2020 12:23 pm

Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.

sf_tech_saver
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by sf_tech_saver » Fri Apr 03, 2020 12:30 pm

Probably true, and probably already priced into their shares.

If anything I believe the pandemic makes individual stocks even more unpredictable.

If anything this is an awesome time to be focused on accumulation. My focus is on saving as much as possible and buying more VTI.
VTI is a modern marvel

Silk McCue
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Silk McCue » Fri Apr 03, 2020 12:33 pm

Diversification is a benefit regardless of the reason for market machinations. There is nothing new here from a market volatility perspective.

I think your Boglehead core ideals may only be skin deep. Therein lies the problem.

Cheers

KSActuary
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by KSActuary » Fri Apr 03, 2020 12:34 pm

I would only go as far as to tilt a portfolio towards growth versus value at this point.

InvestingGeek
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by InvestingGeek » Fri Apr 03, 2020 12:35 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
Outsmarting the market once is not impossible if you really do know better - there are others on this very forum who have done this. In this case, it appears you may. The rest of us don't so we have to own the haystack :).

DoTheMath
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by DoTheMath » Fri Apr 03, 2020 12:41 pm

Sure, if you have good reason to think you have knowledge ahead of the market, then knock yourself out. Although keep in mind that for it to work out profitably for you, the market has to come around to your thinking and do so in a timely manner.

I'm curious as to why you believe Ford and GM are obvious losers beyond what is already priced into the market. If anything, if you were to ask me for suggestions at stocks to look at which might be irrationally beat down right now, I would have suggested GM and Ford. They are large companies which history suggests are too big to fail, the demand for their products is pretty durable in the long haul and I would guess their sales would be mostly unaffected by recent events (maybe in the short term but not over a longer period).
Last edited by DoTheMath on Fri Apr 03, 2020 12:43 pm, edited 2 times in total.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by The Broz » Fri Apr 03, 2020 12:42 pm

There are always winners and losers in business. The idea of owning everything is so that you don't have to guess the winners, and just hope you are right. Owning everything means you are guaranteed to own the winners, and their value is theoretically infinite. Sure - you own losers too, but they can only go to zero.
Owning the full market is simply a bet on the success of American business over the long term. Nothing more - nothing less.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by miamivice » Fri Apr 03, 2020 12:42 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
This sounds like insider trading. If as a physician you have access to non-public information, like the success or lack thereof of clinical trials used to treat disease, and are trading based on that non-public information, it might be worth reviewing the laws on insider trading.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by manatee2005 » Fri Apr 03, 2020 12:44 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
Terrible analogy

BigJohn
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by BigJohn » Fri Apr 03, 2020 12:46 pm

Sure, there will be winners and losers but to profit from that you have to know more than the professionals who do this for a living. What do you think you know that they don’t? If nothing, then those possibilities are already priced in.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by KlangFool » Fri Apr 03, 2020 12:46 pm

OP,

1) If it is obvious to you, why do you think it is not obvious to others?

2) Let's say that you are right, so what? Could you make enough to justify taking the gamble? What is your expected return? 100%? 200%? 1000%?

I only bet on the individual stock that may return 10X to 40X. None of your picks could possibly achieve that.

KlangFool

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by TomatoTomahto » Fri Apr 03, 2020 12:50 pm

It’s a good thing that the professionals doing equity trading don’t have access to physicians and are stumbling around in the dark. This provides you a great opportinity to outsmart the market.

In case it’s not abundantly clear, [/sarcasm].
Okay, I get it; I won't be political or controversial. The Earth is flat.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by nisiprius » Fri Apr 03, 2020 1:18 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
...Won’t there be obvious winners and losers?...
There never are in "normal" times. Exactly why do you think it is easier to identify them in a situation of chaos, turbulence, and conditions that have not occurred before?
...I feel I have as a physician very specific epidemic knowledge ahead of the market...
I once felt that I, as a software engineer, had very specific high-tech knowledge ahead of the market.
Is anyone starting to think they are smarter than the market? The market has been fairly dumb.
The market is dumb, and to date my experience has been that I am dumber. I take it you are starting to think that you are smarter.
...Even Cramer says only a few will survive in many sectors.
That is always true. Company survival is never assured. Some people like to call that "creative destruction." Just to pick one example, who ever would have thought that an obviously hippie, flaky, New Age company (even the name "Apple" sounded weird until we all got used to it) would be the big winner, while solid, 100%-business Osborne would be the loser?

