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 Post subject: Re: Investment Advice
PostPosted: Mon Jan 12, 2015 12:40 pm 
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Posts: 1413
CBMD wrote:
I'd guess that most of the three million who've signed up to SA would disagree with you. Some people allocate funds to different sectors and seek advice on more than one category of investment. If people have the time, money, interest, and desire, I don't see the harm.

Every investor is not passive.It's designed for the hands on active investor. The various index funds haven't exactly being setting the world on fire lately.

There is I think, in the US, a stronger tradition of activist investor than in EU. The Value Line Survey with which SA competes directly, has been around since 1930 and has about 300,000 subscribers who pay between $200-$1,000 a year.

http://www.valueline.com/about/aboutvalueline.aspx


The number of people signed up or paying a subscription is not correlated to the accuracy of the information. Subscribers are willing to pay for the ability to make more money as they see it as an investment not an expense (why do the FT and WSJ have such successful online subscription models while other papers do not?). It's harmful as people are in effect deluding themselves as they think they are well informed and can easily lose all their money.

These two articles explain my thought on the subject:
http://money.usnews.com/money/blogs/the ... -investors
http://www.thestreet.com/story/12462505 ... stors.html


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 Post subject: Re: Investment Advice
PostPosted: Mon Jan 12, 2015 5:39 pm 
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Joined: Feb 19, 2014
Posts: 1380
dkin wrote:
CBMD wrote:
I'd guess that most of the three million who've signed up to SA would disagree with you. Some people allocate funds to different sectors and seek advice on more than one category of investment. If people have the time, money, interest, and desire, I don't see the harm.

Every investor is not passive.It's designed for the hands on active investor. The various index funds haven't exactly being setting the world on fire lately.

There is I think, in the US, a stronger tradition of activist investor than in EU. The Value Line Survey with which SA competes directly, has been around since 1930 and has about 300,000 subscribers who pay between $200-$1,000 a year.

http://www.valueline.com/about/aboutvalueline.aspx


The number of people signed up or paying a subscription is not correlated to the accuracy of the information. Subscribers are willing to pay for the ability to make more money as they see it as an investment not an expense (why do the FT and WSJ have such successful online subscription models while other papers do not?). It's harmful as people are in effect deluding themselves as they think they are well informed and can easily lose all their money.

These two articles explain my thought on the subject:
http://money.usnews.com/money/blogs/the ... -investors
http://www.thestreet.com/story/12462505 ... stors.html

Only a fool would contradict Warren, and I agree with him entirely, or is it the other way round? :) But Warren is making a different comparison there, he's comparing low cost index funds, with high cost money manager type advisers. Seeking Alpha & Value Line are catering to a different investor, the active investor who doesn't rely on either. Such investors may have some portion of their funds in a variety of investments such as managed and/or S&P index funds, and some other portion they actively manage themselves, with the goal of being NO cost. It doesn't have to be one or other, it can be both. Just because it's not your cuppa...........

Here's a piece from SA explaining why they were not particularly concerned at being dropped by Yahoo in 2014.

Quote:
1. We’ve been paying Yahoo significant amounts every month for traffic. As with most of its partners, Yahoo charges Seeking Alpha per click, and the aggregate amounts are high. We’d rather pay this money to our contributors.

2. Our approaches to content have diverged. Seeking Alpha’s vision is to be a crowdsourced platform for serious investors, while Yahoo leans more toward populist, personal finance and general-interest content. For example, SA contributors published articles on 5,962 tickers over the past year. In the area under these articles, we show headlines with maximum relevance to the stock under discussion. In contrast, Yahoo Finance features populist articles on its homepage (as I write this, “Wealth-Building Secrets of the Millionaire Next Door” and “Chinese Billionaires Criticized for Giving Harvard $15 Million”), and has introduced a feed of these headlines below every article.

