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Non-value investing is also more subject to timing.
That's all it is.
It is also very paradoxical to run after independence without being able to devote enough resources to do so...
This is the nature of the Rat Race. It locks you in a universe (Plato's cave), from which it is extremely difficult to escape. Consumption and work eat up all your energy, your time, your resources. It reminds me of The Matrix. We are like locked in a kind of virtual prison that uses us like raw material. The only way out is to disconnect, literally and figuratively. You have to cut the marketing cord, turn off the solicitations of work, stop being a sheep, in short, take a step back. A huge step back. Difficult to do when the entire world is conditioned in this way. But not impossible. And the more you succeed, the easier it becomes.
You also mention that these works are dated, but it's in old pots that we make the best soups, right?
Not me who will say the opposite!
I come from the canton which has more cows than inhabitants (there is a very good article if you don't know it yet on the region)
I don't know Fribourg very well, but I know the people of Fribourg a bit more, with whom I had the opportunity to drink a fair bit during my ER.
Hello Xavier,
It's normal, you can't find everything with FT. It's still a free screener. On the other hand, the values I gave for the screener in my tutorial are not to be copied and pasted ad vitam eternam in a fixed way. You have to have fun, juggle with it, do tests. It's a good starting point, but it's not the universal truth forever. You have to experiment, search.
I came across Otec via the Quant Investing screener (paid). But you don't have to go through a paid screener, especially when you're starting out and have a portfolio to build from A to Z. FT's should be enough for you. Afterwards, when you have many stocks and you can't find anything on FT (which means the market is still high), then you can have fun testing paid screeners. And the good news is that if the market crashes, FT will be more than enough for you, because you'll be able to pick up the nuggets by the shovelful, as was the case in 2009 and the years just after.
And as you say, Amazon has not appeared…! 🙂 So you can't be wrong, unlike the great mass in madness!
If it's just the language of the financial statements that's causing you problems, I'd just like to point out that Yahoo is also available in French, for example for Otec:
https://fr.finance.yahoo.com/quote/1736.T/financials?p=1736.T
Personally, I have always been accustomed since the early days of the Internet to reading reports in English and I am almost more comfortable with it than in French. I have the impression that French is less serious or less evocative. Who knows why.
Afterwards, it can be English or French, the important thing is to understand what is behind it. And that is probably why you talk about a "great void".
So yes of course, obviously, I have an excellent book to recommend to learn how to read financial reports… Security Analysis by the master Ben Graham (see under Tutorial, reference books, other recommended books). It's the BIBLE. You will learn everything you need to know not only about stocks but also about bonds. However, I warn you, it is relatively heavy and technical. You have to hang in there, but if you hold on, it is very instructive. Some will say that it is dated, but in my opinion Graham's principles are more relevant than ever. Let's not forget that he lived through the 1929 crisis and that is what forged his approach as an extremely cautious investor. October 29, 1929… soon the 90th birthday with such crazy valuations… I'm just saying… His other book, The Intelligent Investor, is much easier to read and shorter. With the latter, you have the investment philosophy, with the former, the technique. So start with the intelligent investor if you haven't already. And thank you for the comparison, I obviously take it as a great honor, but I don't think I'm more picky than him. Of course, I always try to have a good margin of safety, but I know several investors who are even more "Grahamian" than me. But it's true that I feel much closer to him than to a Buffett for example.
Indeed a tutorial on financial reports is not a bad idea. I have to find the time because there is much more to say than on a simple screener. Or I could make inserts in the analyses explaining how to calculate certain ratios from the financial statements. Something to think about. Otherwise, if you tolerate a little English anyway, look at the investopedia site, it is quite informative and serious, start here …
https://www.investopedia.com/value-stocks-4689740
https://www.investopedia.com/dividend-stocks-4689744
and let yourself be rocked…
4 years of history is not bad. I recently saw that Yahoo also offers a paid subscription for up to 10 years. FT (paid subscription) offers 5 years. I find that to be sufficient. Only the history of increasing dividends over a longer period is useful.