Image

There is never any time at which indexing appears to be the optimum. It always seems obvious that you should be able to pick, maybe not the very best stocks, but stocks that are better than average. It always seems as if you must at least be able to toss out the obvious stinkers. Apple circa 1997, for example--an obvious stinker.

And yet over the last 15 years, 89% of all actively managed large-cap stock funds underperformed the S&P 500.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by HomerJ » Fri Apr 03, 2020 1:23 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Losers: Ford, GM, many more.
Why are GM and Ford going to be losers in the long-term?

Your "core" Boglehead beliefs are about long-term returns, right?
Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
First off, Cramer is not worth listening to.

Second, owning all the companies is still the right play, unless you know for sure which companies will survive and which won't.

Just like before.

But if you think you can pick the winners and losers, well, sure then yes, you should start picking individual stocks.

Good luck with that.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by HomerJ » Fri Apr 03, 2020 1:23 pm

The Broz wrote:
Fri Apr 03, 2020 12:42 pm
There are always winners and losers in business. The idea of owning everything is so that you don't have to guess the winners, and just hope you are right. Owning everything means you are guaranteed to own the winners, and their value is theoretically infinite. Sure - you own losers too, but they can only go to zero.
Owning the full market is simply a bet on the success of American business over the long term. Nothing more - nothing less.
This. Good post.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by ThriftyPhD » Fri Apr 03, 2020 1:27 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
I'm sure there are a more than a few MDs working into their 70s and 80s after using their medical knowledge to guide their investments.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by watchnerd » Fri Apr 03, 2020 1:33 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
The problem is that the conclusion you've come to is a fairly common one and others have drawn the same conclusion.

See:

https://bigcharts.marketwatch.com/advch ... e&state=12


You might end up buying a bunch of stocks that have already had a big run-up in price.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by dukeblue219 » Fri Apr 03, 2020 1:35 pm

What percentage of 3M's profit comes from personal protective equipment like N95s? I'll bet its tiny.

I get what you're saying, but to be blunt, you don't need to be a physician to make the conclusion that Zoom will sell a lot of licenses and Amazon will make a lot of deliveries. That's why everyone else has bid them up already.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by watchnerd » Fri Apr 03, 2020 1:38 pm

ThriftyPhD wrote:
Fri Apr 03, 2020 1:27 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
I'm sure there are a more than a few MDs working into their 70s and 80s after using their medical knowledge to guide their investments.
Several of my doctor friends were so very prone to making concentrated biotech bets, many of which didn't do well.
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watchnerd
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by watchnerd » Fri Apr 03, 2020 1:39 pm

dukeblue219 wrote:
Fri Apr 03, 2020 1:35 pm
What percentage of 3M's profit comes from personal protective equipment like N95s? I'll bet its tiny.

I get what you're saying, but to be blunt, you don't need to be a physician to make the conclusion that Zoom will sell a lot of licenses and Amazon will make a lot of deliveries. That's why everyone else has bid them up already.
Right.

They're in the "no duh" camp.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by David Jay » Fri Apr 03, 2020 1:45 pm

I agree with many of the other posters: Go for it.

Just do yourself the favor of keeping really good records. That is what moved me from stock-picker to indexer. I couldn't beat the market.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bck63 » Fri Apr 03, 2020 1:50 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
I am buying on each down day. My thought is that I'm buying the winners on the cheap and the losers on the REALLY cheap. Win-win in my book. I own the S&P 500 only, on the equity side of my portfolio.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Prettyfrtnt » Fri Apr 03, 2020 1:52 pm

Great answers so far everyone. I just wanted and needed these answers. I needed your wisdom. I simply wanted to know how you thought about it. I am still very much buying VTI all the time be way of not selling it and saving rate.

1) Not insider trading like a clinic trial. Just public info plus what my level of knowledge.

