OT: Economic Recovery

[Jtung230]

NJ is only 2nd in the country with confirmed cases of Coronavirus. Clearly, Murphy was overreacting.

 

[Scarlet83]

There is a large and growing school of thought that passive investment is superior to active management. Own the market, so to speak, at very low basis point fees, which make a huge difference over time. Passive generally gives you good diversification within the specific index. Having said that, I do own both active and passive Vanguard funds. Most active fund managers don’t beat their benchmark—and they are pros. I also own some individual equities but I’m not a trader so to speak. Your timing may be good starting to invest for the long term in a down market. It’s probably best not to give or get financial advise on a message board. Good luck to you.

The best active managers are beating their passive peers by 5, 10 or more percent. With passive, an investor owns the good, the bad and the ugly within a benchmark. Why do that?

 

[Proud NJ Sports Fan]

Placed an order with a local brewery this morning, for delivery

I'm doing my part to help small biz and the economy

 

[DHajekRC84]

Growth stocks don’t pay dividends. What made you decide on buying Amazon? Your stock portfolio should include both. I encourage you to read more on why companies pay dividends. The most important thing is that you are saving and putting your money to work.

That's generally true except it doesn't hold when a stock is beaten way down by an event like this. it can pay a good Div. and be positioned for a huge gain when things return to normal.
Look at Chrevron (CVX) that pays almost 6% div. and was down 50% from where it was runing in Feb..$120. I couldn't believe I was buying Oil at this time but I read about how conservative they were run and decided to get in a bit. I didn't catch the bottom but it even grew during the last 10 days and up 10% when oil dropped off the face of the earth. Back to $87.
So at SOME point I expect it back to Feb. That will be a 50% ROI while making the 6% to boot.

 

[DHajekRC84]

As I've been an investor for all of about 5 weeks, this has been at the core of my investing strategy. Find companies which had previously traded at a much higher price, but because of Covid, have crashed mightily.

So far I've done pretty well, though I have invested in some industries like the airlines which have meandered more then they have increased(I was a little late in getting in so I didn't get the early rebound jump).

I considered this a very unique opportunity. I have a "play account" and I am lucky enough to be able to take some risk and still have correction time in the windshield. So much so that I grabbed some cash at a low interest rate from a policy and started buying up a bit of this and a bit of that. Some that are going to do well in the current situation (yup, Amazon) and like you...a whole bunch of beat up things. Balanced out across the whole incremental investment. As noted in my other post...CVX, but I also grabbed some Hotel and airlines too. Disney, Lowes etc. Solid companies that I believe will eventually get back close. I've already been in Boeing so no need there plus they have other issues.
We'll see.

 

[Proud NJ Sports Fan]

I considered this a very unique opportunity. I have a "play account" and I am lucky enough to be able to take some risk and still have correction time in the windshield. So much so that I grabbed some cash at a low interest rate from a policy and started buying up a bit of this and a bit of that. Some that are going to do well in the current situation (yup, Amazon) and like you...a whole bunch of beat up things. Balanced out across the whole incremental investment. As noted in my other post...CVX, but I also grabbed some Hotel and airlines too. Disney, Lowes etc. Solid companies that I believe will eventually get back close. I've already been in Boeing so no need there plus they have other issues.
We'll see.

Invest in paragraphs

 

[phs73rc77gsm83]

The best active managers are beating their passive peers by 5, 10 or more percent. With passive, an investor owns the good, the bad and the ugly within a benchmark. Why do that?

I do own both active funds and index funds, both with Vanguard. The different between some active funds with higher fees, and funds with similar objectives from a lower cost group is huge over the years. People buying class A shares, or B shares with a 12B1, or CDSC see significant erosion—maybe 125 basis points up front and 100 basis points per year vs nothing up front and maybe 10 basis point annual fees.

Let me ask you about the “best active managers that beat their peers by 5, 10, or more percent.” Maybe they beat poor active managers. Very rarely, if ever, do you see an active manager beat it’s relevant benchmark by anywhere near those levels over five and ten year periods. Please let me know who that has the S&P 500 as their benchmark has beaten that benchmark by those levels over five and ten or more years. This should be viewed net of expenses and fees. I am a big believer in total return, net of fees and also considering turnover and other tax related concerns. I do own active and passive funds as well as individual equities.

