Money and Investing (formerly Pfizer Stock prices)

From today’s WSJ: Melvin Capital Management, “one of the top hedge funds on Wall Street” lost 53% of its assets in January (before an emergency 2.75 billion infusion of funds from Citadel – see Note below).

I was going to say “too bad for these vultures” but I won’t as that would be a disservice to vultures; at least vultures perform a useful service by cleaning up dead animals and preventing disease and stink, whereas the Hedge Funds are total parasites and other than enriching themselves, perform no useful service.

Other hedge funds took big loses but Melvin was the largest.

Note: rumor has it that as a condition of the cash infusion, besides Citadel getting a big stock position in Melvin, that the board of directors of Melvin had to blow the board of directors of Citadel every day until the cash was repaid.
 
@billyS
Mod: I inadvertently posted #21975 in this thread instead of pfizer-stock-prices thread. The post is inappropriate to this thread.
no biggie but if you have the time could you move it to the appropriate thread.
 

pokler

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From today’s WSJ: Melvin Capital Management, “one of the top hedge funds on Wall Street” lost 53% of its assets in January (before an emergency 2.75 billion infusion of funds from Citadel – see Note below).

I was going to say “too bad for these vultures” but I won’t as that would be a disservice to vultures; at least vultures perform a useful service by cleaning up dead animals and preventing disease and stink, whereas the Hedge Funds are total parasites and other than enriching themselves, perform no useful service.

Other hedge funds took big loses but Melvin was the largest.

Note: rumor has it that as a condition of the cash infusion, besides Citadel getting a big stock position in Melvin, that the board of directors of Melvin had to blow the board of directors of Citadel every day until the cash was repaid.
Hedge funds are a source of liquidity in the bond markets is stressed markets. When mom and pops wanted to unload Puerto Rico paper post default hedge funds were the only bid. Low ball prices but the small guy afraid of losing it all sold them. When mutual funds needed to unload junk bonds in panics of 2008 and March 2020 hedge funds were only bid on the street .
 
Hedge funds are a source of liquidity in the bond markets is stressed markets. When mom and pops wanted to unload Puerto Rico paper post default hedge funds were the only bid. Low ball prices but the small guy afraid of losing it all sold them. When mutual funds needed to unload junk bonds in panics of 2008 and March 2020 hedge funds were only bid on the street .
I stand corrected; they are not lower than vultures; they are on the same level as vultures. I'll give them this: they are a step above leg-breaker Louie with people in financial distress.

Ya know how some people say "I'm sorry for your loss" as part of their script they use to collect a bill from a widow.
Well, in terms of hedge funds I'm not sorry for their loss.
 

pokler

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I stand corrected; they are not lower than vultures; they are on the same level as vultures. I'll give them this: they are a step above leg-breaker Louie with people in financial distress.

Ya know how some people say "I'm sorry for your loss" as part of their script they use to collect a bill from a widow.
Well, in terms of hedge funds I'm not sorry for their loss.
There is really no reason to buy hedge hedge funds when mutual have been outperforming , offer far more liquidity and are much more regulated for your safety and Less concentrated bets for less risk.
 
There is really no reason to buy hedge hedge funds when mutual have been outperforming , offer far more liquidity and are much more regulated for your safety and Less concentrated bets for less risk.
As an industry, roughly 60% of mutual funds underperform their stated benchmarks on an annual basis. large cap growth is almost 75% underperformance. Some asset classes do better but very few. Go out longer and the rate of underperformance grows. Having spent many many years working for the fund companies, I can tell you, they know they suck on a relative basis. Hidden fees, shifting benchmarks to try and look better. The whole share class crap finally got taken down. Plenty of better options for investing.
 
As an industry, roughly 60% of mutual funds underperform their stated benchmarks on an annual basis. large cap growth is almost 75% underperformance. Some asset classes do better but very few. Go out longer and the rate of underperformance grows. ..... Plenty of better options for investing.
From my post #166
No matter how well a managed fund does in the short term returns they “must always return to the mean of their appropriate index less the management fees they charge.”

Seems to me you are just stating the case for the average investor buying index funds that track a particular benchmark rather buying a managed fund that tries to beat it.
 
From my post #166
No matter how well a managed fund does in the short term returns they “must always return to the mean of their appropriate index less the management fees they charge.”

Seems to me you are just stating the case for the average investor buying index funds that track a particular benchmark rather buying a managed fund that tries to beat it.
Give me a guaranteed 7% return for the next 20 years with minimal volatility and low risk. I’ll sign right now
 

pokler

Power Bottom
From my post #166
No matter how well a managed fund does in the short term returns they “must always return to the mean of their appropriate index less the management fees they charge.”

