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David Crosetti  

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  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    If an index is "the market" that it copies and that market is overvalued, using conventional valuation metrics, then buying the index makes absolutely no sense whatsoever.

    The same rules would apply to an overvalued company and buying stock in that company when that stock is overvalued by conventional valuation metrics.

    As I pointed out in a comment above, valuation of "the market" is important to address for maximum total returns. Ignore valuation and purchase at any point in time, holding your position in the index, results in significantly reduced results vs. buying the index at points that reflect value.

    Even when you miss the absolute bottom of the market by as much as 6 months, the results for buying at value are double and triple the results of buying at overvalued points in time.

    I would suggest that anyone who does not grasp this fact, needs to be putting their money in CD's and not the stock market.
    Sep 4, 2015. 11:01 AM | 7 Likes Like |Link to Comment
  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    If one looks at the performance (annualized returns) for different periods of time, he would find that there were great times to invest in an index fund and absolutely terrible times to invest in an index fund.

    Anyone who claims that valuation of the index is irrelevant is, to put it mildly and idiot.

    Run the numbers. If you bought an index like the SP 500 at the end of 1999 and held it through today, you would have an annualized return of 4.4%

    Why? Because the index was overvalued in 1999 and the market responded to that overvaluation with three years of declining stock market results.

    The decline in the SP 500 was so dramatic that the annualized returns for an investment made in the index in 1999 is laughable.

    Let's look at a purchase after the market crash in 2002 with a purchase made at the end of 2002 and held through today.

    The annualized return for the SP 500 index is 8.1%. That's double the results from the earlier investment with an overvalued SP 500.

    Wow.

    Now, let's look at the results from after the market crash in 2009 Let's make the assumption that you bought the index at the end of 2009, because (according to you and others of like mindedness, no one bought stocks at the actual 2009 bottom--that's all fantasy, internet boasting).

    How would you have done? You would have an annualized return of 13.85% through today Wow, that's incredible!

    Why the good result? Because the valuation of the SP500 was priced at a fantastic set of metrics in September of 2009. The valuations screamed, "BUY ME!"

    But what about our investor who doesn't believe in valuation? Let's look at that guy, who ignored valuations and bought the SP 500 in Sept of 2007, when the SP 500 was at a valuation peak. How has that investment done?

    Oh, an annualized return of 5.9%. How pathetic when compare to an annualized return of more than 13%.

    You continue to ignore reality. Valuation matters. You continue to spread false and misleading information. Valuation doesn't matter. You continue to display your complete and total lack of knowledge as to investing.

    It's important for you to know how something works. Obviously you have been measured, weighed, and found wanting.
    Sep 4, 2015. 10:56 AM | 4 Likes Like |Link to Comment
  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    G:

    Among other folks.................
    Sep 3, 2015. 11:58 PM | 1 Like Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    I used to get my kid a Biscotti and a glass of milk. Now she works part time in a coffee shop and can make any drink you can call out.

    Me? Black coffee only.
    Sep 3, 2015. 09:52 PM | 1 Like Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    I think going to a Jr. College and learning a trade makes a hell of a lot more sense than say, getting a Liberal Arts degree (like I have).

    I've read a lot of interesting books, but I'd have to hire a professional to wire my house.

    Dave
    Sep 3, 2015. 09:47 PM | 17 Likes Like |Link to Comment
  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    G:

    Yeah, something like that.

    But, no one is capable of making a valuation, according to some people.
    Sep 3, 2015. 09:45 PM | 4 Likes Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    Kevin:

    You might want to double check on that with a CPA.

    Just Sayin
    Sep 3, 2015. 05:49 PM | 8 Likes Like |Link to Comment
  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    PIA:

    So, if I were to invest in an Index fund or ETF today, I should not worry about the valuations inherent in the portfolio that is being offered to me?

    If the SP500 is "terribly overvalued" then why would I want to put any money there, today?

    If it is fairly valued, should I be adding money to the index?

    If it is "undervalued" should I "load up the truck?"

    Or if it doesn't matter, then why would it matter with individual stock selections?

    Perhaps it's a number's game then? I mean 500 stocks and all I need is for 250 of them to be up and balance out the 250 that are down for an average return?
    Sep 3, 2015. 05:46 PM | 9 Likes Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    Ted:

    I appreciated your sarcasm!

    What about that help with the resume?

    I need a job. I'm bored.
    Sep 3, 2015. 05:40 PM | 2 Likes Like |Link to Comment
  • Creating Wealth For The Average Joe - An Investment Plan And Model Portfolio [View article]
    I would agree with you that most people don't invest a lump sum at one time and then go away.

    In my own experience, I've never done that, but I have bought stock over time. Sometimes 100 shares, sometimes less for any given purchase.

    The same paradigm for measuring results occurs when someone suggests that an investment in SPY, for example, has outperformed a portfolio of common stocks held by an individual investor.

    But as you point out, individual investors and those who purchase ETF's or funds don't always make that one time investment, so the result numbers are often meaningless.

    Nicely done.
    Sep 3, 2015. 05:24 PM | Likes Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    Ted:

    I need one of those 100k opportunities for part time work now that I'm retired.

    Do you think you could update my resume for me?

    I'd appreciate it.

    I'd probably need a government job, though.
    Sep 3, 2015. 05:18 PM | 5 Likes Like |Link to Comment
  • Dividend Stocks Will Give My Daughter $600,000 On Her 18th Birthday [View article]
    You do realize that $10k a year over the next 18 years would have to earn an average return of 13% to reach $600k, right?

    You're going to do that with these 6 stocks?

    Ok, then.
    Sep 3, 2015. 04:18 PM | 16 Likes Like |Link to Comment
  • The 2 Keys To The Magic Formula For Long-Term Investment Success [View article]
    Buffett.
    Sep 3, 2015. 04:09 PM | Likes Like |Link to Comment
  • The Sky Keeps Falling: Are Dividend Growth Investors Buying A Value Trap? [View article]
    PIA:

    Can you provide the proof source for that comment? It would really be interesting to read.

    Thanks.
    Sep 2, 2015. 01:02 PM | 2 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    If we actually cure Hep C, then it will be a very happy day, indeed.

    We'll see about that "cure."
    Sep 1, 2015. 08:19 AM | 1 Like Like |Link to Comment
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