2) I’m not shorting anything so ford and gm were just examples. I should have used travel and airlines. And yes I understand market is knowledgeable on these companies.

3) Anyone agree w Klang about 10x-40x stock plays? Klang seems like Nostradamus to me right now.

4) I mention Costco 3M Zoom Amazon because I agree the ship has already sailed on them. Market gets it. Just look at their stocks compared to broader indices.

5) I’m talking about things that are next based on the math of the pandemic. Here’s an example which is just an example: what if I knew a company that produced the worlds easiest to scale anesthetic and I saw how anesthetics are getting scarce in NY from physician only boards and my understanding of math and the exponential ventilator needs. Can’t wait for someone to ask me the name of that company.
Last edited by Prettyfrtnt on Fri Apr 03, 2020 2:00 pm, edited 5 times in total.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bck63 » Fri Apr 03, 2020 1:53 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
Do you feel you have more knowledge than experts like Dr. Fauci and Dr. Birx, and their massive team? What do you know that they don't? And their publicly-provided information is already known by the market.

Sounds like you're embarking on a losers game.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bottlecap » Fri Apr 03, 2020 1:57 pm

If the haystack is going up in smoke, it doesn't matter anyway. Not a good analogy.

"The market is dumb, and to date my experience has been that I am dumber."

That is the best financial quote I've heard in a long, long time.

JT

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Prettyfrtnt
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Prettyfrtnt » Fri Apr 03, 2020 1:58 pm

bottlecap wrote:
Fri Apr 03, 2020 1:57 pm
If the haystack is going up in smoke, it doesn't matter anyway. Not a good analogy.

"The market is dumb, and to date my experience has been that I am dumber."

That is the best financial quote I've heard in a long, long time.

JT

Maybe some of the hay has fire retardant. Lol. The dumb quote was priceless.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by KlangFool » Fri Apr 03, 2020 1:59 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 1:52 pm
Great answers so far everyone. I just wanted and needed these answers. I needed your wisdom.

1) Not insider trading like a clinic trial. Just public info plus what my level of knowledge.

2) I’m not shorting anything so ford and gm were just examples. I should have used travel and airlines. And yes I understand market is knowledgeable on these companies.

3) Anyone agree w Klang about 10x-40x stock plays? Klang seems like Nostradamus to me right now.

4) I mention Costco 3M Zoom Amazon because I agree the ship has already sailed on them. Market gets it. Just look at their stocks compared to broader indices.

5) I’m talking about things that are next based on the math of the pandemic. Here’s an example which is just an example: what if I new a company that produced the worlds easiest to scale anesthetic and I saw how anesthetics are getting scare in NY from physician only boards and my understanding of math and the exponential ventilator needs.
Prettyfrtnt,

I have about a total of 10K in my "play money" account. In this kind of situation, I would put 1K to 10K on individual stocks that may return 10X to 40X. For example, a company that may create the necessary vaccine or large-scale anti-body test. Please note that in order to gamble this way, in general, you put money into a company that has a capitalization of less than 1 billion.

And, you should have a trading rule. In my case, it is if it triples, I would sell half of my holding.

This is nothing but a gamble. You do this with the full knowledge that you may lose it all. You are not allowed to put more money into this play account. You can only take money out.

KlangFool

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by pkcrafter » Fri Apr 03, 2020 2:01 pm

Won’t there be obvious winners and losers?
Of course, and everyone will know them, right.


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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by north2016 » Fri Apr 03, 2020 2:04 pm

Review the basics of Efficient Market Theory.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Prettyfrtnt » Fri Apr 03, 2020 2:12 pm

bck63 wrote:
Fri Apr 03, 2020 1:53 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
Do you feel you have more knowledge than experts like Dr. Fauci and Dr. Birx, and their massive team? What do you know that they don't? And their publicly-provided information is already known by the market.

Sounds like you're embarking on a losers game.
Unfortunately in many respects I believe that some of the minds on this board have a more sophisticated analytical ability and thus understanding of this new disease than the people leading this (Birx and Fauci included). That’s my opinion. If you think we as a nation have done well or are doing well just look at the numbers. We are #1. And spare the per capita stuff because (t.pueyo).

