How I beat Indexing... in 1 hour

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SuperSaver
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How I beat Indexing... in 1 hour

Post by SuperSaver » Tue Aug 26, 2014 8:45 am

1) Dedicate <5% of your portfolio to "play money"
- In my case it was $5000

2) Open up a brokerage account with $0 trades
- Merrill Edge for BofA customers

3) Scour Top 10 holdings in Vanguard/Fidelity Mid- and Small-Caps

4) Do your research! Pick companies with:
- Consistent quarterly >7% profitablity
- First in a new field
- No real competition
- Stay away from anything you don't understand

5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400

Net profits (even with short term capital gains) >>> anything in Indexed Fund

Conclusions:
1) Beginner's Luck
2) Let Vanguard do most of research for you
3) Take some chances, do a modicum of research
4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds

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rob
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Re: How I beat Indexing... in 1 hour

Post by rob » Tue Aug 26, 2014 8:49 am

SuperSaver wrote:-ITMN: I knew of impending buy out
If true, than it's commonly known that trading on insider information (non public) does in fact work - that's why it's illegal (unless your a politican anyway)....
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien

Call_Me_Op
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Re: How I beat Indexing... in 1 hour

Post by Call_Me_Op » Tue Aug 26, 2014 8:50 am

The market was up in August and therefore, so were your stocks. What you engaged in is called short-term speculation. Sometimes you win, sometimes you lose - but it is not a good long-term strategy. It should not be surprising that with a few stocks you can sometimes beat the indexes - which are composed of a lot of stocks. The reason is you are taking "uncompensated risk", and you have much larger swings to the upside...and the downside.

The fact that you think you have discovered a way to consistently beat the indexes tells me you need to do a lot more studying.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Keep It Simple
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Re: How I beat Indexing... in 1 hour

Post by Keep It Simple » Tue Aug 26, 2014 8:55 am

SuperSaver wrote:1) Dedicate <5% of your portfolio to "play money"
- In my case it was $5000

2) Open up a brokerage account with $0 trades
- Merrill Edge for BofA customers

3) Scour Top 10 holdings in Vanguard/Fidelity Mid- and Small-Caps

4) Do your research! Pick companies with:
- Consistent quarterly >7% profitablity
- First in a new field
- No real competition
- Stay away from anything you don't understand

5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400

Net profits (even with short term capital gains) >>> anything in Indexed Fund

Conclusions:
1) Beginner's Luck
2) Let Vanguard do most of research for you
3) Take some chances, do a modicum of research
4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds
I'll never get back the time I spent reading this....

K.I.S.

Call_Me_Op
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Re: How I beat Indexing... in 1 hour

Post by Call_Me_Op » Tue Aug 26, 2014 8:56 am

The title should be "How I beat Indexing....for 1 hour."
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

Topic Author
SuperSaver
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Re: How I beat Indexing... in 1 hour

Post by SuperSaver » Tue Aug 26, 2014 8:59 am

Re: ITMN

Yes, getting surreptitious insider trading from GOOGLE Finance and Yahoo! Finance is very illegal. I hope the SEC shuts those websites down.

TheRightKost87
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Re: How I beat Indexing... in 1 hour

Post by TheRightKost87 » Tue Aug 26, 2014 9:04 am

SuperSaver wrote:Re: ITMN

Yes, getting surreptitious insider trading from GOOGLE Finance and Yahoo! Finance is very illegal. I hope the SEC shuts those websites down.
If the buy-out info was on Google and Yahoo beforehand, I'm fairly confident that it was priced into the stock when you bought it
"The problem with diversification is that it works, whether or not we want it to"

jf89
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Re: How I beat Indexing... in 1 hour

Post by jf89 » Tue Aug 26, 2014 9:06 am

SuperSaver wrote:Re: ITMN

Yes, getting surreptitious insider trading from GOOGLE Finance and Yahoo! Finance is very illegal. I hope the SEC shuts those websites down.
So then everybody knew about it, and it was already incorporated into the stock's price by the time you started reading the article that told you about it. I'll guess that this specific piece of information wasn't really that important to the stock's rise.
"Save as much as you can, diversify diversify diversify, and you can't go wrong with tech stocks" | -First investing advice I recall from my parents in the 90's (two outta three ain't bad)

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Re: How I beat Indexing... in 1 hour

Post by Grt2bOutdoors » Tue Aug 26, 2014 9:23 am

Those who live by the sword...die by the sword.
Here's another one.....those who play with fire...will get burned by the fire.
Bulls and bears will make money, pigs will get slaughtered at the trough.

