Rolling US Economy Into The Shitbin Thread

I do feel conflict and researched socially responsible investing. I even put a good deal of money in an investing start-up who only invested in progressive/ethical companies. It lost money and they closed up shop. Vanguard offers it's own version, but it's returns are not as good. u

I'm an anti-capitalist who works at one of the the most successful capitalist enterprises of all time. So hypocrisy is not one of my top ten sins :P

There are other things you can invest in that aren't these big corporate-managed funds though -- someone I know had money in this fund that basically did loans to build and improve low-income housing, for example.

I even put a good deal of money in an investing start-up who only invested in progressive/ethical companies. It lost money and they closed up shop.

Interesting! what was it called?

DJI - do you get RSU's or ESPP stuff or ...? How much of your compensation is in shares of this enterprise?

Over 50% of my comp is in RSUs. Which just keep going up and up.

I was feeling kinda glum about all of it and ended up taking a lot of money out of the market earlier this year (luckily just pre-Covid) and bought a house. which i divided into sort of a duplex, and am about to turn the basement into a studio apt where I’ll live and... *sigh* guess be a godforsaken landlord.

no ethical anything under etc etc

damn yall are rich. jealous tbh

still technically have negative net worth, sort of like donald trump ;)

However, if you want to "maximize" your investments, the big zero-fee Vanguard fund isn't the way to go. ... And I am definitely not saying everyone should want to do this.

what does this mean? you should only buy the stocks that go up lots, not the other stocks? well yes, but this doesn't seem like actionable advice, and it also neglects risk.

i'm skeptical of the social value of ESG investing, basically this:
https://www.bloomberg.com/opinion/articles/2019-11-11/esg-stocks-are-graded-on-a-curve

not really rich. just old. my very conservative govt-hating parents were perpetually broke when I was growing up and it lead me to a path of aggressive saving & investing (no-load index/ autopilot) when I was like 19.

well i'm glad this thread took the turn it did, i should think about this stuff if i ever get out of cc debt.

on the whole "the crash is coming" tip i don't know jack about economics so take this with a bucketful of salt but i feel like we're going to be in those mode of people above a certain threshold floating upwards and people below a certain threshold being gutted for a long while and maybe there isn't a single "economy" anymore.

^i more or less agree with this tbh.

w the caveat that when it really comes down to it I don’t know jackshit about the economy either

However, if you want to "maximize" your investments, the big zero-fee Vanguard fund isn't the way to go

I know people say this (if by "maximize" you mean some version of "end up with the most money") but I have never seen any convincing evidence for it, and people have very motivated-cognition reasons for saying it. For a managed fund to be worth the fees, the manager has to be able to beat the market by a lot, and the evidence is sporadic at best that you can identify people who are going to beat it even by a little.

The issue of controlling your own investments to maintain influence is a different story and one I haven't thought about as much.

A question for y'all: for those of you who are vehemently anti-capitalist, progressive leftists, fuck Joe Biden and the Democratic Party -- do you feel awkward or any sense of conflict about having your money invested in some Vanguard-type managed fund?

― sarahell

for me, uh, personally benefiting from capitalism isn't really much different from benefiting from white supremacy (indeed, there does seem to be a significant statistical correlation there). i'm complicit in, and benefit from, a grossly unequal system. what i would like to see is for the system to become _less_ grossly unequal, and honestly? i'm perfectly willing to work within capitalism to do that. whenever i suggest such a thing, though, i find that a lot of _other_ people who are _also_ beneficiaries of, complicit in, the same grossly unequal system, are very quick to tell me "hey, buddy, you don't like it, the door's that way"

and those interactions _do_ give me a pretty strong sense of conflict and awkwardness.

what does this mean? you should only buy the stocks that go up lots, not the other stocks? well yes, but this doesn't seem like actionable advice, and it also neglects risk.