3. Due to its huge audience, some Yahoo readers weren't prepared for the level of discussion and engagement on Seeking Alpha. Given the different approaches to content, it’s not surprising that Yahoo Finance readers are on average less engaged than Seeking Alpha readers. For example, visitors to Seeking Alpha from Yahoo Finance read 40% fewer articles per visit than visitors who come from our email alerts. We care enormously about the quality of discussion on Seeking Alpha, which comes from the quality of our community and readership.

http://seekingalpha.com/article/2343015 ... y-research


A 2014 WSJ piece on an academic study that finds crowd sourced analysis, specifically Seeking Alpha, equal or superior to professional analysts.
Quote:
A new academic study lends credence to the idea that the “wisdom of crowds” phenomenon applies not just to encyclopedia entries and restaurant reviews, but also to stock market predictions

Researchers from City University of Hong Kong, Purdue University and Georgia Institute of Technology found that the tone of stock market opinion blogs published on investor forum SeekingAlpha.com predicted stock returns, as well as earnings surprises, above and beyond what was evident from Wall Street analyst reports and financial news articles.

SeekingAlpha.com, run by venture-backed Seeking Alpha Ltd., based in Ra’Anana, Israel, is a forum for investors who write opinion pieces about stocks for the site. An editorial board vets the quality of the blogs and posts up to 250 articles every day.

Researchers analyzed about 100,000 Seeking Alpha articles and commentary published between 2005 and 2012 for the paper “Wisdom of Crowds: The Value of Stock Opinions Transmitted Through Social Media,” which is forthcoming in the Review of Financial Studies.

The potential to discover market-predicting information in social media has been tantalizing to investors big and small. Several startups, including companies like Dataminr, Gnip and DataSift, have talked about providing feeds of Twitter and other social-media outlets to hedge funds and other money managers to inform their investment strategies.............

........“Seeking Alpha is the only platform to date that we have shown can predict individual stock returns,” said Yu Jeffrey Hu, associate professor at Georgia Tech’s Scheller College of Business and one of the authors of the study. Other authors of the study are Hailiang Chen, Prabuddha De, and Byoung-Hyoun Hwang.

Dr. Hu said that research was in no way sponsored or facilitated by Seeking Alpha. The company did provide a proprietary data stream for one portion of the research, he said.

.............Does this mean sell-side financial analysts are useless? “I wouldn’t say [Seeking Alpha blog writers] are absolutely better than the highly paid Wall Street analysts,” Dr. Hu said. But “Seeking Alpha sentiment has additional insight above and beyond financial Wall Street analysts,” Dr. Hu said.

The researchers also noted that Seeking Alpha predicted stock returns above what was evident from news articles. The report used news stories published on Dow Jones News Service, which is a part of Dow Jones & Co., publisher of The Wall Street Journal. Dow Jones declined to comment.

Overall, the findings fit with prior analysis in other fields on the way crowds can outsmart, or at least be just as smart, as professionals. Studies have shown, for example, that Wikipedia accuracy is similar to that of Encyclopedia Britannica.

Crowd platforms have other advantages over professionals, besides accuracy — Seeking Alpha, for example, covers a greater stock universe than stock analysts, and Wikipedia has more subject entries than Encyclopedia Britannica. Plus, both get updated and revised as things change more quickly than their professional counterparts, Dr. Hu said.

http://blogs.wsj.com/venturecapital/201 ... ysts-news/


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 Post subject: Re: Investment Advice
PostPosted: Tue Jan 13, 2015 3:51 pm 
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Joined: Dec 16, 2007
Posts: 1413
Just because it is better than crap according to some metrics doesn't mean it is valuable.

Interesting article from Taleb:

Quote:
My portrait of the perfect fool of randomness is as follows: he does not believe in religion, providing entirely rational reasons for such disbelief. He opposes scientific method to superstition and blind faith. But alas, human skepticism appears to be quite domain-specific and relegated to the classroom. Somehow the skepticism of my fool undergoes a severe atrophy outside of these intellectual debates:

1) He believes in the stock market because he is told to do so. — automatically allocating a portion of his retirement money. And he does not realize that the manager of his mutual fund does not fare better than chance — actually a bit worse, after the (generous) fees. Nor does he realize that markets are far more random and far riskier that he is being made to believe by the high priests of the brokerage industry.