Capital Grille? why stop there? Why not head over to DelMonico's so you can hobnob with the fancy financiers that frequent the place. :wink:
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

livesoft
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Re: How I beat Indexing... in 1 hour

Post by livesoft » Tue Aug 26, 2014 9:31 am

C'mon folks, let SuperSaver have some fun. We just have to sit back and enjoy the show even though we have already seen it before.
Wiki This signature message sponsored by sscritic: Learn to fish.

inbox788
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Re: How I beat Indexing... in 1 hour

Post by inbox788 » Tue Aug 26, 2014 9:40 am

SuperSaver wrote:5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400
Congratulations on what looks like a 20% return in a matter of weeks! Nice day a the race track. What is your IPS do now? Let the 5 holdings ride? Pick 5 new holdings ride for the next few weeks, or change/add more holdings? If I wanted to copy your strategy today, what do I do? I don't think those vanguard funds have such high turnover, so I should wind up doing something similar. Now when the small and mid caps take do take a dip, I'd expect those top holdings to be a large part, and with my luck, I'd be down 20% in he next 2 weeks.

Btw, where do I track daily or weekly vanguard small and mid cap index trades?

pingo
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Re: How I beat Indexing... in 1 hour

Post by pingo » Tue Aug 26, 2014 9:50 am

Call_Me_Op wrote:The title should be "How I beat Indexing....for 1 hour."
It reminds me of someone I knew who was involved in some internet "business opportunity" clicking links or something or other. That person would post things like, "This is the most incredible opportunity I have ever seen. I just made $50 in ten minutes!"

My (silent) question was always, "How much did you earn during the remaining 7 hours and 50 minutes of your business day?"

$50 a day didn't get anyone very far before the foundation-less "opportunity" collapsed on itself.
Last edited by pingo on Tue Aug 26, 2014 5:26 pm, edited 4 times in total.

gwrvmd
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Re: How I beat Indexing... in 1 hour

Post by gwrvmd » Tue Aug 26, 2014 9:51 am

Oh My God....Livesoft: I thought you were a type A personality with no sense of humor but I see that's not true
I agree with you.....At times we all take ourselves too seriously on this forum...........Gordon
Disciple of John Neff

TareNeko
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Re: How I beat Indexing... in 1 hour

Post by TareNeko » Tue Aug 26, 2014 9:56 am

@OP: unless you beat the index through out your investment horizon with all your money (minus emergency fund), you are not beating the index. Random fluctuations are just that, random...

Topic Author
SuperSaver
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Re: How I beat Indexing... in 1 hour

Post by SuperSaver » Tue Aug 26, 2014 10:07 am

Very interesting to read the unbridled contemptuous comments from otherwise level-headed, rational investors.

To Clarify:
1) I never said my strategy was a long-term one to supplant indexing

2) I never indicated that the strategy would sustain a retirement portfolio

3) It was with "play money"

4) If taking 4% of your whole portfolio is being a "pig", that's a very interesting definition of greed.
- Any different than putting 5% into an Emerging Market Index Growth Fund? No.

5) Regarding ILMN, anyone with a dial-up AOL connection could see where this going:
From 2012:
http://www.bloomberg.com/news/2012-04-0 ... share.html

I bought at $45/share, bought out at $73. The buyout was not reflected in the price when I purchased it.

6) I acknowledged first and foremost it was likely beginner's luck.

7) I likely will not do this again for another year, and hold on to these stocks (FARO, ILMN). Sell LUV when fuel prices go up.

In all seriousness, I want to genuinely thank the Boglehead Forum for educating me. Just yesterday, I noticed my company JPM Target Date had a 1.1% ER. I immediately transitioned into
- Vanguard Total Stock
- Vanguard Total Bond

Thanks to this forum, I saved no less than $200,000 in my hard-earned income over the next 30 years by coming to this site.
Thanks Jack Bogle et al.