 

[DHajekRC84]

NJ is only 2nd in the country with confirmed cases of Coronavirus. Clearly, Murphy was overreacting.

yes, driven by the northeast corner of the state. Nobody is saying there isn't a problem. What folks are saying is there are options that could asdress both sides and as I have been crying out about...this state is not all Bergen, Essex, Union, or Hudson Counties. The situation here in the west and southwest is not the same and there is plenty of space.

The 8 countires west and SW are 4584 (4%) of the total cases and deaths. If the Blue Dots were to scale on this graphic they would be hard to see.

 

[DHajekRC84]

Invest in paragraphs

You're missing your period. (or maybe not)

 

[tom1944]

The best active managers are beating their passive peers by 5, 10 or more percent. With passive, an investor owns the good, the bad and the ugly within a benchmark. Why do that?

Can you show me which ones do that consistently over a 20 year period

 

[Jtung230]

yes, driven by the northeast corner of the state. Nobody is saying there isn't a problem. What folks are saying is there are options that could asdress both sides and as I have been crying out about...this state is not all Bergen, Essex, Union, or Hudson Counties. The situation here in the west and southwest is not the same and there is plenty of space.

The 8 countires west and SW are 4584 (4%) of the total cases and deaths. If the Blue Dots were to scale on this graphic they would be hard to see.

How do you address both sides? If you open business in South Jersey, how do you prevent people in Northeast Jersey from visiting?

 

[Knight Shift]

You're missing your period. (or maybe not)

too much space between his ears!

 

[Knight Shift]

How do you address both sides? If you open business in South Jersey, how do you prevent people in Northeast Jersey from visiting?

You put rules and boundaries in place. It's not that hard. It's called leadership and having a plan.

 

[Jtung230]

You put rules and boundaries in place. It's not that hard. It's called leadership and having a plan.

My town closed the schools and ask everyone to social distance. The very next day everyone showed up at the school playgrounds for playdates and sports team had unofficial practices. Not as easy as you think.

 

[tom1944]

You put rules and boundaries in place. It's not that hard. It's called leadership and having a plan.

I think he wants to know what those rules and boundaries are

 

[RU19931]

NJ is only 2nd in the country with confirmed cases of Coronavirus. Clearly, Murphy was overreacting.

Murphy is overreaching with certain groups while turning a blind eye to other groups. He is attempting to turn the citizens of this state against on another.

 

[tom1944]

Murphy is overreaching with certain groups while turning a blind eye to other groups. He is attempting to turn the citizens of this state against on another.

I really would be interested for you to be more specific and actually name the groups and provide examples of this

 

[Scarlet83]

I do own both active funds and index funds, both with Vanguard. The different between some active funds with higher fees, and funds with similar objectives from a lower cost group is huge over the years. People buying class A shares, or B shares with a 12B1, or CDSC see significant erosion—maybe 125 basis points up front and 100 basis points per year vs nothing up front and maybe 10 basis point annual fees.

Let me ask you about the “best active managers that beat their peers by 5, 10, or more percent.” Maybe they beat poor active managers. Very rarely, if ever, do you see an active manager beat it’s relevant benchmark by anywhere near those levels over five and ten year periods. Please let me know who that has the S&P 500 as their benchmark has beaten that benchmark by those levels over five and ten or more years. This should be viewed net of expenses and fees. I am a big believer in total return, net of fees and also considering turnover and other tax related concerns. I do own active and passive funds as well as individual equities.

Since the posts were all talking about current investments within this market environment, I was using current performance numbers (year to date), not 5 or 10 years. I am in a number of equity strategies that are beating their benchmark between 3-17% year to date, net of fees.

My US growth equity strategy beats its Russell 1000 growth benchmark by 5% on an average annual basis in the last 7 years and by 4% average annual, in the last 10 years, both net of fees.

