Comments on: Don't let all of those stock investment choices fool you …

By: AJC

AJC — Wed, 21 May 2008 13:13:56 +0000

@ Josh – Good Luck!

@ How to Trade Stocks – And, you’re just the person to teach ‘em, right?

@ How to Invest – I’ll leave you and How to Trade to duke it out!

@ Moom – Why pay a middle man? Invest in what YOU know best … that could be a specific investment class/strategy; profession; talent … i.e. yourself! It’s also what Warren Buffett recommends.

By: moom

moom — Wed, 21 May 2008 10:10:36 +0000

“then they’ll hang up a ‘hedge fund’ shingle and speculate with other people’s money and make 2% of funds under mgt + 25% of fund profits (with no downside risk … sweet!).”

The best hedge fund founders (e.g. Soros, Simons) manage their own money as well as investors’ money and kept most of their net worth in the fund. These are the hedge funds that make sense to invest in too as the manager’s interests are aligned with the investors. Of course most of the best hedge funds are closed, though good funds of funds often can invest in some of them.

By: how to invest in the stock market

how to invest in the stock market — Wed, 21 May 2008 09:36:08 +0000

You have to invest the lump sum. Dollar cost averaging makes no sense on the lump sum unless you know the future. Maybe you do want to diversify the sum, but you don’t want to hold on to it.

By: how to trade stocks

how to trade stocks — Wed, 21 May 2008 06:41:50 +0000

Trading is not as easy task so it is important to learn to trade stocks. It will fail if you are not willing to put in extra time to study and learn.

By: Joshua H.

Joshua H. — Wed, 21 May 2008 05:53:53 +0000

Thanks AJC, This money making 201 opportunity sounds alot like Warrens first limited partnership and we both know where he ended up.

By: AJC

AJC — Wed, 21 May 2008 05:11:05 +0000

@ – Josh. Good question … speculation v investment. The ‘lucky’ speculators treat it as a business and know when to quit – using their own money … then they’ll hang up a ‘hedge fund’ shingle and speculate with other people’s money and make 2% of funds under mgt + 25% of fund profits (with no downside risk … sweet!).

By: Joshua H.

Joshua H. — Wed, 21 May 2008 04:46:05 +0000

So what do you think was the difference between the best in the ‘business’ and those who have gone by the wayside?

By: AJC

AJC — Wed, 21 May 2008 00:18:54 +0000

@ Moom – Before I comment, check out tomorrow’s post (and, possibly the next day’s) and let me know your thoughts.

By: moom

moom — Wed, 21 May 2008 00:04:20 +0000

In other words, a specularor or trader (like me) needs to have a definable and measurable “edge” or they should buy the market portfolio. There are more sophisticated ways of doing this than just buying a US index fund at Vamguard or wherever. To start with they should be much more diversified than this, do some rebalancing and use low cost leverage in stocks or real estate where available so they can add maybe lower returning diversifiers to their portfolio.

By: AJC

AJC — Tue, 20 May 2008 18:19:14 +0000

@ Joshua – Absolutely; Warren is not the be-all-and-end-all of making money. Just recognize the difference between being in the ‘business of speculating’ (a Making Money 201 possibility) and ‘optimum investing’ (a Making Money 101 and 301 requirement) … some of the best in the ‘business’ have indeed succeeded over long periods but most have gone by the wayside …