TheRightKost87
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Re: How I beat Indexing... in 1 hour

Post by TheRightKost87 » Tue Aug 26, 2014 10:26 am

SuperSaver wrote:5) Regarding ILMN, anyone with a dial-up AOL connection could see where this going:
From 2012:
http://www.bloomberg.com/news/2012-04-0 ... share.html

I bought at $45/share, bought out at $73. The buyout was not reflected in the price when I purchased it.
If you think anyone could see where this takeover was going, I'm not sure how the logic follows that it wasn't reflected in the price by the market. Do you think of the thousands of investors that read that news (or knew before it was even published), that you were the only one to trade on it?
"The problem with diversification is that it works, whether or not we want it to"

Leeraar
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Re: How I beat Indexing... in 1 hour

Post by Leeraar » Tue Aug 26, 2014 10:35 am

There is a slight reason this might work, part of the "monkeys throwing darts" effect.

When you do this, you are weighting each company equally, as opposed to their market cap weighting in the index. So, you are tilting towards smaller companies that usually have a higher expected return (and higher risk).

(Equal weighting does not work in general, because of the high trading costs.)

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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roymeo
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Re: How I beat Indexing... in 1 hour

Post by roymeo » Tue Aug 26, 2014 10:38 am

TheRightKost87 wrote:
SuperSaver wrote:5) Regarding ILMN, anyone with a dial-up AOL connection could see where this going:
From 2012:
http://www.bloomberg.com/news/2012-04-0 ... share.html

I bought at $45/share, bought out at $73. The buyout was not reflected in the price when I purchased it.
If you think anyone could see where this takeover was going, I'm not sure how the logic follows that it wasn't reflected in the price by the market. Do you think of the thousands of investors that read that news (or knew before it was even published), that you were the only one to trade on it?
I think SuperSaver's not familiar with the way people toss various phrases like "priced into", "reflected in the price", etc. here (and in general efficient market hypothesis discussion). SuperSaver, the idea behind this is that if the knowledge is public, it is already accounted for in the price. Especially with today's information networks, the 'bump' comes from when the knowledge is released (and trading on that knowledge to take advantage of THAT bump is, of course, as we all know, illegal, at least in many countries). That doesn't mean that the price can't continue to go up slowly over a period of time after some bit of news is public...the efficient market hypothesis explanation is that over time the buyers are valuing that info/the company's outlook more and more. No one's intending to insult you by saying some piece of information is already in the price. You may give more credence to a particular piece of info than others, just as you may really want that thing on eBay more than others and offer more money, but in the end the overall market decides when you want to sell what the value really is.

---
edit to add:

No one's ever said you can't ever beat the index. But there's a big difference between 'fooling some of the people some of the time' vs. 'fooling all of the people all of the time'. But heck, if you're able to make large gains with little effort consistently, you should do it.
Last edited by roymeo on Tue Aug 26, 2014 12:13 pm, edited 1 time in total.
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an_asker
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Re: How I beat Indexing... in 1 hour

Post by an_asker » Tue Aug 26, 2014 10:41 am

SuperSaver wrote:1) Dedicate <5% of your portfolio to "play money"
- In my case it was $5000

2) Open up a brokerage account with $0 trades
- Merrill Edge for BofA customers

3) Scour Top 10 holdings in Vanguard/Fidelity Mid- and Small-Caps

4) Do your research! Pick companies with:
- Consistent quarterly >7% profitablity
- First in a new field
- No real competition
- Stay away from anything you don't understand

5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400

Net profits (even with short term capital gains) >>> anything in Indexed Fund

Conclusions:
1) Beginner's Luck
2) Let Vanguard do most of research for you
3) Take some chances, do a modicum of research
4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds
OK, you win. This round.

To be fair to those who have made those comments that you disliked, how about this: for the next few months (say the next four through the end of the year), you provide us with a few ticker symbols using your research. Those of us who choose to use them - in our fun portfolio - will do so. The others will either follow the thread, create a fake portfolio to follow OR do nothing.

No brickbats or bouquets either way. We can then see how you made out each month based on your picks vis-a-vis the general market.

