The one guy was Greek and owned a restaurant with his brother since I was a kid. Even back then he had a 60 Lincoln sitting in the driveway that he wanted my dad to drive to work because it didnt get driven enough. The other guy started a construction business in his garage and grew it into a giant multi-city commercial firm. He didn’t know me but I knew him. Gave the high school 50k for a new gym facility etc. good guy but as usual, his son and hier is a mess. Another one owned convenience stores before they were called convenience stores. All dead now. Good business men that offered good value, never cheated anyone, and just worked hard.
Normally people don’t talk much sitting at a machine but I was sitting right next to the contractor and he didn’t know me. The old man on the other side of him asked him what he did for a living e just said he was in construction. I thought to myself, you idiot, he has a multi mullion dollar construction business with probably 200 trucks and pieces of machinery, different color depending on the city division. Didn’t care if he won or lost. Stereotyping is bad.
Yeah, I’m very lucky to come to the station exactly when there are many such drivers there. I can understand everything, but when I hurry it annoys me.
That’s why you diversify and invest in long-term. Find a good investment strategist. I have a very good math background and I won’t do it myself. It’s not just the math, but the laws that change you have to keep up with. That’s where a good investment strategist comes in.
Re: “Good Investment Strategist”. The historical record says that passive index funds outperform actively managed funds. Good luck in finding a strategist.
The biggest change between the past and today is the loss of company pensions. The pension administrators were not so wonderful at controlling a company’s liability. Now, the person who is $$$ responsible is the employee. How will that play out over the next 50 years?
And, the biggest change coming in the future is global warming. How serious do the problems have to be before the world begins to cope with this issue? How is the market going to handle that? Thus, I say, past performance is not guaranteed.
Passive vs active management returns depends on what time frame you look at. For several decades passive management has done best. Now and for the foreseeable future my manager thinks that a little diversification into actively managed funds can increase annual returns over time. BTW, my manger works at Vanguard, the kings of passive management. They are willing to alter their strategy based on their market assessment.
The manager at a tech firm where I worked years ago said he made an incentive deal with his investment expert. No commissions, no fees or anything else. As I recall the investment guy kept 25% of the upside return, and reimbursed 50% of the downside. So if a stock gained $10,000 over the course of a year, the manager kept 7500, and the investment expert kept 2500. If it lost $10,000 the manager lost $5,000, and the investment expert reimbursed the manager $5,000. I wonder if any investment experts these days are confident enough of their abilities to offer something like that?
That deal is heavily in favor of the “expert”. All he has to do is put the money into a very, very stable product (like a CD) and he will collect 25% of the interest year after year. The outcome is that the investor must now “manage” the “expert” day after day, to ensure that enough risk is being taken. When the “expert” cuts the risk in half, the investor should be making the highest risk investments.
I note that in these days of auto-pilot cars, artificial intelligence has entered the financial world with Robo-Advisors. I expect they also are in early enough stages that they crash and burn also.
I’m certainly not an expert. Most is in index funds where there is trading, and some not that I always get capital gains whether they make money or not. I’ve just learned over the years to not panic and ride it out. I always wonder though if people are so good, why are they still working? Guy with the cabin next to ours was a day trader. Big article in the paper. When things went south never heard much from but sold the cabin.
It’s hard to predict what will happen in a couple years so I just try to keep my powder dry. It’s reported that 60% of people are living paycheck to paycheck, and credit card balances at high levels. Inflation and prices high and main sectors in a struggle. Toro reported a 17% decline in their residential product lines so consumers are holding tight. So can the healthy 40% carry the day, or will they? Crystal ball says ask again. Paid $3.99 for regular yesterday which was a 40 cent increase in one day. Got mid grade in the other car and that was still $3.79 but I’m sure that’ll jump with the next shipment. Oh yeah, employment figures were adjusted down again after they changed calculator batteries, so you can’t really rely on figures coming out of the fed.
The BLS is not a political entity. If the political appointees that run the Department of Labor tried to cook the books, we would know about it. There are plenty of responsible apolitical organizations that would find out and blow the horns. This would happen no matter which party is in power.
Not counting the Army, my working career has expended almost 5 decades…and I’ve only worked for one company that had a pension.
A good strategist isn’t trying to beat the stock market…they are putting your money in investments that’s right for you. 6 months before the market took a tumble about 5 years ago…our investment company sent out a letter that they were moving all money out of the market and into bonds because they were seeing things in the market that in decades of research have never seen before. It saved us tens of thousands from our IRA’s. Good luck doing that yourself.
You could consider Berkshire Hathaway to be–more or less–like a Mutual Fund, due to its holdings of many blue-chip stocks–in addition to the number of large companies that it owns outright. Over the decades, Warren Buffett and his associates have managed to beat the market in most years.
It IS a mutual fund. It is a closed fund, meaning that the number of shares if fixed so the value of the shares are loosely linked to the value of the portfolio. I say loosely because the shares are bought and sold just like stock so if the fund is doing good, investors are willing to pay more than the market value of the portfolio. If it doesn’t do well, the the value of the shares could go below the value of the portfolio. Supply and demand.
Most mutual funds are open funds, meaning that the fund managers can print as many shares as they want to, but the money collected has to be invested into the portfolio. Generally, these funds are very closely valued to the value of the portfolio. If the value of the portfolio goes up, so does the value of the shares in the fund. If the market drops, so does the value of the fund shares.
It functions more or less like a mutual fund, but it is actually a large-cap stock holding.
My only complaint about BH is that they don’t pay a dividend, but I expect that to change because the number of high-quality companies that they can buy at this point is much more limited than it was in the past.
Good point.
I have held my BH stock for more than 25 years, and its performance in recent years hasn’t always beaten the market average, but when I compare my cost basis with the current value, I see a gain of ~500%, so I am very much satisfied with its performance.