jmp8822

Bingo. They are looking at scaling solutions... It's just kind of crazy that it's valued at $120B and they haven't implemented scaling yet. Usually when you develop a software solution that needs to scale you take care of that at step 1, not after the software is live. I am very intrigued to see what happens to bitcoin in a major global recession (perhaps in the next year or two?). People loved internet stocks in the late 1990s. I have a feeling the 20-30 somethings at the time were the most confident in their internet stock holdings (these people had never seen stocks decline, perhaps like bitcoin holders today). Did their confidence prevent them from losing 90-100% of their money? People that ask me about bitcoin are certainly intrigued by the price rising - if that is why you are buying it, who will be left to buy when it's 'cheap'? I'm not sure there will be enough bitcoin bargain-hunters to stop the panic.

I tend to agree with what you're saying here. No research to back this up, but like you are saying, the technology of stock trading/ETF trading is much more advanced than 2007/2008 (much easier to trade for individual investors). In my opinion (having worked in the 401k business in the past), vastly more money is at the fingertips of investors directly via investment websites than the past. Anecdotally, I think of the machine shop workers I used to talk with about their 401ks: some of these guys have several hundred thousand dollars in their 401ks and are nearing retirement - will they be able to resist the urge to reallocate (move to cash) their investments online, without having to ever talk to an adviser or even a customer service rep? It seems like the old pension system being replaced by 401ks can really amplify wealth transfer because of how much money unsophisticated/fearful investors hold in a market crash environment - all to be sold with a couple clicks when fear is the highest. It is sad that people can save and work for years to then lose half of it because of one or two behavioral investing mistakes. Another speculation, will the concentration of wealth in baby boomers accounts have a major effect on the next market crash? Might there be a massive amount of selling because of boomers seeing their retirement income base/assets slipping away, wanting to stop the bleeding?

Anecdotal point from today - I was buying options in the same name at the same strike today with IB and Merrill Edge. The option cost $1.05 at IB to get a fill. At Merrill Edge I had to pony up $1.15 to get a fill - ouch.

A fund that doesn't charge a management fee, but only a performance fee is IMO not ideal. Without regular income there is a strong incentive to try to get performance fees, whatever the cost. Better to blow-up trying to get to high-water mark, than getting stuck with zero income. A good reason to ask how much of the manager's personal wealth is currently invested in the fund. +1 I have the vast majority of my net worth invested in my fund - I am very uninterested in "blowing-up" to possibly make a performance fee. Curious what your fee structure is, if you don't mind disclosing. Thanks. It's 25% above a 6% return, resetting annually. High water mark to not allow a loss, then a performance fee because of getting back to even. The docs have a 2% fee that I waive. My attorney told me to add it initially because if I ever wanted to pivot later (charge mgmt fee) I would need new docs.

A fund that doesn't charge a management fee, but only a performance fee is IMO not ideal. Without regular income there is a strong incentive to try to get performance fees, whatever the cost. Better to blow-up trying to get to high-water mark, than getting stuck with zero income. A good reason to ask how much of the manager's personal wealth is currently invested in the fund. +1 I have the vast majority of my net worth invested in my fund - I am very uninterested in "blowing-up" to possibly make a performance fee.

There will be a massive revaluation of many, many companies if 10-year US Treasuries are at 6% in 4-years. Wouldn't a company like Caterpillar almost certainly go down 30-40% in that scenario? (Picking on Caterpillar because I think it is overvalued today anyway, but there would be hundreds of similar examples)

An anecdote on leasing regarding my 2016 Camry: the residual that Toyota Financial says the vehicle will be worth in six months, when my two year lease ends is $18,298. It is probably worth $15,500 at auction right now. So, I will turn the Camry in and lease another Camry or a different vehicle/brand. Toyota Financial will swallow a $3,000+ market value loss on my vehicle. My total payments over 2 years including sales tax will be $3,000. This example is happening to many captive finance companies and is dragging down residuals on new leases and hurting used values - Toyota included.

Without changing the subject too much, I sometimes wonder if moving forward, stock market declines will continue to be large, more like 2008-2009, as recessions roll through. Retail investors have so much equity in 401ks and IRAs that they can liquidate easily online to bonds, cash, etc. I think the supply/demand will be exaggerated because of how many people could have a finger on the sell button. Then all the forced selling comes through, creating even more panic and retail liquidations. It is sort of depressing how unprepared most 401k investors are from a psychological standpoint - one big downside of losing the traditional pension plan system - protecting employees from themselves.

Do you have a frequent flier account with American Airlines, etc.? Just looking on the AAdvantage website, it looks like you can get a one year WSJ subscription for 3,200 miles. Barron's is 1,900 miles for one year. Both are listed via the redeem for magazine subscription link.

Down 28-percent in 2015, up 135-percent in 2016. 70-percent total over 2 years. As I said earlier, I didn't post last year because I didn't want to see how bad I was doing. I was partly in commodity services and an industrial service firm, starting early 2015. Both have been winners now, however I made some trading mistakes on the way.

I picked the highest return choice this year. Last year, I never opened the thread because my results were bad.

Is there something I should read about trading in today's world online? By trading, I mean that I buy a few different stocks a year, which I tend to hold for about a year or so. Also, I tend to buy lower liquidity names, where I might like to buy 10 or 20-percent of volume in a given day. Regarding IB, I have started using the Accumulate/Distribute algorithm on the desktop trading program, which seems to work okay for me. But I've realized I generally don't feel very educated about placing trades. Does anyone have any tips for buying volume in somewhat thin smaller caps or just general IB trading tips? Is there something specific I should read? I have trouble figuring out the best things to know for someone like me (which I would guess applies to many on this board) who trades infrequently but wants to get the most volume at the best price. Maybe there isn't much to know here, but just in case I thought I would reach out to the board. Regarding retail brokers, (I'm currently using Merrill Edge) does anyone have tips for getting more volume without scaring the computers? I say scaring the computers because it seems like I put up a limit of 1,000 shares at X price maybe a penny from the trading price, and never get filled? Looking for some tips here too where you can't hide your volume.

