Any thoughts on The Aurora Report? [Arora Report]

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
petergibbons
Posts: 17
Joined: Sun Apr 05, 2015 11:50 am

Any thoughts on The Aurora Report? [Arora Report]

Post by petergibbons » Sun Nov 27, 2016 10:03 pm

It is a paid investment newsletter than gives advice re: stocks, bonds, precious metals etc. Any one have any experience or thoughts?

User avatar
9-5 Suited
Posts: 145
Joined: Thu Jun 23, 2016 12:14 pm

Re: Any thoughts on The Aurora Report?

Post by 9-5 Suited » Sun Nov 27, 2016 10:08 pm

"The financial media tends to focus most of its attention on stock market forecasts by purported investment gurus. They do so because they know that's what gets the public's attention. Investors must believe they have value or they wouldn't tune in. Nor would they subscribe to investment newsletters, nor publications like Barron's that claim to provide you with "news before the markets know."

Unfortunately for investors, there's a whole body of evidence demonstrating that market forecasts have no value (though they provide me with plenty of fodder for my blog) -- the accuracy of forecasts is no better than one would randomly expect. For investors who haven't learned that forecasts should only be considered as entertainment, or what Jane Bryant Quinn called investment porn, they actually have negative value because forecasts can cause them to stray from well-developed plans."

- Larry Swedroe

My advice: Avoid newsletters and other forms of market prediction at all costs.

petergibbons
Posts: 17
Joined: Sun Apr 05, 2015 11:50 am

Re: Any thoughts on The Aurora Report?

Post by petergibbons » Sun Nov 27, 2016 10:51 pm

9-5 Suited wrote:"The financial media tends to focus most of its attention on stock market forecasts by purported investment gurus. They do so because they know that's what gets the public's attention. Investors must believe they have value or they wouldn't tune in. Nor would they subscribe to investment newsletters, nor publications like Barron's that claim to provide you with "news before the markets know."

Unfortunately for investors, there's a whole body of evidence demonstrating that market forecasts have no value (though they provide me with plenty of fodder for my blog) -- the accuracy of forecasts is no better than one would randomly expect. For investors who haven't learned that forecasts should only be considered as entertainment, or what Jane Bryant Quinn called investment porn, they actually have negative value because forecasts can cause them to stray from well-developed plans."

- Larry Swedroe

My advice: Avoid newsletters and other forms of market prediction at all costs.


While I do agree with you, and I am pretty skeptical in general, this guy seems to have a good track record according to the data he has published on his website. That to me is something worth considering. Just wanted to see if anyone here has any thoughts on what he has to offer on his site.

User avatar
Watty
Posts: 11814
Joined: Wed Oct 10, 2007 3:55 pm

Re: Any thoughts on The Aurora Report?

Post by Watty » Sun Nov 27, 2016 11:09 pm

I am always skeptical that someone with effective investment picking skills or a special method would choose to sell a newsletter for a relatively modest amount when they could work on Wallstreet or trade their own account and make a seven figure plus yearly income.

There are hundreds if not thousands of newsletters and blogs that purport to give good stock picking advice. Just by random chance some of them will be right and those will be the ones that survive so their track record may not mean much. This is called "survivorship bias" and you can Google that.

Trader/Investor
Posts: 233
Joined: Wed Dec 02, 2015 9:35 pm

Re: Any thoughts on The Aurora Report?

Post by Trader/Investor » Sun Nov 27, 2016 11:12 pm

Arora Report Performance Review - CXO Advisory

[Link formatted by admin LadyGeek]

User avatar
Taylor Larimore
Advisory Board
Posts: 26250
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Any thoughts on The Aurora Report?

Post by Taylor Larimore » Sun Nov 27, 2016 11:26 pm

petergibbons wrote:It is a paid investment newsletter than gives advice re: stocks, bonds, precious metals etc. Any one have any experience or thoughts?

