Read? Are You A Snake Oil?
Snake oil in investing world???
11. "No book is ever gonna tell you what to do successfully as an investor."
12. "There's so much storytelling, narrative, even snake oil being sold in the name of this dogma of diversification. It's just making people poorer and not even providing very much risk mitigation."
Want to know more on what are sold as snake oil?
Google "Snake oil masterclass" - see yourself! LOL!
Posts
CW,
ReplyDeleteLOL!
1) Snake oils can easily turn lemons into lemonade:
Precisely! No book is gonna tell you how to be a successful investor... That's why you need to attend my Masterclass!!!
I'll reveal to you in person with direct tender loving face time, hold your hand, and even give you a hug! You are loved and accepted here. Don't be afraid. My little bei kambing...
Not only that, after the course, you have access to the whole community of my past students. Look! You are no longer alone and lonely... WE ARE LEGION.
2) Yes, quite a few in our community have a rather superficial understanding of diversification... Thinking they own 100 stocks they are "diversified".
Or telling themselves when they own our STI ETF, its "diversified" when its just 3 banks and a telco ;)
3) I like his other quote about risk mitigation and the goal of investing - raise our rate of compounding.
Which is another way of saying Earn More.
Without your 10 baggers to dilute out your zero baggers, you can take all the Panadols you want, you'll still be waiting to breakeven one day....
Simple math. If we doubled our portfolio, and the market crash -50% the next year, we still haven't lost money. Got Panadols we still can say we made money!
But if we increased our portfolio by only 4%... How to mitigate against a -50% drawdown???
Just lie to yourself just as long got Panadol, its OK?
Look Daddy! I didn't inhale!
:)
ReplyDeleteThis type of tail risk funds or strategies can generate hundreds or thousands of % when markets crash 20+%.
But during normal times, it will bleed -2% or -3% each year. And for US markets, that's 75% of the time.
It's designed to take up 4% or 7% of your overall portfolio. And not take centrestage or be the focus of your investing.
Permabears hate anything that keeps the market going up big, as that bleeds their strategies & prevents their big payoff. So you gotta understand where he's coming from. ;)
Not to say that there won't be a meaningful correction on the horizon.
But this guy was telling his clients back in Apr 2020 that a much much bigger crash was coming soon & that the initial uptrend was basically a dead cat bounce.
People who took his words wholeheartedly and went all to cash missed out on the Fed-induced rally, instead of using what tail risk funds are really meant for: less than 10% of your portfolio & focusing your other 90% for "earn more".
Spur,
DeleteYup, when I saw the "Black Swan" moniker, its Nassim Taleb kind of hedge.
That's how long only investors can hedge their portfolios despite being 100% vested ;)
Crazy right?
Those brave investors who went all in into the US indexes during the March 2020 lows have doubled their investments!
How cool to have a built-in -50% drawdown mitigating shield!
Smol,
DeleteRetails can insure their portfolio without having to be HNWI or paying expensive fund fees.
Just spend 2% of your portfolio to buy out-of-the-money longer dated put options on QQQ or SPY.
Spur,
DeleteYes, that's provided retail is willing to be active and learn the Greeks for options.
As for STI only Pandas, have to learn CFDs or futures for hedging...
After getting confused, no wonder snake oils will tout Buy-and-Hold to ease their fears...
No need to hedge one... Stocks only go up!
Panda/Koala's way of hedging in Singapore after 55 yrs old is to max up your Medisave account (most habitual CPF savers should be max at 55) and then top up your medisave as hedge into your OA and use the hedge to buy when market corrected.
ReplyDelete