writser

Quit your job.

Sure, but exponential vs. linear is not really a programming language thing either. Probably it's better to have the linear algorithm in Visual Basic than the exponential one in assembly. The FPGA stuff is already happening, just Google and you'll find plenty examples. People are building network cards with built-in trading capacities, routers / switches that preprocess price feeds (even cisco), all you can think of. The amount of resources being dedicated to this field is staggering. By the way, you probably knew this already but FPGA's are also being used to mine bitcoins. Have you ever seen this? . Fascinating stuff :) .

The project looks interesting but if you use the Interactive Brokers API to do trading I wouldn't call it 'high-frequency'. I think what programming language you are actually using is not important at all in this case (actually I would say in most cases, but that's a completely different discussion :) ). Even if the performance difference between, let's say, Assembly, Java and Python is a factor 100 we're talking about a few microseconds whereas random stuff about your internet connection (what IB gateway am I connected to, how close do I live to my internet backbone) can make a 10ms+ difference. Not to mention that dedicated HFT firms have leased lines, direct exchange access, dedicated hardware and microwave towers, among other stuff. You won't stand a chance. Besides that, IB has an 100 order limit per day or something so you can't build any serious strategy anyway. In the 'medium-frequency' areas where you can do some interesting stuff from home (and I believe they exist) it is really not going to matter what programming language you are going to use. Your best bet is probably to use the language you are most familiar with (and that generates maintainable code - doing stuff in assembly would be a terrible idea imho). p.s.: an interesting blog if you're interested in HF strategies: https://mechanicalmarkets.wordpress.com/ .

This discussion is a bit pointless because the ETF trader is probably talking about a whole different kind of situation than what the readers here are assuming. Suppose all market participants are retards and SPY trades $.15 under it's intrinsic value. You could easily buy it, sell the underlying portfolio at the same time, redeem your shares in the fund at market close and you would be out of your position in a day. Such a trade is practically speaking 99.99999% risk-free if you know exactly what you are doing unless the world is collapsing and I would go 100%+ long too if I knew the opportunity existed (and if I was 100% sure other people were actually stupid and that I am right). Unfortunately this would never happen because other smart market participants are monitoring SPY as well and it never trades away more than $.01 from fair value. My guess is that the trader was just trying to convey how rare of an opportunity this seemingly small $0.15 profit was by explaining he would literally bet the house on it. That used to be my job. But that's a short-term ETF-arbitrage perspective - completely different from buying BRK on margin and hoping the discount to fair value will close over time.

Thepupil: the good thing is that if even on this "value" forum people ignore a lot of ideas in advance then that at least suggests there are some misvalued stocks out there. I agree with a previous poster: if an idea is obviously terrible people would be all over your thread bashing your idea. And if your ideas were already discussed by hundreds of posters it would probably not be cheap anymore.

This thread is great. I'm going to buy Apple, short Apple, buy KRFT (hearing good things about their beer) and short all ISP's. My Peter-Lynch-style research will ensure outsized returns. I'm still looking for a swap provider on the S&P DW-PMI composite index family (decibel-weighted public music inconvenience) as I would like to short the high-volume hiphop tranches.

Definitely inflation-adjusted.

I started this year. I don't have a finance background and the curriculum seems like a decent way to learn the fundamentals of accountancy / valuation / economy in a structured way. Any career upside is a free kicker.

I do think it matters in some interesting ways (apart from having a ****-measuring contest). Suppose somebody on this forum is extremely enthousiast about a controversial stock (Outerwall comes to mind as an example) and allocated 20% of their portfolio to it. If that somebody has a job and a $20k portfolio then that would be a completely different situation from somebody who is retired and has to live the rest of his/her life from a $2m portfolio. It's much easier to manage a high-concentration, high-conviction portfolio if you don't have any money :) . And I think that implies that a lot of discussions on this forum are probably a bit skewed towards risky behavior because a) most people have no money and b) old people are probably underrepresented on this board. Something to keep in mind when you read a topic about mind-boggling returns or about the next 10-bagger opportunity. It would be interesting to do some research on whether this bias exists on this forum and a topic like this would be a potential starting point for that. Some interesting questions: is there a correlation between personal portfolio size and diversification / annual returns / portfolio volatility / portfolio turnover? I believe these could be some of the points the topic starter is interested in. That said, if a new forum member opens a topic 'how much money do you have' I doubt you will start a sensible discussion. I'm surprised he/she is not also asking for our addresses ..

Agreed. I also think it is, well, let's call it "optimistic" to predict the market will price certain stocks rationally during the next crisis. In fact, to predict anything at all about the next crisis.

it's depressing. Yes ...

Maybe that's why women on average outperform in investing but suck at chess (not sure I agree with that one).

With investing & poker the point is not to be the world #1. You just have to be better than the people you play with. If you play for the marbles, that is .. For lots of people that is very hard though, they rather play with the best of the best, make sick bluffs and epic laydowns (in poker) or make macro calls, try to pick ten-bagger growth stocks and speculate on the future of controversial large caps (in investing). The drive (to prove yourself) that makes you want to beat everybody in chess, soccer or videogames is not necessarily an advantage in investing. Even on this forum people have a tendency to spend (in my not so humble opinion) far too much time and energy on controversial stocks & calls like BH, AMZN, VRX, ASPS, OCN, a Grexit or Japan macro-economics. These discussions are fun and I participate in them too but the average poster would probably be better off looking at all the obscure micro-cap threads with 5 replies. And this forum is actually a pretty nice place, on a site like SeekingAlpha people spend even more time proving how smart they are. Disclaimer: I love chess. And videogames. I probably suck at investing.