I would agree this is a joke - I've heard him tell the same joke using Microsoft instead of GM about 7 years ago. I am about 99-percent sure this is a joke - again, I've heard him say the exact same thing in a similar setting using MSFT as the company instead of GM. Could he be actually interested in GM? Maybe - but in this case he was joking regarding his age/hearing.

I would agree this is a joke - I've heard him tell the same joke using Microsoft instead of GM about 7 years ago.

Ha! This strikes me as a wise quote. Further proving your point - I have a couple dozen pairs of socks and also white undershirts in their package ready to go for three years from now when I need them. I'm definitely not the guy to ask about fashion - or fashionable equities.

His quotes are so enlightening and logical. It seems like what he is describing will work for the next 100 years. However, he might be ignoring his prior self? The person that won Manager of the Decade for a reason?

Don't you mean he thinks it is a binary outcome with a higher probability of success than the market does? Just because he thinks he is right and it might be a good risk-adjusted bet, doesn't mean it isn't a binary outcome. Sure - it might not be a zero - and no I'm certainly not short. The problem with it: he is being proven wrong every quarter, and has been for years now. That is a disaster of an investment. Is the thesis stronger now than when he first invested? I would say no - so he has lost money and the thesis is now weaker. It is a fine line between ignoring the crowd and ignoring the fundamentals. The crowd creates opportunity, but is definitely not always wrong. The opportunity cost is all the other securities he could have bought in the last 5-10 years that didn't stay flat or go down in value.

I agree with all of what you are saying here. He has taken the whole 'premature accumulation' thing to a new level. The opportunity cost alone of some of these investments is off the charts - not even mentioning the fact that the actual prices are much lower in some cases than his average purchases. Are Sears or Joe going to be up 2-3x in the next few years? If not, can he find nothing else that will be up a similar amount with less risk? I just don't understand the exit plan with either of those, which I find to be extremely important. Interestingly, my best rate of return investment ever was buying IDT around the time Berkowitz was selling at a 90+ percent loss. I also had a lot of success with BAC a few years ago, but most of his holdings today I would not consider owning. I hope he proves me wrong because I have learned a lot from his work and like rooting for him.

I believe he already had enough money at the time that he wasn't going to be in trouble if the business didn't make money.

I have thought about this some as well. Didn't he used to always say "we count the cash"? Maybe we should all stick to Bruce's old advice.

I've been fine with the two providers I use: Kathryn Yulish for admin, and Richey May for audit/tax. https://www.yulish.com http://www.richeymay.com Yulish charges me $500/ month for admin. Richey May charges me $8500 annual for audit and tax. Hope that helps.

Thanks for your continued commentary in this thread.

I think it depends on the market environment. In 2008-2009 many mediocre to bad companies were trading at 80-percent+ discounts. Holding those for 5 years provided great returns compared to safer blue-chip names that might have been down 30-percent. This market isn't providing the severe dislocations that existed, which is making it tough for me, at least. Massive volatility is nice when you have the ability to pivot.

Thanks everyone for the responses. Very helpful. I will be managing < $1m so keeping the upfront costs minimal will mean bps in expenses. Is the paper work difficult for someone without much knowledge of finra/sec laws? Or is the $3k expense mainly for the time it takes to do on your own? Has anyone done all the paperwork on their own? I obviously don't know your situation at all, but I'll give you a few opinions. I would pick the setup you want to use for the long-term. As in, if you want to run a fund, use that structure up front. From a performance standpoint, bill the expenses to the management company, not the fund. That way you will have 'normal' performance like you were using your personal brokerage account. I haven't ever established an RIA, but from the fund side of things, I can't fathom 'doing it myself'. I'm very cheap (preaching to the choir), but from a liability standpoint alone, I think it is worth the cost for the docs. I would guess almost no professionals have written their own legal documents, which goes back to the point about attempting to establish yourself early for your long-term structure. That should position you better for success.

huh???? The purpose of leverage is to increase your balance sheet so you can make more income. But borrowing from your 401k is moving it from one place in your balance sheet to another? And of course there is the double taxation issue. The only advantage to borrowing from 401k is to invest in things you cannot invest in your 401k. But there is just such a high cost. This is not accurate. When you borrow from a 401k, you are not withdrawing money from your account. The 401k plan is issuing you a loan and in-effect, your 401k holdings are the collateral. Also of note, some plans do not allow for loans. It's up to the business owner when they establish the plan. I need to make a correction here. After reading more on this topic, a 401k loan does not provide financial leverage as I previously implied. Randomep was correct in that it is in fact moving assets from one spot on the balance sheet to another. However, a loan from a 401k plan does allow you tax free access to up to $50k of your 401k account balance. The "interest" you pay on the loan is paid back to your own account. Some have noted that you're repaying your loan with after-tax dollars. This is true, but the loan is received free of taxes to begin with so its a wash. The "interest" you pay yourself would be paid back with after-tax dollars however. My apologies for the mistatement. A 401k loan can be a cheap way to get cash, but it does not provide financial leverage as such. You pay back the loan with after-tax dollars. You also pay back the interest with after -tax dollars. The interest is 'new money' to the account. You do not get to deduct this interest amount like you would a traditional 401k contribution, when you save money from your paycheck. The expensive part is at retirement, when you take out this 'new money' interest that you paid with after-tax dollars. You have to pay income tax again. There are many disadvantages and tax risks to 401k loans for credit-worthy consumers.