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Vanguard Fan 1367 » Fri Apr 03, 2020 2:16 pm

I don't know who said it, but I like the saying that the best time to buy into the market is when there is "blood in the streets."

I hope that this down market will be like the many others that have happened since 1926 and will eventually recover nicely. That is why I am taking Saint Jack's advice and staying the course. I am not doing something, just standing there. Many have said that while it is extremely popular to sell when the market is down it is the very worst time.

I am happy with my Vanguard Total Stock Market fund, my Vanguard S&P 500 funds, and my Fidelity Total Stock Market Fund. I am enjoying owning the whole haystack.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by HEDGEFUNDIE » Fri Apr 03, 2020 2:17 pm

miamivice wrote:
Fri Apr 03, 2020 12:42 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
This sounds like insider trading. If as a physician you have access to non-public information, like the success or lack thereof of clinical trials used to treat disease, and are trading based on that non-public information, it might be worth reviewing the laws on insider trading.
Only if the OP had a duty not to trade on that non-public information, for example if he/she worked for the biotech company developing the drug.

Sounds like you may need to review the laws on insider trading instead...

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by nisiprius » Fri Apr 03, 2020 2:26 pm

[Deleted by poster, Nisiprius]
Last edited by nisiprius on Fri Apr 03, 2020 4:53 pm, edited 4 times in total.
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by drk » Fri Apr 03, 2020 2:29 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
You need to start reading White Coat Investor. The sooner you accept that your specific knowledge isn't so special, the better.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bck63 » Fri Apr 03, 2020 2:31 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 2:12 pm
bck63 wrote:
Fri Apr 03, 2020 1:53 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
Do you feel you have more knowledge than experts like Dr. Fauci and Dr. Birx, and their massive team? What do you know that they don't? And their publicly-provided information is already known by the market.

Sounds like you're embarking on a losers game.
Unfortunately in many respects I believe that some of the minds on this board have a more sophisticated analytical ability and thus understanding of this new disease than the people leading this (Birx and Fauci included). That’s my opinion. If you think we as a nation have done well or are doing well just look at the numbers. We are #1. And spare the per capita stuff because (t.pueyo).
I'm not talking about the nation's political leadership. Discussing that is not permitted on this forum. But in terms of actionable information that would be useful to investors on this board, can you share specifically what you know about epidemiology and the nature of this pandemic that hasn't been shared publicly already by the nation's experts? It may help us make better investing decisions, since all publicly available information has already been absorbed by the market.

Please share with us. Thanks.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by drk » Fri Apr 03, 2020 2:31 pm

HEDGEFUNDIE wrote:
Fri Apr 03, 2020 2:17 pm
Only if the OP had a duty not to trade on that non-public information, for example if he/she worked for the biotech company developing the drug.
Right. As Matt Levine says, "Insider trading is not about fairness. It's about theft."

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by arcticpineapplecorp. » Fri Apr 03, 2020 2:37 pm

if you haven't read it, you might want to pick up a copy of Larry Swedroe's book, "Rational Investing in Irrational Times". The book covers numerous cognitive biases (my copy has 52 such, but a revised edition has even more).

In the scenario you describe, you're likely to make such biases:
1. Are you overconfident of your skills?
2. Do you confuse information with knowledge?
3. Do you project recent trends indefinitely into the future?
4. Do you confuse the familiar with the safe?
5. Do you confuse great companies with Great High Return Investments?
6. Do you confuse speculating with investing?
7. Do you confuse skill with luck?
8. Do you confuse before-the-fact strategy with after-the-fact outcome?

If you don't understand why or how these pertain to you, I recommend you read Larry's book. The thing about cognitive biases is we think they only apply to other people.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Kenkat
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Kenkat » Fri Apr 03, 2020 2:40 pm

I used to think I had a blowtorch but experience over time led me to learn that I just had two sticks to rub together to try to make a fire.

