Advice to the Lazy and Unmotivated

[Cigarbutt]

Interesting.

There are many ways to skin a cat, some say.

Like many, I find investing fascinating but it remains only one area of interest.

Perhaps a gratifying aspect of investing is that results allow you to gain control of the schedule and have more time for other activities (whatever you may choose).

Over the years, I find that I'm using a sort of an unconscious 90-90-90 rule.

-90% of the investment universe is outside my pockets of wisdom.

-Of the remaining 10% of potential opportunities, at least 90% get rejected very rapidly.

-Of the remaining 1%, I devote at least 90% of my time to delve. When I hold something interesting, I delve deep and sometimes, the idea makes it to my investment punch card.

I know I miss a lot of opportunities that way and I enjoy slowly enlarging my opportunity set but that seems to be an approach that maximizes the return on the time invested. I will call this the "ROTI".

Involvement in this forum is likely to be beneficial in that regard.

Hope this is useful to others.

 

[Guest longinvestor]

Interesting.

Involvement in this forum is likely to be beneficial in that regard.

Hope this is useful to others.

 

+1 to the approach and being useful to others. Except that this board is mostly not beneficial, the Investment Ideas board is mostly a dud. If the number of posts and views on that section correlates with investments that participants have made based on that, that would've lead to mediocre to terrible results.

 

Apparently lots of investment decisions are made after reading internet message boards. If anything, one can learn what not to do from message boards. Most of Munger's psychological misjudgments are played out everyday on this board. Probably on other boards as well.

[Cigarbutt]

I did not know what dud meant. I looked it up. Your judgement is quite severe.

We'll see. Maybe, over time, the 90-90-90 rule will apply here as well.

Looking back some threads and anticipating, I continue to think that compounding can be maximized in some instances.

Good luck.

[oddballstocks]

I did not know what dud meant. I looked it up. Your judgement is quite severe.

We'll see. Maybe, over time, the 90-90-90 rule will apply here as well.

Looking back some threads and anticipating, I continue to think that compounding can be maximized in some instances.

Good luck.

 

I know someone who wrote a script to evaluate this.  The correlation between number of posts and returns is almost 1 to 1.  The more posts the worse the return.

 

Your best bet is to just look at ideas with zero or a handful of responses.  If there is a lot of discussion move on.

[rukawa]

I did not know what dud meant. I looked it up. Your judgement is quite severe.

We'll see. Maybe, over time, the 90-90-90 rule will apply here as well.

Looking back some threads and anticipating, I continue to think that compounding can be maximized in some instances.

Good luck.

 

I know someone who wrote a script to evaluate this.  The correlation between number of posts and returns is almost 1 to 1.  The more posts the worse the return.

 

Your best bet is to just look at ideas with zero or a handful of responses.  If there is a lot of discussion move on.

 

That is basically what I do. This also means that it pays to look at threads in the Investment Ideas section that are no longer near the front.

[augustabound]

 

8am to 5pm - studying web development (front end for now) & designing & developing content for my 1st site

 

 

Former custom home builder turned wannabee developer here.  ;D

[Uccmal]

I did not know what dud meant. I looked it up. Your judgement is quite severe.

We'll see. Maybe, over time, the 90-90-90 rule will apply here as well.

Looking back some threads and anticipating, I continue to think that compounding can be maximized in some instances.

Good luck.

 

I know someone who wrote a script to evaluate this.  The correlation between number of posts and returns is almost 1 to 1.  The more posts the worse the return.

 

Your best bet is to just look at ideas with zero or a handful of responses.  If there is a lot of discussion move on.

 

Lol,  I guess you and I should have terrible results.....

 

Al: 3430 posts

 

Nate: 1900 posts

 

 

[Guest]

Al,

 

Perhaps I'm mistaken but I think Nate meant for a stock idea (VRX, SHLD, etc). The more posts an idea has the worse the returns.

[Uccmal]

Al,

 

Perhaps I'm mistaken but I think Nate meant for a stock idea (VRX, SHLD, etc). The more posts an idea has the worse the returns.

 

I was getting to that:

SHLD, BH, AIG, BAC warrants, AAPL, VRX, FNMA ;

 

A mixed bag to be sure. 

[Guest longinvestor]

Al,

 

Perhaps I'm mistaken but I think Nate meant for a stock idea (VRX, SHLD, etc). The more posts an idea has the worse the returns.

 

I was getting to that:

SHLD, BH, AIG, BAC warrants, AAPL, VRX, FNMA ;

 

A mixed bag to be sure.

 

I did an analysis in 2015 on the most discussed stocks on the Investment Ideas page (you can do this by simply sorting the posts by clicking on the replies column header); I went back to the date of the first post on each of those ideas, the stock price on that date and the current stock price(2015). That post below, you can see some big winners LVLT, AAPL, GOOG; And some popular duds. Interestingly VRX had not blown up in 2015 ;)

 

General Discussion / Re: What happened to this board?

