... furthermore, I found this article which I believe does a very good job of assessing the situation, and I agree with his approach. It looks like things I've read before (esp. the part about advantages of the indiv. investor over the institutional inestor) some time ago, but I see it was written as recently as last year.
Thank you for the resources. I still have a tough time believing it is anywhere near 10% though. I have talked with many people about investing, and I have only ever met two who I would say had even some clue what they were doing. Basically everyone else did not even know basic things like the S&P 500 grows by about 10% per year. These are smart people too, like engineers and science PhDs. I think it's probably impossible to get a true figure on this question because most people who "invest" are just random people out there in the world. Hard to say exactly though.
The average account balance for Robinhood users is something like $5000, and the median is way below that. I found that shocking. Really emphasizes my point though.
I used to frequent investing message boards and I saw quite a bit there. It was a real eye-opener, and quite a few were very savy. I think those are the type that are beating the market, to the limited extent that it occurs.
That said, I wouldn't be so concerned about consistently beating the market. I would be concerned about beating it over the long haul. That is a very different thing. And I think it is a lot easier to beat it over long durations than it is to beat the market consistently on an annual basis.
“Yes, the complete abdication of anti-trust considerations in recent decades has produced a sort of winner-take-all economic dynamic among individual companies. But the advancement of technology itself makes even these monopolies vulnerable, which is why some of the largest cap stocks in 2000 have languished with total returns well below the overall return of the S&P 500 in the decades since.
Moreover, it’s taken a multi-year bubble, and an advance to the highest valuations in U.S. history, simply to bring the average annual nominal total return of the S&P 500 since the 2000 market peak to 7.9%.”
—John Hussman, September 2025 Market Commentary
You and your buddy Hussman always want to cherry pick and go back to the year 2000. You are not after a true characterization of how the market has performed historically. The S & P has returned about 11% over the last 100 years. The Nasdaq much higher. Yet you continually paint it as a horrible investment.
Assuming you are at least 40 years old, if you make it to 140 you are statistically in.
Thank you for the resources. I still have a tough time believing it is anywhere near 10% though. I have talked with many people about investing, and I have only ever met two who I would say had even some clue what they were doing. Basically everyone else did not even know basic things like the S&P 500 grows by about 10% per year. These are smart people too, like engineers and science PhDs. I think it's probably impossible to get a true figure on this question because most people who "invest" are just random people out there in the world. Hard to say exactly though.
The average account balance for Robinhood users is something like $5000, and the median is way below that. I found that shocking. Really emphasizes my point though.
I used to frequent investing message boards and I saw quite a bit there. It was a real eye-opener, and quite a few were very savy. I think those are the type that are beating the market, to the limited extent that it occurs.
That said, I wouldn't be so concerned about consistently beating the market. I would be concerned about beating it over the long haul. That is a very different thing. And I think it is a lot easier to beat it over long durations than it is to beat the market consistently on an annual basis.
I could see that. I would say though, again, what percent of investors do you think are posting on investing messageboards? I would think less than 1%, if you're including all people who invest. Even if you're including people who are a bit more serious about it, I would think it's still single digits. I have consistently beat the market, but there are a variety of things about me that are quite different from the average (normal!) person. I have multiple friends with PhDs in things like chemistry, engineering, etc who know damn near nothing about investing despite the fact we've talked about it a dozen times and I've tried to teach them. I have another friend who is a very successful accountant who knows less at age 40 than I did at age 24. That is the norm out there. Not trying to brag at all. I'm just trying to emphasize and make the case that the vast majority of people are terrible investors, and even people who are smart often don't even understand the basics. Given almost no actively managed funds (who are run by literal professionals) beat the market, it doesn't really make sense that there would be many dark horses out there quietly beating the professionals. Why wouldn't you go professional yourself if you could do that?
Anyway, thanks again for the resources. Still kind of chewing on this. I am busy in my life right now but plan to go back and calculate my actual returns each year since 2019 and will post them here when I do. My return in 2020 was something like 70%. Unfortunately Vanguard and Robinhood do not make it easy to look up what your annual returns were year by year, so this will take a little work on my end, and I want to make sure I do it right so the numbers are accurate.