Passive is at a huge headwind because as a stock price grows relative to its index, by definition, passive is buying more of that stock (buying higher). And as a stock price falls relative to that index, passive sells more of that stock (selling lower). Big headwind.

Over the long run, for patient investors that prudently choose investment managers with high active share, active will beat passive inclusive of fees almost all of the time.

 

[tom1944]

Since the posts were all talking about current investments within this market environment, I was using current performance numbers (year to date), not 5 or 10 years. I am in a number of equity strategies that are beating their benchmark by 3-10% year to date, net of fees.

My US growth equity strategy beats its Russell 1000 growth benchmark by 5% on an average annual basis in the last 7 years and by 4% in the last 10 years, net of fees.

Passive is at a huge headwind because as a stock price grows relative to its index, by definition, passive is buying more of that stock (buying higher). And as a stock price falls relative to that index, passive sells more of that stock (selling lower). Big headwind.

Over the long run, for patient investors that prudently choose investment managers with high active share, active will beat passive inclusive of fees almost all of the time.

Can you link a study that shows that so we can see examples of who these fund managers/families are

 

[Scarlet83]

Can you link a study that shows that so we can see examples of who these fund managers/families are

I am sorry. I can’t do that.

I am simply making the point that good active management beats passive for patient investors. Google is your friend.

 

[tom1944]

I am sorry. I can’t do that.

I am simply making the point that good active management beats passive for patient investors. Google is your friend.

I did Google and most everything said managed funds generally do not beat index funds over time

 

[Scarlet83]

I did Google and most everything said managed funds generally do not beat index funds over time

The key word is generally. Generally, active beats passive about 25% of the time net of fees. But I am talking specifics, because that is what matters to an investor. No one invests in ALL active strategies, so why lump all different portfolio managers with different analysts and different investment methodologies into one homogeneous box? Because companies that sell passive strategies market that way, that’s why.

Gotta get back to work.

 

[tom1944]

The key word is generally. Generally, active beats passive about 25% of the time net of fees. But I am talking specifics, because that is what matters to an investor. No one invests in ALL active strategies, so why lump all different portfolio managers with different analysts and different investment methodologies into one homogeneous box? Because companies that sell passive strategies market that way, that’s why.

Gotta get back to work.

The best I found was over a long period only 10% of managed funds beat their index. Most people cant identify those 10% of funds 20 or more years out.

I was hoping you had some information on how to do that

 

[miketd1]

You might get lucky and find an active manager that can beat a passive approach.

But to me that’s more like gambling than investing since you can literally get the average with comparatively zero risk.

I’ve got a 20 year horizon. I’m not trying to be rich. I just want to be secure.

Funny thing is prior to this pandemic, I saw no reason why anyone would buy an annuity. Well, here’s your answer....

 

[phs73rc77gsm83]

The best I found was over a long period only 10% of managed funds beat their index. Most people cant identify those 10% of funds 20 or more years out.

I was hoping you had some information on how to do that

Agreed. You may find a small group of active managers who may marginally (not 5%,10%, or more) beat their benchmark over a short period of time but not over the time periods such as 5, 10, or more years. Show me in a prospectus filed with the SEC.

I have zero vested interest in this one way or the other and different strokes for different folks so I’m going to step away from the discussion.

Last point for Miketd1, and again this is just my opinion: single premium immediate annuities are very transparent and can be fine in a portfolio under certain needs and conditions, I would not buy a variable annuity or combination investment and insurance product (fees are way too high).

Good luck to all!

 

[DHajekRC84]

My town closed the schools and ask everyone to social distance. The very next day everyone showed up at the school playgrounds for playdates and sports team had unofficial practices. Not as easy as you think.

and I am assuming that was back 2 months ago before people got serious with their behavior? There will always be examples of why not to do it. I've been back and forth with posters here as to some things that can be done. Many just keep looking for reasos not to and taking their worlds and extrapolating them across the state. (and I am not saying you).

There is still no good reason for golf with considerations. Many had already put in place before "Murphy's Law" was played. And it's a finite number of golfers (72?) across one day or period of time spread across what, a hundred acres?

