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    LawyerhereHamilton Nolan
    4/14/16 1:25pm

    I’m a complete investment novice. So can someone explain to me what they are going to do differently and what an average person could do differently with their investments?

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      PithyTheElderLawyerhere
      4/14/16 1:28pm

      1. Put your savings in index funds.
      2. Let it sit there until 5 years before retirement. Put more in if you have it.
      3. Once you’re 5 years away, start pulling money out of the stock market as long as it is not in the toilet.
      4. Retire.
      5. Die.
      6. The Void.

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      icanneverremembermyburnercodeLawyerhere
      4/14/16 1:31pm

      Hedge funds don’t have to follow the same rules and regs as normal funds do. They can charge exhorbitant fees with the promise to “out perform” the market. They are laughably bad at this. The purpose of low cost index funds are to try and mirror the market such as te S&P 500. While markets do go up and down historically the trend is they will be higher in the future than they are now. Index funds are cheap because there isn't much to manage with them.

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    Carmen PolentaHamilton Nolan
    4/14/16 1:21pm

    I like that both Hillary and Bernie are going to prosecute and jail Wall Street, but let’s at least be honest that Wall Street does some good work. I bought oil futures back in February and boy I am making a whole lot of money. I bought them on margin too so I was able to really load up. And all it took was one little recommendation from my favorite banker.

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      MontoviroCarmen Polenta
      4/14/16 1:43pm

      HRC and Sanders called. They want the number of your broker. The proceeds from her cattle futures trading are burning a hole in her pants pocket, and he found a bunch of old subway tokens under his Davenport’s cushions.

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      Low Information BoaterCarmen Polenta
      4/14/16 1:45pm

      Triple leverage short DJI. You heard it here first.

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    Jerry-NetherlandHamilton Nolan
    4/14/16 1:40pm

    It’s about time, NY. - CalPers (the big enchilada of retirement funds) did this 2 1/2 years ago. when California’s retirees pulled $4 billion out.

    Now onto the next one. Everytime a civil service retirement fund pulls billions out of hedge funds the balance shifts just a smidge.

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      JohninLAJerry-Netherland
      4/14/16 1:45pm

      CALPERS is a bellwether too (they were the first to really allocate into alternative asset classes way back when). Surprising that it’s taken so long for others to follow their lead and save on fees. Fees, after all, eat into returns.

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      PoodletimeJerry-Netherland
      4/14/16 2:43pm

      It’s about time everybody got out. Run, really, really fast, and don’t look back. Hedging is a strategy, not an investment. It’s been years since hedge funds acted as actual hedges against actual scenarios that actually occurred. Now they’re just masturbatory excuses for overpaid Wall Street douchebros to charge excessive fees for mediocre money management.

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    HeavyJohnsonHamilton Nolan
    4/14/16 1:59pm

    So, this graph. I look at it all the time. I can’t quite figure it out...has market volatility really increased substantially in the last 15-20 years, or is it just an illusion because similar percentage changes are amplified on the scale as the total value of the market has increased?

    I guess my question is...is the modern market actually more volatile than it used to be?

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      pre-emptive sighHeavyJohnson
      4/14/16 2:14pm

      It’s because of market growth. If you look at any 20 year period, you’ll see the volatility.

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      BrtStlndHeavyJohnson
      4/14/16 3:21pm

      It’s the scale. The gigantic drop in October of ‘87 is hardly noticeable.

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    D-FusHamilton Nolan
    4/14/16 2:06pm

    Has anyone studied the misallocation of human capital caused by the over-sized financial sector? If trends like this divestment continue and the financial sector is forced to “right-size,” will America’s “brightest minds” enter the productive economy and start producing (and not just bull shit apps, but real innovations)? Are there people quantifying in GDP terms the economic loss of these people’s continued misallocation toward unproductive pursuits? If you haven’t written on this, it might be an interesting post.

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      MontoviroD-Fus
      4/14/16 4:10pm

      If folks weren’t paid as much as they are for financial engineering, perhaps they would undertake some real engineering.

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      Drakkon- Gravity is HOLDING AMERICA DOWN!!! Wake up people!D-Fus
      4/14/16 5:40pm

      But I owned your stock for four one-thousandths of a second and demand my voice is heard!

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    MontoviroHamilton Nolan
    4/14/16 1:44pm

    Those hedges deserve a trimming.

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      MontoviroMontoviro
      4/14/16 4:07pm

      After all, they’ve been clipping investors.

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      MontoviroMontoviro
      4/14/16 4:08pm

      Let’s not beat around the bush about it.

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    FauxhemianRhapshodyHamilton Nolan
    4/14/16 2:22pm

    Oh yeah. No worries about a crash at all. Carrion.

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      kafabeFauxhemianRhapshody
      4/14/16 2:52pm

      That graph is somewhat misleading. It wouldn’t look so volatile in the recent past if it was plotted on a log scale. Although, I really don’t know what I am talking about.

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      Montovirokafabe
      4/14/16 4:07pm

      Oh, yes, you sly one, you do know want you’re talking about:

      Log scale (or, more accurately, a semi-log, or log-lin plot).

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    ThisIsNotMyRealNameAndNumberHamilton Nolan
    4/14/16 2:40pm

    While I agree that hedge funds are generally bullshit, I also think that the trend towards passive investing might cause some counterintuitive results.

    In a world where everyone is a passive index fund investor, no one is doing any work to figure out whether companies are actually over- or undervalued — that’s traditional hedge and mutual fund territory. So as a consequence a bunch of companies might end up being valued incorrectly in the market just because they are or are not part of an index fund. Paradoxically, this would be a great opportunity for a hedge fund to step in and make a killing by doing a proper valuation.

    Basically what I’m saying is a predominantly passive investing world is exactly the one where a few hedge funds can actually make good money. A predominantly active world , like the one we live in, is where most hedge funds perform like dogshit because there’s too much competition. So I dunno what’s good or bad here, but we (active and passive investors) all need each other in this capitalism death spiral!

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      BradysAwesomeHamilton Nolan
      4/14/16 1:18pm

      Bobby Axelrod is gonna be bummed.

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        Sonic Reducer 151BradysAwesome
        4/14/16 1:28pm

        I don’t think that pickle’s ever happy.

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      JohninLAHamilton Nolan
      4/14/16 1:32pm

      It would be interesting if NYCERS and CALPERS tried to institute a blanket “no AUM fee” policy. Managers confident in their ability to produce alpha would stay on (these are two of the biggest institutional investors in the world, after all), and those who weren’t would be weeded out. In any event, it will be interesting to see where NYCERS decides to reallocate this money.

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