He disbelieves the bishops (on grounds of scientific method), but replaces him with the security analyst. He listens to the projections by security analysts and "experts"— not checking their past accuracy and track record. Had he checked them he would have discovered that these are no better than random — often worse.

http://edge.org/3rd_culture/taleb05/taleb05_index.html


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 Post subject: Re: Investment Advice
PostPosted: Tue Jan 13, 2015 4:44 pm 
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Joined: Nov 11, 2012
Posts: 312
Anyone got a view on the Institue of Investing and Financial Trading ? Thinking of doing one of their courses but they aren't cheap and, to do so, will probably require relocation to Dublin for duration.

http://www.iift.ie/

_________________
"All that is necessary for the triumph of evil is that good men do nothing. " - Edmund Burke


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 Post subject: Re: Investment Advice
PostPosted: Tue Jan 13, 2015 7:25 pm 
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Joined: Feb 19, 2014
Posts: 1380
dkin wrote:
Just because it is better than crap according to some metrics doesn't mean it is valuable.

Interesting article from Taleb:

Quote:
My portrait of the perfect fool of randomness is as follows: he does not believe in religion, providing entirely rational reasons for such disbelief. He opposes scientific method to superstition and blind faith. But alas, human skepticism appears to be quite domain-specific and relegated to the classroom. Somehow the skepticism of my fool undergoes a severe atrophy outside of these intellectual debates:

1) He believes in the stock market because he is told to do so. — automatically allocating a portion of his retirement money. And he does not realize that the manager of his mutual fund does not fare better than chance — actually a bit worse, after the (generous) fees. Nor does he realize that markets are far more random and far riskier that he is being made to believe by the high priests of the brokerage industry.

He disbelieves the bishops (on grounds of scientific method), but replaces him with the security analyst. He listens to the projections by security analysts and "experts"— not checking their past accuracy and track record. Had he checked them he would have discovered that these are no better than random — often worse.

http://edge.org/3rd_culture/taleb05/taleb05_index.html

But more valuable than crap?

Taleb is opinion, as opposed to the fact found in the study. As Senator Daniel Patrick Moynihan noted: "Everyone's entitled to his own opinion, but not to his own facts".


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 Post subject: Re: Investment Advice
PostPosted: Tue Jan 13, 2015 10:18 pm 
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Joined: Dec 16, 2007
Posts: 1413
CBMD wrote:
dkin wrote:
Just because it is better than crap according to some metrics doesn't mean it is valuable.

Interesting article from Taleb:

Quote:
My portrait of the perfect fool of randomness is as follows: he does not believe in religion, providing entirely rational reasons for such disbelief. He opposes scientific method to superstition and blind faith. But alas, human skepticism appears to be quite domain-specific and relegated to the classroom. Somehow the skepticism of my fool undergoes a severe atrophy outside of these intellectual debates:

1) He believes in the stock market because he is told to do so. — automatically allocating a portion of his retirement money. And he does not realize that the manager of his mutual fund does not fare better than chance — actually a bit worse, after the (generous) fees. Nor does he realize that markets are far more random and far riskier that he is being made to believe by the high priests of the brokerage industry.

He disbelieves the bishops (on grounds of scientific method), but replaces him with the security analyst. He listens to the projections by security analysts and "experts"— not checking their past accuracy and track record. Had he checked them he would have discovered that these are no better than random — often worse.

http://edge.org/3rd_culture/taleb05/taleb05_index.html

But more valuable than crap?

Taleb is opinion, as opposed to the fact found in the study. As Senator Daniel Patrick Moynihan noted: "Everyone's entitled to his own opinion, but not to his own facts".


I've read the paper. It's interesting however is totally different to how most people would interact with a site like Seeking Alpha. As it effectively removes bias as it is data driven.

I would be interested to see how their algorithm worked over different time periods e.g. 2005-2006, 2011-2014 etc. Also different return values not just 'abnormal returns'.

There are other algorithmicly driven funds such as hedge funds etc that no doubt use data scraping (from multiple sources.. I'm sure we can all think of various indicators) and textual analysis in their algorithms. These things sometimes give the impression that they work... until they don't.


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 Post subject: Re: Investment Advice
PostPosted: Wed Jan 14, 2015 6:38 pm 
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Planning Tribunal Attendee

Joined: Feb 19, 2014
Posts: 1380
dkin wrote:
CBMD wrote:
dkin wrote:
Just because it is better than crap according to some metrics doesn't mean it is valuable.