Open the western and southern county parks. "no, you can't stop people from coming from north jersey" , yes you can. Someone can check residence via ID at the entrance. "oh, do you want to be that person?" That's what they are for and you're worried they will catch it thru a car window? You want to pay me $15/hr to play park ranger and get myself outside for a day? Sure.

Same with town beaches...who somehow find a way to charge and keep people off them in the off season.

Its April. Raining, raining, and raining. The rain isn't cleansing the surfaces and the air outside?

If there is a will, there is a way. But its way too easy just to say no. Focus on the problems and not the solutions. Where's the task force on common sense options?

Sorry. In my opinion this was a great 1st quarter for Murphy. Followed up by few halftime adjustments. And now he is losing the game with his prevent defense. (this IS a Football forum afterall lol).

 

[Scarlet83]

You might get lucky and find an active manager that can beat a passive approach.

But to me that’s more like gambling than investing since you can literally get the average with comparatively zero risk.

I’ve got a 20 year horizon. I’m not trying to be rich. I just want to be secure.

Funny thing is prior to this pandemic, I saw no reason why anyone would buy an annuity. Well, here’s your answer....

Saying it’s luck demeans the research into finding and understanding active portfolio managers, their team, their investment philosophy, their buy and sell process and their secret sauce... that which makes them unique. Understanding what they own. These details really matter.

But if you want to think it is luck...

 

[Jtung230]

@1984

I don't know if you can exclude people from public parks because where they are from. A lot these things are binary or the state is subject to some type of discrimination law suits. I don't disagree with you about partial reopening, especially for activities that are self distancing by nature (golf). But as usual, a few knuckleheads ruin it for the rest of us.

 

[Jtung230]

Saying it’s luck demeans the research into finding and understanding active portfolio managers, their team, their investment philosophy, their buy and sell process and their secret sauce... that which makes them unique. Understanding what they own. These details really matter.

But if you want to think it is luck...

I think we can all agree that not all active managers beat the index consistently. I think for most investors, passive investment is best. But if you have an investment strategy that you believe in, you can find an active manager that shares and invests with the same strategy as you. Or you can review each active manager to see who's strategy you like the best. This all require you to be sophisticated enough and can spend the time to do the research to find that right manager.

 

[RU05]

Sorry. In my opinion this was a great 1st quarter for Murphy. Followed up by few halftime adjustments. And now he is losing the game with his prevent defense. (this IS a Football forum afterall lol).

But he's not losing the game by keeping the parks closed. He's pissing some people off, which is not smart politically. This would be more akin to giving up a couple TD's late in a blowout victory. It might hurt his statistics but this really is a near inconsequential matter in the scope of the larger issue.

Now I think he should open the parks, I don't think there is any significant danger there in terms of transmission, and it would certainly take some unneeded pressure off of him, but really, not being able to go to the park is not hurting anyone.

 

[RU05]

A wonder how much of closing the parks to EVERYONE, was more in response that you can't close them to a specific group that likes to break rules and then cry that they are being singled out?

I think that played into it.

I think the spring breakers in Florida played into it.

I think a bunch of different things played into it.

 

[RU05]

From the article, exemplifying the lack of thoughtfulness put into the close the parks decision. How does someone biking alone violate the social distancing requirements? Getting killed by a car is a better outcome than the possibility of catching Covid-19 while biking in park? Murphy's Law!

a guy from Middlesex County who emailed me to say, “While cutting thru Johnson Park in Piscataway Monday, I was chased out by a park ranger who told me I had to bike on River Road, which is a busy road with no bike lane. I took a couple of pictures to make my point….”
The pictures made the point in graphic detail. River Road is a four-lane speedway with no shoulder. It is often used by drivers seeking a short cut to and from Interstate 287.
Murphy’s stated reason for shutting down state and county parks is, the Middlesex County website tells us, to “help us limit the spread of covid-19.” The website doesn’t say how forcing bicyclists to play bumper cars with SUVs serves that goal, however.

“My local parks are closed but the streets are crowded with people, bikes, cars and dogs. In the park, only people would be allowed. Much safer than the street.”

