PFE having a pretty good week despite calling off the Allergan deal, any thoughts? market just assuming they've got another move coming?
needed this 5% bump from BX, shit has been killing me for a year or so. though the 10% div yield is nice ...
I spent like 3 years throwing every dollar at SL and got them paid off. Absolutely worth it, even though those 3 years sucked miles of dicks. I would say do that.
$CRM just been killing it for me since I bought in mid February at $60. Reports with a target of $86 came out today
My only complaint is I didn't pick up more shares Friday, but could anyone explain it to me like i'm 5 why Teck Resources is up so much today?
This thread seems to have died. Guess I'm glad I've recouped everything from the down year but wish I would have bought more a couple months back.
We are in a super low volatility environment (the VIX went down to its lowest point of the year last night) and that's generally a boring time to trade / invest. Stock prices aren't moving very much to give people anything to talk about. In the downtime I have been reading about what happens when the market becomes "over-indexed". I just made up that term but you know what I mean .... when too many people just index instead of picking individual stocks. When will that happen (I don't think we are there yet) and what will be the best way to capitalize on it?
Here is one. Ill try to find some more that I have read. We are probably years off from this happening but you would think all this indexing would present some opportunities somewhere. Another thing ive thought about is that this may cause extra volatility around the index rebalances. http://www.ft.com/intl/cms/s/0/2e975946-fdbf-11e5-b5f5-070dca6d0a0d.html#axzz46CeYIio1 Spoiler http://www.ft.com/cms/s/0/2e975946-fdbf-11e5-b5f5-070dca6d0a0d.html#ixzz46IPD0ifg The deteriorating ability of money managers to beat their indices has led to investors accelerating a shift towards passive strategies such as exchange traded funds, adding to the pressure on actively managed funds to justify their fees. Equity funds that are actively managed have suffered net outflows of $34.9bn globally this year but stock market ETFs have taken in another $7.6bn, according to research company EPFR, despite the turbulent performance of markets. Last year, ETFs attracted nearly $200bn while actively managed equity funds lost $124bn. “It doesn’t surprise me that we’re getting this continuous move towards passive investment,” said Mohamed El-Erian, chief economic adviser to Allianz. “Active funds have disappointed investors, and in a low-return environment costs become more important.” The shift is most pronounced in stocks. This year the assets of passive US equity vehicles crossed the 40 per cent mark of total US equity fund assets, up from 18.8 per cent a decade ago, according to Morningstar, a data provider. But the trend is also accelerating in bonds. Actively managed fixed income funds globally have lost almost $16bn in 2016, but bond ETFs have absorbed nearly $41bn of investor inflows this year, according to EPFR. More than a quarter of all US bond fund assets are now in passive vehicles, according to Morningstar, up from less than 10 per cent a decade ago. Morningstar dubbed this “flowmageddon” in its latest newsletter, writing that “something big is happening” to the investment management industry: “ETFs have gained the upper hand in the active/passive debate”. The trend has been under way for years but the continued — and worsening — ability of asset managers to consistently beat their indices is expected to accelerate the move. Just 19 per cent of US mutual funds that invest in “large-cap” companies outperformed the S&P 500 in the first three months of 2016, according to Bank of America Merrill Lynch, the lowest quarterly hit rate since its data began in 1998. Only 6 per cent of “growth” funds managed to beat their index, the worst rate since at least 1991. As a result of the shift towards cheaper funds, the shares of US-listed asset managers have dropped nearly 8 per cent this year, compared with the S&P 500’s 0.6 per cent gain, and overall have sagged by more than a fifth since the 2015 peak. Active managers will have to respond to the changing landscape by cutting costs and making staff run larger portfolios, according to Tim Guinness, chief investment officer of Guinness Asset Manager and manager of the Guinness Global Money Managers Fund, an investment fund focused on the industry. The result could be “paymageddon” for active managers, he said. “We see ETFs and passives taking market share for a few more years, and in due course I would expect active funds to get cheaper and cheaper to compete. The days of great prosperity for active fund management may be behind us.” Active managers defend their performance record Investors turn to cheap passive funds to avoid overpriced, underperforming stockpicking Investment group executives are aware of the dangers and are scrambling to respond by cutting fees and unveiling their own passive investment vehicles. “This isn’t a potential threat to mutual funds, it is already here,” Joe Sullivan, chief executive of Legg Mason, told the Financial Times earlier this year. Like many other large, traditional asset managers, Legg Mason has launched a series of next-generation ETFs to adapt. “Investor preferences ebb and flow, but as an asset manager if you can’t tap into that you put your business at great risk.” Fidelity and Capital Group, the largest US asset management groups, known for their stockpicking funds, have ploughed more money into marketing the benefits of active management over the past year. Capital Group has funded studies to show that particular kinds of fund families can be relied on to outperform over the long run. Fidelity revealed in its most recent annual report that its return to asset growth last year was the result of new passive products. “Fidelity’s consistently strong investment performance has shown that there is long-term value in active management,” wrote Charles Morrison, the asset management division president. “That said, sometimes perception can overshadow reality.”
