Comments on: Idiot Investing: Paul B. Farrell says Losing is Winning

By: Morin

Morin — Mon, 03 Jan 2011 09:30:37 +0000

I have a friend who is using this system for long time, but he is buying just after the recession so anyway he is not loosing but just earning.

By: Investment Support

Investment Support — Mon, 21 Jun 2010 05:19:50 +0000

invest is essential for every one it;s make better your life
If that is not the most idiotic thing that I have heard in 2008, I don’t know what is. To actually come out and publicly boast that you have a winning strategy that entails no work and proud of the fact that you helped people lose more than 1/3 to 1/2 of their portfolio values takes some real nerve.

By: Idiotic Investing: Paul B. Farrell is Hunting Swans | The Disciplined Investor

Tue, 20 Jan 2009 09:57:29 +0000

[...] astounded by the blabber and blather that our dear old friend Mr. Farrell was presenting regarding Lazy Portfolios. Yes, those [...]

By: Mark

Mark — Wed, 07 Jan 2009 06:36:58 +0000

Interesting: http://online.wsj.com/article/SB12312777854975860…

Some things from this article sound familiar:
Manage cash and go to it when there are no bargains
Ignore benchmarks
Don’t worry about underperforming through part of a market cycle

Still, something just does not sit right. Is this market timing and if so, does market timing work in the long-run? Is it wise to hire an investment manager who has no shackles…especially without 100% transparency? How is an investor to compare the risk/reward ratios for managers without shackles?

I apologize if I’m being a bit thick but deprogramming years of traditional financial “education” takes time.

By: Mark

Mark — Wed, 07 Jan 2009 04:05:39 +0000

Still searching for a meaningful benchmark

Unless I am missing something here, surely there must be more to it than that. If so, then why not use the 3-Month T-Bill as my benchmark? While the 10-Year total return ending 12/31/2008 on the 3-Month T-Bill of 40.44% is much better than the S&P 500 Total Return for the same period of -13.00%, that still barely keeps up with the CPI of near 30% for the same period. I doubt that you are suggesting any consistently positive benchmark is appropriate. Is it proper to focus only on absolute returns rather than relative returns? How should an investor gauge if they, or their advisor, are performing well? If we throw out the S&P 500 and blends of indexes matching their asset mix, what is left?

By: Andrew Horowitz

Andrew Horowitz — Wed, 07 Jan 2009 03:02:02 +0000

Re: Mark commented on Idiot Investing: Losing Less is Now Winning ? ==

Mark...

Sure, anything could work that does not dip below zero

Andrew

By: Andrew Horowitz

Andrew Horowitz — Tue, 06 Jan 2009 04:10:03 +0000

Re: Mark commented on Idiot Investing: Losing Less is Now Winning ? --

The S&P as a benchmark is kind of silly. Why is right! We could just go back to making money and make the benchmark zero. Or is that too simple?

Andrew

By: Mark

Mark — Tue, 06 Jan 2009 03:33:05 +0000

The search for a meaningful benchmark

Maybe a benchmark of zero is a good starting point if we throw out the concept of relative returns and focus only on absolute returns. Not that it makes much of a difference in today’s market, but would a better starting point be the three-month T-Bill (or whatever we want to use as a risk-free rate)? From there shouldn’t there be a spread added to the risk-free rate depending upon the additional risk the investor is willing to take?

By: Mark

Mark — Mon, 05 Jan 2009 07:48:11 +0000

I actually do commend Paul B. Farrell on his lazy portfolio approach to beating the S&P 500. If your goals are simply to beat the S&P 500 then the low cost index method is effective. However, I ask myself “Why is it that everyone uses the S&P as a benchmark?” Sure, it may be a good benchmark for determining the relative performance of a portfolio of U.S. equities, but isn’t that where the use should stop? I wonder where the use of the S&P as “the benchmark” started. Who is responsible for propagating its use? As we can see with the lazy portfolios, it’s not a difficult benchmark to outperform. Maybe the use of this index has been propagated by the “buy and hold” advisors.

Andrew,

What do you suggest investors use as a benchmark? If they don’t have a measure of relative performance, how should they measure their success as investors? Is a blend of indexes representing their asset mix appropriate? Or should investors forget benchmarks altogether and keep laser focused on the probability of achieving their financial goals?

By: Andrew Horowitz

Andrew Horowitz — Mon, 05 Jan 2009 04:27:03 +0000

Re: VPro commented on Idiot Investing: Losing Less is Now Winning ? --

V:

It is really pathetic... Needs to be outed..

Andrew

By: VPro

VPro — Sun, 04 Jan 2009 01:13:32 +0000

Andrew, yeah, this is the same guy who a few weeks back listed 30 reasons why we'll be in a depression in 2010 or 2011, I don't recall which. If that's true, "lazy portfolios" will be worthless. I don't even bother looking past the headlines anymore and certainly don't take them seriously. You're right to address it and thanks.