There is a difference between not letting people ride bikes in the park, and forcing them to ride a bike down a busy highway.

Murphy did the former.

 

[Knight Shift]

There is a difference between not letting people ride bikes in the park, and forcing them to ride a bike down a busy highway.

Murphy did the former.

He really did both by closing off the park for no good reason when grocery and liquor stores have greater social distancing issues. Rules could have been put in places, signs could have been posted before taking draconian action of shutting them down completely. For example, he could the rules could have prohibited people standing in place and standing within 6 feet of each other. Bicycle riders do not ride within 6 feet of each other generally, except the dickheads who think they can ride 2-4 abreast and take up the road.

 

[RU05]

He really did both by closing off the park for no good reason when grocery and liquor stores have greater social distancing issues. Rules could have been put in places, signs could have been posted before taking draconian action of shutting them down completely. For example, he could the rules could have prohibited people standing in place and standing within 6 feet of each other. Bicycle riders do not ride within 6 feet of each other generally, except the dickheads who think they can ride 2-4 abreast and take up the road.

Not really, he only closed the parks. He never forced people to ride down a busy highway.

But I'm with you in that the parks should be open. I'm just against the idea that he is putting peoples lives in danger by doing so.

 

[Knight Shift]

Not really, he only closed the parks. He never forced people to ride down a busy highway.

But I'm with you in that the parks should be open. I'm just against the idea that he is putting peoples lives in danger by doing so.

I guess I look at it a bit differently. People who like to trail ride and ride in parks are now being forced onto busy roads where they are navigating pedestrians and have to worry about cars.

 

[Scarlet83]

I think we can all agree that not all active managers beat the index consistently. I think for most investors, passive investment is best. But if you have an investment strategy that you believe in, you can find an active manager that shares and invests with the same strategy as you. Or you can review each active manager to see who's strategy you like the best. This all require you to be sophisticated enough and can spend the time to do the research to find that right manager.

I already said that most active managers do not beat their benchmark after fees. But some do, and some beat their benchmark significantly after fees and over any 3 year rolling period. That is all I said.

And yes, it takes some expertise.

 

[miketd1]

Saying it’s luck demeans the research into finding and understanding active portfolio managers, their team, their investment philosophy, their buy and sell process and their secret sauce... that which makes them unique. Understanding what they own. These details really matter.

But if you want to think it is luck...

I’m sure the board would appreciate if you could share with us the contact information for your golden goose who is consistently beating the market.

 

[DHajekRC84]

But he's not losing the game by keeping the parks closed. He's pissing some people off, which is not smart politically. This would be more akin to giving up a couple TD's late in a blowout victory. It might hurt his statistics but this really is a near inconsequential matter in the scope of the larger issue.

Now I think he should open the parks, I don't think there is any significant danger there in terms of transmission, and it would certainly take some unneeded pressure off of him, but really, not being able to go to the park is not hurting anyone.

Its all cumulative and hurting my brain and my liver.

 

[vandalen1]

I am sorry. I can’t do that.

I am simply making the point that good active management beats passive for patient investors. Google is your friend.

Only 20% of active managers beat the market on a yearly basis. And they're not always the same ones. Just FYI. You can look it up and with the higher fees they charge, if you pick the wrong one, it'll cost you more than an ETF or some other passive investment.

 

[Scarlet83]

Only 20% of active managers beat the market on a yearly basis. And they're not always the same ones. Just FYI. You can look it up and with the higher fees they charge, if you pick the wrong one, it'll cost you more than an ETF or some other passive investment.

Absolutely correct. And it requires sophistication and research, which an average investor does not have. If the average investor does not obtain that expertise, then passive is fine. I only got involved in this post thread because someone said something like passive always beats active. That is not true.

I have attempted to carefully explain that with expertise, proper research and investor patience, active management beats passive after fees. Through this crisis and the many others times of market stresses, there are always winning companies and losing companies. There are always companies whose management allocates capital extremely well, and others that don’t. There are always companies with unique products and services that will flourish in both good economies and in bad (secular growth). And there are portfolio managers who have cultivated a team and a process to choose those companies.