Buying stocks now? 3/17/2020

Red Cinders said:
Catlady, I've heard that about fund managers seldom beating the market. I'm wondering that now in the changing environment if they'll do better than index funds. Over the past few years, the market went either straight up or sideways for a time. There weren't a lot of losers. Once we come out of this mess, the landscape may change and make good stock pickers important again. BTW, I like your style! :)
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actually most fund managers are very good stock pickers ....the problem most funds are to small to be efficient cost wise ....keeping the lights on and paying talent is costly so it is not the stock picking that can’t win , its the costs .

Morningstar and ibbotsen found that if you stick to the top 20% of the mega funds in size your chances of beating indexing jumps to 80% ....funds like fidelity contra , fidelity growth company , fidelity blue chip growth have beaten their indexs for the most part for many years
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mathjak107 said:
actually most fund managers are very good stock pickers ....the problem most funds are to small to be efficient cost wise ....keeping the lights on and paying talent is costly so it is not the stock picking that can’t win , its the costs .

Morningstar and ibbotsen found that if you stick to the top 20% of the mega funds in size your chances of beating indexing jumps to 80% ....funds like fidelity contra , fidelity growth company , fidelity blue chip growth have beaten their indexs for the most part for many years
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This article is one year old, but I'm sure it's still true now =
https://www.cnbc.com/2019/03/15/act...th-year-in-a-row-in-triumph-for-indexing.html

"Dow Jones Indices released its annual report on how actively managed funds performed against their benchmarks. The conclusion is that active managers continue to show dismal performance against their passive benchmarks. For the ninth consecutive year, the majority (64.49 percent) of large-cap funds lagged the S&P 500 last year."
 
Catlady said:
This article is one year old, but I'm sure it's still true now =
https://www.cnbc.com/2019/03/15/act...th-year-in-a-row-in-triumph-for-indexing.html

"Dow Jones Indices released its annual report on how actively managed funds performed against their benchmarks. The conclusion is that active managers continue to show dismal performance against their passive benchmarks. For the ninth consecutive year, the majority (64.49 percent) of large-cap funds lagged the S&P 500 last year."
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That is only true if you don’t consider fund size and every fund in the universe cans mostly because of not stock picking but the costs of running small funds .....just pick from the top 20% of funds with the most investor dollars ..odds soar to 80% you will beat indexing.. so not sure why you are posting what you did ....it has nothing to do with what I said
 

Red Cinders said:
CatlI've heard that about fund managers seldom beating the market . I'm wondering that now in the changing environment if they'll do better than index funds. Over the past few years, the market went either straight up or sideways for a time. There weren't a lot of losers. Once we come out of this mess, the landscape may change and make good stock pickers important again. BTW, I like your style! :)
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"I've heard that about fund managers seldom beating the market"

That is true...they make money even if you lose money.


Active fund managers trail the S&P 500 for the ninth year in a row in triumph for indexing
PUBLISHED FRI, MAR 15 20197:09 AM EDTUPDATED FRI, MAR 15 201912:52 PM EDT

Bob Pisani@BOBPISANI




KEY POINTS
  • Active managers who claim that they would do better during periods of heightened volatility are going to have to find another argument.
  • For the ninth consecutive year, the majority (64.49 percent) of large-cap funds lagged the S&P 500 last year.
  • After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index.
 
oldmontana said:
"I've heard that about fund managers seldom beating the market"

That is true...they make money even if you lose money.


Active fund managers trail the S&P 500 for the ninth year in a row in triumph for indexing
PUBLISHED FRI, MAR 15 20197:09 AM EDTUPDATED FRI, MAR 15 201912:52 PM EDT

Bob Pisani@BOBPISANI




KEY POINTS
  • Active managers who claim that they would do better during periods of heightened volatility are going to have to find another argument.
  • For the ninth consecutive year, the majority (64.49 percent) of large-cap funds lagged the S&P 500 last year.
  • After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index.
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Again read what I wrote above ,...that is not the whole story....fund managers do pick stocks better but the cost of running medium and small funds with relatively smaller amounts of money has costs not stock picking do them in .

but do a sort of the 20% biggest funds in investor dollars and your odds jump to 80% that you will beat indexing.. that was a study by Morningstar and ibbotsen
 
I wonder how many people getting ready to retire now see it as a distant date.

Ford was at $36.66 in the 90s now it is less than $5. I sold my shares six years ago.

Berkshire Hathaway is down 8.9% this year @$257,346 from a five year high of $344,790.
 
oldmontana said:
Thanks for that day old information.

I hope that made your day.