I estimate that their portfolio is also up ~5% since you bought, the discount hasn't narrowed that much. 3% or something probably.

Especially if you want to value a company given multiple scenario's I would start with estimating probabilities. If you think that the chances of Greece recovering are 80% and your expected return in that case is 300% you can pretty much skip modelling all other outcomes because they are irrelevant to your investment decision. To me it looks like you start with the nitty gritty details of an extremely complicated scenario that is basically impossible to value and as fas as I can see you haven't even determined whether it is is relevant or not. Why not just say 'in case of a bank run I am probably fucked and lose 70% of my initial investment' and start from there? If you investment decision hinges on the specific mechanics of a currency conversion you should probably not buy into it anyway. That said, bank runs are interesting so by all means continue the discussion.

Correct. A lot of people seem to implicitly assume that "Greek default" equals "Grexit" and I think that that is not the case. An alternative scenario is that Greece is allowed to stay in the union but has to give up its fiscal autonomy or something along those lines. This would cause less panic in the short run and is therefore maybe more palatable to politicians on both sides. I think this scenario should be discussed before theorizing about how many days it would take to print enough Drachme's.

A tangential question I've been pondering: would a Greek default necessarily mean that Greece has to to leave the euro zone?

I agree with the above sentiment. Just suck it up and think in percentage terms. You could diversify a bit more to get closer to market returns if you're unsure about your investing capabilities (which I think is the _actual_ problem, not the size of your portfolio). Also, you will get used to the extra digit in your account faster than you would think.

A couple of years ago I really enjoyed "A short history of nearly everything". Casual but insightful. Other history books I appreciated include: Titan - the life of John D. Rockefeller (by Chernow, mentioned before in this thread) Reminiscences of a stock operator (great book though you could debate whether this is actually a history book) Extraordinary Popular Delusions and the Madness of Crowds The Prize: The Epic Quest for Oil, Money & Power (title suggests a very light read but it is quite the opposite) More recent history: Barbarians at the gate (RJR Nabisco) When genius failed (LTCM) The smartest guys in the room (Enron) FWIW I found this site a long time ago that keeps track of all books recommended by Munger: http://mungerisms.tumblr.com/tagged/Munger-Pick . Not sure how accurate the list is but some good books in there. With regards to the previous post: I think that most Munger quotes should be taken with a grain of salt. My guess is that he's just trying to give basic advice, like: "read some stuff about previous booms and busts so you don't go broke in the next one". And we, the groupies, overanalyze his advice and interpret it as "we can outperform the benchmark by 1% annually for every 1000 pages of history books we've read". The added value of reading the 11th history book suggested in this thread after you've read the first 10 is probably very low, especially in the context of investing. But after reading a couple of history books you are probably not the audience Munger was trying to reach anyway. I just read because I enjoy it (and I bet so does Munger).

A 5% dividend yields exactly the same result as using the dividend money for buybacks and you selling 5% of your position. You end up with the same amount of cash and the same stake in the same company (ignoring taxes etc.). I completely agree with the sentiment that it *feels* wrong to have to sell shares to pay for your retirement. However, that's just our brain playing tricks with us. You should look at the total return of capital, regardless of whether they are tender offers, buybacks or dividends. Only if there is no return of capital _at all_ you might get into a difficult spot when you're retired because you might be forced to sell holdings at unfavourable prices.

"There are more idiots in the stock market than I previously thought. And I had low expectations.” - S. Biglari.

This might be controversial but what annoys me a bit about a lot of great investors is that they make a lot of money and then feel compelled to spread the gospel of their own 'philosophy' to show that not only they are rich - they are also very smart. As if they feel guilty about their riches and try to make it up by pretending to be the next Plato. Soros - Theory of reflexivity. Ray Dalio - Principles. Spitznagel - Dao. Bill Gross - His cryptic letters about his dog. Charlie Munger - Lollapalooza, incentives. Peter Thiel - Zero to one. Howard Marks - The most important thing. Nate Tobik - Leverage and succes ( tongue in cheek :P ). etc. They have all designed their own unique philosophical framework for approaching investing but appararently any of them works. Imho for the average value investor investing is X% boring hard work, Y% complete panic, and Z% blind luck. I feel like these guys mostly come up with their theories after they made a couple of billion and are getting bored of looking for the next mispriced security. Some of these theories are quite interesting but I'm not sure how relevant they all are. I appreciate a guy like Icahn for the simple reason that he just keeps investing instead of trying to become a professor.

Because you emphasize that these women were 'normal' I immediately believe that you played Magic :) . If you're still interested in the game you should check out some of these videos: link. Vintage is the most powerful format and these decks are just insane (and $10k to $20k a piece).

Awesome post, thanks for sharing that. Love the guy flipping over the Black Lotus! Back when I started to earn some money I thought it would be an awesome idea to use my first savings to buy a power 9 set. Obviously I never pulled the trigger .. I still have a couple of duals and some other nice cards though. As a matter of fact, I played a couple of Magic games a few weeks ago after a 10+ year break. Spoiler: the game is still great. Already I am suckered into 'investing' in a couple of new cards. The funny thing is that quite a lot of people play it but you never know - admitting that you play it is apparently just as uncool as it was in high school :) .

If you open an IB account spot rates are so competitive that you shouldn't need Norbert's Gambit. They're also way cheaper than TD Ameritrade in general. It's basically a no-brainer. Only downside is that the learning curve of their platform is a bit steeper.