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Toons
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Toons » Fri Apr 03, 2020 2:44 pm

I am going to touch base with my
"Psychic"
For The Answer
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

GibsonL6s
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by GibsonL6s » Fri Apr 03, 2020 2:55 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
The simple answer is because you don't know. The future is going to be more complicated and art this point I wouldn't even want to try to predict who is going to win. Also remember a successful business does not always translate into stock market success. Everyone I know who has a Peloton loves it, but that doesn't mean they have the capital to support their growth, don't have a huge recall or product liability lawsuit they can't overcome, have an accounting scandal that tanks them or loose market share to the next big thing to come along. I would assume as a doctor you don't have the time to research and think all of this through for an entire portfolio of diversified equities. If one wanted to follow a few hunches for fun with a small part of their portfolio I would say go for it. Good luck and thanks for what you do! :sharebeer

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by rkhusky » Fri Apr 03, 2020 3:00 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 1:52 pm
Here’s an example which is just an example: what if I knew a company that produced the worlds easiest to scale anesthetic and I saw how anesthetics are getting scarce in NY from physician only boards and my understanding of math and the exponential ventilator needs. Can’t wait for someone to ask me the name of that company.
You buy in big. And then the Government tells the company that they have to sell it to them at cost. Goodbye profits. Or another company comes out with a better and cheaper anesthetic and your company's stock drops 80%. Or the management of the company is sent to prison for fraud. There's always risk with individual stocks.

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vineviz
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by vineviz » Fri Apr 03, 2020 3:24 pm

drk wrote:
Fri Apr 03, 2020 2:29 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
You need to start reading White Coat Investor. The sooner you accept that your specific knowledge isn't so special, the better.
There are nearly a million practicing physicians in the US today.

Anyone willing to bet their own money that the folks at Goldman Sachs, Fidelity, and Wellington don’t know ANY of those doctors deserves whatever portfolio returns they get.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by arcticpineapplecorp. » Fri Apr 03, 2020 3:32 pm

GibsonL6s wrote:
Fri Apr 03, 2020 2:55 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Questioning my bogelhead core ideals. Generally we want diversification. It is a benefit. Are we sure it is a benefit during a pandemic.

Won’t there be obvious winners and losers?

Winners: 3M, Costco, Zoom, Amazon... others I will not share here. I feel I have as a physician very specific epidemic knowledge ahead of the market.

Losers: Ford, GM, many more.

Is anyone starting to think they are smarter than the market? The market has been fairly dumb.

Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
The simple answer is because you don't know. The future is going to be more complicated and art this point I wouldn't even want to try to predict who is going to win. Also remember a successful business does not always translate into stock market success. Everyone I know who has a Peloton loves it, but that doesn't mean they have the capital to support their growth, don't have a huge recall or product liability lawsuit they can't overcome, have an accounting scandal that tanks them or loose market share to the next big thing to come along. I would assume as a doctor you don't have the time to research and think all of this through for an entire portfolio of diversified equities. If one wanted to follow a few hunches for fun with a small part of their portfolio I would say go for it. Good luck and thanks for what you do! :sharebeer
excellent points. moral of the story: sometimes you just don't know (for the OP, the pic below is Elizabeth Holmes. If you don't know her, do some research):

Image
Last edited by arcticpineapplecorp. on Fri Apr 03, 2020 3:34 pm, edited 3 times in total.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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watchnerd
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by watchnerd » Fri Apr 03, 2020 3:33 pm

arcticpineapplecorp. wrote:
Fri Apr 03, 2020 3:32 pm
[
excellent points. sometimes you just don't know:

Image
Ouch.

Burn.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by CardioMD » Fri Apr 03, 2020 3:39 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
I’m glad you do because I certainly don’t.
“The stock market is a giant distraction from the business of investing.” -Jack Bogle

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Valuethinker » Fri Apr 03, 2020 3:51 pm

DoTheMath wrote:
Fri Apr 03, 2020 12:41 pm
Sure, if you have good reason to think you have knowledge ahead of the market, then knock yourself out. Although keep in mind that for it to work out profitably for you, the market has to come around to your thinking and do so in a timely manner.

