Ask me anything about finance/investing - Page 6

cool thread Sicks macks, gonna read thorugh it all a cpl more times in detail later...


I have a couple different questions.

1) A good friend of mine keeps telling me to invest in gold / silver (like literally go buy amts of gold/silver and keep them at home), is this a good or bad idea?

2) I'm going back to school in the Fall and plan on studying Finance.. the reason being someday i'd like to work in some type of trading or hedge fund, but I literally have no clue where to start, and have taken the last year off school. Is Finance even the right degree? Who should I talk too, and what are some tips you can give to someone as clueless as me who is interested in learning about your trade?

ty.

On January 07 2010 15:29 brandlor wrote: Ok, read the thread and your right, answered lots of useful questions. Since I don't come from an Ivey league school although I come from one of the top Canadian business schools I will have to take the long way around. i currently work for the Canadian devisions of one the world largest banks so I can work my way up that way. Like you said eirlier I can go through IB to get to PE or HF and such. What do you find is the usual age and exp level of these people? Should I be looking 3-5 years to climb the latter ( i guess it depends how high were talking) or 10+? Or is it more of a 'Depends how smart you are and who you impress' answer? (Sorry for any spelling mistakes. Our browsers are glichy and IT is trying to fix it)

Generally people jump from investment banking at the natural breaking points. So at the end of their analyst run (3yrs I think?), or their associate run (I forget how long the typical associate is in for). As for how long it takes to climb the ladder, I don't really. It's really situational. If you come into an IB analyst program on most good desks you can do whatever you want in finance so long as you don't get fired. If you're on a less prominent desk, or in a middle or back-office role your career mobility is going to be dependent on you, and your firm's culture. Again, if you think you can handle a tougher role, make it known and work hard. People really tend to like vouching for impressive people.

Have you read American Psycho (or seen the movie)?

If you have, could rate 1 - 10 (1 being lowest and 10 being highest) to what degree your and your co-workers lifes resemble those of the characters of the book? I don't mean the murdering, but the COCAINE and the BITCHES along with general nihilism.

EDIT: most importantly do you ever compare business cards with your friends?

Thanks Sicks, much appreciated!

Lots of great info.

On January 07 2010 15:44 BigRed0000 wrote: 1) A good friend of mine keeps telling me to invest in gold / silver (like literally go buy amts of gold/silver and keep them at home), is this a good or bad idea?

It's an idea. Precious metals like these are thought to hold their absolute value throughout history and act as a natural inflation hedge. That said, they certainly don't always hold their dollar value, so if inflation is less than expected they will be disastrous investments. It's essentially an inflation bet in a pretty speculative market. I prefer investing in productive assets, so I personally hold no gold/silver ever. If you're worried inflation expectations are too low but want something less speculative, try a TIPS (Treasury Inflation Protected Securities) fund or something like that. That said if you are convinced that people are underestimating inflation in the coming years, gold and silver will be very profitable.

As for buying them and holding them at your home, this seems silly. You'll be risking theft, and likely paying a premium for the metal itself at retail. People who advocate this generally distrust the financial system as a whole; I personally use the WAFA theory. As in, if your exposure to gold through a gold fund at a prominent mutual fund company becomes worthless We're All Fucked Anyways, so don't worry about keeping any at home. The WAFA theory also describes why treasury securities are thought of as risk free.

Cliffs: Gold and silver are very speculative, when buying them understand that you are taking an active bet against current inflation expectations. Buy it through a fund if you do.

On January 07 2010 15:44 BigRed0000 wrote: 2) I'm going back to school in the Fall and plan on studying Finance.. the reason being someday i'd like to work in some type of trading or hedge fund, but I literally have no clue where to start, and have taken the last year off school. Is Finance even the right degree? Who should I talk too, and what are some tips you can give to someone as clueless as me who is interested in learning about your trade?

Well, actually most of the traders I know got their jobs by being on a prominent varsity sports team at Ivy League schools. Assuming you aren't doing that too:

Finance is probably the best major choice, but it isn't the only one. As long as you understand accounting, you can take pretty much anything. You need to try and build up and use your professional network or lean on your school's career center to get an internship. Make sure to join your school's investment club. Run a model portfolio (www.marketocracy.com is great for this). If you post again and mention some things you like or ways you like to approach problems I can suggest roles you might want to look at.

sick macks, have you ever heard of peter schiff?
do you think hes wrong about the US economy if so?
sorry for being so hostile before, i'll try to be reasonable

BigRed, i found that my econ classes were more useful to my investment knowlage that my fiance classes. I found that my finance was more focuses on working in daily banking. Lines of credit and loans more then investing.

I also took capital market courses that were very useful.

On January 07 2010 15:54 auffenpuffer wrote: Have you read American Psycho (or seen the movie)? If you have, could rate 1 - 10 (1 being lowest and 10 being highest) to what degree your and your co-workers lifes resemble those of the characters of the book? I don't mean the murdering, but the COCAINE and the BITCHES along with general nihilism.

American Psycho is pretty much my favorite movie (my next 5 are probably Pixar movies though, I'm a weird one).

Me and my friends are probably like a 7, I know some 10s, but I also know a lot of 2s in the business (finance is a lot less nepotistic than it was, so you get some really diligent teetotalers). You have to understand everyone has seen that and Wall Street, and so we'd all like to think we're in on the joke when we're being ridiculous. Furthermore, I live in Boston, I imagine if I was in NY I would score higher, just because the scene is much more intense there. Whereas they go out to Avenue or whatever on Saturday, we go skiing or hang out at the lake.

