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Need advice: Investing your bankroll
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18-07-2007 8:18pm#1
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Willis take some time and learn about this area from scratch, it will be interesting and probably rewarding. As mentioned the askaboutmoney forum is top notch, and their basic guide for noobs should be read:
http://www.askaboutmoney.com/guide/index.htm
You are right in your instinct not to trust any bank people, but the same goes for fund managers and the like. Also coming from a poker perspective you will laugh at investment professionals when it comes to shares because they are so full of crap, it's random and they haven't a clue without inside knowledge 99% of the time.
But shares might be interesting for a poker guy, although 2 years is a very short period and 17k is very small, although I don't agree with redjoker that you would be killed by commission unless you are buying and selling like an idiot.
If learning this isn't interesting to you, and leaving 17k in Neteller for a year indicates that may be ture
then you could just go do something like Quinnlife's freeways funds which are cheap to do. 0 -
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El Stuntman wrote:When you're in a situation like this, the only way your currency can go is down.
I expect 1.50 within 12 months
i guess someone should tell ipoker to change over to yoyos, esp. since they've no american players.0 -
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phantom_lord wrote:
i guess someone should tell ipoker to change over to yoyos, esp. since they've no american players.
On most skins if not all you can choose euro as your base currency so if the $ goes to 1.50 your BR is still worth the same in euro but more in $.0 -
Actually Sikes I haven't read Fooled by Randomness, but I am interested in the area of predictability generally, and especially as it applies to any form of gambling (which I include investing generally). You know that even coinflipping isn't 50-50. There is a bias of 1% in the way people flip coins for it to land on the same side it was flipped. So given enough bets at that you could become rich through coin flipping. Coin spinning is far more predictable, depending on the coin. American coins with more weight on the head side have an 80% bias to fall onto heads.
Now the stock market is obviously a more complex phenomenon, and I don't pretend to be an expert in this area, but I take the same empirical view of it that I would with any area studied in science and pay attention to the studies done.
For those professionals who track long term market "trends" in order to inform future outcomes, apart from it being atheroetical and ignorent of the problem of induction, it is also demonstrably an unsucessful method of predicting future prices. This is what the research shows. It reminds me of the time I saw a women in the Sporting Emporiumm at the roulette wheel studiously writing down every number that came up, obviously a victim of the gambler's fallacy. Her trend spotting is pretty analagous to that of such investment professionals.
I'm not gonna get into the various market behaviour theories, just to say that the best evidence from a research point of view suggests that the random walk hypothesis is the best current theory that fits the data. Very simply it says that in an efficient market (meaning prices reflect all known information) prices changes are independent of one another (just cause it went up this week says nothing about what it will do next week). It asserts that people value a share similarly based on all the known information about the share and the market, and that its price fluctuates randomly around that value.
The only good information in this day and age to have in order to better assess the value of a share than other people is inside information, nothing your investment professional knows will better enable him to predict a share price than a random monkey, and the monkey will not charge you for the privalege of his wonderful insight and understanding.
You have to realise the world of professional investment is not based on academic understanding, it is not an endeavour based on scientific research, it almost proceeds in spite of it. Most investment professionals are just glorified sales people for the company they are employed by. They earn commissions doing nothing for you that would outperform a farmer doing the same thing for you. We in the world of poker know what our edge is and we realise that edge usually in our long term. Fund managers and the like perform randomly when controlled for market shifts as a whole. They have no edge, but they pretend to, and it annoys me because they are respected erroneously.
When the best advice an investment professional can give you is to create a diverse portfolio, it's another way of saying it's all random governer, I haven't a notion what shares will outperfom the market. Any other advice is just speculation by risk loving gamblers that we prey on at the poker table, "this mining company *may* strike gold you know!"