I'm curious as to why you believe Ford and GM are obvious losers beyond what is already priced into the market. If anything, if you were to ask me for suggestions at stocks to look at which might be irrationally beat down right now, I would have suggested GM and Ford. They are large companies which history suggests are too big to fail, the demand for their products is pretty durable in the long haul and I would guess their sales would be mostly unaffected by recent events (maybe in the short term but not over a longer period).
I am guessing that you missed the irony in that?

GM went broke during the GFC of 2008-09. Was bailed out by the US government. Bondholders got 10 cents on the dollar I believe shareholders got basically nothing. GM is not TBTF.

Long term demand for personal transportation vehicles? Yes. LT demand for the large vehicles that make all of Ford & GM's profits, and are favoured by American consumers to a much greater extent than other countries? Well, maybe not.

Doesn't mean GM & Ford (and other automakers) are not cheap right now (well, Tesla is not cheap - I think we can safely assert that, even if we argue about its future). They might well be. But I'd want to do some scenario thinking - how much pain can their balance sheets take before Chapter 11?

It's like Boeing. The company has this enormous orderbook in a growth industry. But buy the stock, now? I'd really want to believe they could survive a long winter, because I think it is going to be one*.

* or to be more precise, it could be 2+ years before air traffic travel goes back to trend growth.
Last edited by Valuethinker on Fri Apr 03, 2020 3:59 pm, edited 1 time in total.

bck63
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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bck63 » Fri Apr 03, 2020 3:54 pm

Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
Why own a haystack (VTI) when someone has a blowtorch? Even Cramer says only a few will survive in many sectors.
As an aside, this is why I like to invest in the S&P 500. There will likely always be a top 500 great companies in the US. When some fail, they will move out, and others will move in. And I will get rid of the losers and pick up the winners. I know it's almost identical to total market in terms of returns, but there's just something I like about the S&P.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by Valuethinker » Fri Apr 03, 2020 3:56 pm

vineviz wrote:
Fri Apr 03, 2020 3:24 pm
drk wrote:
Fri Apr 03, 2020 2:29 pm
Prettyfrtnt wrote:
Fri Apr 03, 2020 12:23 pm
I feel I have as a physician very specific epidemic knowledge ahead of the market.
You need to start reading White Coat Investor. The sooner you accept that your specific knowledge isn't so special, the better.
There are nearly a million practicing physicians in the US today.

Anyone willing to bet their own money that the folks at Goldman Sachs, Fidelity, and Wellington don’t know ANY of those doctors deserves whatever portfolio returns they get.
Indeed and the analysts at those banks are often MDs, themselves, as well as PhD level life scientists. They attend the conferences and read the papers. I also understand they surf the online forums where bleeding edge medical science is discussed. And they do do surveys of doctors.

For a hedge fund that kind of bleeding edge knowledge can make them a fortune, so they do, indeed, hire people to collect it.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by chw » Fri Apr 03, 2020 3:58 pm

You might be right about some of those stocks, but not able to consider some variable that could negatively impact other stocks you like. Some thoughts-

1) Say you're right about some of these stocks- do you plan to buy and hold forever, or do you have an exit strategy?
2) Seems like you have a lucrative day job, do you really want to be keeping track of a basket of stocks, and trying to keep ahead of potentially bad news, which might impact your holding a particular stock? You'll find that by the time you get or hear about any impactful news about a company, the market will know ahead of you.

Trust me, you'll be better off with the haystack- you'll find it has plenty of fire retardant in it.

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Re: Do you want to own the whole haystack when someone has a blowtorch?

Post by bmelikia » Fri Apr 03, 2020 4:07 pm

KlangFool wrote:
Fri Apr 03, 2020 12:46 pm
OP,

1) If it is obvious to you, why do you think it is not obvious to others?

2) Let's say that you are right, so what? Could you make enough to justify taking the gamble? What is your expected return? 100%? 200%? 1000%?

I only bet on the individual stock that may return 10X to 40X. None of your picks could possibly achieve that.

KlangFool
What stocks are you looking at right now that you think could be in the 10x to 40x category? I have some gambling money so just curious
"I would rather die with money, than live without it...." - Bogleheads member Ron | | "The greatest enemy of a good plan, is the dream of a perfect plan." | -Bogle

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