Gyroscopic Investing

I think i know,

But in your opinion why the passive portfolios are available online and the active strategies no?

Trading strategies vs passive lazy investment : why we know good lazy investments, and we cant find good trading short term systems?

Long term laziness means time is playing with you : coumpound interests, return to the mean, less fees, etc.
Short term trading means time is playing against you : you must be faster than people doing the same thing as you but are more trained and have much better and faster software.

I don't understand your first question, but I suspect it to be a very different thing : you can be active with a long term strategy (see dividend growth strategy for example). Active vs passive is not the same as long vs short term.

Maybe there aren't many good short term trading systems because it just doesn't work.

notsheigetz wrote: Maybe there aren't many good short term trading systems because it just doesn't work.

+1

frugal wrote: Trading strategies vs passive lazy investment : why we know good lazy investments, and we cant find good trading short term systems?

The problem is public disclosure of short term trading systems will eradicate the edge if everyone and their mother started to trade it (look at DecisionMoose for an example).  So normally you won't find working ones disclosed for free and only available for a very high cost.  It's elitism, sure, but the stock market is not a charity.  It is designed to transfer money from the dumb to the smart which means not everyone can or will win.  Even with the PP, you have not made yourself out to be smart, still dumb, but diversified enough to capture smart money flows.

k9 wrote: Long term laziness means time is playing with you : coumpound interests, return to the mean, less fees, etc.
Short term trading means time is playing against you : you must be faster than people doing the same thing as you but are more trained and have much better and faster software.

I don't understand your first question, but I suspect it to be a very different thing : you can be active with a long term strategy (see dividend growth strategy for example). Active vs passive is not the same as long vs short term.

"Active vs passive is not the same as long vs short term" no? Why?

Normally it is.

notsheigetz wrote: Maybe there aren't many good short term trading systems because it just doesn't work.

AdamA wrote:

notsheigetz wrote: Maybe there aren't many good short term trading systems because it just doesn't work.

+1

There are many examples of well succeded traders using systems, in all countries.
Or its all FALSE/FRAUDE?

MachineGhost wrote:

frugal wrote: Trading strategies vs passive lazy investment : why we know good lazy investments, and we cant find good trading short term systems?

The problem is public disclosure of short term trading systems will eradicate the edge if everyone and their mother started to trade it (look at DecisionMoose for an example).  So normally you won't find working ones disclosed for free and only available for a very high cost.  It's elitism, sure, but the stock market is not a charity.  It is designed to transfer money from the dumb to the smart which means not everyone can or will win.  Even with the PP, you have not made yourself out to be smart, still dumb, but diversified enough to capture smart money flows.

yes and why PP is disclosed?

(to know if you think like me)


REGARDS to ALL YOU

frugal wrote:

k9 wrote: Long term laziness means time is playing with you : coumpound interests, return to the mean, less fees, etc.
Short term trading means time is playing against you : you must be faster than people doing the same thing as you but are more trained and have much better and faster software.

I don't understand your first question, but I suspect it to be a very different thing : you can be active with a long term strategy (see dividend growth strategy for example). Active vs passive is not the same as long vs short term.

"Active vs passive is not the same as long vs short term" no? Why?

Normally it is.

I might be wrong on terms there, but stock picking (rather than buying an index ETF) seems to be an active strategy but can be for the very long run (for example buying & holding forever, just living on the dividend flow).

There are many examples of well succeded traders using systems, in all countries.
Or its all FALSE/FRAUDE?

For 1, very successful trader, there are 10 average ones (who won some money but would have won more had they worked for the minimum wage rather than trading) and 100 losers who lost some or all of their money and a few hours of their life. But you'll only read news about the winner. It's not false/fraud, it's survivorship bias.

frugal wrote: yes and why PP is disclosed?

Hi Frugal,

That's a great point. In general, if an investment strategy is "good" then it can't be disclosed publicly because if everyone knows about it, then it doesn't work. For example, if the 60 day moving average of a stock determines whether to buy or sell it, if this trick is known publicly than people will start using a 59 day moving average to get the jump on all the 60 dayers. And someone else will start using a 58 day moving average to get the jump on him.

Essentially, any opportunity is lost if everyone else knows that a certain system works because they can tweak it slightly to get the jump on you... and someone will tweak it to get the jump on him, until it doesn't work for anyone.

However, the PP is different. The 4 asset classes themselves are so huge that it's not possible to manipulate them. There's so many people buying gold everyday relative to any individual investor who decides to use the PP, that it doesn't matter if the PP is public info. The same for an Index Stock fund, TBills and Bonds.

With regards to rebalancing, yes, it is possible that if everyone rebalanced at the same time, and a large number of people used the PP, it would cause problems. Suppose Stocks were down and Bonds were up. Some PP holders sell bonds to buy stocks but in doing so, they drive the price of bonds down and the price of stocks up, just a very small amount.

If a large number of people used the PP, then there'd never be any rebalancing event because as soon as one group started to rebalance, it would shift the assets back to where they were before a rebalance was needed.

That said, it shouldn't be an issue in real life because:

1) Even if everyone in the world used the PP, rebalance bands would occur at different points in time based on the entry point investors made into the PP. Additionally, there's subtle differences in the PPs that would cause different rebalancing times as well.

2) The underlying asset classes of the PP are so large that many people not in the PP are also trading them daily. Thus, their movement is not purely dependent on people rebalancing their PP.

Great question and great thought process!

This forum is really special.

People like to THINK.

You are completly right, but I have another 3rd point 

Fellows,

In my opinion ALL the passive investing strategies are public on internet because as much people do it better for the investors doing the same strategy. It is a longterm strategy so as much people has it better.

Good Trading strategies are not public because they lose the edge if many traders follow it.


Do you agree?

Pretty much. And anyone who tries to sell you access to their super secret knowledge is making their money on those sales rather than the market, even if maybe at one time they made money timing the market.

If you're going to make money being a trader, you pretty much have to find your own edge, keep it to yourself, and work the equivalent of a full-time job to find it and keep it.

IMHO, most people willing to make trading into a job would be better served getting another job. Being a full-time trader isn't really very fun, especially for someone with a family to support. Too much stress and too much risk, or at least that's the way I see it.

And it's far from being the most interesting job on earth, too.

I disagree
They are 2 different worlds
Investing & modern portfolio strategy is based on the assumption that every piece of news is reflected in the value of the concerning assets.
Trading fills the gape between actual news and the value. They don't have a strategy so there is nothing to post on the internet. Instead of a stategy, they have access to every piece of instant information, a lot of fast computers and direct access to the marketfloor. They just have one goal, to be faster than the market

k9 wrote: And it's far from being the most interesting job on earth, too.

Being a trader is not interesting?

Trade by the chart must be fantastic.

Thomas Hoog wrote: I disagree
They are 2 different worlds
Investing & modern portfolio strategy is based on the assumption that every piece of news is reflected in the value of the concerning assets.
Trading fills the gape between actual news and the value. They don't have a strategy so there is nothing to post on the internet. Instead of a stategy, they have access to every piece of instant information, a lot of fast computers and direct access to the marketfloor. They just have one goal, to be faster than the market

By the chart is not with news or other info.

Only using technical analysis.


REGARDS!