Interesting article from Taleb:

Quote:
My portrait of the perfect fool of randomness is as follows: he does not believe in religion, providing entirely rational reasons for such disbelief. He opposes scientific method to superstition and blind faith. But alas, human skepticism appears to be quite domain-specific and relegated to the classroom. Somehow the skepticism of my fool undergoes a severe atrophy outside of these intellectual debates:

1) He believes in the stock market because he is told to do so. — automatically allocating a portion of his retirement money. And he does not realize that the manager of his mutual fund does not fare better than chance — actually a bit worse, after the (generous) fees. Nor does he realize that markets are far more random and far riskier that he is being made to believe by the high priests of the brokerage industry.

He disbelieves the bishops (on grounds of scientific method), but replaces him with the security analyst. He listens to the projections by security analysts and "experts"— not checking their past accuracy and track record. Had he checked them he would have discovered that these are no better than random — often worse.

http://edge.org/3rd_culture/taleb05/taleb05_index.html

But more valuable than crap?

Taleb is opinion, as opposed to the fact found in the study. As Senator Daniel Patrick Moynihan noted: "Everyone's entitled to his own opinion, but not to his own facts".


I've read the paper. It's interesting however is totally different to how most people would interact with a site like Seeking Alpha. As it effectively removes bias as it is data driven.

I would be interested to see how their algorithm worked over different time periods e.g. 2005-2006, 2011-2014 etc. Also different return values not just 'abnormal returns'.

There are other algorithmicly driven funds such as hedge funds etc that no doubt use data scraping (from multiple sources.. I'm sure we can all think of various indicators) and textual analysis in their algorithms. These things sometimes give the impression that they work... until they don't.

Well at least we've migrated from crap, to better than crap, to interesting. That's progress. Be thankful for small mercies etc. :)


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 Post subject: Re: Investment Advice
PostPosted: Mon Jan 26, 2015 11:13 pm 
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Joined: Feb 19, 2014
Posts: 1380
dkin wrote:
CBMD wrote:
On the general topic of equity advice, a good, reliable and transparent source is "Seeking Alpha", if you have time to read even a tiny fraction of their considerable output.

It's considered the creme de la creme of free crowd sourced opinion, and much like Wiki, analysts have found it just as reliable as the stuff you pay for. They have 8,500+ people writing for them, and they pay them on different tiered scales. Once you register/sign up you can subscribe to a wide variety of daily emails cut and diced by sector/country etc. You'll never be able to read them all.

Quote:
Seeking Alpha is a crowd sourced content service for financial markets .[1] Articles and research covers a broad range of stocks, asset classes, ETFs and investment strategies. In contrast to other equity research platforms, insight is provided by contributor base of investors and industry experts (Buy-side) rather than sell side.[2][3] Seeking Alpha was founded in 2004 by former Wall Street analyst, David Jackson.[4] The company reports it has distribution partnerships with MSN Money, CNBC, Yahoo Finance, MarketWatch, Nasdaq and TheStreet.[5] However, Yahoo Finance chose to end its relationship with Seeking Alpha on July 28, 2014.[6] [7]

As of February 2014, Seeking Alpha had 3 million registered users, and attracted 8 million unique viewers a month.[8][9]


http://en.wikipedia.org/wiki/Seeking_Alpha

http://seekingalpha.com/


I think you are largely wasting your time with this kind of micro financial analysis. It's impossible to predict the future and index funds have been found to equal informed professional investors.

My own maxim is to try and predict global trends (almost impossible see Nassim Taleb) and then just buy a generic etf in those areas. Then enjoy the sun. Too much analysis is counterproductive for multiple reasons including the delusion that you are in some way informed. How accurate is the data set.... It's almost impossible to answer this question.


A good example of the value of Seeking Alpha. Apart from the utility of the pieces themselves, the awards encourage other writers to up their game,

Quote:
Outstanding Performance Article Rewards

We're excited to announce our latest two Outstanding Performance award winners. Each author receives $2,500.

Winner #1: Top short idea on AAMC (Altisource Asset Management) by Paulo Santos, published December 5, 2013. Return to date: +74.7%

http://seekingalpha.com/article/1880421 ... cing?ifp=0

Winner #2: Top long idea on EA (Electronic Arts) by David Weinstein, published December 21, 2012. Return to date: +257%

http://seekingalpha.com/article/1077041 ... ness?ifp=0

Note: Both articles were part of the SA PRO equity research archive available exclusively to SA PRO subscribers. In honor of the awards, both articles will be available for 48 hours before going into the archive.


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