KCLarkin

Just super weird to me that people are putting on the exact same trades that didn't work last time... --- Edit to add: This Gurufocus article seems delusional (in the context that GEO had something like a 65% drawdown during Trump's first term): During Trump's first term, GEO Group was on a steady climb, securing massive contracts with ICE and benefiting from stricter immigration enforcement that ramped up the need for detention space. The playbook here is simple: with Trump back in office, investors see the potential for a replay of these high-demand conditions. GEO Group's unique position in the private detention market could turn a policy shift into another big payday, with federal contracts piling up and revenue set to spike.

Am I delusional or did almost all of the 2016 "trump trades" fail? Going from memory, but IIRC: Financials Fannie and Freddie For-profit prisons For-profit education? Manufacturing? Energy Did any of the 2016 trump trades outperform SPY or QQQ over Trump's term?

Can anyone explain the move in banks? I don't get it. We already had a trump trade in financials that went bust. And that was with Mnuchin at treasury. Wishful thinking?

FASTGraphs? This is probably my most frequently used tool. It's a good way to quickly get a long-term perspective on price and earnings growth over the long term. And to see if there is a divergence between earnings and price. I think you can use Koyfin and others to generate a similar graph. But FASTGraphs is tuned for this single use-case.

Another option, is to dynamically adjust your withdrawals based on the sequence of returns: https://cornerstonewealthadvisors.com/wp-content/uploads/2014/09/08-06_WebsiteArticle.pdf Rather than retiring with a given lifestyle and hoping your capital lasts. You adjust your lifestyle to guarantee your capital lasts.

This is a bit of a nightmare, especially if you have your assets split between a variety of taxable and tax-free accounts. General advice would be to keep a "cash bucket" of say 1 year worth of expenses and top it up regularly (say quarterly). This keeps you from needing to sell assets in the middle of a drawdown. If I don't want to sell something, I sometimes use IBKR margin for cash management. You should also budget for a safe withdrawal rate. $100k on a $2M portfolio would be extremely risky unless you are willing to slash your spending during bear markets.

One criticism: this is a short list, so it is very hard to make any generalizations. The cutoff is 2.4M%. So there are some very interesting companies that didn’t make the cut. I’d like to see a list with at least the top 100.

I get that this can work when Mr. Market goes crazy. But intellectually, it makes no sense.

With this approach, you are systematically undervaluing the best businesses. Here is an example from my own "mistake" in using this normalized approach: MSC (industrial distributor) YE 2015: Trailing earnings: $3.79 Foward earnings (actual): $3.77 Normalized Earnings: ~$4.00 Cheapest Price 2015: $55 Normalized PE: 13.75 FASTENAL YE 2015: Trailing earnings: $0.89 Foward earnings (actual): $0.87 Normalized Earnings: ~$0.75 Cheapest Price 2015: $19 Normalized PE: 25 On normalized PE, MSM was almost half the price of Fastenal! But which was cheaper? Over the next 9 years, performance was: MSC EPS CAGR: 5.3% Annualized Return: 7.6% FAST EPS CAGR: 10.6% Annualized Return: 17.2% MSC was pretty close to fairly priced in 2015. Fastenal was the real bargain. But that is easy to say in hindsight. How could you have known at the time? There were a couple pretty strong clues: MSC ROE 17% 10yr EPS Growth: 9% FAST ROE 29% 10yr EPS Growth: 12% Fastenal was clearly the better business. If you asked 100 investors in 2015 which was the better business, 100 (including me) would have said Fastenal. But then fools, like me, bought MSC because it was "cheaper".

Trying to be "conservative" is a mistake. You should try to be accurate. How many great and very reasonably priced companies have value investors missed because they were too "conservative". I agree with Gregmal, you should be looking out at least 3-5 years. Trailing earnings are already priced into the stock. Forward earnings are usually too (though Meta is an example of "conservative" investors missing forward earnings by a mile). If you look at only forward earnings, every great company will look expensive. If you use trailing earnings, every value trap will look cheap. Nvidia is a great cautionary tale. In January 2022, TTM (2022) was $4.44. actual fwd (2023) was $3.34. You could have been conservative and estimated 2024 earnings at $3 or $4 or $5. But actual 2024 earnings were $12.96. Sure, you might have missed the drawdown from $300 to $100. But you would also miss the run from $100 to $900. Conservatism comes at a price. --- This also depends on your strategy. If you are buying a cyclical, you should be looking at the past 10-20 years. And then maybe overlay some thoughts on forward earnings. For a real growth stock, you should be looking out 5-10 years.

Agree that it is unlikely a no-brainer and very likely a bad deal. But... This is an insurance product not an investment, so you should be expecting to only get principal back..at best. You are insuring against the "risk" of her living longer than four years (or whatever the insurer's actuarial tables say). Given her age and current principal drawdown, I'm not sure the insurance is necessary. She can probably afford to self-insure. I'd be worried about her burn rate rising if she needs more intensive LTC.

Is there a Vanguard of annuities? It does seem like the ideal product for this life stage but the commissions and fees mean most annuities are a rip-off. Caveat emptor. If you can’t find a good annuity, a fixed income ladder is probably the best option for that life stage. But honestly, her current portfolio seems fine unless you are convinced rates are coming down quickly.

These stocks did perform well 2000-2012. I looked at a few boring "compounders". The few stocks I looked at all did good to very good during this period (though this is hindsight because these are famous compounders in part because they performed well during this period): Copart Fastenal Autonation O'Reilly Tractor Supply Alimentation Couche-Tard Boyd Group Heico Most of those have also done well in the 2012-2024 period, I think. And some newer flavours (e.g. Constellation Software and Transdigm) have done exceptional as well. So it is tempting to assume great compounders are "evergreen". But Mr. Market has bid many of these up, so who knows. But if you can buy these types of companies at reasonable prices, you can generally ignore what the indexes do.

But China will win a race to the bottom. If the only difference between phones is cost, China will win.

Why is there so much desire to destroy American companies with strong market positions? Competition is now global and you need strong national champions. If you handicap American tech, who wins? China, Korea. In the best case, you give some modest market share to another American big tech co. Can you imagine Taiwan trying to voluntarily cede TSMCs dominant position? This reflexive hatred of "big tech" is such self-inflected nonsense.