Pension Reset - what your asset/geographic allocation be?

[Deleted User]

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

Linton

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

There are two extreme scenarios.  Every investor focuses solely on the few specific companies, geographies, sectors etc that they believe will outperform or every investor constructs a diversified portfolio tilted towards their particular objective.  .The net performance  difference averaged over everybody investing is zero,  The effect in terms of the wider benefit to the individual investors eg the likelihood that they meet a realistic objective, is not zero.

The reason is that for an objective to be realistic it must be below the maximum achievable.  Those investors who aim single mindedly for the maximum, if not succesful, could fail to achieve what they would have been happy to live with.  Obviously if their sole objective was to achieve maximum returns then 99%+ will be unsuccessful.  Someone else will have beaten them.

The problem is that no-one knows, except with hindsight, what the optimal investment strategy will be.  Therefore if you want to achieve something you need to spread your bets so that no matter where the real gains are to be made you get something.

Thrugelmir

ZingPowZing said:

Decently performing stocks have been front and centre for a long time now. I don’t have a penny in Tesla or Amazon but others -particularly those involved in buybacks - have done very well without “shooting the lights out” or exposing their investors to risk of “ruin.” I see more danger in cowboy fund managers.

Other than following the herd. What do know that the broader market doesn't regarding these particular companies?   You are merely following a well trodden path taken by many investors.  Namely over confidence in your own abilities. Having a closed mind isn't advisable. 

eskbanker

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

It's self-evidently true, in terms of basic maths, that your cake won't change its size according to how many slices it's carved into, but it's still too simplistic to see that analogy as representative of the issues involved in considering diversification when planning investment activity.

[Deleted User]

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

It's self-evidently true, in terms of basic maths, that your cake won't change its size according to how many slices it's carved into, but it's still too simplistic to see that analogy as representative of the issues involved in considering diversification when planning investment activity.

Thank you.
You're right, there are many other considerations. Those are variables, that one a mathematical certainty. Not a "viewpoint".

eskbanker

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

It's self-evidently true, in terms of basic maths, that your cake won't change its size according to how many slices it's carved into, but it's still too simplistic to see that analogy as representative of the issues involved in considering diversification when planning investment activity.

Thank you.
You're right, there are many other considerations. Those are variables, that one a mathematical certainty. Not a "viewpoint".

No need to thank me, it's not as if I'm agreeing with you!

[Deleted User]

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

It's self-evidently true, in terms of basic maths, that your cake won't change its size according to how many slices it's carved into, but it's still too simplistic to see that analogy as representative of the issues involved in considering diversification when planning investment activity.

Thank you.
You're right, there are many other considerations. Those are variables, that one a mathematical certainty. Not a "viewpoint".

No need to thank me, it's not as if I'm agreeing with you!

It's not a mathematical certainty? It's a "viewpoint"?

eskbanker

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

eskbanker said:

ZingPowZing said:

Well, I'm happy to be wrong about what others believe, particularly since nobody is contesting the assertion that diversification - regardless of other benefit - does nothing to raise investment value overall. If everyone already agrees that - neither of us know - so much the better.

You're just rephrasing your extensively-debated 'diversification is a zero-sum game' there, but even if it was accepted that there's some validity in that viewpoint, that still doesn't mean that it's a bad idea when viewed from the perspective of an individual investor.  However, there's no point in taking a dogmatic position about it, as it's clearly not a binary black-and-white issue and, as highlighted already, will be more suitable for some than others....

Maybe I misunderstand you, eskbanker. Are you saying that you DON’T accept that zero is the difference to the value for any sample of investments regardless of its diversification through any number of investors overall? Do you believe diversification changes the total value?
Because if diversification can change the size of the cake by one crumb, I’d pay a handsome reward for the formula.

I'm saying that, from the position of an individual investor, the overall size of the cake is unlikely to be relevant to their decision about their investment approach....

Yes yes, but do you not accept that in all models of diversification, the net effect over the whole sample is zero? 

It's self-evidently true, in terms of basic maths, that your cake won't change its size according to how many slices it's carved into, but it's still too simplistic to see that analogy as representative of the issues involved in considering diversification when planning investment activity.

Thank you.
You're right, there are many other considerations. Those are variables, that one a mathematical certainty. Not a "viewpoint".

No need to thank me, it's not as if I'm agreeing with you!

It's not a mathematical certainty? It's a "viewpoint"?

It's a matter of definition - given that specific scenario of subdivision of a fixed and finite entity such as a cake, then yes, it's a mathematical certainty that, regardless of their size, the slices add up to the whole, no less and no more.  But that analogy doesn't really fit the world of investing, which is far from fixed and finite, in value, volume and composition....

Bobziz

I'm not sure about DoctorStrange, but I'm confused now. Is cake good or not ? Or is everyone just losing the will to live...

[Deleted User]

It really, truly is not a "matter of definition" - diversification does not make its proponents richer.