I used to frequent investing message boards and I saw quite a bit there. It was a real eye-opener, and quite a few were very savy. I think those are the type that are beating the market, to the limited extent that it occurs.
That said, I wouldn't be so concerned about consistently beating the market. I would be concerned about beating it over the long haul. That is a very different thing. And I think it is a lot easier to beat it over long durations than it is to beat the market consistently on an annual basis.
I could see that. I would say though, again, what percent of investors do you think are posting on investing messageboards? I would think less than 1%, if you're including all people who invest. Even if you're including people who are a bit more serious about it, I would think it's still single digits. I have consistently beat the market, but there are a variety of things about me that are quite different from the average (normal!) person. I have multiple friends with PhDs in things like chemistry, engineering, etc who know damn near nothing about investing despite the fact we've talked about it a dozen times and I've tried to teach them. I have another friend who is a very successful accountant who knows less at age 40 than I did at age 24. That is the norm out there. Not trying to brag at all. I'm just trying to emphasize and make the case that the vast majority of people are terrible investors, and even people who are smart often don't even understand the basics. Given almost no actively managed funds (who are run by literal professionals) beat the market, it doesn't really make sense that there would be many dark horses out there quietly beating the professionals. Why wouldn't you go professional yourself if you could do that?
Anyway, thanks again for the resources. Still kind of chewing on this. I am busy in my life right now but plan to go back and calculate my actual returns each year since 2019 and will post them here when I do. My return in 2020 was something like 70%. Unfortunately Vanguard and Robinhood do not make it easy to look up what your annual returns were year by year, so this will take a little work on my end, and I want to make sure I do it right so the numbers are accurate.
If your portfolio returned 70% in 2020, that is pretty remarkable. In 2020 the Dow had a return of 6%, the S & P had a return of 16% and the Nasdaq had a return of 42%. I am not sure if those returns only include index appreciation or also includes dividends. You must have had some high-performing stocks or mutual funds.
Professional money managers are looking for a risk adjusted return, and have risk officers to answer to. Many of the aggressive strategies blow up when things get tough.
I used to frequent investing message boards and I saw quite a bit there. It was a real eye-opener, and quite a few were very savy. I think those are the type that are beating the market, to the limited extent that it occurs.
That said, I wouldn't be so concerned about consistently beating the market. I would be concerned about beating it over the long haul. That is a very different thing. And I think it is a lot easier to beat it over long durations than it is to beat the market consistently on an annual basis.
I could see that. I would say though, again, what percent of investors do you think are posting on investing messageboards? I would think less than 1%, if you're including all people who invest. Even if you're including people who are a bit more serious about it, I would think it's still single digits. I have consistently beat the market, but there are a variety of things about me that are quite different from the average (normal!) person. I have multiple friends with PhDs in things like chemistry, engineering, etc who know damn near nothing about investing despite the fact we've talked about it a dozen times and I've tried to teach them. I have another friend who is a very successful accountant who knows less at age 40 than I did at age 24. That is the norm out there. Not trying to brag at all. I'm just trying to emphasize and make the case that the vast majority of people are terrible investors, and even people who are smart often don't even understand the basics. Given almost no actively managed funds (who are run by literal professionals) beat the market, it doesn't really make sense that there would be many dark horses out there quietly beating the professionals. Why wouldn't you go professional yourself if you could do that?
Anyway, thanks again for the resources. Still kind of chewing on this. I am busy in my life right now but plan to go back and calculate my actual returns each year since 2019 and will post them here when I do. My return in 2020 was something like 70%. Unfortunately Vanguard and Robinhood do not make it easy to look up what your annual returns were year by year, so this will take a little work on my end, and I want to make sure I do it right so the numbers are accurate.
There is a lot to digest here. Like about enough to easily fill a book, which leads me to my first suggestion, and that is to read some books on investing. They are actually fairly interesting and you might enjoy them. I did read a few such as those written by Peter Lynch.