Seems to me you are just stating the case for the average investor buying index funds that track a particular benchmark rather buying a managed fund that tries to beat it.
There are plenty of funds who have outperformed. Mean regression will sell lots of books and is appealing academically but in the real world there are great managers if you do your home work .
 

pokler

Power Bottom
From my post #166
No matter how well a managed fund does in the short term returns they “must always return to the mean of their appropriate index less the management fees they charge.”

Seems to me you are just stating the case for the average investor buying index funds that track a particular benchmark rather buying a managed fund that tries to beat it.
Maybe so for YOUR funds ...
 
I'm an individual investor who did so well over the years with VTI (Vanguard Total Index). Very low fees, a reasonable dividend and appreciation comparable or better than the Dow. Some mutual funds get lucky in some years and outperform the market but most don't on a regular basis. Wall Street insiders call individual investors money "dumb" but in my opinion, true "dumb money" is pension fund money.
 

pokler

Power Bottom
I'm an individual investor who did so well over the years with VTI (Vanguard Total Index). Very low fees, a reasonable dividend and appreciation comparable or better than the Dow. Some mutual funds get lucky in some years and outperform the market but most don't on a regular basis. Wall Street insiders call individual investors money "dumb" but in my opinion, true "dumb money" is pension fund money.
Yes it's super easy to buy index funds and go on cruise control but with some work you'll find funds with consistent alpha

Is 100% of your $ in stocks? I doubt it.
Has your portfolio as a whole beaten its passive benchmark?
If no or if you don't know then you have no idea how well you are doing !
 
Yes it's super easy to buy index funds and go on cruise control but with some work you'll find funds with consistent alpha

Is 100% of your $ in stocks? I doubt it.
Has your portfolio as a whole beaten its passive benchmark?
If no or if you don't know then you have no idea how well you are doing !
Over the last five years: VTI went up by an average of 14.26% while the Dow went up by just 10.22%. I hate to brag but with VTI I beat the benchmark so easily during this period. I have a very diversified portfolio of other stocks and investments and not all my eggs are in one basket by any means. I hope I won't lose any money since I'm quasi gloating here..
 

pokler

Power Bottom
Over the last five years: VTI went up by an average of 14.26% while the Dow went up by just 10.22%. I hate to brag but with VTI I beat the benchmark so easily during this period. I have a very diversified portfolio of other stocks and investments and not all my eggs are in one basket by any means. I hope I won't lose any money since I'm quasi gloating here..
The Dow is hardly the correct benchmark but that's a different story. Sure the stock part of your portfolio may have done well but what about the other parts? Are you getting paid for the risk you are taking? Asset allocation is biggest determinant of your performance. Most people just focus on stocks.
 
There are plenty of funds who have outperformed. Mean regression will sell lots of books and is appealing academically but in the real world there are great managers if you do your home work .
There are close to ten thousand (10,000) domestic mutual funds of which maybe a couple dozen have beat the market by more than 6% over a 10 year period (Peter Lynch's record). This # of outliers on that sample size is consistent with pure chance on any type of statistical distribution curve you want to apply.
Maybe you can pick the few winners out of the 10,000, but I surely can't.

I have a couple of index funds (a bit of diversification - only one is total market index) and under 10 individual stocks that I invested in because I knew about the companies from my interfacing on various levels with them. Since I'm heading toward 74 I have about 1/3 of my assets in target date domestic investment grade bond etfs (ishares ) mostly to ride out a recession and still be able to met my RMD's over the any 6 year period w/o having to sell stock during such periods. I have 5% cash (MM, short CD's and internet savings account (0.5% now).
I've been around a long time and have seen and learned a lot.
 

pokler

Power Bottom
There are close to ten thousand (10,000) domestic mutual funds of which maybe a couple dozen have beat the market by more than 6% over a 10 year period (Peter Lynch's record). This # of outliers on that sample size is consistent with pure chance on any type of statistical distribution curve you want to apply.
Maybe you can pick the few winners out of the 10,000, but I surely can't.

I have a couple of index funds (a bit of diversification - only one is total market index) and under 10 individual stocks that I invested in because I knew about the companies from my interfacing on various levels with them. Since I'm heading toward 74 I have about 1/3 of my assets in target date domestic investment grade bond etfs (ishares ) mostly to ride out a recession and still be able to met my RMD's over the any 6 year period w/o having to sell stock during such periods. I have 5% cash (MM, short CD's and internet savings account (0.5% now).
I've been around a long time and have seen and learned a lot.
First off there are far far less than 10,000 domestic funds. That number is pumped up by the multiple share classes. Any given fund can have 3-7 different share classes. I'm a subscriber to Morninstars premium software and did a fast analysis. I put all Large cap blend in a bucket and there were over 1500 funds. Then I told it I want only unique funds and it came to only 176! All the rest were different share Classes I filtered out .
Of the 176, 25 beat the S&P 500 over past 5 yrs and 12 over past 10.
Large Blend is the hardest Catagory to beat the Market since the stocks are so widely followed. When you get into LCV , mid cap , small cap , where value can be added far greater portions beat their index .
 