What do you think the people that manage the funds do? They basically try and predict what stocks (and other investments) will go up and which won't, and when, and buy low and sell high. Like, the general rationale for investing in one of those funds is "leaving it to the experts" ... that is a very good rationale, btw. But, it's kinda like, idk, buying furniture. You can get decent solid mass-produced furniture that might not be the best-made or perfectly designed to fit the spaces you want to put it, but it's okay and you don't really have to put much effort into obtaining it, and it's fairly inexpensive. Your ideal furniture would cost more, in either money or time and labor. So, there are more "actively and/or aggressively" managed funds that will likely give you higher returns, but they will have higher fees. Some people are fine with that, if they "know" their investments will be more profitable even with the fees. (The dude that uncovered/predicted the sub-prime crisis was a private fund manager like this.) ... Of course, the other part of the analogy is, if you have shitty carpentry skills and know jackshit about building furniture, you probably shouldn't be day-trading on Robin Hood and buy a West Elm living room set, er, put your savings in the Vanguard STAR fund.

The logic of the standard Vanguard advice, AFAICT, is that those 'actively and aggressively' managed funds don't actually have any actual benefit (to the person with a 401k) over the long term.

i don't know what the star fund is but the "zero fee" vanguard fund mentioned when this started such as total stock market index fund (not zero but close) doesn't fit any of what you're talking about and is good for people who don't want to spend time researching stocks

there is research justifying it but the common anecdote is warren buffett making some bet about the s&p 500 vs some other thing

For a managed fund to be worth the fees, the manager has to be able to beat the market by a lot, and the evidence is sporadic at best that you can identify people who are going to beat it even by a little.

I think there are also aspects relating to scale at play. Plus, the big thing of "you are being paid to manage other people's money."

Personally, I have a mix of stuff -- some low/no-fee managed funds, some moderately-priced managed funds, some fairly conservative investments in Farm Bonds and CDs, and a bunch of individual stocks that either I or my mother picked. I am (for now) beating the market, I think ... not that I wanna be all, "Hey, let me manage other people's money, I'm an investing genius" ... mostly it's stocks that Schwab has given good ratings that are in industries that are doing well, companies whose businesses I understand, as well as a handful of things I purchased pre-Covid that I think will eventually bounce back in the longer term. ...

is good for people who don't want to spend time researching stocks

totally!!! I respect this!

those 'actively and aggressively' managed funds don't actually have any actual benefit (to the person with a 401k) over the long term.

not everyone is that person though ... some people have investment savings that aren't tax sheltered (as in the 401k isn't taxable until the funds are distributed to the person), as well as some people are looking for more short-term gains ... like wanting to be able to buy a house or something in a few years or so.

if i wanted to buy a house in a few years i would not save it in stocks. anyway i'm going to the gym to invest in my bod now

i’m a 3-fund guy (Total market index, total intl index, total bond index—weighted heavily toward the TMI) and many Bogleheads swear by it, but I just always did bc im dumb and lazy

harbl is your gym open?? mine is not :(

Empirically doesn’t the average *hedge fund* does worse than the s&p500. These people have plenty of time to spend on this. People suck at it. In the long run *all* people suck at it.

And averaged across all investors (institutions, hedge funds, etc.) the average investor does slightly worse than than the total stock market *by definition* (this isn’t an empirical claim, it’s a statement about how averages work in the presence of trading costs).

TBF, isn't it that the average hedge fund *investor* does worse, after all the fees? I might have my stats wrong about that. Also since pretty much anyone with access to rich people's money can call their scammy bullshit a "hedge fund," the average is likely weighed down by garbage a bit. Still do not advocate trying to beat the market, just saying.

The socially responsible investing service was called SWELL.

Oh yeah if you’re a hedge fund that takes fees from outside you personally should be doing better than the market unless you’re an idiot.

The most successful hedge fund doesn’t take outside investment though IIUC (Renaissance).

actually I just meant that I think there are hedge funds that, in pure returns, beat the market on a consistent basis (although again I could be wrong). I figure they do it through legal grey-area strategies, inside information etc.

There are a few quant/hft firms that have reliable track records of finding profitable strategies and exploiting them until they are no longer profitable and repeating that trick (the repeating that trick bit is the hard bit, https://www.nytimes.com/2019/11/13/books/review/the-man-who-solved-the-market-gregory-zuckerman.html is not great, but it’s good on that bit).

They are not using techniques available to private investors though, and they have a much higher tolerance for risk than any sensible individual person should have, so their existence is not an argument for doing something other than buying an low fee index tracker.