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Re: How I beat Indexing... in 1 hour

Post by Grt2bOutdoors » Tue Aug 26, 2014 10:43 am

Surely, you don't actually believe I was calling you a pig? :o
Being up 20% in short order is not skill, it's just random - in your case it appears to be positive. For every winner, there is a loser especially in the stock market where sellers may be on the losing side of the trade if the stock appreciates going forward. The same can be said of a purchaser where the security bought falls in price.
The real question is "can you replicate your performance again"?

Good Luck to you.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

homermtb
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Re: How I beat Indexing... in 1 hour

Post by homermtb » Tue Aug 26, 2014 12:00 pm

I would say congratulations to KIS for staying the course with 95% of her portfolio.

I can attest to the sweet seduction of playing the stock market(when you win), but I recently found this forum and index investing, and I'm transitioning my portfolio along boglehead allocations now. This doesn't mean that I don't look longingly from time to time at some stock charts wishing I could be in whatever stock is hot at the moment. :wink:

In fact, I have a similar strategy where the large majority of my portfolio is in index funds, but I keep a very small amount just to buy/sell as I please

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Gambler
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Re: How I beat Indexing... in 1 hour

Post by Gambler » Tue Aug 26, 2014 12:48 pm

homermtb wrote:I would say congratulations to KIS for staying the course with 95% of her portfolio.

I can attest to the sweet seduction of playing the stock market(when you win), but I recently found this forum and index investing, and I'm transitioning my portfolio along boglehead allocations now. This doesn't mean that I don't look longingly from time to time at some stock charts wishing I could be in whatever stock is hot at the moment. :wink:

In fact, I have a similar strategy where the large majority of my portfolio is in index funds, but I keep a very small amount just to buy/sell as I please
um.. I've been seduced?! :shock:
didn't realize it till I read what u wrote.

maybe I shouldn't pull the trigger on this:
http://www.bogleheads.org/forum/viewtop ... 1&t=145312 (My HELOC + Margin = $200k to play with)
"Always be thankful for what you have no matter how much or how little" -EternalOptimist

jbourne99
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Re: How I beat Indexing... in 1 hour

Post by jbourne99 » Tue Aug 26, 2014 2:01 pm

You're a genius. How do I get you funds to invest on my behalf and what do you charge?

bmelikia
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Re: How I beat Indexing... in 1 hour

Post by bmelikia » Tue Aug 26, 2014 2:10 pm

SuperSaver wrote:1) Dedicate <5% of your portfolio to "play money"
- In my case it was $5000

2) Open up a brokerage account with $0 trades
- Merrill Edge for BofA customers

3) Scour Top 10 holdings in Vanguard/Fidelity Mid- and Small-Caps

4) Do your research! Pick companies with:
- Consistent quarterly >7% profitablity
- First in a new field
- No real competition
- Stay away from anything you don't understand

5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400

Net profits (even with short term capital gains) >>> anything in Indexed Fund

Conclusions:
1) Beginner's Luck
2) Let Vanguard do most of research for you
3) Take some chances, do a modicum of research
4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds
Come back in 10 years - then we'll have a look at your performance numbers. Until then. . .keep on rockin' in the free world!

P.S. - call out your picks ahead of time too - just to keep you honest
"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

Leeraar
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Re: How I beat Indexing... in 1 hour

Post by Leeraar » Tue Aug 26, 2014 2:30 pm

A rising tide lifts all boats.

L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

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FelixTheCat
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Re: How I beat Indexing... in 1 hour

Post by FelixTheCat » Tue Aug 26, 2014 2:47 pm

I remember I was a financial genius back in to 2007/2008. :D
Felix is a wonderful, wonderful cat.

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Kenkat
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Re: How I beat Indexing... in 1 hour

Post by Kenkat » Tue Aug 26, 2014 2:57 pm

I tried this once back in the early 2000's - similar percentage of my portfolio - i.e., not something that will break you but at the same time, real money in play. I had some successes and some failures. After a little after three years, I basically matched the S&P 500. And that was mostly because of one stock that had tripled in value - which I have to admit is kinda fun to see. But I also saw the risk there - if not for that one good pick, I would have trailed pretty badly. And a lot more work for basically no benefit.