Peter:

The Aurora Report is primarily a market-timing newsletter. You can read what experts say about market timing in the link below (note particularly what Mark Hulbert, who tracks newsletter performance, has to say):

viewtopic.php?f=10&t=156499

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

Mav
Posts: 42
Joined: Tue Jan 05, 2016 10:55 pm

Re: Any thoughts on The Aurora Report?

Post by Mav » Sun Nov 27, 2016 11:36 pm

Trader/Investor wrote:Arora Report Performance Review - CXO Advisory

[Link formatted by admin LadyGeek]
How credible are these guys, I'd know about them for years ? Is it worth subscribing?

User avatar
9-5 Suited
Posts: 145
Joined: Thu Jun 23, 2016 12:14 pm

Re: Any thoughts on The Aurora Report?

Post by 9-5 Suited » Mon Nov 28, 2016 12:42 am

Be very cautious about assuming past performance is predictive of future results.

Imagine you flip a coin ten times and I guess correctly the outcome each time. Would you consider me a coin flipping guru, or even entertain remotely the idea such foresight was possible?

How many newsletters and advisors and firms would you suppose tout their poor track records? I'd guess none.

Proceed with caution is all. Don't lose your skepticism!

User avatar
eye.surgeon
Posts: 119
Joined: Wed Apr 05, 2017 1:19 pm
Location: California

Re: Any thoughts on The Aurora Report?

Post by eye.surgeon » Sat Nov 25, 2017 7:21 pm

Read up on regression to the mean. It's a statistical inevitability and it's not kind to the hot fund manager or newsletter maestro.
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report?

Post by nisiprius » Sat Nov 25, 2017 8:01 pm

petergibbons wrote:
Sun Nov 27, 2016 10:03 pm
It is a paid investment newsletter than gives advice re: stocks, bonds, precious metals etc. Any one have any experience or thoughts?
"Since 2007, The Arora Report remains #1 investment newsletter of its kind in terms of risk adjusted performance." If, as they say, it's been #1 for seven years, I'd have expected a lot of people to have discovered it... but it doesn't seem to be a hugely popular website. If Google is correct, this is the first time it's been mentioned in this forum. (Curious that so many new forum members have noticed this thread and have posted in praise of the Arora Report).

Image
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.

WildBill
Posts: 301
Joined: Wed Jun 29, 2016 10:47 pm
Location: San Antonio, Texas

Re: Any thoughts on The Aurora Report?

Post by WildBill » Sat Nov 25, 2017 9:35 pm

Howdy

Several individuals who are very recent members of the forum, all with limited postings, all somehow coincidentally touting an obscure investment newsletter, all at the same time?

Quite the coincidence. :P

Happy reading 8-)

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

MrPotatoHead
Posts: 55
Joined: Sat Oct 14, 2017 10:41 pm

Re: Any thoughts on The Aurora Report?

Post by MrPotatoHead » Sat Nov 25, 2017 9:39 pm

WildBill wrote:
Sat Nov 25, 2017 9:35 pm
Howdy

Several individuals who are very recent members of the forum, all with limited postings, all somehow coincidentally touting an obscure investment newsletter, all at the same time?

Quite the coincidence. :P

Happy reading 8-)

W B
My thoughts also.

User avatar
LadyGeek
Site Admin
Posts: 41653
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Any thoughts on The Aurora Report?

Post by LadyGeek » Sat Nov 25, 2017 10:08 pm

Thread locked for moderator review. (Also, a few posts were removed for review.)

Update: See below.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
LadyGeek
Site Admin
Posts: 41653
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Any thoughts on The Aurora Report?

Post by LadyGeek » Sun Nov 26, 2017 10:37 am

This thread is now unlocked. A few posts have been removed.

Note the discussion was bumped from Nov 28, 2016 (one year ago).
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

User avatar
oldcomputerguy
Posts: 2102
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods

Re: Any thoughts on The Aurora Report?

Post by oldcomputerguy » Sun Nov 26, 2017 11:22 am

nisiprius wrote:
Sat Nov 25, 2017 8:01 pm
"Since 2007, The Arora Report remains #1 investment newsletter of its kind in terms of risk adjusted performance."
Hm. Interesting quote.

