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"It's not about outperformance; it's about being average."

There is nothing average about being average!

Absolutely not true! Yes, that's what the word "hedge" means but as a rule hedge funds aren't hedged. They just don't have to abide by the rules regarding such things as diversification under which standard mutual funds operate. Often times hedge funds are very risky indeed because they can make big unconventional bets.

That's why as a stockbroker I NEVER suggested a hedge fund to a client. If the thing dropped, I didn't want to have to respond to the question of why the fund wasn't hedged (against losses) as they thought I implied. No way!

:eek:

Well, as the market seems to be continuing its march downward, we may find out soon enough whether or not the cardboard market is impacted by a bear market in US equities.

And I guess each of us will get to decide whether that makes a difference in how much we are personally willing to spend on cardboard.

Hopefully no one loses their shirt! And hopefully any economic turbulence doesn't result in anyone here losing their job. Because that seems like it would definitely impact your ability to buy more cards.

correct thats why S and P index fund is what buffet said to buy and it outperforms 95 percent or so of the investment manager funds that people pay big money to those managers for...selling covered call options on them just adds a little bit more too..

it works better than if market goes down and also if market goes up but not parabolic up for many years in a row. but still profit.... there are many articles stating how the SP outperforms money managers. and hedge funds...only 4 did better than SP in 2024, i know its linkedin but i too lazy to look up all the them...there are a ton of articles on it

https://www.linkedin.com/posts/dante...33892608-gcGA/


https://www.aei.org/carpe-diem/the-s...nt-even-close/

As a covered call and put seller, you have to have a slightly different mentality to how your portfolio looks. You can’t be greedy, you won’t make every dollar, but you are always making cash. Also, short term cap gains are just part of the game.

Yes, you can miss those 10% runs, but it’s no big deal. I sell weekly calls and puts every Monday morning around the stocks I own. I try to bring in half a percent each Monday in cash, every week. No matter if the market is up or down. I’m trying to bank 26% per year, plus hopefully more because I sell out of the $ calls, usually.

Sometimes one or more my stocks get called away Friday night, no big deal, I already pocketed the option premium. If it made a big run on the week, I can either buy the option back before close on Friday, for very little premium because of the time to expiration, or I can just buy another 100 shares of stock and sell next Friday’s option with 7 days of new time premium on it, aka banking more cash.

When selling weekly put, I only do it on things I am comfortable buying at the price, but I’m pocketing the premium, one way or another. I can always buy out Friday night. I tend to sell these way out of the money, just making tiny %s

Example, I like gold. I just did this.
Bought 100 shares GLD@ 279.70 total $27,970
I sold next Friday $280 call for $300
If it gets called away next Friday, I bank the $300 plus the $30 for shares going up to $300. That’s 1.17% in ten days. I also sold a put for a few dollars.

If gold drops, no big deal, I’ll sell a a call the following week and chip away at the loss and I’m good with owning the gold.

Fees aren’t bad these days, just $0.65 per contract, not like the old days at $8. I’ll literally sell a $5 option, I don’t care, I just want the $4.35, with almost no chance of getting caught holding the bag.

Just an example, but that what I do on 15 or so positions each week. Some may bring in 1.5%, some may bring in 0.2%, but it’s all about the average.

Side note, the cash goes to SPYI, that pays a monthly dividend at 12.77% per year, which is DRIP’d to buy more shares each month when the dividend pays. When the market goes to crap, hopefully there is enough in here to add a new position or bulk up an existing at a good price. Or, straight to the BST when I get the cardboard itch!!!

Bob

Ah, capitalism.

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Speaking of alternative assets, gold hsa hit what I think is an all time high, at lesat dollar wise (I believe there may be other ways to look at it where it's still nowhere near its 90s levels).

I'm skeptical. Hedge funds call themselves that because the correlation coefficient of their returns against those of the stock market are low. That though doesn't mean they can't be very risky indeed. That's what history shows anyway.

:(

So why do they attract such huge amounts of capital, if people would be better off with index funds, or a mix of index funds and bond funds? Countless billions are invested in these funds.

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I wasn't the one who made that argument. I would sooner trust a portfolio manager with a long above average track record to beat the market than an index selected not to beat the average but to be the average. Yes, the statistical evidence for my preference is lacking but I'd rather choose an experienced, intelligent investor to manage my portfolio than the chimpanzee who beat the market the most by throwing darts.

Because every investor an edge, and every single hedge fund manager can make a very good case why his strategy will deliver the superior risk adjusted returns. Only some (a very few?) succeed though.

;)

I don't just have the right to be skeptical; I'm right to be skeptical.

;)

Are you familiar with Eugene Fama's research or John Bogle's book?

Everyone thinks they have an edge!

And the hedgies seem to be pretty good at selling their story.

No doubt, some of them are probably pretty good, and might even be worth their elevated fees. I think the general premise is their ability to deliver in any market, although they might miss out on the high highs, they'll also protect you from the downswings.

Often another marketing element is their ability to invest in nontraditional assets that might be off-limits in more traditional funds.

Of course, Buffett's bet didn't make the hedgies look all that great:

https://proinvestnews.com/2025/01/28...for-investors/

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S&P Global publishes its SPIVA (S&P Indices Versus Active) scorecards twice a year. The scorecard compares the performance of active mutual funds (after fees) to relevant S&P benchmark indexes over periods of one, three, five, 10, and 15 years. It found that 88% of active large-cap funds failed to beat the S&P 500 over the last 15 years as of the end of 2023. Even when you look at a shorter three-year period, about 80% failed to beat the benchmark.