What region are you in, by the way?
I simply look at the valuation (price to book) and the trend (moving average) for the key indices. This gives me a macro idea of where to be… or not to be…
Normally you fill it out online when you open the account (and they ask you to update it fairly regularly if I remember correctly).
So you are only taxed at 15% on dividends.
I never submitted it to the Swiss tax authorities. I don't see why I should do it anyway. They only want to tax you on the remaining dividends (after deducting the US 15%).
So it is not very convenient to have to come home with obligations at the moment.
If we think only about bonds, it is indeed not appropriate. On the other hand, in terms of asset allocation, a little bonds does not hurt. The great B. Graham even recommended 50/50 with a weighting that can vary depending on market conditions. Investment is an art that is never all black or all white. Sometimes it is even contradictory. I made 10% on my US bonds in 4 months without counting the yield (which is monthly moreover) and I have already taken part of these gains.
1) Momentum: I simply look at the current value compared to that of 6 months ago, or even 12 months ago. I do not buy a stock if a stock has fallen for example from 20% or more in the last 6 or 12 months, because it is a knife falling, even if it has excellent fundamentals and is very cheap. Conversely, I can be more tolerant if a stock has a very strong momentum, even if it is a little more expensive than my usual criteria, because that means that the market is understanding its mistake.
2) Premium/discount: yes if the value is negative the ETF is very slightly cheap… but I don't think it's a strategy worth pursuing…
3) Bonds and rates. No, it's the opposite, when rates go up, bonds go down and vice versa. So right now, since rates are very low, there's a greater chance that they'll eventually go up again, and that bonds will go down. The only question is when, because these rates have been falling for a while now, despite the fact that in many places they're already negative. The ideal time to invest in bonds is when rates are historically high, not only do you get a good return, but you also have every chance that the price will go up when rates go down.
4) display: thanks, I saw and fixed the bug a few days ago, it's possible that your cache still shows you the old "view", try emptying it perhaps?
Momentum effect: be careful, I am only interested in this effect for three reasons:
- the stock dropped 20% or more, which makes me want to sell
- the market is below its xxx day moving average (eg 200) and I am not buying anything in this market
- A stock has excellent fundamentals and is not expensive, if it has good momentum it is the icing on the cake
I would never bother buying stocks or ETFs just because they have the best momentum at the moment. I know this strategy, it's true that it has proven itself in certain circumstances, but it is very volatile. And it is pure technique, which I hate. In my eyes, momentum is only of interest to avoid volatility (in the event of a fall) or to gain time on a cheap stock (and not have to wait 3 years for the market to realize it).
The PE ratio on stocks often doesn't mean much. On a stock ETF, it's even worse, since companies with negative PE ratios are excluded from the calculation, which totally distorts the data. As for the case you cite (TLT PE ratio), it actually means absolutely nothing. I think you saw it on a site like Yahoo Finance, but fortunately it's not indicated on iShares.
To assess whether the market value of an ETF is correct, we must compare it to its NAV (Net Asset Value), which is the sum of all the assets of the fund, minus the liabilities (and divide by the number of shares in circulation). iShares makes it easy for you by directly indicating the premium or discount of each ETF. Generally on large, very liquid ETFs, the difference is minimal and there is no need to ask yourself too much if the ETF is correctly valued. The market takes care of it all by itself!
So the question of whether the price to yield is correct is not about the ETF, but rather simply about whether US long-term bonds are expensive or not. In other words, whether long-term rates are historically low or not. And the answer is: they are miserable! (but still better than here…)
https://www.macrotrends.net/2521/30-year-treasury-bond-rate-yield-chart
That being said, if you have read my series on diversification, you understand the important role of long bonds in a portfolio. They are the only asset class that is inversely correlated to stocks. And it is impossible to know how long these low rates will last. Maybe they can even go down further (and bonds will therefore increase in value as they have in recent months). For this reason I have decided to take a small line of around 10%, mainly for diversification purposes. But I would not venture higher as long as rates are at this level.