Redjoker praised hedge fund managers. For those who don't know what it is, the best example is analgous to sports arbitrage. And like sports arbitrage the profitability of hedge funds has decresed in the past couple of years, and for the exact same reasons. Although the precise real long term profitabilty of hedge funds is very debatable and information scarce, we can at least agree that hedge fund managers in general *might* be doing something more useful for their clients, though in the best cases it's probably due to being dodgy
I'm not going to go digging for research references I'm afraid, but it's not difficult to find. Here's the link to the Warren Buffet slecture and Q&A I was watching:
http://video.google.com/videoplay?docid=-6231308980849895261&q=warren+buffet&total=326&start=0&num=10&so=0&type=search&plindex=0
As for the well thing Sikes, I respect people who do it, but it's not my kind of thing, I quite dislike talking about myself.0 -
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good feckin post manhotspur wrote:Actually Sikes I haven't read Fooled by Randomness, but I am interested in the area of predictability generally, and especially as it applies to any form of gambling (which I include investing generally). You know that even coinflipping isn't 50-50. There is a bias of 1% in the way people flip coins for it to land on the same side it was flipped. So given enough bets at that you could become rich through coin flipping. Coin spinning is far more predictable, depending on the coin. American coins with more weight on the head side have an 80% bias to fall onto heads.
Now the stock market is obviously a more complex phenomenon, and I don't pretend to be an expert in this area, but I take the same empirical view of it that I would with any area studied in science and pay attention to the studies done.
For those professionals who track long term market "trends" in order to inform future outcomes, apart from it being atheroetical and ignorent of the problem of induction, it is also demonstrably an unsucessful method of predicting future prices. This is what the research shows. It reminds me of the time I saw a women in the Sporting Emporiumm at the roulette wheel studiously writing down every number that came up, obviously a victim of the gambler's fallacy. Her trend spotting is pretty analagous to that of such investment professionals.
I'm not gonna get into the various market behaviour theories, just to say that the best evidence from a research point of view suggests that the random walk hypothesis is the best current theory that fits the data. Very simply it says that in an efficient market (meaning prices reflect all known information) prices changes are independent of one another (just cause it went up this week says nothing about what it will do next week). It asserts that people value a share similarly based on all the known information about the share and the market, and that its price fluctuates randomly around that value.
The only good information in this day and age to have in order to better assess the value of a share than other people is inside information, nothing your investment professional knows will better enable him to predict a share price than a random monkey, and the monkey will not charge you for the privalege of his wonderful insight and understanding.
You have to realise the world of professional investment is not based on academic understanding, it is not an endeavour based on scientific research, it almost proceeds in spite of it. Most investment professionals are just glorified sales people for the company they are employed by. They earn commissions doing nothing for you that would outperform a farmer doing the same thing for you. We in the world of poker know what our edge is and we realise that edge usually in our long term. Fund managers and the like perform randomly when controlled for market shifts as a whole. They have no edge, but they pretend to, and it annoys me because they are respected erroneously.
When the best advice an investment professional can give you is to create a diverse portfolio, it's another way of saying it's all random governer, I haven't a notion what shares will outperfom the market. Any other advice is just speculation by risk loving gamblers that we prey on at the poker table, "this mining company *may* strike gold you know!"
Redjoker praised hedge fund managers. For those who don't know what it is, the best example is analgous to sports arbitrage. And like sports arbitrage the profitability of hedge funds has decresed in the past couple of years, and for the exact same reasons. Although the precise real long term profitabilty of hedge funds is very debatable and information scarce, we can at least agree that hedge fund managers in general *might* be doing something more useful for their clients, though in the best cases it's probably due to being dodgy
I'm not going to go digging for research references I'm afraid, but it's not difficult to find. Here's the link to the Warren Buffet slecture and Q&A I was watching:
http://video.google.com/videoplay?docid=-6231308980849895261&q=warren+buffet&total=326&start=0&num=10&so=0&type=search&plindex=0
As for the well thing Sikes, I respect people who do it, but it's not my kind of thing, I quite dislike talking about myself.0 -
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hotspur wrote:Actually Sikes I.....
though the precise real long term profitabilty of hedge funds is very debatable and information scarce, we can at least agree that hedge fund managers in general *might* be doing something more useful for their clients, though in the best cases it's probably due to being dodgy
Some interesting stuff in this post.
Hedge funds are often quoted as having brilliant returns, as are indices of hedge funds. The rreason for this is that these indices do not include hedge funds which have failed, as their weighting has gone to zero! For anyone interested in this area try reading "The rise and fall of long term capital management" by Roger Lowenstein0
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