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Rational Money
Приєднався 27 гру 2022
The Fundamental Problem With Stock Picking
This video explores the fundamental problem with stock-picking and the challenges faced by fund managers in beating benchmarks. It highlights the statistical reality that surpassing investing benchmarks is difficult, supported by data showing that only a small percentage of active fund managers manage to outperform their respective benchmarks.
The video delves into the concept of positive skewness, which explains the chronic underperformance of active managers. It emphasizes the unbalanced distribution of returns in equity benchmarks, where a few stocks contribute significantly to gains, leaving many managers trailing behind.
The research suggests that random stock selection often leads to underperformance. The essay discusses the implications of these findings for evaluating active funds and the rise of passive investing. It emphasizes the impact of skewness on stock selection, the poor performance of a majority of stocks, and the asymmetric nature of returns.
It concludes that the structure of the market stacks the odds against successful stock picking, making it a daunting task for fund managers. The video suggests that the average investor, without a finance degree, should consider a more balanced strategy by diversifying investments and including well-diversified index funds to capture overall market growth and reduce risk associated with picking individual stocks.
#stocks #stockpicking #benchmarks #mathematics #statistics #investing #coinflip #bankofamerica #fundmanager #experts #underperformance #passiveinvesting #distribution #equity #gains #empirical #PositiveSkew #MutualFunds #skewness #ClosetIndexing #marketSkewness #performance #averagevalue #valuestocks #optimal #stockmarket #treasurybills #Trend #funds #returns #investors #mutualfunds #exchangetradedfunds #stockpickers #sp500 #nvidia #gpus #AI #finance #WinningStocks #SkewedReturns #Fees #BalancedStrategy #IndexFund #Diversification #risk #highreturnstock #dataanalysis #money
The video delves into the concept of positive skewness, which explains the chronic underperformance of active managers. It emphasizes the unbalanced distribution of returns in equity benchmarks, where a few stocks contribute significantly to gains, leaving many managers trailing behind.
The research suggests that random stock selection often leads to underperformance. The essay discusses the implications of these findings for evaluating active funds and the rise of passive investing. It emphasizes the impact of skewness on stock selection, the poor performance of a majority of stocks, and the asymmetric nature of returns.
It concludes that the structure of the market stacks the odds against successful stock picking, making it a daunting task for fund managers. The video suggests that the average investor, without a finance degree, should consider a more balanced strategy by diversifying investments and including well-diversified index funds to capture overall market growth and reduce risk associated with picking individual stocks.
#stocks #stockpicking #benchmarks #mathematics #statistics #investing #coinflip #bankofamerica #fundmanager #experts #underperformance #passiveinvesting #distribution #equity #gains #empirical #PositiveSkew #MutualFunds #skewness #ClosetIndexing #marketSkewness #performance #averagevalue #valuestocks #optimal #stockmarket #treasurybills #Trend #funds #returns #investors #mutualfunds #exchangetradedfunds #stockpickers #sp500 #nvidia #gpus #AI #finance #WinningStocks #SkewedReturns #Fees #BalancedStrategy #IndexFund #Diversification #risk #highreturnstock #dataanalysis #money
Переглядів: 113
Відео
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Accelerating the payment of your student loans or your mortgage might not always be your best bet. Often, we're conditioned to think that eliminating debt as soon as possible is the surefire path to financial stability. However, life, much like finance, isn't always black and white. The truth is, there could be strategic advantages to maintaining certain types of debt, potentially enhancing you...
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Переглядів 80Рік тому
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The Story Of The WORLD'S RICHEST Country
Переглядів 1,1 тис.Рік тому
The Story Of The WORLD'S RICHEST Country
Jesus Christ our Lord is the example of how we are to live our lives. If he says we are to tithe 10% to the church then we ought to emulate that and set our taxation at 10% as well.
With canada were trying to combat that with immigrants. In some twisted way the social services increased budget makes the gdp higher. Makes the the country seem more productive but its the opposite. Its as corrupt as it gets
Just have to be smart WHEN you buy. Buy during corrections , buy after 27 Red days in a month … it’s all about entry point I haven’t lost yet 10 years experience
The last 10 years we're was above the usually market growth. The 2x s&p500 ETF had a 25% growth each years. But its more Like realistic 2% above the original index If you backtest the last 30 years.
Thw question is: Why is it biased? What is the bias based upon, who controls it, and who regulates it on upholding the law. AI regulations and programming should be waaaaay more transparent than it is right now.
The market is mostly up though.... Leveraged indexes typically best the market even if you account for expense ratios
There is actually optimal leverage based on expense ratio and volatility decay and for most stock market indices this sits between 2 and 3x leverage.
This didn’t age well
Los dos son malos a mí. Me agarraron la fuerza y me pusieron un chip y ya tiene más de un año. Yo me di cuenta personas personas falsas que no valen. La pena son escoria de personas. Vivo en Tijuana. Me llamo José Luis Alderete
Elon is right on literally everything he even has a good voice unlike sam🤢.
i don't trust people that do not speak with their normal voice... this guy doesn't speak with his normal voice
Team Elon,but gotta ignore "WOKE" & it WILL go away!!🥴!
Oh quit,YOU ACTUALLY gonna let laughable "WOKE" split tech apart. Your giving "Woke" power,shame on you. Get over it & both of you agree the REAL jerk is "WOKE" for crying out loud.!! 😮🫨🙄🥴!
I honestly said to myself "who laughing now" before the Who's laughing now clip😮
The author doesn’t know what he’s talking about. Yiu can buy and hold and rebalance yearly and you’ll kill it
Is this AI generated?