First off there are far far less than 10,000 domestic funds. That number is pumped up by the multiple share classes. Any given fund can have 3-7 different share classes. I'm a subscriber to Morninstars premium software and did a fast analysis. I put all Large cap blend in a bucket and there were over 1500 funds. Then I told it I want only unique funds and it came to only 176! All the rest were different share Classes I filtered out .
Of the 176, 25 beat the S&P 500 over past 5 yrs and 12 over past 10.
Large Blend is the hardest Category to beat the Market since the stocks are so widely followed. When you get into LCV , mid cap , small cap , where value can be added far greater portions beat their index .
All the stuff below, except the 10yr returns I listed, is from my memory, and at 4am in the morning, and I have some effects from "the vaccine" I just got — so if you find typos and the like please take that into consideration. When I get a chance I'll post some info about that in the COVID thread.


I won't argue your stats of 3-7 share classes. However, IMHO, your statement is an over simplification as the classes can (and do) have very different yields so in my mind they can be considered different funds. A between 1 to 2% annual range difference in yield over 3-7 share classes over the years is dramatic.


For example one of the few funds I have is DWS Science and Technology. Like I said I am ancient and started investing before the advent of Index Funds. As I recall in early 70's I invested in Fund for Mutual Depositors They had no load and very low expenses and believe it or not you needed to have a savings account in a mutual savings bank in order to invest in FMD funds (Fund for Mutual Depositors, duh!). So that's what I did.

Eventually FMD was taken over by Scudder Funds which was taken over by DWS. I have all my records on all this, My spread sheet records were 1st in a cellulose and graphite form i.e., I kept reinforced loose leaf sheets in a note book and wrote the entries in pencil. Year end records are kept in a paper folder. With the invention of the PC records were kept in electronic form (remember Lotus 1,2,3) and so on. I kept this fund just for the hell of it and too lazy to take cap gains)

the 10 yr annual returns for various classes (mine is the grandfathered in "S" : 15.93, 16.27,17.12(S), 17.26 and surprise, surprise, the returns are in exact order of their annual expenses. None beat the 10 yr index. BTW, 3 of the 4 classes beat the 1yr technology index (1 yr index 45.13), and 1 was a couple tenths of a % below. Again, surprise, surprise, the returns are in exact order of their annual expenses.

Something else that you can think about: even if we use your 176 example there are only 12 that beat the S&P 500 index. I would call that reversion to the mean. No? (Perhaps you can look up the 20 year returns to see how many beat the mean, and it would be really interesting to see if they are the same 12 - I don't have the resources to do such, nor the inclination.

Also, (something not always thought about) for the even your 176 # is suspect (Like I said I am ancient) as over the years I have seen funds with terrible performance just disappear via mergers into better funds. Although I haven't read it in a couple of years, all this stuff is in Random Walk Down Wall Street B. Malkiel. Really smart guy and I like really smart guys. Came out with 12th ed last year or so and I will be getting it - has updated stats supporting his pint of view and also stuff on bitcoin.
 

pokler

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Morningstar classifies funds by the holdings.
Any given fund may have several share classes each with a different ticket symbol.
Each of these is the exact same fund with the same holdings the only difference being fees. Of course the funds will rank in performance in opposite order of fee amount. But to say they are different funds is just not true. Any analysis worth reading with point this out.
And I can't say this enough. Asset allocation is a far bigger determinant of your portfolios performance than if a given fund is beating the market. Most books focused on fees and efficacy of Markets are are leading readers astray by not focusing on what really matters , asset allocating.
 
Morningstar classifies funds by the holdings.
Any given fund may have several share classes each with a different ticket symbol.
Each of these is the exact same fund with the same holdings the only difference being fees. Of course the funds will rank in performance in opposite order of fee amount. But to say they are different funds is just not true. Any analysis worth reading with point this out.
And I can't say this enough. Asset allocation is a far bigger determinant of your portfolios performance than if a given fund is beating the market. Most books focused on fees and efficacy of Markets are are leading readers astray by not focusing on what really matters , asset allocating.
Kindly provide a couple of examples.
 
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