Here's the list of the top newsletters of the last ten years, according to the Hulbert Financial Digest.

I don't see the Aurora Report mentioned there at all. Am I missing something?
Anybody know why there's a 20-pound frozen turkey up in the light grid?

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report?

Post by nisiprius » Sun Nov 26, 2017 12:46 pm

oldcomputerguy wrote:
Sun Nov 26, 2017 11:22 am
nisiprius wrote:
Sat Nov 25, 2017 8:01 pm
"Since 2007, The Arora Report remains #1 investment newsletter of its kind in terms of risk adjusted performance."
Hm. Interesting quote.

Here's the list of the top newsletters of the last ten years, according to the Hulbert Financial Digest.

I don't see the Aurora Report mentioned there at all. Am I missing something?
Well, it is the Arora[sic] Report... not the Aurora report... but of course Hulbert doesn't list it under that name, either.

It is the last name of Nigam Arora, who "holds the patent with 28 claims on the ZYX Method."

That is U.S. Patent 7,624,036. It is described as "an analytical method of providing change management statistics in an organization which includes a plurality of individuals."
The present invention involves an analytical method of providing change management statistics in an organization which includes a plurality of individuals. The method involves the steps of: creating a survey including a plurality of questions relating to the subjects of Planning, Execution of the planning, and Persons responsible for the execution of the planning; obtaining responses to the plurality of questions from the individuals in the organization; and calculating at least one index relating to at least two of the subjects. The step of creating a survey includes creating questions on Planning which relate to vision, strategy and desired results; questions on Execution which relate to readiness, ambition, knowledge, ability and momentum; and questions on Persons which relate to least one of conditioning, fear, trust and inductivity. The step of obtaining responses includes a step of dividing the individuals in the organization into groups having one or more group members. The questions elicit information from each group member in the form of responses indicative of the opinion of the respondent on at least one of the subjects of vision, strategy, desired results, readiness, ambition, knowledge, ability, momentum, conditioning, fear, trust and inductivity. The step of creating a survey includes creating at least one question relating to a general opinion relating to the entire organization and at least one question relating to a specific opinion relating the respondent individual of the organization.
I've at least skimmed the page that is supposed to describe the investing application of The ZYX Change Method and I don't see any place where it tells about creating surveys, to whom they send surveys (corporate management of the companies whose stocks they are interested in? If not them, then whom?) or why anyone would take and return those surveys...
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.

User avatar
LadyGeek
Site Admin
Posts: 41653
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by LadyGeek » Sun Nov 26, 2017 1:01 pm

^^^ I corrected the spelling on the thread title.
To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

namrac
Posts: 42
Joined: Sat Jul 09, 2016 10:59 am

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by namrac » Sun Dec 03, 2017 2:26 pm

I have not been here for some time and undoubtedly the answer to my question has likely been answered multiple times. But I arrived here googling reviews of the Arora Report as well. In the past few months, I've been looking at many financial websites (always with the perspective of skepticism). They all have their supposed means and techniques for analyzing and choosing stocks.

The common wisdom of Bogleheads is that it's no better than throwing darts. But if picking stocks is no better than throwing darts, then it seems to me that the entire idea of the stock market and even capitalism it to a great extent pointless. If throwing darts is as good as any method of picking stocks, then it implies no company is any better than another. In many respects, that perspective negates the entire idea of Capitalism. But clearly, some companies are better than others. Some succeed and some fail. Some produce vast wealth and others go bankrupt. So I truly don't understand the mantra on this site that it is pointless to pick individual stocks. Can anyone explain that? Buffet succeeded by value investing based on research of data and observable information, not throwing darts, and not using total market index funds. Different companies produce very different results.

Slacker
Posts: 452
Joined: Thu May 26, 2016 8:40 am

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by Slacker » Sun Dec 03, 2017 2:40 pm

namrac wrote:
Sun Dec 03, 2017 2:26 pm
I have not been here for some time and undoubtedly the answer to my question has likely been answered multiple times. But I arrived here googling reviews of the Arora Report as well. In the past few months, I've been looking at many financial websites (always with the perspective of skepticism). They all have their supposed means and techniques for analyzing and choosing stocks.