Just ask your questions online, my liver is already saturated by the Valais Fair 🙂
This is not a naive question, on the contrary, it is the crux of the matter.
Indeed, there is not much worthwhile at the right price at the moment. I am also less and less prolific in terms of analyses, and it is precisely because there is nothing to say, except that almost everything is too expensive.
In such cases, it is better to refrain from buying, keeping the stocks that are still at fairly reasonable prices, especially if they are defensive in nature.
Gold is indeed in this kind of situation rather an ally, especially since despite its rise in recent months, it remains cheap compared to stocks. You can buy it simply with the AUCHAH ETF.
Bonds are as you say irrelevant at the moment, except perhaps a few US treasury bonds at +20 years via TLT. They have risen a lot, I have sold a few, but their yield is not so bad and above all it brings diversification to the portfolio.
If you want to invest in stocks via an ETF in a market, the best currently is Japan (SJPA). Just behind there is Australia or Canada, but a little expensive all the same.
And of course, it's always better to buy stocks directly.
Look at my asset allocation (under tools), that's what it's for.
Very interesting, thanks for the link
I have been warning readers about the risks of ETFs for quite some time now, even though I own a few of them too!
Telegram, chat, forum…
The medium doesn't matter. I'm not going to open a thousand lanes if the only road in service isn't already saturated. Quite the opposite.
I also know SPXU that I used with my trading signal at the time. It is a leveraged alternative to shorting SPY or buying SH. You have to support the leverage effect… Not a huge fan of options either, like all insurance, as you point out.
to bounce back:
– markets/analyses: no worries about quality, it’s not because I analyze a stock that it’s necessarily a buy recommendation. It can even be an example not to follow (like the recent GM analysis) or a sell recommendation
– forum: do not allow comments on articles and divert the discussion to the forum: no, we must leave this possibility which is appreciated. On the other hand, let’s see if I can possibly automate a republication of articles in a part of the forum…
I will be brief
1) yes you need a margin account at IB to short
2) I do everything “manually” or rather on Excel
3) trading auto signal: partly based on minis/maxis. But I don't use it anymore for various reasons.
4) UBS: as you say, the problem remains the same… it doesn’t change in such a short time
A++
So this excellent sentence was from you! Very last participant 😉
Yes, of course you can open topics. That's what it's for.
The ETF for the S&P is the traditional SPY, the most used in the world. It costs next to nothing and is hyper liquid. If you can't short it, then buy SH.
You are right. Trend following is TA and as you know I am not a fan of the latter. It is indeed a good way to lose money.
However, several renowned authors, who in any case cannot be classified among the gurus of TA, have proven that trend strategies can work. I am thinking for example of Jeremy Siegel in his bible Investing in Long-Term Stocks (https://www.dividendes.ch/lectures/), James O'Shaughnessy in What works on Wall Street (excellent work) and the various research of Mebane Faber. See also my series on diversification (https://www.dividendes.ch/2017/08/comment-diversifier-son-portefeuille-pour-se-prevenir-des-risques-de-marche-120/).
I use these trend-following in my asset allocation primarily to know if we can buy or if it is better to wait for a more favorable moment because the market is still bearish. This certainly does not allow you to work miracles in terms of performance, but it helps to reduce the volatility of the portfolio, especially if it is associated with a capital protection strategy (see tutorial).
More specifically to your question, I also have a small line of alternative strategies in this allocation that actually goes a little further by shorting the market, but only when it is both very expensive and in a bearish phase. I consider this position more as a kind of hedge than speculation.
Mebane Faber uses simple 200-day MAs for all assets. After several backtests, I had the best results with simple MAs with durations that vary somewhat depending on the assets. In addition, I convert the assets to CHF before calculating the MAs. For SPY I therefore use 224 days.
For UBS, please read my analysis, everything is said there. (under articles/analyses or via the search bar)
For screeners, this would probably deserve an article… You just have to give me a little time 😉
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