That is a good question. I thought about something similar when I was looking at a couple of etfs to buy. When I researched their holdings they all held the same funds and each other as well.
Which things? And basically everything is in an index today so you will be severely limiting your choices (any investment not in an index probably wouldn't fit the profile im looking for) At some point, we aren't there yet, it will pay off to not be a passive investor. Im guessing at that point the analysts will have a big advantage over the indexers and your average investor will pay for active management. Like everything else, the people to first spot the trend will make the most money.
How will square handle the move to the chip card? Without doing any research, the long term prospects of Square don't look appealing to me. I think you will see a lot of innovation in payment systems over the next 5 years. There was a 60 minutes segment not too long ago about how Kenya, of all places, has adopted the cell phone as a major source of payment(no square needed). Too much competition (that is better) for Square to be a good risk / reward investment IMHO.
Kind of related on Zero Hedge today. http://www.zerohedge.com/news/2016-04-21/most-crowded-trade-history Spoiler The Most Crowded Trade in History In the past we have talked about the rise of “blind buyers.” They represent those who have transitioned from looking at equities as shares of ownership in companies and businesses to equities simply as an asset class. As such, they place their equity investing on autopilot in passive and index products. Among others, the group represents individual investors, institutional investors or computerized investors trading correlation and asset allocation models. It is far less time intensive for an individual investor to buy an index fund rather than research stocks or active managers. It is probably more cost effective to have a quant build a model to trade market relationships than to hire a team of analysts to delve deeply into individual companies. Monetary policy which has been pinned at aggressively easy levels has only reinforced this transition to viewing equities as an asset class. Stagnant policy has minimized investors' need to make decisions about the path of interest rates. Nowadays, market participants generally share similar views on the path of policy going into and coming out of each economic release. There is not much variation on where interest rates will be in the future and how will they influence a company’s cost of capital. The Fed Put and the accompanying liquidity wave have encouraged investors to simply buy the asset class as a whole. The permanently easy monetary policy has removed an important market variable that goes into the decision making process that creates a two sided market. Historically, research has indicated that most active managers underperform the index on an annual basis. That being said, we can’t help but to recall legendary mutual fund investor John Neff’s memoir about his time at the helm of the Windsor fund. Neff talked about the pain of underperforming the S&P 500 by 6.7% in 1971 and 8.8% in 1972. Later, his 10% outperformance in 1973 offered no solace because the fund lost 16.8%, which followed the 25% loss in 1972. In 1975 and 1976, Neff posted gains of 54.5% and 46.4%, outperforming the S&P 500 by 17.4% and 22.6%, respectively. There is no doubt Neff is exceptional and an outlier, but today’s environment would never allow such brilliance to emerge. According to Morningstar, US equity active managers have endured $179 Billion of outflows, while US equity passive funds experienced $110 Billion of inflows over the past year. During the past 18 months in which the market has risen 10%, US equity fund assets have shrunk by 1.5% according to Morningstar’s data. During the same period, passive US equity funds have grown by 19%. The mix of US equity mutual fund assets has gone from 63% active and 37% passive 18 month ago to 58% active and 42% passive today. That is a strong shift over such a short time period. Instead of looking for manager’s and investment opportunities to beat the market, investors are opting to be the market and are likely creating the most crowded trade in history. Stagnant monetary policy fosters a groupthink outlook. The Fed Put prompts the same positioning. Computerized programs trade correlations and relationships established during an extended period of abnormal policy. Active managers continue to retrench as the market diverges from the fundamentals, but the blind buyers continue to participate - it does not matter if the market is 10x, 15x, or 20x earnings, they buy for one reason, it is the market.
So what is the knock on choosing the play that puts you ahead 80% of the time? If we overthink it, what are we doing?