That said:
I do wear a tie to go out a decent amount
My friends and I grab $40 steaks for drunk munchies at midnight a good bit
8 of us are probably going to rent a 16k-a-week estate this year during the summer (nantucket will be a problem for a week)
All of my friends do at least pretty well for themselves with girls

But:
People do some coke, not tons, I don't do any
We don't go clubbing ever
In certain cities (READ: WASHINGTON DC), working at hedge fund is not a good thing with the womens
People are flashy with clothes, but not as openly with large status symbols like apartments and cars (this is a Boston thing I think)

On January 07 2010 16:07 woodbrave1 wrote: sick macks, have you ever heard of peter schiff? do you think hes wrong about the US economy if so? sorry for being so hostile before, i'll try to be reasonable

I have heard of him, but I really don't watch cable news. What he's saying about housing seems reasonable judging from the video you posted. I think he's ignoring price stickiness in explaining what's going on with pricing, and I don't understand why he's saying American's haven't started saving (they have recently afaik). In totality, I think what he describes about the US economy is a real threat (though not to the degree he describes), but not a certainty. That said, I'm really not a macro guy (and I cover Europe) so this is just an opinion.

ya see this is why i dont trust people who use big words and sound smart cause they retarded many times

if there was one resourse (or two) where someone could learn the "basics" of investing what would it be ? I understand that the best resource is probably someone who's working in a field and can sit down with you, but I mean a book, a website, etc.

Just watched Collapse let me know if you've seen it and what you think about it

This thread is crazy sick thanks

On January 09 2010 12:44 MaxUT wrote: if there was one resourse (or two) where someone could learn the "basics" of investing what would it be ? I understand that the best resource is probably someone who's working in a field and can sit down with you, but I mean a book, a website, etc. Just watched Collapse let me know if you've seen it and what you think about it This thread is crazy sick thanks

haven't seen collapse. I don't honestly know how you'd go about learning the basics of investing. I learned the basics from my my father, the logistics in school, and then I developed my own style by being around hundreds of smart investors in the workplace and piecing together what I thought worked. I asked a friend who also works in the field what he thought, and he recommended the book "One Up on Wall Street" by Peter Lynch (the famous Fidelity PM). He, too, though said there's probably something more well-rounded out there.

I think something like a corporate finance textbook (I used Fundamentals of Financial Management) might be best. Reading financial forums (don't use any so I don't know, maybe marketocracy.com) with an incredibly skeptical eye might help too. Just remember to pick apart everyone's arguments on why x is a good investment, in finding out why the 95% of investing advice is bullshit you discover a lot about how to come up with the 5% on your own.

boom

Sicks Macks, what do you think of Timothy Sykes?

*bump

sicks macks, what do you think of these guys? you think it is also a viable option to trade with your own account rather than giving your money to someone else?

here are some interviews from ttt.

http://thetechnicaltrader.net/?p=1932

http://thetechnicaltrader.net/?p=2197

http://thetechnicaltrader.net/?p=1989

http://thetechnicaltrader.net/?p=1972

http://thetechnicaltrader.net/?p=1912

i really think trading = poker in some aspects.

I hate to disappoint, but I really don't follow financial commentators that much. As I mentioned before I believe technical analysis is largely bunk.

In the book "the little book that beats the market", the author Joel Greenblatt pretends to have some mathematical formula that identifies undervalued stocks. He calls it the Magic formula (www.magicformulainvesting.com) and (http://www.formulainvesting.com). He has a website that shows what stocks are undervalued according to his formula.

He claims that his formula would have generated ~33%* growth on your dollar per year for the last ~30* years, where the stock market has shown a groth of ~12%* per year during the same period, on average. That was before the recent market crash.

After reading books like "formula investing", i don't believe beating the market is that easy. Or maybe it is? Tell me what you think about this book, if you haven't read it, do you think it's BS?


* I dont remember the exact numbers, but its very close.

PS. What you're doing is great.

On January 18 2010 13:28 GiYoM wrote: After reading books like "formula investing", i don't believe beating the market is that easy. Or maybe it is? Tell me what you think about this book, if you haven't read it, do you think it's BS?

I don't know the book, but I'm inclined to be very cynical. Asset managers that have repeatable processes that produce half of that excess return are handsomely paid to keep it quiet by their employers or investors. If he's selling it on the web or in a book it's probably not really repeatable... which isn't to say he didn't achieve those returns, but it's likely he tried a number of different strategies and picked the one that kept winning flips so to speak. Remember, investing has many orders of magnitude more variance about the mean (which is positive) relative to poker, so in a sample of tens of millions of people who don't know what the fuck they're doing, some will experience outlandish success due to nothing but luck.

On January 18 2010 13:28 GiYoM wrote: PS. What you're doing is great.

thanks

EDIT: a quick perusal of the site reveals that the guy seems reasonable. Using fundamental factor-based screening (what he's all about) is a great first step in finding good stocks to buy, but "successful screen based" strategies are too easily datamined, which, given the limitless number of fundamental factors, reveals false correlations.

If its not too much to ask :
How much $ u make @ year clean after taxes & etc only at your real job ? If you dont feel like answering specific maybe say if its under or over 100k ? I d understand if you dont want to answer at all

On January 18 2010 15:15 Spitfiree wrote: If its not too much to ask : How much $ u make @ year clean after taxes & etc only at your real job ? If you dont feel like answering specific maybe say if its under or over 100k ? I d understand if you dont want to answer at all

after taxes under 100k this year, likely over next year. I live in Massachusetts in the USA, my effective marginal tax rate is over 40%