The common wisdom of Bogleheads is that it's no better than throwing darts. But if picking stocks is no better than throwing darts, then it seems to me that the entire idea of the stock market and even capitalism it to a great extent pointless. If throwing darts is as good as any method of picking stocks, then it implies no company is any better than another. In many respects, that perspective negates the entire idea of Capitalism. But clearly, some companies are better than others. Some succeed and some fail. Some produce vast wealth and others go bankrupt. So I truly don't understand the mantra on this site that it is pointless to pick individual stocks. Can anyone explain that? Buffet succeeded by value investing based on research of data and observable information, not throwing darts, and not using total market index funds. Different companies produce very different results.
It is pointless because the overwhelming majority of people aren't privy to privileged information that no one else has so, in effect, it becomes throwing darts because you have no way of knowing if picking GM is better than Ford is better than Toyota, Nissan, Hyundai, etc. And when you think there is a "guaranteed" winner such as Apple, guess what? Everyone else thinks so too and it is pretty well priced in (only big surprises in profitability positive or negative are going to move the stock and how did you know that such a profit surprise was about to come????).

Given that the average person has access to the same information as all the other average people -> you won't know which companies outperform so you could get lucky and "win" or you could get unlucky and "lose" but if you owned all the auto-companies, you get both the winners and losers and rely more on expansion of the economy than just selecting winners.

So, unless you have a sure fire way of picking the companies that are better, that will succeed and avoid the ones that fail it is best to stick with the indices. I've picked some winners purely by luck and I've picked some losers purely by being unlucky. No more picking for me, just taking everything now. Lost money on Sun Edison, Losing money on GE, Gained (so far) on Cummins, Gained (so far) on Microsoft [these and other individual stocks are now less than 2% of networth and will continue to shrink as more of our money gets piled into Index funds]

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by nisiprius » Sun Dec 03, 2017 10:33 pm

namrac wrote:
Sun Dec 03, 2017 2:26 pm
...Buffett succeeded by value investing based on research of data and observable information, not throwing darts, and not using total market index funds. Different companies produce very different results...
And yet, Warren Buffett's advice to retirement savers is this:
"Consistently buy an S&P 500 low-cost index fund," Warren Buffett told CNBC's On The Money in an interview recently. "I think it's the thing that makes the most sense practically all of the time." ... "The trick is not to pick the right company, the trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way," he added.
Why do do people invoke Warren Buffett's name to advocate doing something different from what Warren Buffett says to do?
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.

Ari
Posts: 452
Joined: Sat May 23, 2015 6:59 am

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by Ari » Mon Dec 04, 2017 4:37 am

namrac wrote:
Sun Dec 03, 2017 2:26 pm
In many respects, that perspective negates the entire idea of Capitalism. But clearly, some companies are better than others. Some succeed and some fail. Some produce vast wealth and others go bankrupt. So I truly don't understand the mantra on this site that it is pointless to pick individual stocks. Can anyone explain that?
It is a very common error to conflate good companies with good investments. A good company will produce great wealth and a bad company will not. But in investments, you also have to look at the price. Investors are more eager to buy the good companies than the bad ones, which means they will drive up the price (basic supply/demand). The higher the price of the stock, the more you have to pay for the same share of the company's earnings. So the higher the price, the worse the investment. How high will investors drive the price? It will increase until the amount of money they can expect from company A per dollar spent is the same as the amount of money they can expect from company B per dollar spent. If company A is a better investment, the price will increase until it is as bad as company B. If company B is a terrible investment, its price will fall until it is as good as company A.

This is what makes it so difficult to pick winning stocks. Everyone is contantly trying to do it, and since prices are self-adjusting, they will adjust until they cancel out the effect of good vs. bad companies.

