Comments on: NYU: Market Timing Bests Buy & Hold

By: Weekly Recap & Outlook - 11.13.09 « Obvious Insights

Weekly Recap & Outlook - 11.13.09 « Obvious Insights — Fri, 13 Nov 2009 22:09:01 +0000

[...] Barry Ritholz’s The Big Picture: NYU: Market Timing Bests Buy & Hold. He goes on to point out that it’s likely the managers who bested buy and hold were using [...]

By: Investing by the seat of their pants | Financial engineering resource center

Fri, 13 Nov 2009 11:06:18 +0000

[...] as to the benefits (or not) of a buy-and-hold investment methodology. Barry Ritholtz at the Big Picture highlights some recent research showing that some portfolio managers are able to exploit [...]

By: Can You Find “Superior Information” About Markets? | The Big Picture

Thu, 12 Nov 2009 14:17:04 +0000

[...] Yesterday, we discussed the NYU paper on how Market Timing beat Buy & Hold over the past few decades. [...]

By: Mark E Hoffer

Mark E Hoffer — Thu, 12 Nov 2009 00:28:13 +0000

DiggidyDude,

do you mean, like this: “…Market Dilution via Endemic Corruption and Fraud
Definition: Dilution: A thinned or weakened state.

It seems like Matt Taibi’s recent article in the Rolling Stone has reminded everyone that we still have a problem with ‘naked shorting’ with the SEC being the biggest joke in town. Jim Puplava did a great Crime of the Century series of interviews last year with the likes of Bud Burrell and Patrick Byrne.

I would advise anyone who missed them to give them a listen to get just an inkling of the systemic corruption that pervades the markets. Bud Burrell, a very sharp guy, believes there is one naked counterfeit share for every legitimate share in the US markets. You may want to read that last sentence again. Scary indeed! Even with all the will in the world, the SEC would be farting in the wind against such endemic larceny.

Markopolos summed up the financial mafia succinctly enough during the Madoff Testimony:

“Government has coddled, accepted, and ignored white collar crime for too long. It is time the nation woke up and realized that it’s not the armed robbers or drug dealers who cause the most economic harm, it’s the white collar criminals living in the most expensive homes who have the most impressive resumes who harm us the most. They steal our pensions, bankrupt our companies, and destroy thousands of jobs, ruining countless lives.” Harry Markopolos in Congressional Testimony …”
http://www.financialsense.com/fsu/editorials/2009/1103.html

By: DiggidyDan

DiggidyDan — Wed, 11 Nov 2009 23:53:25 +0000

I doubt it would give them a heart attack, when you consider that most firms make big bucks from transaction fees. Convincing the majority to try and time the market would probably make them a lot of money from just moving it around all the time. (and probably make the majority a lot poorer) The heart attack would be if everyone just decided the market is a sham in general and stuck their dollars in the mattress or tips or cds, etc.

By: Buy & Hold God Jeremy Siegel is Proverbially Dead | Wall St. Cheat Sheet

Wed, 11 Nov 2009 23:01:49 +0000

[...] Ritholtz over at my favorite blog The Big Picture picked up on an interesting study by NYU: [F]und managers who invest based on macroeconomic trends [...]

By: DeDude

DeDude — Wed, 11 Nov 2009 21:30:08 +0000

The stock marked of the past 3 decades is a ponzi scheme that would make Madoff blush. The CEO and Banksters, stuff the boards with friends that will look the other way (as long as they are in on the scam). Then the companies borrow cheep money from their friends (who gets it directly or indirectly from the fed). That money is then used to buy back stocks so it looks to the investors like the company is a success. Investors then buy stocks in these ever growing success story companies, and the insiders can harvest huge bonuses and stock options. Just like the credit fulled GDP growth of the last decade, it all works great as long as credit is flowing freely. Did I hear somewhere that corporations are having a hard time getting credit, uh-ohhhh.

By: Investing by the seat of their pants Abnormal Returns

Investing by the seat of their pants Abnormal Returns — Wed, 11 Nov 2009 20:12:00 +0000

By: Mark E Hoffer

Mark E Hoffer — Wed, 11 Nov 2009 19:36:11 +0000

MorticiaA,

it’s a good point re: Morningstar..for all the hue & cry during ‘The Financial Crises’, NRSRO ‘Ratings Agencies’ are spoken of, but not Morningstar..

BR,

Sounds like a good time to offer a vehicle, to People, so they can ‘buy’m by the box’..

i.e. FusionIQ powered Mutual Fund/ Investment Trust
~~~
“…but over the past 20 years you would have been far better off investing in the provider than the service. Over the last decade, for instance, T Rowe Price (TROW) the stock has returned an average of 12% per year as of 1/31/08. The Vanguard 500 Index fund (VFINX), by contrast, has returned barely 4% per year over that time period, and it was in the top half of all large-cap stock mutual funds. The T Rowe Price example isn’t an anomaly, however. Over the decade ending December 31, 2006, the returns of the largest and most established mutual fund companies have routinely beaten the returns of their fund offerings by a factor of 2 or even 3…”
http://amateurassetallocator.com/2008/03/18/mutual-fund-companies-make-better-investments-than-the-funds-they-manage/

By: MorticiaA

MorticiaA — Wed, 11 Nov 2009 17:50:49 +0000

I’ve downloaded the research paper b/c I’m extremely interested in the findings. However, as I expected, the researchers don’t name names in who the top 25% were in their research. Darn those academicians.

As for Morningstar — that’s precisely the response I would expect from them. I appreciate MS for it’s data-compiling abilities, but as for analysis… I’ve begun to consider them the George Costanza’s of investments: do the opposite of what Morningstar says and I’ll come out ahead.