So I think it is ok to give it a try, but I would be sure to monitor my results closely over a decent amount of time before declaring total victory over the mindless masses.

wassabi
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Re: How I beat Indexing... in 1 hour

Post by wassabi » Tue Aug 26, 2014 3:06 pm

OP was pretty clear that he was playing with his "fun" money. Nothing wrong with that. Some people choose to spend their fun money on a cruise or some other expensive vacation. Nothing wrong with taking a small percentage of the portfolio to have some fun. Can't take your money with you when you die.

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Re: How I beat Indexing... in 1 hour

Post by Raybo » Tue Aug 26, 2014 3:13 pm

In a store today, I took 4 pennies out of a cup next to the register to help me pay a 99 cent bill, a quick 4%!

And, I didn't deplete the cup. If I go back every day and make the same 4%, I can double my SWR!
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.

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Re: How I beat Indexing... in 1 hour

Post by YDNAL » Tue Aug 26, 2014 3:14 pm

SuperSaver [OP] » Tue Aug 26, 2014 9:45 am wrote:5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400
Guessing what "early August" means, and running through yesterday:
FARO $52 to $58
ITMN $45 to $75
ILMN $160 to $175
LUV $28 to $32
TSLA $240 to $262.50

I'd say go with conclusion #1.
SuperSaver wrote:Conclusions:
1) Beginner's Luck
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

derosa
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Re: How I beat Indexing... in 1 hour

Post by derosa » Tue Aug 26, 2014 4:10 pm

So what is it for the next hour?

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baw703916
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Re: How I beat Indexing... in 1 hour

Post by baw703916 » Tue Aug 26, 2014 4:29 pm

Raybo wrote:In a store today, I took 4 pennies out of a cup next to the register to help me pay a 99 cent bill, a quick 4%!

And, I didn't deplete the cup. If I go back every day and make the same 4%, I can double my SWR!

Personally, I'm hoping for a SWR of more than 4 cents per day. :)
Most of my posts assume no behavioral errors.

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Cosmo
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Re: How I beat Indexing... in 1 hour

Post by Cosmo » Tue Aug 26, 2014 4:50 pm

SuperSaver wrote:1) Dedicate <5% of your portfolio to "play money"
- In my case it was $5000

2) Open up a brokerage account with $0 trades
- Merrill Edge for BofA customers

3) Scour Top 10 holdings in Vanguard/Fidelity Mid- and Small-Caps

4) Do your research! Pick companies with:
- Consistent quarterly >7% profitablity
- First in a new field
- No real competition
- Stay away from anything you don't understand

5) For me, this was in early August
- FARO: first in field, no real competition
-ITMN: I knew of impending buy out
- ILMN: same as FARO
- LUV: knew of fuel prices coming down from USA Today app
- TSLA: despite insane P/E ratio

RESULTS:
Cost basis $4400
Market Value: $5400

Net profits (even with short term capital gains) >>> anything in Indexed Fund

Conclusions:
1) Beginner's Luck
2) Let Vanguard do most of research for you
3) Take some chances, do a modicum of research
4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds
So you started this one hour exercise earlier this month and you already know that you beat indexing? In three weeks' time? Is this a serious post? Sorry but I detect a troll here.

Cosmo

wassabi
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Re: How I beat Indexing... in 1 hour

Post by wassabi » Tue Aug 26, 2014 5:18 pm

It's a shame that so many people are ridiculing the OP. The person even posted thanking the community for helping him to realize he was spending too much on expense ratios. Doesn't sound like a troll to me. No reason to ridicule the person just because many of you disagree with the trading method he used with some of his spare cash. I personally don't use fun money for the same purpose he did, but I've seen the idea of spending "fun" money advocated by many on this board.

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Re: How I beat Indexing... in 1 hour

Post by leonard » Tue Aug 26, 2014 5:22 pm

Hmmmm....having trouble with the math and algebra reconciling this approach with the numbers here:

http://www.bogleheads.org/forum/viewtop ... 1&t=145439

So, are individual stocks $5k as stated here in this thread or $50k as stated in the other thread? And if $5k of your individual stocks beat the indexes (which indexes BTW; it matters) how did the other $45k's worth of individual stocks turn out?
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.