I think that you may be right and the number who beat the market even over the long terms is quite low, and that is because the vast majority of people don't have the time or focus to do it intelligently.
With all that said, jumping to my advice, it is that the best thing is this - start small, learn what works for you, and adjust accordingly.
As for actively managed funds not often beating the market, you have to understand the folly of comparing an individual investor's strategy and performance against that of an institutional investor. They are massively different. An individucal investor has so many advantages over institutional investors, it's like apples and oranges.
Lastly, I would highly encourage an individual investor to not put the bulk of their finances at risk. Retirement funds, emergency money, etc. are probably not something I would put at much risk.
Also, I have posted here a few years ago about my experiences in the dot.com days and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.
Hope that helps.
Excellent article, btw, that those in our household came across yesterday that discusses investing and how to go about it. It might be behind a paywall but if you don't have a NY Times subscription, it may be worth searching out somehow:
Professional money managers are looking for a risk adjusted return….
This is a really good point, and its not nearly as hard to beat SP500 on a risk-adjusted basis, where you consider both total return and volatility, since the indices can be quite volatile, and increasingly so as the weight of tech stocks grows so high.
I could see that. I would say though, again, what percent of investors do you think are posting on investing messageboards? I would think less than 1%, if you're including all people who invest. Even if you're including people who are a bit more serious about it, I would think it's still single digits. I have consistently beat the market, but there are a variety of things about me that are quite different from the average (normal!) person. I have multiple friends with PhDs in things like chemistry, engineering, etc who know damn near nothing about investing despite the fact we've talked about it a dozen times and I've tried to teach them. I have another friend who is a very successful accountant who knows less at age 40 than I did at age 24. That is the norm out there. Not trying to brag at all. I'm just trying to emphasize and make the case that the vast majority of people are terrible investors, and even people who are smart often don't even understand the basics. Given almost no actively managed funds (who are run by literal professionals) beat the market, it doesn't really make sense that there would be many dark horses out there quietly beating the professionals. Why wouldn't you go professional yourself if you could do that?
Anyway, thanks again for the resources. Still kind of chewing on this. I am busy in my life right now but plan to go back and calculate my actual returns each year since 2019 and will post them here when I do. My return in 2020 was something like 70%. Unfortunately Vanguard and Robinhood do not make it easy to look up what your annual returns were year by year, so this will take a little work on my end, and I want to make sure I do it right so the numbers are accurate.
There is a lot to digest here. Like about enough to easily fill a book, which leads me to my first suggestion, and that is to read some books on investing. They are actually fairly interesting and you might enjoy them. I did read a few such as those written by Peter Lynch.
I think that you may be right and the number who beat the market even over the long terms is quite low, and that is because the vast majority of people don't have the time or focus to do it intelligently.
With all that said, jumping to my advice, it is that the best thing is this - start small, learn what works for you, and adjust accordingly.
As for actively managed funds not often beating the market, you have to understand the folly of comparing an individual investor's strategy and performance against that of an institutional investor. They are massively different. An individucal investor has so many advantages over institutional investors, it's like apples and oranges.
Lastly, I would highly encourage an individual investor to not put the bulk of their finances at risk. Retirement funds, emergency money, etc. are probably not something I would put at much risk.
Also, I have posted here a few years ago about my experiences in the dot.com days and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.
Hope that helps.
Excellent article, btw, that those in our household came across yesterday that discusses investing and how to go about it. It might be behind a paywall but if you don't have a NY Times subscription, it may be worth searching out somehow:
I have read around 20 different books on either investing specifically or personal finance or economics. I feel I understand this stuff decently well, and my returns suggest that also since I have outperformed basically every actively managed fund out there over the last five years as well as beat the market every year as well. I don't know everything and especially don't know what it's like to work at a financial institution doing this since I'm just some quantitative scientist guy who has made investing a major hobby over the last 11 years. I will say, however, if things keep going how they have been, I will be able to retire by about age 41, if I want to. I don't want to, so I will keep working, but there aren't many people who could do that through their own work and strategizing.
