Time to cut our loses?

adindas

DrSyn said:

So provide a link to the site where DCF is all done for you. 

How much do they charge.

Which sites are going to provide the "margin  of safety" calculations for those shares, so you do not have to? 

What about if they do not cover the shares or markets you are interested in, what do you do then?

Buffett admits himself, that with all of his calculations he has still lost his shareholders a lot of money. So I think it is unlikely you, I or the majority of people will do better than him.

It is interesting that in his will, for his wife 90% of his money will be put into the S&P 500 index & 10% into Treasury Bonds. He could have chosen any of the fancy ways you are suggesting, but he did not, Nor did he pick a discretionary investment company.

Old timers like Warren Buffet, Jack, Bogle, Lars Kroijar together with the evidence I have seen say it is hard to beat the markets. I think that is more likely to be correct, than than the latest vested interested parties & Y tubers that have only just started on their investment journey within the last 10 years. Others of course may not agree.

Most of Wall street Analyst price target that you find in stock analytical website such as TipsRank, seeking alpha is calculated based on DCF.

Example of online DCF calculator to find fair value (intrinsic value) tons of them, just spend a few seconds

http://www.moneychimp.com/articles/valuation/dcf.htm

Margin of safety Formula, once you have found the intrinsic value

DrSyn said:

Just because Micheal Burry may be making more money than the average investor, does not mean you will do so even when trying to following him.

He may just have had a run of good luck. You may not be as skilled or  as lucky as him.

It would be nice to just buy an index fund and get a guaranteed "Real return of 10% (or more if possible) a year"
However with investing there are never any guarantees, that applies to index investing just as much as  it applies to your suggested ways of investing.

Did you observe how the S&P once performed during the bear market. Throw your lump-sum money randomly, blindly. If you were unlucky you throw your lump-sum during the peak you might be waiting more than 15 years before you could see a penny profit. Please have a look on it. Not everyone could wait for more than15 years.

I am not suggesting to anyone. Also I never say you follow Michael Burry. I am just commenting previous post about timing the market.

It is not either investing in Index or individual stocks. What prevent people of doing both.

bostonerimus

Frugality and saving/investing a large percentage of your income is the foundation of financial success. If people put as much effort into budgeting and saving money as they do trying to apply stock market numerology, there would be a lot more financially comfortable people - seeking alpha is a mug's game.

For the last 35 years I've invested in a portfolio of a few index trackers, basically 60/40, and rebalanced through the tough times like 2008. Maybe I was lucky to invest through the last 35 years, but all I did was invest regularly and rebalance and that allowed me to retire at age 52. My spending is tiny relative to my net worth and covered by a DB pension and rental income anyway, so I class myself as financially independent as I don't have to worry how much my pot goes down, my investments and DC pension are only of interest to my heirs.

So I did nothing clever and basically just followed what my Mum told me to do when I was little, ie never buy on "hire purchase", never spend more that you earn, always have "a bit put aside", and don't leave the lights on.

GazzaBloom

bostonerimus said:

Frugality and saving/investing a large percentage of your income is the foundation of financial success. If people put as much effort into budgeting and saving money as they do trying to apply stock market numerology

I agree with this!

We started on our serious money management overhaul around 4 years ago and are now debt and mortgage free and I am now maxing my salary sacrifice to 33% of my income which with employer contributions sits me just at the annual allowance. 

In hindsight, the key things we did that I would advocate to anyone is use zero based budgeting - I set up a budget spread sheet for every month for the forward 3 years and added in every single regular expense and one off expenses I could think of, with pay rise estimates for income and inflation estimates for outgoings. Build up a cash emergency fund, pay off your debts, we used the avalanche method of highest interest first, then paid off the mortgage, then loaded up the investing via pensions and S&S ISA. 

We focussed of saving money on bills and shopping, curb discretionary spending and paying off debts and the mortgage.

All through this period our pensions and ISA were invested in low cost index funds and we forgot about them. Just let them do their thing, still are in fact.

k6chris

bostonerimus said:

Frugality and saving/investing a large percentage of your income is the foundation of financial success. If people put as much effort into budgeting and saving money as they do trying to apply stock market numerology, there would be a lot more financially comfortable people - seeking alpha is a mug's game.

This.  Think of a cage of monkeys stock picking for 3 months, using the best tools and data available.  The outcome would be a distribution curve with some monkeys having done very well "beating the market" and others "investing is for the long term". On lookers, unaware that they are monkeys, might start to worship the wisdom of the first, or suggest the second offer a longer-term recovery opportunity.  Add in those followers making questionable money management decisions, using leverage, always chasing the lead monkeys or closing their position after a 20% fall, and you have a pretty accurate picture of an awful lot of retail investing.

Choose broadly based funds with low costs, that let you sleep at night, and forget about the monkeys.

Malthusian

DrSyn said:

Just because Micheal Burry may be making more money than the average investor, does not mean you will do so even when trying to following him.

Michael Burry doesn't make money in the present tense. He cashed out after winning big in the credit crisis. His hedge fund is now a retirement hobby business with a total portfolio value of $128 milllion - if he was still taking it seriously he would have investors beating down his door and it would have billions under management.

He's no fool. The only successful gamblers are those who know to quit while they're ahead.