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Re: How I beat Indexing... in 1 hour

Post by nisiprius » Tue Aug 26, 2014 7:31 pm

I do not think it is harmless to allocate 5% of your portfolio as "fun money." I think "fun" is a euphemism for the emotions that are actually experienced by gamblers. I think gambling can be addictive for some people and it is best not to find out whether you are one of these people.

I've asked this question before, and haven't gotten an answer. Obviously if you gamble 5% of your portfolio and win, you
SuperSaver wrote:4) Enjoy nice Capital grille Dinner, knowing you beat the market, and the Index Funds
But what do you do if you lose? Specifically, what happens if you lose the entire 5%? Do you say "well, that sucked" and never invest any fun money again? Or do you allocate a second 5% to "fun" in hopes of winning back the lost money?
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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Gambler
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Re: How I beat Indexing... in 1 hour

Post by Gambler » Tue Aug 26, 2014 10:47 pm

kenschmidt wrote:I tried this once back in the early 2000's - similar percentage of my portfolio - i.e., not something that will break you but at the same time, real money in play. I had some successes and some failures. After a little after three years, I basically matched the S&P 500. And that was mostly because of one stock that had tripled in value - which I have to admit is kinda fun to see. But I also saw the risk there - if not for that one good pick, I would have trailed pretty badly. And a lot more work for basically no benefit.

So I think it is ok to give it a try, but I would be sure to monitor my results closely over a decent amount of time before declaring total victory over the mindless masses.
yeah... I'm beginning to think that speculating long term w/$ u can afford to lose might just match the S&P 500 over that time period.

but yeah, it's fun to pick a fund that averages 35%/yr for the past 5 yrs. :moneybag
on the other hand, it sucks when a fund NEVER went above the price you bought it for. it just kept on dropping :(
"Always be thankful for what you have no matter how much or how little" -EternalOptimist

anonyvestor
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Re: How I beat Indexing... in 1 hour

Post by anonyvestor » Wed Aug 27, 2014 1:18 am

This post offers far more insights into psychology than investment strategy. The widespread ridicule and contempt seems more alarming than your own exploration with your investments. Certainly there was no rationale need to repeat the ridicule ad nauseum.

Perhaps your gains reflected a genuine insight into market valuation, but I suspect you are fully aware your investment strategy might well disappoint next time.

I am interested in the judicious use of allocating a token portion of one's portfolio to "speculation," market timing, or any other "non-boglehead" application. There may be some value in allocating a limited portion of one's portfolio to gain investment experience as a learning exercise, and to limit the temptation and potential damage of indulging in speculation with a larger allocation.

My question for you,...

If you had lost the same $ you had gained, would you have had the discipline to recoup your losses through austerity? Or doubled down to gain it back?
Nothing wrong with going to Vegas with a $1,000 allowance - if you are prepared to accept the loss.

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SuperSaver
Posts: 128
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Re: How I beat Indexing... in 1 hour

Post by SuperSaver » Wed Aug 27, 2014 9:30 am

Had I lost $5000, I never would have tried the endeavor again.

Buy hard to go against a company named #1 in MIT's "smartest companies list.
I also knew from engineering friend that 3-D printing is wave of future

FARO and ILMN were solid bets

ITMN was a chance: only 1-product company!

SouthWest Air was solid given declining fuel prices

The book is still out on TSLA

linenfort
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Re: How I beat Indexing... in 1 hour

Post by linenfort » Wed Aug 27, 2014 10:24 am

I guess the bottom line is that you should be proud, but don't expect accolades for a few trades on this forum.
The broad market has done great lately, and we've seen it all before. Many times.
Conclusions:
1) Beginner's Luck
+1

YDNAL
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Re: How I beat Indexing... in 1 hour

Post by YDNAL » Wed Aug 27, 2014 10:27 am

SuperSaver » Wed Aug 27, 2014 10:30 am wrote:Had I lost $5000, I never would have tried the endeavor again....
SuperSaver,

It seems to ME that you like making *bets* -- per earlier post by leonard -- that go beyond $5K in fun money.
leonard wrote:Hmmmm....having trouble with the math and algebra reconciling this approach with the numbers here:

http://www.bogleheads.org/forum/viewtop ... 1&t=145439
SuperSaver wrote:My 401k --- maxed out
JP Morgan, Target Date 2040 = $200,000
<< snip allocation detail >>
(Per their website, I'm on target to reap $134,000/year at retirement)