To keep the dialogue going and to also learn more, if individual investors have such enormous advantages over institutional investors, why wouldn't institutional investors just try to be more like individual investors? I know that's a little bit of a silly question, but I hope you can understand the point of the question. If I'm returning an average of 18% per year, what's stopping me from getting 10 of my well to do friends giving me their money to manage and taking 1% of the returns? I'm still beating the market by a huge amount.
Someone else mentioned my 70% annual return in 2020. This is off of memory and is very likely not exact, but it was around there for my brokerage account. I don't touch my retirement account, so it performed the same as the market did that year. Since then I have outperformed the market by about 7-8% each year, on average. I am much better now than I was only a few years ago though, so I expect that figure to be higher moving forward. Given the US and World economy and society is kind of dancing on the precipice of collapse right now, however, I'm very aware anything could happen.
“Also, I have posted here a few years ago about my experiences in the dot.comdays and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.”
Morgan Stanley Boise’s biggest broker was pushing margin and tech IPOs in the build up to the 2000 bubble. In fact, this broker controlled the allocation of IPOs, which Morgan Stanley was a leader. In the aftermath he was fired, lost his license, bankrupt, and divorced. I got one of his clients, at the top this client had a $1.5 million account on margin, with $1 million in equity. By the time I got the account it was worth about $50,000. The client sued the firm, fortunately I had good notes where at the our first meeting the client said: “Milt lost me a lot of money, but he made me a lot of money.” My response “I am not like Milt, I do things differently.”
This post was edited 9 minutes after it was posted.
There is a lot to digest here. Like about enough to easily fill a book, which leads me to my first suggestion, and that is to read some books on investing. They are actually fairly interesting and you might enjoy them. I did read a few such as those written by Peter Lynch.
I think that you may be right and the number who beat the market even over the long terms is quite low, and that is because the vast majority of people don't have the time or focus to do it intelligently.
With all that said, jumping to my advice, it is that the best thing is this - start small, learn what works for you, and adjust accordingly.
As for actively managed funds not often beating the market, you have to understand the folly of comparing an individual investor's strategy and performance against that of an institutional investor. They are massively different. An individucal investor has so many advantages over institutional investors, it's like apples and oranges.
Lastly, I would highly encourage an individual investor to not put the bulk of their finances at risk. Retirement funds, emergency money, etc. are probably not something I would put at much risk.
Also, I have posted here a few years ago about my experiences in the dot.com days and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.
Hope that helps.
Excellent article, btw, that those in our household came across yesterday that discusses investing and how to go about it. It might be behind a paywall but if you don't have a NY Times subscription, it may be worth searching out somehow:
I have read around 20 different books on either investing specifically or personal finance or economics. I feel I understand this stuff decently well, and my returns suggest that also since I have outperformed basically every actively managed fund out there over the last five years as well as beat the market every year as well. I don't know everything and especially don't know what it's like to work at a financial institution doing this since I'm just some quantitative scientist guy who has made investing a major hobby over the last 11 years. I will say, however, if things keep going how they have been, I will be able to retire by about age 41, if I want to. I don't want to, so I will keep working, but there aren't many people who could do that through their own work and strategizing.
To keep the dialogue going and to also learn more, if individual investors have such enormous advantages over institutional investors, why wouldn't institutional investors just try to be more like individual investors? I know that's a little bit of a silly question, but I hope you can understand the point of the question. If I'm returning an average of 18% per year, what's stopping me from getting 10 of my well to do friends giving me their money to manage and taking 1% of the returns? I'm still beating the market by a huge amount.
Someone else mentioned my 70% annual return in 2020. This is off of memory and is very likely not exact, but it was around there for my brokerage account. I don't touch my retirement account, so it performed the same as the market did that year. Since then I have outperformed the market by about 7-8% each year, on average. I am much better now than I was only a few years ago though, so I expect that figure to be higher moving forward. Given the US and World economy and society is kind of dancing on the precipice of collapse right now, however, I'm very aware anything could happen.