Because so many people are trying to find the winning stocks, the market becomes extremely skilled in doing so. And because the market is so skilled, anyone trying to beat it faces terribly difficult odds. To be a good investment, it's not enough that the company is a good company. It must be a better company than the market thinks it is. And the market is very, very quick and knows very, very much.
All in, all the time.

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by nisiprius » Mon Dec 04, 2017 8:25 am

Here is my personal answer. I believe that there are indeed investors with deep understanding of the businesses they invest in, and quite possibly a dollop of what amounts to legal inside information--information far superior to what you and I get by glancing at brokerage stock screener--and, possibly, in some cases, illegal inside information obtained so carefully that they do not get caught. I believe that these investors do indeed function to provide price discovery, and to allocate capital to the companies that can make best use of it. I also believe that the collective edge of these genuinely skilled investors is very small, measured in basis points; that it is only worthwhile to them personally and to their employers because it is multiplied by the huge investments they make. And I don't believe any of them have any reason to share their alpha with me.

If you believe that you can make a fortune by reading third-hand stories of how someone thinks Warren Buffett thinks and trying to do the same thing yourself--reading a Wall Street Journal headline and saying "Aha! I perceive that the market is fearful. I shall be greedy," you are likely to be disappointed.

In the Sherlock Holmes stories, Watson has direct personal contact with Holmes, Holmes explains all of his deductions to Watson, and is constantly saying to Watson, "You know my methods. Apply them." And, after studying and writing about Holmes and his thought processes for decades, Watson still cannot glance at someone and figure out that they are a Freemason who has done manual labor in China. It's not easy to do what Warren Buffett does. And, it should be noted, over the past ten years, the performance of Berkshire Hathaway has not been dramatically different from 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.

namrac
Posts: 42
Joined: Sat Jul 09, 2016 10:59 am

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by namrac » Fri Dec 08, 2017 7:17 pm

All good answers. Thank you. I've heard them before and they make sense on the surface. But I'm confounded by the following comparison to TSM I've done multiple times with numerous stocks that don't require any analytic skills at all to come up with. I came up with the common list below--and there are plenty more--by just getting a feel from reading financial sites and news sources. Then looking at how they have done both short and long term. I keep repeating it to try and convince myself I should put my money into a TSM fund but I just can't rationalize how it makes any sense.

If I compare some commonly invested good stocks--FANGS and a few others--(eg AMAT, MU, FB, GOOG, NFLX, NVDA, BA, AAPL) to ITOT (total market) they all come out ahead at 1, 2, 5 and 10 year time frames (GOOG the exception at 2 year time frame). Not a few of them. Every single one. And not just by a little. By multiples of 4 to 10 times greater. The BH argument, I assume would be, you don't know what will happen in the next 10 years though...the past is no indication of the future, etc etc. But really? Anyone think most if not all of these stocks are not going to do well in the next 10 years given where the world is headed with AI, self driving cars, the IOT, and a continued move to online marketplaces? It was not a slightly better result with any of these stocks, it was hugely better results for every single one of them. Even if only half of them performed as well in the future, you'd likely be miles ahead of TSM

Scratching my head.

User avatar
Taylor Larimore
Advisory Board
Posts: 26250
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by Taylor Larimore » Fri Dec 08, 2017 9:10 pm

Any thoughts on the Aurora Report?
namarc:

Consider this quote by Jack Bogle:
"After nearly 50 years in this business, I do not know of anybody who has done market timing successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently."
viewtopic.php?f=10&t=156499

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

User avatar
Mel Lindauer
Moderator
Posts: 27633
Joined: Mon Feb 19, 2007 8:49 pm
Location: Daytona Beach Shores, Florida
Contact:

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by Mel Lindauer » Fri Dec 08, 2017 9:26 pm

It's very easy to pick winners looking in the rear view mirror. The real trick is to pick them IN ADVANCE of those nice returns.