-TAXABLE Vanguard Account-
S&P 500 Admiral Index: $70,000
Extended Market Index: $15,000
Mid-Cap Index: $5,000
Emerging Market Index: $15,000
Wellington Fund: $3,000
Utilities ETF = $1000
Healthcare ETF = $1000

In addition, I have in other TAXABLE accounts:
Dodge & Cox International: $10,000
T Rowe Blue Chip Growth: $5,000
T Rowe Large Cap Value: $5,000

Other Investments:
$50,000 in direct stock (PG, MRK, HD)
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

leonard
Posts: 5993
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Re: How I beat Indexing... in 1 hour

Post by leonard » Wed Aug 27, 2014 1:38 pm

SuperSaver wrote:Had I lost $5000, I never would have tried the endeavor again.

Buy hard to go against a company named #1 in MIT's "smartest companies list.
I also knew from engineering friend that 3-D printing is wave of future

FARO and ILMN were solid bets

ITMN was a chance: only 1-product company!

SouthWest Air was solid given declining fuel prices

The book is still out on TSLA
How did "PG, MRK, HD" fair?

EDIT: ????????
Last edited by leonard on Thu Aug 28, 2014 7:10 pm, edited 1 time in total.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.

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hoppy08520
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Re: How I beat Indexing... in 1 hour

Post by hoppy08520 » Wed Aug 27, 2014 8:25 pm

SuperSaver, congrats on your hot hand, but remember that over time, the house always wins.

LongerPrimer
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Re: How I beat Indexing... in 1 hour

Post by LongerPrimer » Wed Aug 27, 2014 9:24 pm

You could run the numbers and see if you cold beat the market by just holding AAPL.
I like the KISS concept. :oops:

LongerPrimer
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Re: How I beat Indexing... in 1 hour

Post by LongerPrimer » Wed Aug 27, 2014 9:44 pm

A good portion of DS now defunct UGMA was based on a single small cap.
A good portion of DS non-retirement market assets was/is in 3 to 4 small caps ( sold some to buy house).
A good portion of DS remaining, nonretirement assets is in a single company. a fast mover and small cap.
A goods portion of our (his & hers) trading accounts is based on a just a few small caps (<10 at any time).

All the above have consistently beat the indexes. I saw an a long ago JB interview, who acknowledge that it is fairly easy to beat indexes, If your investments are small, you are nimble in recognizing trends and companies, and don't have to worry about owning too much of a single/similar company or too much of a single/similar company.

LongerPrimer
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Re: How I beat Indexing... in 1 hour

Post by LongerPrimer » Wed Aug 27, 2014 9:47 pm

If your system works, good for you.
Lots of traders and partners at Goldman Sachs made fortunes based on a particular system.

Leeraar
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Re: How I beat Indexing... in 1 hour

Post by Leeraar » Wed Aug 27, 2014 9:59 pm

Go for it.

I freely admit I am too stupid to do what you propose.

Which also begs the question, why would you tell us? Just implement your system for yourself and make bags of money. If you reveal your secrets the efficient market will arbitrage them away.

L.
Last edited by Leeraar on Wed Aug 27, 2014 10:23 pm, edited 2 times in total.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")

Pizzasteve510
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Re: How I beat Indexing... in 1 hour

Post by Pizzasteve510 » Wed Aug 27, 2014 10:03 pm

Deleted

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Redstorm
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Re: How I beat Indexing... in 1 hour

Post by Redstorm » Wed Aug 27, 2014 10:43 pm

Gives us Septembers picks now Supersaver :idea:

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Runalong
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Re: How I beat Indexing... in 1 hour

Post by Runalong » Thu Aug 28, 2014 3:03 pm

Sure, I'll play. Here are my picks but my time frame is until the end of 2014 so as to eliminate any hint of luck :wink:

(Price at 4:00PM EST, 8/28):

INTC 34.65
LUV 32.05
PES 15.34
HPQ 38.00
PPC 29.87

For reference: VTI 103.58

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