That's quite a few books, many more than I did.
You are bouncing around between different investing levels. Now you have added financial advisor category to individual investor and institutional. Each has advantages and disadvantages and a savy investor would be keenly aware of the differences and act upon them.
You ask for differences and a few are that instit. investor (mutual and hedge fund, ETF, etc), cannot jump in and out of stocks as quickly or as drastically as indiv. can.
"Portfolio Turnover Ratio" is a measure of a fund, and too high a 'turn over rate" is often viewed negatively.
Actively managed funds also have to keep within a range, generally of cash to equity, and this may limit their options.
And funds are highly influenced by cash inflows and outflows, so they have to find good ideas of where to park the money, which may not always be easy. Indiv. Investor does not really have this requirement influencing their performance.
Also, a mutual fund may have strict restrictions about their strategy or target investments, like crypto being possibly included, and an indiv. does not.
And a major one, so I hear, is that mutual funds are at a very large need to show quarterly gains, and may make significant moves at these milestones so as to reflect positively on the fund performance, even to the detriment of longer term performance. Indiv.- no such pressure.
With financial advisor, risk adjusting based on client's preference is the big limitation or strength, depending on how you look at it.
This just scratches the surface.
As for your own performance, congrats. I would keep an eye out for how well you fare on the down years, and how well things go/adjust when we hit a major correction. That is part of the equation and would be prudent to have a plan and to see how that might mitigate your strategy.
“Also, I have posted here a few years ago about my experiences in the dot.comdays and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.”
Morgan Stanley Boise’s biggest broker was pushing margin and tech IPOs in the build up to the 2000 bubble. In fact, this broker controlled the allocation of IPOs, which Morgan Stanley was a leader. In the aftermath he was fired, lost his license, bankrupt, and divorced. I got one of his clients, at the top this client had a $1.5 million account on margin, with $1 million in equity. By the time I got the account it was worth about $50,000. The client sued the firm, fortunately I had good notes where at the our first meeting the client said: “Milt lost me a lot of money, but he made me a lot of money.” My response “I am not like Milt, I do things differently.”
Interesting.
I was talking more of individual investors and also about some who have lucrative company stock options (and what they decided to do with them once they vested).
I knew one guy (a friend of a friend) who was highly leveraged and was killing the market and when it went bust, he lost quite a bit. I can't remember if he lost his house or not, but I do know that he got out of stock investing and when he got back on his feet he got into buying up local rental property and has reportedly done well.
I did get involved with Tech and other IPOs through a broker/bank that offered them exclusively. The ROI could have been huge, had one sold at the right time. I tended to hold on too long, which was not great about maximizing return, but made me a prefered customer since they apparently prefered customers who didn't flip their allocations. They were a middleman and that would be frowned upon by the underwriters.
There is a lot to digest here. Like about enough to easily fill a book, which leads me to my first suggestion, and that is to read some books on investing. They are actually fairly interesting and you might enjoy them. I did read a few such as those written by Peter Lynch.
I think that you may be right and the number who beat the market even over the long terms is quite low, and that is because the vast majority of people don't have the time or focus to do it intelligently.
With all that said, jumping to my advice, it is that the best thing is this - start small, learn what works for you, and adjust accordingly.
As for actively managed funds not often beating the market, you have to understand the folly of comparing an individual investor's strategy and performance against that of an institutional investor. They are massively different. An individucal investor has so many advantages over institutional investors, it's like apples and oranges.
Lastly, I would highly encourage an individual investor to not put the bulk of their finances at risk. Retirement funds, emergency money, etc. are probably not something I would put at much risk.
Also, I have posted here a few years ago about my experiences in the dot.com days and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.
Hope that helps.