And averaged across all investors (institutions, hedge funds, etc.) the average investor does slightly worse than than the total stock market

It definitely is a perceptual issue -- since we are talking about "averages" -- like, say, your low fee index tracker is the mean at 50% -- assumedly there are individual investors who may be at 60% as well as those who are at 40% (just for example). Some people feel like that extra 10% is something they are capable of and is worth the risk/effort. Other people (who are also very sane and reasonable and might be at the gym right now) think, you know what, I am totally fine with 50% because I don't want to potentially end up at 40% (or lower) even if I could potentially get up to 60%.

Like, I am not even talking about the arrogant and often delusional investors who are gonna be "outliers" at like the 90% percentile -- just the "I bet I can do a little bit better than the average" investor ... idk, does that make sense?

It makes sense but it assumes you have control over whether you are in the 40th or 60th percentile, and there is extremely strong evidence that none of us do.

(And in fact it’s even worse because if the stock market is the 50th percentile, the average investor is not in the 50th percentile. They’re in the 49th percentile, because trading actively isn’t free.)

pimp shit

anything can happen anytime you make a choice that is why there are statistics and data you can look at to not "feel like you are capable" of things you are not!

caek/efficient markets hypothesis otm

finding strategies that don’t work consistently or over the long run is the key thing imo. there’s a whole field called behavioral finance that finds exceptions from the EMH, but then there’s a paper that shows that the deviations go away after the papers get published. the good hedge funds are beating the market by constantly finding new anomalies and then moving on once they stop holding, it’s not like a stable strategy

however there are empirical finance papers that show that the rule ‘buy in halloween, sell in may’ beat the market like 99% of the time in every country and decade in the last 200 years. so who knows

A question for y'all: for those of you who are vehemently anti-capitalist, progressive leftists, fuck Joe Biden and the Democratic Party -- do you feel awkward or any sense of conflict about having your money invested in some Vanguard-type managed fund?

not really, i'm forced to either save or spend money. i don't have a lot of money, i'm not a hedge fund that can control what these corporations do. if i put it in a savings account the bank is going to decide where to put it and take all the gains.

I know people say this (if by "maximize" you mean some version of "end up with the most money") but I have never seen any convincing evidence for it, and people have very motivated-cognition reasons for saying it. For a managed fund to be worth the fees, the manager has to be able to beat the market by a lot, and the evidence is sporadic at best that you can identify people who are going to beat it even by a little.

“ A question for y'all: for those of you who are vehemently anti-capitalist, progressive leftists, fuck Joe Biden and the Democratic Party -- do you feel awkward or any sense of conflict about having your money invested in some Vanguard-type managed fund?”

Absolutely. My participation is based on lack of a safety net that will support me as a self employed person in my old age. That guy who said in 08 or whatever that it’s stupid to not dance as long as the music is playing was basically right.

participation based on quotes from The Joker

FWIW, I have been actively avoiding the stock market and equity funds for decades now for ethical reasons. Simply participating in the system feels like too great a leap to do without turning my stomach.

That all said, I'm eying fifty from across the room and starting to wonder if I need to make the leap, perhaps with an ethical fund? I've been courted by Green Century for years, maybe after I read up on their vetting further.

just want to mention that given the topic of this thread and the current state of affairs all this fund talk feels like whistling past the graveyard

I mean that's the other thing to bear in mind! When would one choose to buy into this shitshow? Presumably post-MAGACOVID.

don’t try and time the market if you’re investing for the long term. slow and steady wins the race

yah, post-MAGA life suggest that the monopoly cast of rapacious dingleberries will be somewhat less performatively gluttonous and past experience suggests that leads to an indefinite bear market?

i don't wanna win the race, i want working parks departments and functioning infrastructure!

read taht as 'raspberry dingleberries' at first

available at nuts.com

This IS the time to think about it because it's so weird. The market is absurdly high and reality-proof at the moment, unless we're all just admitting the actual financial health of the world doesn't matter to the stock market. My parents watch CNBC every day, so I'm always seeing the reactions of the investor class. (As long as our portfolios are okay, nothing else matters, cue Metallica)

Every week I wonder if I should cut my 403b contributions or not...