Just remember: You can't buy yesterday's returns. Lots of investors lose lots of money trying (it's called "performance chasing").
Best Regards - Mel | | Semper Fi

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by nisiprius » Fri Dec 08, 2017 9:55 pm

namrac wrote:
Fri Dec 08, 2017 7:17 pm
...Anyone think most if not all of these stocks are not going to do well in the next 10 years given where the world is headed with AI, self driving cars, the IOT, and a continued move to online marketplaces? It was not a slightly better result with any of these stocks, it was hugely better results for every single one of them. Even if only half of them performed as well in the future, you'd likely be miles ahead of TSM...
Yes, it does look that way to almost everyone at the start. The problem with indexing and staying the course is that it is so obvious that successful stock-picking and successful market timing would come out way ahead of indexing and staying the course, not just a little, but, exactly as you said, by huge amounts. Doubling your exponential growth rate or even more. And it looks easy. After all, Bill Miller and the Legg Mason Value Trust beat the S&P 15 years in a row, every single year.

You have to do what you like, of course. But even when it is clear that there is a new technology with immense promise, and even if you are right, identifying the companies that will be the successful players is very hard. It was not at all obvious that Apple would be a giant company and that Commodore and Atari would fail. Osborne looked like a sure thing. Similarly, it was not at all obvious that Enron was going to collapse. That's an interesting case because after the fact, someone pointed out a little item in a footnote of the glossy annual report that actually could have been a warning, yet nobody spotted it. In 1999, nobody would have guess how poorly GE would do. And on and on it goes.

New technologies are always coming along, and investors are always getting excited about companies in that technology field because of thereal promise that everybody sees in them. If you think you can beat an S&P 500 index funds by the simple process of:

a) Identifying some hot new technologies or industries that are clearly going to be important in the future,
b) focussing on a few companies that big, well-capitalized, and well managed that are going to play in that area,

then you are doing what a million other investors have done before you. It's not a new idea. Remind me one of these days to dig out just what happened to the Wired index of "new economy" companies and the index fund that tracked it.
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.

namrac
Posts: 42
Joined: Sat Jul 09, 2016 10:59 am

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by namrac » Sat Dec 09, 2017 1:05 am

Thanks for your comments nisiprius.

Perhaps my recent posts are a bit of a therapy session of sorts for me. A bit like the teen who deep down knows he needs and wants boundaries but can't admit it. In the past several months I've tried to evaluate a dozen financial sites, newsletters, & analytic services (Seeking Alpha, YCharts, Investopedia, Market Beat, Guru Focus, Market Realist, Whalewisdom...). My inbox is so inundated with alerts, news, & reports that I had to create folders and filter rules to even have any sense of order. I had not looked at a couple of the folders for a couple of weeks but looked today. Each is filled with hundreds of emails. Any one of them--let alone a half dozen or more--would be difficult to impossible to keep up with wile working full time. It hit me that I'm spinning my wheels trying to invest wisely with value picks. It hit me today that even with a quality, no nonsense site like YChart--with its 4,000 data points--for stock screening to picks stocks based on value and data rather than hot tips, I'm not going to outdo pros that can't even outperform each other.

But that didn't dissuade me from thinking I could intelligently pick something like Amazon based on what I see first hand with my own purchasing habits (a massive increase in the everyday consumer moving to online shopping). But if I were so sure of my convictions on a stock like Amazon, why didn't I have the courage to buy and hold those stocks fully invested this past year? I didn't out of fear of a big correction. I've watched myself repeatedly bail out of fear when things drop only to watch them come back. The classic, classic amateur/foolish investor mistake. My number one goal was not to lose money while trying to make money. I achieved that goal but would have made more with a buy and hold of an index fund. Of course, most here know this all too well. I'm just talking out loud.

Intellectually, just before setting a ridiculously narrow stop limit, I would think about the studies, the books, the academics of it and tell myself don't do it again. But time would go by and I repeated the pattern. It's tough to admit I've been dumb with my investing decisions the past year. Hopefully, the bad decisions are sinking in. Easy to say I'll eat healthier next week but sometimes not as easy to follow through.

The responses of everyone are health food for me!