Eyeful

adindas said:

Did you observe how the S&P once performed during the bear market. Throw your lump-sum money randomly, blindly. If you were unlucky you throw your lump-sum during the peak you might be waiting more than 15 years before you could see a penny profit. Please have a look on it. Not everyone could wait for more than15 years.

I am not suggesting to anyone. Also I never say you follow Michael Burry. I am just commenting previous post about timing the market.

It is not either investing in Index or individual stocks. What prevent people of doing both.

If that same investor had thrown their money in equal amounts into the index you showed, over a period of between lets say 3  or 5 years, then they would not need to wait for 15 years. 

There is nothing to prevent people from investing in index funds and individual shares. People can make their portfolios as simple or as complex as they like.

Some things have not changed since I first took an interest in investing. 
Newbies are lead to believe that:-
it is easy it to beat a major market index,
fees & charges do not matter
you can time the market
"dogs of the ftse 100"  or the "little box that beats the market"  etc, will work year in year out.
because some successful investor uses a method, all you need to do is follow it & you will be as successful

adindas

Eyeful said:

adindas said:

Did you observe how the S&P once performed during the bear market. Throw your lump-sum money randomly, blindly. If you were unlucky you throw your lump-sum during the peak you might be waiting more than 15 years before you could see a penny profit. Please have a look on it. Not everyone could wait for more than15 years.

I am not suggesting to anyone. Also I never say you follow Michael Burry. I am just commenting previous post about timing the market.

It is not either investing in Index or individual stocks. What prevent people of doing both.

If that same investor had thrown their money in equal amounts into the index you showed, over a period of between lets say 3  or 5 years, then they would not need to wait for 15 years. 

There is nothing to prevent people from investing in index funds and individual shares. People can make their portfolios as simple or as complex as they like.

Some things have not changed since I first took an interest in investing. Such things as salespersons suggesting to newbies that
it is easy it to beat a major market index,
fees & charges do not matter
you can time the market
"dogs of the ftse 100"  or the "little box that beats the market"  etc, will work year in year out.
because some successful investor uses a method, all you need to do is follow it & you will be as successful

Nope. This is what an unfortunate person who throw money in Lump sum in one go during the bear market.

This is for a person who do not use their sensible approach because just blindly listen to the headline that Lump sum will outperform the DCA even during the bear market.

I have been saying this for many months that DCA will normally outperform lump-sum during the bear market.

I also show the research showing that DCA will normally beat lump-sum in the bear market. If this person did DCA throwing a smaller chunk say within 3-5 year like you said they would not be in this situation, need to wait more than 15 years before they could see a single penny profit. In the above example the very unfortunate person might even need to wait more than 20 years before seeing a single penny profit.

When you said this in this MSE forum you will be heavily attacked

And Just for correction:

• When you said a sales person I am not quote sure who are you referring to ? A sales person will profit something from selling.
• I never said it is easy to beat the market.
  
• About fees & charges, indeed it does not matter if you are using near zero fees platform. Nowadays challenger platform with near zero fees is starting to flourish. You could trade as low as £1 and it will cost you almost nothing.

Again I am not encouraging people to trade, I am simply responding to your previous post.

Eyeful

If you really think that a zero fee platform, does not charge you when you sell and buy shares then you are mistaken. They are a business just like any other platform, they do it to make money!
If you do not see charges up front, then the charges are going to be "hidden" somewhere.  I would not be surprised if the "hidden" charges  total is not higher than total up front charges.

adindas

Eyeful said:

If you really think that a zero fee platform, does not charge you when you sell and buy shares then you are mistaken. They are a business just like any other platform, they do it to make money!
If you do not see charges up front, then the charges are going to be "hidden" somewhere.  I would not be surprised if the "hidden" charges  total is not higher than total up front charges.

That is common sense. If they do not make money than you will need to be careful as it is just a matter of time before they collapse. But this is subject to another discussion.

They still make a small money from spread.

They make money from cash staying a few days in the account

They make huge amount of money from other services such as CFD, Option trading where people pay overnight and weekend fees especially with leverage. But you do not need to do CFD or Option trading.

masonic

adindas said:

I have been saying this for many months that DCA will normally outperform lump-sum during the bear market.

I also show the research showing that DCA will normally beat lump-sum in the bear market.

There is no disputing that you have been saying this for many months, just as you have been singing the praises of hedge fund managers, and warning people that markets go down on Fridays because of traders closing their positions. The trouble is that these opinions have been based on flawed information. Taking the case of DCA in bear markets, you indeed produced some research supporting this, but the research excluded bear markets that didn't last very long. Without the benefit of hindsight, it is not possible to know how long a bear market will last, and it is not possible to know if a 10% correction will go on to become a bear market. So while it is certainly the case that DCA will do better in a market that will be in a sustained downward trend, such an event cannot be predicted.

The fact is that DCA sometimes does beat lump sum, even in the absence of a bear market (off the top of my head, DCA over 6-12 months was superior something like 30% of the time). It just takes markets to be somewhat lower towards the end of the DCA period than the start. It is not sensible to hold large amounts of cash over the long term, so any DCA period should be relatively short. DCA is more likely to be successful if starting from a market peak vs when markets have already fallen 20% (the start of bear market territory). Neither approach helps protect the investor from a crash that happens a year or two in the future.