Excellent article, btw, that those in our household came across yesterday that discusses investing and how to go about it. It might be behind a paywall but if you don't have a NY Times subscription, it may be worth searching out somehow:
I have read around 20 different books on either investing specifically or personal finance or economics. I feel I understand this stuff decently well, and my returns suggest that also since I have outperformed basically every actively managed fund out there over the last five years as well as beat the market every year as well. I don't know everything and especially don't know what it's like to work at a financial institution doing this since I'm just some quantitative scientist guy who has made investing a major hobby over the last 11 years. I will say, however, if things keep going how they have been, I will be able to retire by about age 41, if I want to. I don't want to, so I will keep working, but there aren't many people who could do that through their own work and strategizing.
To keep the dialogue going and to also learn more, if individual investors have such enormous advantages over institutional investors, why wouldn't institutional investors just try to be more like individual investors? I know that's a little bit of a silly question, but I hope you can understand the point of the question. If I'm returning an average of 18% per year, what's stopping me from getting 10 of my well to do friends giving me their money to manage and taking 1% of the returns? I'm still beating the market by a huge amount.
Someone else mentioned my 70% annual return in 2020. This is off of memory and is very likely not exact, but it was around there for my brokerage account. I don't touch my retirement account, so it performed the same as the market did that year. Since then I have outperformed the market by about 7-8% each year, on average. I am much better now than I was only a few years ago though, so I expect that figure to be higher moving forward. Given the US and World economy and society is kind of dancing on the precipice of collapse right now, however, I'm very aware anything could happen.
Not sure if my previous post made it through.
CG 3 - you say you have outperformed "the market" by about 7-8% each year, on average. What exactly are you comparing your portfolio to??
“Also, I have posted here a few years ago about my experiences in the dot.comdays and described how the common talk on the street and in the gym was how so-and-so grabbed a pile of well-timed tech stock and doesn't have to work anymore. Saw some of those folks work out well and some that it came back to bite them.”
Morgan Stanley Boise’s biggest broker was pushing margin and tech IPOs in the build up to the 2000 bubble. In fact, this broker controlled the allocation of IPOs, which Morgan Stanley was a leader. In the aftermath he was fired, lost his license, bankrupt, and divorced. I got one of his clients, at the top this client had a $1.5 million account on margin, with $1 million in equity. By the time I got the account it was worth about $50,000. The client sued the firm, fortunately I had good notes where at the our first meeting the client said: “Milt lost me a lot of money, but he made me a lot of money.” My response “I am not like Milt, I do things differently.”
Interesting.
I was talking more of individual investors and also about some who have lucrative company stock options (and what they decided to do with them once they vested).
I knew one guy (a friend of a friend) who was highly leveraged and was killing the market and when it went bust, he lost quite a bit. I can't remember if he lost his house or not, but I do know that he got out of stock investing and when he got back on his feet he got into buying up local rental property and has reportedly done well.
I did get involved with Tech and other IPOs through a broker/bank that offered them exclusively. The ROI could have been huge, had one sold at the right time. I tended to hold on too long, which was not great about maximizing return, but made me a prefered customer since they apparently prefered customers who didn't flip their allocations. They were a middleman and that would be frowned upon by the underwriters.
At Morgan Stanley you got downgraded on future IPO allocations if you flipped. The broker in charge of allocations would save the gems for himself. I told the branch manager OK, I just won’t do them anymore. Good for me in that I avoided the problems.
I met a big swinging dick Denver Morgan Stanley broker September 2008 when everything in financials were hit hard. He was chain smoking outside the office and highly levered to stock options. I was not, but had $14,000 worth that eventually expired worthless. Though that same day I bought $20,000 Morgan Stanley $25 preferred for $10, got in the $5 range at the lows. Sold in the $20; should have held.
I was talking more of individual investors and also about some who have lucrative company stock options (and what they decided to do with them once they vested).
I knew one guy (a friend of a friend) who was highly leveraged and was killing the market and when it went bust, he lost quite a bit. I can't remember if he lost his house or not, but I do know that he got out of stock investing and when he got back on his feet he got into buying up local rental property and has reportedly done well.