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by nisiprius » Sat Dec 09, 2017 7:56 am

namrac wrote:
Sat Dec 09, 2017 1:05 am
...But that didn't dissuade me from thinking I could intelligently pick something like Amazon based on what I see first hand with my own purchasing habits (a massive increase in the everyday consumer moving to online shopping)...
That's just what Peter Lynch seemed to be advocating. He invested in L'eggs because his wife thought it was really good hosiery... or something like that. As consumers, we have have a deep knowledge of the intrinsic quality of products, that amounts to the equivalent of inside information that the numbers guys with their green eyeshades (does anyone wear green eyeshades?) will never know. They know financial ratios and balance sheets, but we know what's cool. Sure. Right.

Fortunately, I wasn't investing in individual stocks then... I thought Webvan looked good. I mean really, really good. Everything about it looked "right." I thought it would be the wave of the future. I thought I'd probably be buying my groceries from Webvan just as soon as became available in my area. The backing was good, they'd bought the trucks, they'd built the warehouses, it was being run by solid business people.

I'm not quite sure when Amazon broke out of the "books" area and started to be "everything." It was slow. I am almost sure I recall Bezos saying, in 1998 or thereabouts, that they had specifically chosen "books" because the ratio of titles-in-print to titles-you-can-physically-have-in-a-store was huge, much larger than for CDs, and he didn't think CDs would work as well. Then Amazon started to sell CDs...

The point is not "buying stuff over the Internet is gonna be big, I tell you, big!" The point is, "in a 1999 time frame, would you really have known that Amazon was the one, and that Webvan wasn't?"

I mean, I'm not following this stuff but while I think most people still drive to the store to get groceries, I do see a Peapod truck from time to time, and when we visited friends who live on somewhat-isolated island in Casco Bay, I noticed Amazon Prime Pantry boxes in someone's trash. Internet-mediated grocery delivery seems to be a legitimate and expanding business. It's just that Webvan wasn't the one to make a success of it.

P.S. I expect a couple of follow-up posts from people saying "Webvan never looked all that good to me."
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.

User avatar
abuss368
Posts: 11886
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by abuss368 » Sat Dec 09, 2017 11:33 am

petergibbons wrote:
Sun Nov 27, 2016 10:03 pm
It is a paid investment newsletter than gives advice re: stocks, bonds, precious metals etc. Any one have any experience or thoughts?
Hi petergibbons -

Interesting. In my experience most investment newsletters have not delivered on their promises. Many years ago, when we believed we were smarter than the markets, and picked individual stocks (what is a bond?), we subscribed to The Bull Market Report. We soon became a Boglehead and that has been the best financial decision we ever made.

Hindsight is a great thing and easy from a stock perspective. The question (and test) is how many newsletters know what stocks will outperform the market in advice? How consistently can they pick winning stocks? My experience has been not many and not for long.

Best.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

User avatar
abuss368
Posts: 11886
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Any thoughts on The Aurora Report?

Post by abuss368 » Sat Dec 09, 2017 11:35 am

9-5 Suited wrote:
Sun Nov 27, 2016 10:08 pm
"....... or what Jane Bryant Quinn called investment porn........"

- Larry Swedroe
I recall the first day I read this term on the forum. I could not believe my eyes. After a small laugh, it became apparent that this was a very good description.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

User avatar
abuss368
Posts: 11886
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by abuss368 » Sat Dec 09, 2017 11:48 am

namrac wrote:
Fri Dec 08, 2017 7:17 pm
All good answers. Thank you. I've heard them before and they make sense on the surface. But I'm confounded by the following comparison to TSM I've done multiple times with numerous stocks that don't require any analytic skills at all to come up with. I came up with the common list below--and there are plenty more--by just getting a feel from reading financial sites and news sources. Then looking at how they have done both short and long term. I keep repeating it to try and convince myself I should put my money into a TSM fund but I just can't rationalize how it makes any sense.