« on: May 29, 2015, 01:52:59 PM »

Since the perception of Quality of posts has come up, thought I'd put up some summary stats that is perhaps more objective when measuring quality.

 

Here is a table of the top stocks discussed (most replies) in the Investment ideas section (just the first page) and how the stock has performed since the first post.

 

          # posts        Then    Now  Change    Rank

SHLD        7996        $58      $42    -28%          11

BAC        6252        $13      $16    23%            7

AAPL        4502        $46      $130    183%        3

ALS.TO  3911        $14      $14      0%              9

BBRY        3082        $62      $10    -84%          13

FTP.TO  2431        $40      $4            -90%      14

BH        1898        $293      $353      20%          8

AIG        1785        $31      $59      90%            5

FIATY    1777        $6      $9          50%          6

SD        1667        $5      $1          -80%            12

VRX        1545        $74      $239    223%        2

GOOG    1527        $268      $545    103%        4

LVLT        1474        $13      $55    323%          1

MBIA        1440        $10      $9    -10%            10

 

Source: Yahoo Stock Page; Dividends not included.

 

The list above accounted for 50% of all posts in the investment ideas section.

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[Paarslaars]

A lot of this is rather recent though, you don't know how it will play out.

I noticed some people here have a (bad?) habit of finding great idea's but getting in too early and be forced to average down.

The thesis might still play out in their favor but it remains to be seen.

 

For instance, FTP has now tripled since its lows.

Those who averaged down, might have some nice returns by now.

[CorpRaider]

Frequency of posts might not always imply enthusiasm.  In many of those cases it reflects debate and controversy.  I think that is the case with many if not most of those posts.  Some of the "compounders" have posts but there is not controversy about how to express the investment, for example, as was the case with BAC-WTA.  Most of that thread is theoretical discussion about how to express the bet and why.

[TwoCitiesCapital]

I did not know what dud meant. I looked it up. Your judgement is quite severe.

We'll see. Maybe, over time, the 90-90-90 rule will apply here as well.

Looking back some threads and anticipating, I continue to think that compounding can be maximized in some instances.

Good luck.

 

I know someone who wrote a script to evaluate this.  The correlation between number of posts and returns is almost 1 to 1.  The more posts the worse the return.

 

Your best bet is to just look at ideas with zero or a handful of responses.  If there is a lot of discussion move on.

 

This does seem to be the case for long-only strategies, but I've actually made quite a bit of money on some of the names most extensively discussed by using basic option strategies (covered calls, covered puts). I use the discussions to get a basic understanding of the thesis and as a barometer of hype/panic to know when to sell options.

 

I've made close to 25-30% in just the last 6 months selling 1-2 month puts @ 30-40% below current prices on Sears after panics began because following the thread gave me confidence that:

 

1) People were being overly pessimistic

2) Eddie has a history of bailing it out/pulling rabbits out of his hat and

3) Bankruptcy wasn't immediately imminent even if Eddie failed to act in a month or two

 

If you were long the stock, you lost money. But there are other ways to profit from an idea even if it's just determining that it's not as good or as bad as everyone says it is at a given time.

 

Similarly have been making money on VRX with options and with Altius by trading the swings in the stock. All three are heavily discussed and have done terribly from a multi-year, long-only perspective, but there was still quite a bit of money to be made by trading the sentiment in each one.

[clutch]

... All three are heavily discussed and have done terribly from a multi-year, long-only perspective, but there was still quite a bit of money to be made by trading the sentiment in each one.

 

Interesting. But unfortunately not a feasible strategy for those lazy and unmotivated  ;)

[Guest longinvestor]

Frequency of posts might not always imply enthusiasm.  In many of those cases it reflects debate and controversy.  I think that is the case with many if not most of those posts.  Some of the "compounders" have posts but there is not controversy about how to express the investment, for example, as was the case with BAC-WTA.  Most of that thread is theoretical discussion about how to express the bet and why.

Surely filled with controversy and arguments, such is the nature of message boards. But to conclude that there is no implied enthusiasm? There's a different kind of enthusiasm perhaps in the symbols of the notorious list here. The duds were owned by some of the "Gurus" worshipped around here. Following Gurus is fraught with peril. Besides Gurus, there are the Sons-of-soil @Cobf. The posts I remember reading on the duds have a healthy portion of such enthusiasm evident.

 

Investing after listening to "anyone" is worse than being lazy and unmotivated, at least the kind that leads to index investing as a chosen investing strategy. The odds are heavily in favor of laziness over the kind of enthusiasm in the ueber discussed stocks.

[CorpRaider]

Just saying, half the posts on the VRX threads and SHLD are about whether it is a zero.  Markel probably has no where near the number of posts but is much more reflective of a consensus long. 

 

I just question whether selecting based on post count reflects positivity about investment outcome.  I would be more interested in seeing figures for all posts, but really I'm not that interested.

 

I definitely continually assert that VOE, RPV, VBR, etc... are likely to kick most of our asses over the long term.