Not all indexes are created equal. Buy stuff that isn't in the S&P 500. Buy stuff that isn't in the Russell 2000. Don't buy Sprint & Valeant HY debt. Don't buy the large bank's IG debt. Don't buy on the run Treasuries.
Until you have several million dollars, just index. Zero Hedge's investment style (or at least their style of publishing) is to try to prove they are smarter than everyone else and everyone else is an idiot, investment returns be damned. I used to love reading Zero Hedge, then I got into the industry and started developing some knowledge in areas that is more than a millimeter deep. Whenever I read Zero Hedge discuss those areas where I focused, I was continually baffled by their lack of understanding of the facts at hand.
I agree / disagree about Zerohedge. I think the guy is actually really smart and has a great understanding of the topics that are discussed. But at the same time he is a pessimistic fucker who thinks the world is going to end. For those reasons I only read the site occasionally. Its not a knock on the choice that puts you ahead 80% of the time at all. Its pointing out that indexing, in a few years, wont put you ahead 80% of the time because everyone else is going to be doing it.
At some point I feel like it could come down to who has the best/faster algorithms to catch price moves better.
Buying a house in 3 weeks so I sold off a few positions this week for extra cash. By sheer dumb luck, I unloaded all my Apple shares yesterday with a $105 limit order. Had no idea earnings were today and it's now at $97
The algos and speed is a pretty crowded trade right now. WE use 10 gigabit connections and all servers that run the algos are co-located in New York, so speed has become less of an issue IMO. Being a prop trader I can compete with Billion dollar hedge funds and banks on speed. Im thinking more on a macro level and finding value trades that are mispriced long term.
yeeeesh --- The U.S. economy expanded in the first quarter at the slowest pace in two years as American consumers reined in spending and companies tightened their belts in response to weak global financial conditions and a plunge in oil prices. Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance, Commerce Department data showed Thursday. The increase was less than the 0.7 percent median projection in a Bloomberg survey and marked the third straight disappointing start to a year. Shaky global markets and oil’s tumble resulted in the biggest business-investment slump in almost seven years, and household purchases climbed the least since early 2015, the data showed. While Federal Reserve officials on Wednesday acknowledged the softness, they also indicated strong hiring and income gains have the potential to reignite consumer spending and propel economic growth. “The fact that personal consumption is a bit on the soft side is a disappointment, especially in light of the low gasoline prices,” said Thomas Costerg, senior economist at Standard Chartered Bank in New York, who correctly projected first-quarter growth. “Consumption seems to be stuck in a low gear.” Economists’ projections for GDP, the value of all goods and services produced in the U.S., ranged from gains of 0.1 percent to a 1.5 percent. This is the government’s first of three estimates for the quarter before annual revisions in July. Consumer Spending Household purchases, which account for almost 70 percent of the economy, rose at a 1.9 percent annual pace last quarter, compared with 2.4 percent in the final three months of last year. Spending, while slightly better than the 1.7 percent median forecast, was a disappointment in light of the consumer-friendly fundamentals including low gasoline prices, cheap borrowing costs, increased hiring and warmer-than-usual winter weather. “The first quarter is going to be the worst quarter for consumption for all of 2016,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC in New York. “With financial markets calming down and retracing all of their losses, the fundamental factors that have driven consumption will continue to do so.”
Yeah. I'm no active investor/stock picker like many ITT. I just have a bunch of money stored away in an 60/40 fund (VBIAX) that I plan to eventually use for a house down payment, although I'm in no hurry to buy and comfortable with the risk that brings. Just looks to me like the market is outperforming expectations right now.
Over in Europe, Unilever just issued a 0% coupon bond. I don't mean a zero coupon bond that is issued at a discount and accretes to par over time. I mean they issued a bond at par ($1000) and in 5 years they will pay you back par ($1000) with no interest in between now and then. I think I've seen everything now.
I just realized even though it wasn't classified as a zero coupon discount note, it was issued at a small discount of .323 points so the investor buys the bond for $996.77 and in 5 years they get $1000 for an annual return of .08%
Feeling good about my F purchases. I think there was another poster in here that was buying F as well.
Wish I had bought more. Bought in a few month ago at $12.23. Am a very novice investor, but I felt they were under priced compared to the rest of the automotive sector and I liked the dividend. Have experience a much better return that I imagined though. Was pretty much just buying it for the dividend plus the fact that its a blue chip in a sector predicted to grow in terms of global sales next year (per Euro Automobile manufacturers association)
They were/are, anecdotally starting to see more driving their newer ford explorer model. It looks good.