If I compare some commonly invested good stocks--FANGS and a few others--(eg AMAT, MU, FB, GOOG, NFLX, NVDA, BA, AAPL) to ITOT (total market) they all come out ahead at 1, 2, 5 and 10 year time frames (GOOG the exception at 2 year time frame). Not a few of them. Every single one. And not just by a little. By multiples of 4 to 10 times greater. The BH argument, I assume would be, you don't know what will happen in the next 10 years though...the past is no indication of the future, etc etc. But really? Anyone think most if not all of these stocks are not going to do well in the next 10 years given where the world is headed with AI, self driving cars, the IOT, and a continued move to online marketplaces? It was not a slightly better result with any of these stocks, it was hugely better results for every single one of them. Even if only half of them performed as well in the future, you'd likely be miles ahead of TSM

Scratching my head.
Hi namrac -

The FANGS? Will these stocks be around as we move forward? Your guess is as good as mine.

Going back in time a little bit (but not to far) reminds me of these hot stocks at the time:

1) America On Line
2) Pet.com
3) Worldcom
4) Enron
5) Global Crossing
6) Lucent
7) Munder NetNet Fund

We could continue to build this list but hopefully the point is the same: Be Careful.

There is someone on the other side of that trade who thinks the stock is not worth it. Perhaps a Gordon Gekko or big money firm.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

User avatar
abuss368
Posts: 11886
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by abuss368 » Sat Dec 09, 2017 11:51 am

In Jack Bogle's "The Little Book of Common Sense Investing", Jack recommends that for the investors who are so inclined to trade in individual stocks, to create a "funny money" account and allocate no more than 5% of your investment portfolio for these purposes. This will serve two purposes: 1) satisfy your desire to play the markets, and 2) not jeopardize your retirement!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

User avatar
nisiprius
Advisory Board
Posts: 34361
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by nisiprius » Sun Dec 10, 2017 2:08 pm

abuss368 wrote:
Sat Dec 09, 2017 11:51 am
In Jack Bogle's "The Little Book of Common Sense Investing", Jack recommends that for the investors who are so inclined to trade in individual stocks, to create a "funny money" account and allocate no more than 5% of your investment portfolio for these purposes. This will serve two purposes: 1) satisfy your desire to play the markets, and 2) not jeopardize your retirement!
I have to say this. I have not seen Jack or anybody else address the case that you lose your "funny money." It seems to be assumed that the worst that could happen is that you underperform the S&P 500. But what if you do lose your 5%? Remember, the premise is that you have a desire to play the markets that is so insistent that you need 5% of your portfolio to sate it. After you've lost that 5%, that desire isn't going to go away. The likely sequel is that you either allocate a fresh 5% in funny money... or, worse, 10%, in hope of recouping.
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.

User avatar
abuss368
Posts: 11886
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!

Re: Any thoughts on The Aurora Report? [Arora Report]

Post by abuss368 » Sun Dec 10, 2017 3:04 pm

nisiprius wrote:
Sun Dec 10, 2017 2:08 pm
abuss368 wrote:
Sat Dec 09, 2017 11:51 am
In Jack Bogle's "The Little Book of Common Sense Investing", Jack recommends that for the investors who are so inclined to trade in individual stocks, to create a "funny money" account and allocate no more than 5% of your investment portfolio for these purposes. This will serve two purposes: 1) satisfy your desire to play the markets, and 2) not jeopardize your retirement!
I have to say this. I have not seen Jack or anybody else address the case that you lose your "funny money." It seems to be assumed that the worst that could happen is that you underperform the S&P 500. But what if you do lose your 5%? Remember, the premise is that you have a desire to play the markets that is so insistent that you need 5% of your portfolio to sate it. After you've lost that 5%, that desire isn't going to go away. The likely sequel is that you either allocate a fresh 5% in funny money... or, worse, 10%, in hope of recouping.
I agree. What happens if one not only underperforms the market but in fact losses the 5%? The desire to play may not stop or be satisfied at that point. In fact it could be magnified by a simple "I will make it back" and another fresh 5% is added to the "funny money" account.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

Post Reply