[dsmithatx]

People who fail to read and educate themselves will listen to snake oils salesman pitches and trade stocks like a junkie on heroin. I spent years learning industries, learning how to read quarterly report, to identify signs of fraud, and pay attention to the news every single day.

Like anything you do you have to be committed and determined to be successful. It's not a dark secret that there are no short cuts in life. This article assumes we are all much dumber than I prefer to believe we are. We being people who have money to trade stocks and suffer from big losses.

I learned how to trade stocks by reading books about value investing and accounting practices. Very simple stuff that like anything worth learning takes a bit of time and effort. I don't get the upvotes on this article.

[smileysteve]

> I spent years learning industries, learning how to read quarterly report, to identify signs of fraud, and pay attention to the news every single day.

How'd that work out for you? Do you beat the S&P 500 YOY with less volatility? If you account for your hours and trading fees? How many years in a row?

If your answer is yes, you should start a fund! Because statistically, whether a mutual fund or exclusive hedge fund, you're a miracle.

> Like anything you do you have to be committed and determined to be successful.

His argument, seemingly based off the Random Walk Down Wall Street data; which basically shows that no matter how committed and determined you are, the broad based index is going to beat you, if not 1 year, year over year.

[dsmithatx]

Today I have 5 stocks i've bought over the past 60 days. I wont take the time to post my past 24 years of investing. I'm doing ok and so is my team of close friends I bounce ideas off of.

https://imgur.com/EQ0iWWT

[minimax]

The S&P 500 is up 15% from 60 days ago which is considerably more than all of the positions in your screenshot.

[dsmithatx]

I'm long in these holdings. The S&P500 over 60 days involves no research.

[deegles]

I believe that's the point. You could have been on vacation instead of doing all that work to pick stocks and still made more money.

[pertymcpert]

Looks like it's up around 5% from Nov 20th, not 15%.

[dsmithatx]

I bought XOM about 2-3 weeks ago at 71.75 You're also not calculating dividends. Xom is pay 4.4 and some of my other holding have already paid a few thousand in dividends.

[minimax]

Today is Feb 21, 60 days ago is late December not November.

[smileysteve]

> over the past 60 days

is not year over year

> doing ok

You can be doing okay, you can even be beating the S&P 500 in the short term; but if you're beating the S&P 500 over the long term you are beating almost every professional team of fund managers.

https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/13240...

[orojackson]

I mean, look at what Fidelity is doing with FZROX and FZILX. Both Vanguard and Fidelity are locked in a crazy fee war [1] to be the GOAT of asset management companies [2]. How the hell do you compete with Fidelity as an individual stock picker when there are no fees to speak of to participate in this fund?

I've seen people mentioning that HFT can totally and consistently beat indexes [3], but then a) can I even get in on the action with less than $1000 and b) is the automated system in place any good?

[1] https://riabiz.com/a/2018/12/13/vanguards-asset-machine-wobb...

[2] https://news.ycombinator.com/item?id=18701283

[3] https://news.ycombinator.com/item?id=19228699

[dsmithatx]

RHT should make me about $6000. I bought it the day after IBM announced they would pay $190 a share. Disclaimer I'm Redhat Certified.

[dsmithatx]

I was actually up 13% on ENB a Canadian pipeline company. My gain is cut in half because I doubled up on shares. I'm long on everything but RHT which is a cash payout.

[kgwgk]

You’ll probably make 10% on this trade. But the is risk of losing more than that if the transaction doesn’t close for some reason is real. That’s not free money.

[dsmithatx]

It's been approved by RH and the DOJ. Google tried to make a larger offer. Where is the risk in not getting $190 a share?

[kgwgk]

The risk is obviously lower now than it was the day after the acquisition was announced. And the upside is also lower now. Less than 4%, for a closing which is not expected until the second semester of 2019 as far as I understand.

[whitepoplar]

Given all your preparation and work, do you think you're able to beat the market on a risk-adjusted basis? What marginal edge do you have over professional institutions + quant funds, who are also reading reports and paying attention to the news? (to say the least)

[dsmithatx]

I average 12%-20+% yearly. I like to look at companies with a good PEG (price to earnings over growth) on a PEG of 1.00 or less unless their are good fundamentals. I like companies with a low P/E. I like dividends as I can reinvest cash.

My grandfather taught me about how industrials are cyclical and easy to make money on. Gas prices go up in the summer etc. etc.

Reading news means nothing. Understanding the overall picture of the economy, jobs, housing, commodities, macroeconomics (a fundamental understanding which few take time to learn) are key. Interpreting the "news" is important and learning to filter. Most news is (as the article kind of says) telling you what trends are happening. Never buy a trend. The news mostly tells the past. You have to focus on the present and future.

The news is actually talking about recession. The economy is strong at the moment. The news told us oil would never go below $150 a barrel. If you take time to learn the larger picture you would know these things are fear and not true. See the forest for the trees.

[orojackson]

Totally agree. As this commenter [1] said it succinctly (although in a different context): "Such a family office also has to contend with other giants trying to claim the G.O.A.T. title for asset management companies with incredible scale efficiencies. The stakes are 'for all the marbles of the game' high, and they're using all the benefits of capital scale they can scrounge."

I find it extremely hard to believe that one dude can consistently beat Vanguard and Fidelity in the midst of their fee war when it comes to public equity (private equity, however, is a whole different ball game, but that's beyond the scope of this discussion).

[1] https://news.ycombinator.com/item?id=18701283

[fucking_tragedy]

> do you think you're able to beat the market on a risk-adjusted basis?

I don't think anyone is going to beat the market doing their due diligence. It's more about making sound investments instead of treating investing like gambling at a casino or rooting for a particular sports team.

[orojackson]

If that is the case, why not just buy the entire US stock market through something like FZROX, SWTSX, or VTSAX? That feels like a sound investment to me.

[dsmithatx]

that's a fucking_tragedy indeed lol

Good fortune to you!

[orojackson]

But there is a shortcut in this particular instance: following Charlie Munger's advice and just buying index funds like VTSAX, SWTSX, or FZROX. A 10-year return of 13.25% for VTSAX is really sweet given the very low effort it takes to throw money into that fund.

It's not a matter of being dumb or not: it's a matter of whether the average investor is willing to carefully research companies or not. You seem to do it as a hobby, and it's great that you're getting 12% to 20% returns. But I'd wager that the average retail investor doesn't have the same drive as you do in figuring out which company's stock might rise.

[empath75]

After I told my coworker that I was beating the market in my stock picking account by quite a lot, he said “Man, I’m down 80%, like $10,000. What do you think I should buy to make it back?”

I said, “Just sell everything and put it in an index fund.”

I don’t think he did. He’s probably down more now.

Stock picking is fun, but for me it’s just gambling. If I lost that much, I’d quit.