I did get involved with Tech and other IPOs through a broker/bank that offered them exclusively. The ROI could have been huge, had one sold at the right time. I tended to hold on too long, which was not great about maximizing return, but made me a prefered customer since they apparently prefered customers who didn't flip their allocations. They were a middleman and that would be frowned upon by the underwriters.
At Morgan Stanley you got downgraded on future IPO allocations if you flipped. The broker in charge of allocations would save the gems for himself. I told the branch manager OK, I just won’t do them anymore. Good for me in that I avoided the problems.
I met a big swinging dick Denver Morgan Stanley broker September 2008 when everything in financials were hit hard. He was chain smoking outside the office and highly levered to stock options. I was not, but had $14,000 worth that eventually expired worthless. Though that same day I bought $20,000 Morgan Stanley $25 preferred for $10, got in the $5 range at the lows. Sold in the $20; should have held.
YEs, that was exactly it, at Wit Capital, Morgan Stanley's competitor (now defunct), the investors like me who held on were given higher access to subsequent IPOs. That really pissed off the other investors on the chat boards.
Back in about that date range, I bought into Google upon going public (open market) when a techie friend assured me that it was as good a seach engine as I thought. Never sold those shares and only added along the way.
Also, jumped right into double leveraged ETFs when they originated in 2006, in tech and small cap, which turned out profitable. A few years later the triple leveraged came out and I ventured there, too.
I bought a significant amount of my net worth in a double leveraged up S&P 500 in a retirement account September 2008. Looked horrible by March, but doubled my initial investment, perhaps more by the time I got out.
I bought a significant amount of my net worth in a double leveraged up S&P 500 in a retirement account September 2008. Looked horrible by March, but doubled my initial investment, perhaps more by the time I got out.
I was into the levaraged small cap ETFs and Tech. I kept them until volatility ramped up in the late teens, at which point the daily rebalancing that they do was cutting into their performance, so I would just double up or triple up on the underlying unleveraged ETF.
At this point of my investing journey, I would not leverage, and based on the market valuations also, I have chosen not to for about the last 5 or 6 years.
I am reading that the market is now fairly steeply leveraged now and mostly from retail investors.
I have read around 20 different books on either investing specifically or personal finance or economics. I feel I understand this stuff decently well, and my returns suggest that also since I have outperformed basically every actively managed fund out there over the last five years as well as beat the market every year as well. I don't know everything and especially don't know what it's like to work at a financial institution doing this since I'm just some quantitative scientist guy who has made investing a major hobby over the last 11 years. I will say, however, if things keep going how they have been, I will be able to retire by about age 41, if I want to. I don't want to, so I will keep working, but there aren't many people who could do that through their own work and strategizing.
To keep the dialogue going and to also learn more, if individual investors have such enormous advantages over institutional investors, why wouldn't institutional investors just try to be more like individual investors? I know that's a little bit of a silly question, but I hope you can understand the point of the question. If I'm returning an average of 18% per year, what's stopping me from getting 10 of my well to do friends giving me their money to manage and taking 1% of the returns? I'm still beating the market by a huge amount.
Someone else mentioned my 70% annual return in 2020. This is off of memory and is very likely not exact, but it was around there for my brokerage account. I don't touch my retirement account, so it performed the same as the market did that year. Since then I have outperformed the market by about 7-8% each year, on average. I am much better now than I was only a few years ago though, so I expect that figure to be higher moving forward. Given the US and World economy and society is kind of dancing on the precipice of collapse right now, however, I'm very aware anything could happen.
Not sure if my previous post made it through.
CG 3 - you say you have outperformed "the market" by about 7-8% each year, on average. What exactly are you comparing your portfolio to??
I started writing out a post, but I think I don't really want to say much more about myself. To answer your question though, I use the S&P500 as my metric. That's what Berkshire Hathaway compares themselves to also, so I feel it is a fair standard to use.
Domestic large money managers are invariably benchmarked to the S&P 500. Even though the distortion of Mag 7 weightings forces those looking to beat the index to allocate percentages even higher.