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Talking stocks, trading, and investing in general - Page 214

post #3196 of 5470
Quote:
Originally Posted by seeldoger47 View Post

I thought the rationale for owning low beta was because they outperform the market over the long run. 

Beta is just a measure on how sensitive the stock is to the general market I think.
post #3197 of 5470
Quote:
Originally Posted by seeldoger47 View Post

I thought the rationale for owning low beta was because they outperform the market over the long run. 

I generally hold long term, with a very long term horizon. I do, however, occasionally prune.
post #3198 of 5470

looks like it may be a bloodbath tomorrow

post #3199 of 5470
Quote:
Originally Posted by seeldoger47 View Post

I thought the rationale for owning low beta was because they outperform the market over the long run. 

Not this.
Quote:
Originally Posted by javyn View Post

Beta is just a measure on how sensitive the stock is to the general market I think.

This.
post #3200 of 5470

The point I'm trying to make is, assuming a buy and hold strategy, minimum variance portfolios, low beta, outperform the market over the long run (i.e. throughout a handful of bear and bull markets.) This is a component of Warren Buffet's investment style.

post #3201 of 5470

That and dynamically leveraging, put option writing, hyper dollar cost averaging, active managing, and distressed asset investing. 

post #3202 of 5470
Why are you making that point? If your assuming because I sold something after holding it for only 1 year, that I always do so, then you are drawing the wrong conclusion.
post #3203 of 5470
Quote:
Originally Posted by seeldoger47 View Post

The point I'm trying to make is, assuming a buy and hold strategy, minimum variance portfolios, low beta, outperform the market over the long run (i.e. throughout a handful of bear and bull markets.) This is a component of Warren Buffet's investment style.

That seems to be false by definition - certainly over a long timeframe.
post #3204 of 5470

One of my favorite plays right now is going short long term bonds. Bond holders face to lose 10%-30% with the pending rise in rates. This is a play that will require some guts and patience.

 

I have completely pulled out of the emerging market and HY bond funds that were previously held in my 401k and it might be a good idea for everyone to discuss this with their investment advisers. You will be happy to to re-purchase your fixed income positions at the much higher rates, rather than getting hosed while still holding worthless paper, and when rates fall again, you will have nice capital gains if you choose to sell.

 

Owning bonds today is a suckers game.


Edited by DeltaGammaVega - 2/23/13 at 1:40pm
post #3205 of 5470
Quote:
Originally Posted by javyn View Post


Beta is just a measure on how sensitive the stock is to the general market I think.

 

You are correct, Beta is generally calculated as the variance in returns in relation to a market benchmark (typically the S&P 500 for the US market.)

 

For example, a stock with a Beta of 1.5 will face a 1.5% gain for every 1% gain in the reference index. Likewise, it will lose 1.5% for every 1% loss in the reference index. This is an estimation of course and actual movements are usually not exactly equal to the Beta.

post #3206 of 5470
Quote:
Originally Posted by DeltaGammaVega View Post

One of my favorite plays right now is going short long term bonds. Bond holders face to lose 10%-30% with the pending rise in rates. This is a play that will require some guts and patience.

I have completely pulled out of the emerging market and HY bond funds that were previously held in my 401k and it might be a good idea for everyone to discuss this with their investment advisers. You will be happy to to re-purchase your fixed income positions at the much higher rates, rather than getting hosed while still holding worthless paper, and when rates fall again, you will have nice capital gains if you choose to sell.

Owning bonds today is a suckers game.

Are you not responsible for the coupon while shorting a bond? How long do you have to wait for this to be worthwhile...
post #3207 of 5470

I don't short specific bonds, I put some money into bearish bond ETFs or funds with high duration. It is definitely worth the fee to have the asset manager do the custodial work in this :)

 

However long it takes the US to reach 6.5% unemployment and for rates to spike.

post #3208 of 5470
Interesting, could be a good play, though I think the payoff will take a while.
post #3209 of 5470

Agree that shorting bonds will make money in the future. Plan to do it eventually, but want to see some more momentum before entering a position.

 

The typical investor cannot duplicate Warren Buffet's investment style.

 

Market is looking overbought to me. Think it is high time to shave some positions and take some profits.

post #3210 of 5470
Quote:
Originally Posted by RedLeg View Post

Agree that shorting bonds will make money in the future. Plan to do it eventually, but want to see some more momentum before entering a position.

 

The typical investor cannot duplicate Warren Buffet's investment style.

 

Market is looking overbought to me. Think it is high time to shave some positions and take some profits.

 

thinking the same 

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