I love how Sam Altman doesn't respond to why he made openAI from open-source-non-profit to closed-source-for-profit.... and he thinks we just accept that? With the same IP - OPENai
I've seen a strategy where you look at the 200 moving average. If the s&p 500 is above that average it makes sence to buy such a leveraged etf because the time decay is a lot lower because the volatility is also a lot lower. What do you think about it?
If they're only short term - why is SSO and UPRO up so big since their inception? Please don't respond with a TQQQ comment, no interest in that ETF.
a little late but its because we are in a bull market so all leveraged etfs had more returns than non leveraged counterparts
No they are long term options when you buy in a bear market I’m still holding TQQQ from covid 8.50 entry point lol
Economy is a funny thing. It seemed like as more and more people practice a theory, it lashed back...
'PromoSM'
Well, Sam Altman is on the path of becoming *Most hated man*
Just because you like sucking on elons balls doesn't mean Sam is a hated man.
It costs nothing to also add a km^2 conversion
Sorry about that!
@@rationalmoney it’s all good, your content seems solid. Good luck!
do texas and france
Would be interesting!
This is underrated, keep it up!
Thanks, appreciate it!
Interesting. But the key distinction is always going to ve that Norway is a country and Cali is not. California doesn’t have a sovereign government, its part of a democratic system where it is effected by the federal government.
Good point!
I think the point is that california is as powerful as one of the better off countries
But whats their total gdp
Norway probably higher
@@cantskjaggalikethis if you believe that you probably don't live in california Norway is only 482 billion for less than a quarter Norwegians do better
@@cantskjaggalikethisCalifornia has 8 times Norway’s GDP btw
He literally shows Norway has more in the video
@@cantskjaggalikethis search what per capita means
Communist DemocRATS are doing their best to DESTROY California.. crippling taxes, high crime, idiotic regulations.. PEOPLE ARE LEAVING
Did the population go down?
Spend that tv money wisely, like maybe buy some land on Easter Island
Nope. The oceans are NOT rising. Stop with the climate hoax.
www.climate.gov/news-features/understanding-climate/climate-change-global-sea-level
@@rationalmoney of course! They are the problem! Would you share a source that tobacco is perfectly safe and there are no side effects if that source was from the tobacco industry? Do your research. And stop spreading lies <3
@@coachjoel9463 So you would rather believe that every statistic company, scientists and governments in the entire world from over 250 countries is plotting against you for no apparent gain to themselves? Sounds a bit paranoid dude
I’ve been hearing about Tuvalu going under water for the past 20 years. Paging Al Gore…
That might be because it takes time, haha..
Elon Musk isnt an engineer, he studied economics and physics..
You're referring to his formal education only.
Elon isn’t an engineer. He has no actual degree in engineering. He’s fake as shit.
Yes he does
How do i immigrate there?
Swim
Maybe you might want to not live on an island only 10 feet tall. I mean its common sense.
It’s more complicated than that Sherlock.
Not all people have the financial ability to just move whenever.
Sea levels are NOT rising.
They definitely are
I question this as well. Think about it Obama one of the biggest proponents of climate change bought a house on the beach or has several houses on the beach from what I understand. Why would he do that if sea levels are rising. He would lose his house. If anybody would know the president of the US would know how bad the problem is and how quickly it's going to put his house underwater. On top of that our climate change guru Al Gore who's been making the same complaints for years is constantly flying private jets all over the world. His contribution to pollution in the air is probably his greatest contribution. I think it's a big lie to shift money from one pocket to the other and even the solutions are no better than the problem look at solar panels and car batteries both of them require extensive mining often using child or slave labor and third world countries and the materials are extremely dangerous and toxic to the planet to dig out of the ground and it uses a lot of fossil fuel to dig them out of the ground and transport them to the manufacturing facilities and when they're finished they sit in the landfills because they're too expensive to recycle. We are literally just shifting what we're using to destroy the earth instead of gas burning cars or using electric cars now to destroy the Earth. So while I agree that planting more trees and cleaning up the water and getting rid of things like plastic and even fossil fuels eventually when we have a better solution is important. I think a lot of these climate alarmist just use this to control us more. They don't want us having the freedom to move around. My understanding is at davos where all the rich people get together and decide what they want to do with us little minions they are now saying that coffee is destroying the planet and that we are no longer allowed to drink coffee or they want to stop our ability to drink coffee. They want us to not be allowed to eat meat they don't want us to drive cars anymore or at least cars that can drive and all conditions in our easy to recharge.
U are a non profit. So basically u work on donations
The person who is too fear about losing money ever seen.
They work 70 hrs a week and many are suicidal from life there. They are not thriving
Debt only stems from tax and interest. And tax is just theoretical liability on paper.
Depends who the interest is owed to
You forgot one thing.. singapore is small island & population only 5 million. All development, facilities, buildings etc already there. So, annually nation income ‘don’t know’ where to channel to..
Wrong flag
Who owns all the banks
Bro im sorry but that map is not right, its tilted 90° and the countries are all mixed up...
The map seen in second 33
Wow it’s almost like immigrants aren’t a bad thing
You're on to something!
Well european immigrants aren't bad
settle down. It’s a country of less than 1 million. It wouldn’t even be considered a large city in most countries.
No crap. It is a fiscal paradise
No taxes haha
You don’t understand money Boy Robert is one of the smartest people on planet earth. You are a joke
Yeah your true that’s why he is billionaire in debt in you still broke 😂😂😂😂
In all fairness I didn’t know how I was going to generate any income for myself either back in 2018
U more dumb and poor than him, u even dont know macro economic works
Well stock market doesn't have value over time stcks can fail or if you are in a pandemic or in Ukraine then your stocks will be inexistent but you don't see what type of person he is he doesn't like the risk
Yeah but he had a lot of fun in those years
Haha, no doubt!