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OK I am finding the same data for hedge funds. Assume you will say it's not a valid comparison?

https://www.aei.org/carpe-diem/the-s...nt-even-close/

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Seems one can manipulate or select data to prove either side of it, from what I am seeing online. Not surprisingly, the data purporting to show hedge fund returns are mostly superior are from ..... hedge funds. People seeming more like academics say the opposite.

Sadly no. I'll look them up.

:(

i have talked to many of fund manager and when i ask them that SPY outperforms 95 percent of funds, they always agree, but they say individuals get too scared to hold them during those extreme downs and rather just let someone else manage

Go and call some of the fund guys..and ask them if they out perform the S and P since the inception of their fund....you will see they dont 95 percent of time time

show me the data you are showing....even CNBC and every network will say S and P has outperformed almost every hedge fund....i would wonder where your sources are and how long they are tracking...

The thing about chimpanzees, though, is that you don't have to pay them very much. The results show over and over that the funds with the highest returns are the ones with the lowest fees.

Sent from my SM-S906U using Tapatalk

Peter, are you going for your MBA in Finance? Those are a couple big names to know if you are.

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Yes, that is what I am saying, not sure why you think I am saying the opposite?

I read Bogle's book a long time ago, it was very enlightening, gave me a new perspective. Very short and to the point.

+1. A Random Walk Down Wall Street by Burton Malkiel is also worth a read.

If you want to get in the nitty gritty of evaluating and picking stocks then read “Security Analysis” by Benjamin Graham and “Common Stocks and Uncommon Profits” by Philip Fisher. Warren Buffett swears by these two books. Peter Lynch wrote a couple books back in the 1990s which also incorporate Graham’s and Fisher’s stock picking philosophies.Lynch’s books are easy reading.The Intelligent Investor by Graham is also worth reading.

Books shmooks. All ya really need is B & B - Baseball cards and Bitcoin. Haha

I liked this book as well.
https://www.amazon.com/dp/1455503304...d_asin_title_2

It's interesting, most people you talk to think of investing as picking individual stocks, but ain't necessarily so.

Touch ‘em all: “ Books shmooks. All ya really need is B & B - Baseball cards and Bitcoin. Haha”


That’s perfectly reasonable. I wouldn’t be surprise if Wall Street is doing this right now. Classically when it doesn’t make sense to buy stocks, the Wall Street Bros would shift their money into bonds. Annette Thau’s The Bond Book is a good reference. When buying bonds or stocks don’t make sense then the Bros would shove the money into alternatives like land, metals, collectibles etc.

Well, anecdotally, I think prices are coming down now. I'm getting a lot of offers from sellers on eBay. Offers that are bringing the prices down below the most recent comps -- in some cases, quite significantly. It never made sense to me that baseball cards would somehow be immune to policy and economic uncertainty, and I think that's playing out now.

How are we feeling about the baseball card market now? I don't think I am being political by saying that we are all dealing with man-made volatility that no professional investor alive has ever managed through. In this environment, I'd have to imagine that you're better off as a buyer than a seller of cards -- that is, if you have the stones for it.

Prices for consumers going up, retirement accounts going down...I'm certainly not stocking up on card purchases.

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Rare pre-war increasing in price, still a financial struggle to keep up with that market.
Entry points coming down on phenomenal American companies, what's not to like?

[QUOTE=Casey2296;2507591]-Entry points coming down on phenomenal American companies, what's not to like?[/QUOTE]

The hit to my S&P 500 mutual fund today, for starters!! :(

And a card for the thread. An American symbol of class, consistency, competence and excellence.

[QUOTE=ValKehl;2507595]Time in the market Val not market timing. A great time to dollar cost average into the S&P, depending on your horizon. If it helps I would love to buy back my Shotwell back I traded you :-)

[QUOTE=Casey2296;2507598]Hi Phil, hope all is going well for you. My wife and I have always followed your advice, as we have never been market timers. We follow the "Hold What You Got" advice found on the backs of many W502 cards. We held what we had during the 2007-09 recession, and our investments turned out okay. We are hoping for the same result once the recession/stagflation period we are now entering is over. We have been tempted to move $$ from our high-yield savings account into our S&P 500 fund when we thought the stock market had hit rock bottom, but we've never had the courage to take the plunge.

One of my collecting focuses is type cards. I'm especially partial to scarce type cards with neat advertising, such as the nice Shotwell Mfg. Co. card you traded me 2 years ago. But hey, you got my Western Playground type card which I still miss, and I doubt you care to offer it back to me.:) Tell you what, you come up with a Sam Rice card I need, especially a Witmor Candy with the vertical back, and you'll have your Shotwell back in a heartbeat! :D

Love the '66 Aaron. Great card ! Thanks for posting.

I think collectibles may provide a safe haven for money coming out of the stock market.

Maybe instead of moving over a gigantic chunk when you think the bottom has arrived, move smaller chunks over periodically. That way you don't get burned quite so badly if the "bottom" keeps moving down.

Or even just switch your allocation a bit. If you usually invest X every month, then ramp it up to 1.5X or 2X while the market seems to be down.

Although that might require allocating away from other stuff, like cardboard, in which case it might be more painful than we want to admit.