A Great Investor has only one word of advice

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stemikger
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A Great Investor has only one word of advice

Post by stemikger » Wed Jul 11, 2018 1:42 pm

In case anyone missed it. Great article on MarketWatch today.



http://www.msn.com/en-us/money/savingan ... ocid=ientp
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bottlecap
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Re: A Great Investor has only one word of advice

Post by bottlecap » Wed Jul 11, 2018 1:51 pm

At first blush, I tend to agree.

It contains an interesting, but obvious, point about Buffett that many ignore, too.

JT

jjface
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Re: A Great Investor has only one word of advice

Post by jjface » Wed Jul 11, 2018 2:02 pm

No no it should be "Bogleheads"!

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Pajamas
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Re: A Great Investor has only one word of advice

Post by Pajamas » Wed Jul 11, 2018 2:05 pm

Here, saved you a click:
“Diversify,” Nobel-Prize winner Harry Markowitz once responded when asked how investors should approach the stock market. “And if I had to offer a second piece of advice, it would be: Remember that the future will not necessarily be like the past. Therefore we should diversify.”

Random Walker
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Re: A Great Investor has only one word of advice

Post by Random Walker » Wed Jul 11, 2018 2:25 pm

Lots of ways to diversify: geography, asset classes, styles, factors, alternatives.

Dave

columbia
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Re: A Great Investor has only one word of advice

Post by columbia » Wed Jul 11, 2018 2:51 pm

He had three funds, nice and simple. Then he changed the allocation by replacing the large cap ETF with a half a dozen industrial companies that he believes will benefit from the rebuilding efforts after last year’s hurricane season.
https://www.google.com/amp/s/seekingalp ... -portfolio

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nisiprius
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Re: A Great Investor has only one word of advice

Post by nisiprius » Wed Jul 11, 2018 3:01 pm

1) The article does not cite any source for the supposed Markowitz quotation. Therefore, it is impossible to find the context and understand exactly what Markowitz meant by "diversify" here.

2) The article contains 30 words from Markowitz and 128 words from Cullen Roche. And that's only counting words within quotation marks, not the many "as Roche explains" indirect quotations.

3) With regard to his own investing, the great investor is said to have said:
I should have computed the historical co-variances of the asset classes and drawn an efficient frontier. Instead, I visualized my grief if the stock market went way up and I wasn't in it--or if it went way down and I was completely in it. My intention was to minimize my future regret. So I split my contributions 50/50 between bonds and equities.
Although this, too, is frequently quoted, the only source I've found is Jason Zweig's Your Money and Your Brain. So, again, I haven't had a chance to read Markowitz' words in context.

But it sounds as if he considers "50/50 between bonds and equities" to be adequate diversification for ordinary everyday retirement-saving purposes, since that's what he did himself.

Unless, of course, in the actual original source he went on to say "I split my contributions 50/50 between bonds and equities. That was a disastrous mistake that I've regretted ever since."
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.

gmaynardkrebs
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Re: A Great Investor has only one word of advice

Post by gmaynardkrebs » Wed Jul 11, 2018 3:19 pm

I thought it was "plastics."

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