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Boris Marjanovic  

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  • Intelligent Investing Is (Literally) Child's Play! [View article]
    ron3637,

    If I was just an average person and didn't want to spend any time learning about the financial markets, this is what I would do: 60% low-cost index fund (or ETF equivalent) and 40% bonds (or ETF equivalent). I would rebalance once per year to get it back to 60/40. Simple strategy and will outperform most actively managed funds in the long run.
    Feb 16, 2015. 11:54 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    taarheel,

    "It's sort of the Heisenberg principle at work in the investing world. By observing results (and reacting to them), we change them."

    That is a very interesting analogy. I might use it in future articles. Thank you!
    Feb 16, 2015. 11:51 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Carlos Gabriel,

    I guess we will have to see. Although, I am willing to bet Jim will at least outperform the average hedge fund (which is sadly not very difficult to do).
    Feb 16, 2015. 11:47 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Envoy Global Research,

    "In general, though, based on my experience, I do think some sort of basic strategy will outperform sheer random picks."

    I agree, it is possible to outperform by using a basic strategy. Preferably a quantitative strategy where you have a simple computer model selecting the stocks for you.
    Feb 16, 2015. 11:44 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    davidjr74,

    "While it may be true that a lot of investments are simply left up to chance...how do you explain investors who simply have beaten the market consistently over many years? Surely, that can't all be luck."

    If you have 100 million coin-flippers, I can guarantee you that a few will end up flipping heads 20+ times in a row (the equivalent of a good long term investment track record like Buffett's). Surely, these coin-flippers must be skilled at flipping coins, right? There is absolutely no way they could have been lucky, right? I think we both know the answer - it was just blind luck!
    Feb 16, 2015. 11:39 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    CanadasYoungestRetiree,

    "The longer someone plays, the more skill matters. If a portfolio manager does well for a year or two, I'm not too impressed. But if they can do it consistently over a few decades? That's the skill coming through."

    I agree with you - the longer someone invests successfully, the more likely they are skilled. Still, considering there are tens of millions of investors in the world, a few will get lucky consistently, year after year. How do we know which ones were lucky and which ones were skilled then? The answer is it is difficult to know.
    Feb 16, 2015. 11:31 AM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Robert Duval,

    "But never mind that. I disagree because there are too many individuals, from Tepper to Buffett to Klarman to Soros to many others, who consistently outperform."

    There are tens of millions of investors in the world, so it makes sense that a few would become billionaires by luck alone. Think about the countless people who use the same exact strategies as the men you listed above and end up underperforming. It easy to list a few names like Buffett and Soros....after all, they get all the media attention. But what about the countless investors (some of them very intelligent) who end up failing? These people never get the media attention so we simply don't know about them.
    Feb 16, 2015. 11:26 AM | 2 Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Frederic Bull,

    "The idea that a child or pet beating a fund manager can be extrapolated to all children, pets, and fund managers, and as a result a conclusion can be drawn that luck is the primary force in play."

    All I was trying to show was that a child randomly picking stocks has as much of a chance at beating the market as does a professional fund manager. This proves that luck drives investment results.
    Feb 15, 2015. 09:43 PM | 1 Like Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    UncleEddie,

    Buffett was enormously lucky in life. He had massive advantages that 99.9999% of people will never have. If he was born today he - even if he used the same investment style - he would never achieve the same track record.
    Feb 15, 2015. 09:09 PM | 2 Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    abdullah999,

    The reason some value investors perform better than average is because value investing requires one to be patient and trade infrequently. And as I mentioned in this article, portfolio turnover is the best predictor of long term returns.
    Feb 15, 2015. 06:54 PM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Craig Mauk,

    For a lot of people I would simply suggest they buy a simple ETF that tracks the S&P 500 index. But I would never go as far as to say that ETFs are the best investment vehicle out there. After all, many ETFs simply track indexes and these indexes are flawed. For example, one of the major flaws with the S&P 500 is that it is market-cap weighted. Of course, there is now an equally weighted S&P 500 ETF which fixes this problem. But there are still other flaws that need to be fixed. So simply creating a superior index fund is perhaps the best solution for those who want the highest long term investment returns with minimal risk.
    Feb 15, 2015. 04:16 PM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    T Rail Investor,

    That is a perfectly reasonable question. Our hedge fund is a quant fund. We don't research stocks. We know that regular index funds beat most professionals. But most index funds are flawed in their design. So we simply built a superior index fund. Simply put, the best way to beat index funds is to create a better index fund. That is where we add value.
    Feb 15, 2015. 04:08 PM | Likes Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    Michael Boyd,

    It literally doesn't matter what you compare Pro articles' performance to, it doesn't change the point I was trying to make. I simply showed that doing no research at all works just as well, and often even better, than wasting time researching stocks.

    In fact, often times when people research stocks their human biases and flaws actually cause them to pick the worst ones. The only way to solve this problem is to randomly pick stocks or build a quantitative model to do it for you based on some set of rules (like valuation, etc.).
    Feb 15, 2015. 04:05 PM | 1 Like Like |Link to Comment
  • Intelligent Investing Is (Literally) Child's Play! [View article]
    User 8202401,

    "I could never trust a strategy that randomly picks stocks. All it takes is a very poor streak of 3 years or so and I can virtually be wiped out and maybe never make it back."

    If you just stick to randomly picking stocks from the S&P 500 you'll be fine. If you construct an equally weighted portfolio of, say, 10 to 20 stocks it will usually match or even beat the market. The chances of you being virtually "wiped out" using this method are not much greater than when you buy an index fund or ETF that tracks the market.

    The truth is almost any strategy can work in the long run, as long as you don't trade too much. As I proved in this article, there is no need to waste time researching stocks....it simply does not improve performance.
    Feb 15, 2015. 04:00 PM | 3 Likes Like |Link to Comment
  • Profiting From Market Randomness [View article]
    marydugan,

    The financial markets are one area where the bell cruve does not work well. For example, 1000 year market events happen very regularly, making the bell curve a very dangerous tool to use to measure risk. This is why a lot of the financial institution went bust back in 2008, because of flawed math like that.
    Feb 10, 2015. 04:42 PM | Likes Like |Link to Comment
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