I look at what a stock will be , thanks to information available, in one year. I look for Ford to double.
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ford is more than likely getting a credit down grade over the next month or so to even worse junk levels . their borrowing costs will sky rocket and they likely will file bankruptcy wiping out shareholder debt and equity... ford is a speculation , not an investment at this point .

anyone who puts money in to ford should expect to loose money , and if they don't , well that is the long shot and why it is speculating


https://www.ccn.com/why-bankruptcy-forgone-conclusion-for-ford-motor-company/
 
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Hopefully Ford will work out a deal to temporarily make ventilators. GM is already on board. It might just provide the life support that Ford needs until things return to somewhat normal. I like these stories of companies repurposing themselves to fill a need in a crisis. A local sports team apparel maker is now making surgical masks because the type of material they use for their apparel is the same as is used for masks. If they fill a desperate need and are able to keep their businesses afloat because of it, then that's a win-win for everybody.
 
Red Cinders said:
Hopefully Ford will work out a deal to temporarily make ventilators. GM is already on board. It might just provide the life support that Ford needs until things return to somewhat normal. I like these stories of companies repurposing themselves to fill a need in a crisis. A local sports team apparel maker is now making surgical masks because the type of material they use for their apparel is the same as is used for masks. If they fill a desperate need and are able to keep their businesses afloat because of it, then that's a win-win for everybody.
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At the prices Ford and GM were a about a week ago I took a flyer and purchased stock in both....a small amount of our stock portfolio. Ford is up about 11% and GM up 20% .

I enjoy investing.
 
Catlady said:
Warren only got into techs because he hired two younger guys to replace him, they are the ones who pushed to buy Apple. And fund managers very seldom beat the market. I don't like mutual funds, but do buy sector ETFs for safety because they own most of the companies in that sector. Not all of them will fail and many also pay dividends.
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You mentioned not liking mutual funds a couple of times. Just curious....why don't you like them?
 
OneEyedDiva said:
You mentioned not liking mutual funds a couple of times. Just curious....why don't you like them?
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Diva, they charge a hefty managing fee, you can't trade them instantly like you can an ETF so don't know what the price will be when selling or buying at the end of the day, you have to trust the manager to make good decisions.
 
Just read a bulletin from Vanguard saying to expect a steep but quick recession very soon. Just posting that because it appears close to unanimous a recession is very near. I just hope if it is steep it is also quickly gone.
 
fmdog44 said:
Just read a bulletin from Vanguard saying to expect a steep but quick recession very soon. Just posting that because it appears close to unanimous a recession is very near. I just hope if it is steep it is also quickly gone.
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No one can tell the future, but I've read that the longer the bull market, the longer and steeper will be the bear market. This bull market just turned 11 years old, I believe it was the longest. So, if it's true, this bear market and recession will be long and brutal, especially considering this very economically damaging pandemic. I am no longer buying stocks, I'm saving the money for in case I need it to live on.
 
fmdog44 said:
Just read a bulletin from Vanguard saying to expect a steep but quick recession very soon. Just posting that because it appears close to unanimous a recession is very near. I just hope if it is steep it is also quickly gone.
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one of the most important things i learned about investing is rarely what we all think and see play out that way ...there is always something not on anyone's radar that alters what we all think is a given
 
Catlady said:
Diva, they charge a hefty managing fee, you can't trade them instantly like you can an ETF so don't know what the price will be when selling or buying at the end of the day, you have to trust the manager to make good decisions.
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Yes, I like the features of the ETFs you mentioned as well. But I mostly have mutual funds since I didn't become aware of ETFs until a few years ago. Some mutual funds have lowered their fees to under 1.00% (ie: Vanguard's VDIGX is .22%) BULIX lowered their fees from about .87% to .67% over the years. Still the funds are not lower than ETFs though, I know. 🤑
 
many funds at fidelity are zero expense and cheaper than etf's ... many admiral shares at vanguard are the same as their etf versions .... i converted my vfiax fund to voo so i copuld move it away from vanguard ... it was the same expense when i last did it .

there can be hidden disadvantages to etf's .

etf's can be a lot more volatile since they are traded like stocks and can be sold short . funds have trading restrictions and can't be shorted . in fact at fidelity you must hold a fund at least 30 days befor selling .

etf's can become very badly disjointed at times from their nav ..... we saw that in the flash crash where popular etf's like dvy traded down 35% while the actual assets were only down 5% , before they were able to arbitrage themselves out .

etf's sell at a premium and or discount ... at times you can over pay compared to the fund .... or buy at a premium and sell at a time there is a discount and the loss is worse.

bond etf's can have huge spreads between bid and ask as well as liquidity can be a problem for them . the third ave bond etf had to be closed and locked when they could not get takers for the shares unlike a fund which just sells the underlying assets .

we are seeing chaos in the pricing of total bond etf's this past month with bnd seeing 5% moves down .....

make sure you understand what you buy .... don't buy on myth or what you hear ...do your homework ... there are enough articles and studies on stuff today to make informed choices.

while i prefer managed funds i do use some etf's from time to time ....
 

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