Anyone who says they can predict the future is either lying or a fool but I’m betting on dividend aristocrat no-load index funds.
Jeff
1 year ago
Berkshire Hathaway, either class.
Mark Schwartz
1 year ago
Jed Clampet was shooting at some food and up came a bubbling was black crude, texas tea, and off to Beverly Hills the Clampets went… and over the next decade fossil fuels will be the place to be… the drive to green everything will be slow due to logistics, supply chain problems and poor planning on the world’s part for sustainability. So don’t give up on fossil fuels just yet….
johntlim
1 year ago
With high conviction: emerging market value stocks.
Perhaps, but I would be very cautious about investing in a market that so many feel is overdue to take off. Having “high conviction” about future prospects can also get one in trouble.
Last edited 1 year ago by parkslope
Bhavana Padiyath
1 year ago
Emerging Markets. The demographics favour them. Blue Chip U.S. stocks that are fairly valued (yes, they do exist).
Philip Stein
1 year ago
No doubt there will be unexpected events over the next ten years that will render any predictions useless
Isn’t the point of investing in broad market index funds a recognition that no one can predict with certainty what investments will outperform in the future? Isn’t that why we diversify broadly, so we can have at least some exposure to the market’s future winners, whatever they may be.
I think you nailed this question. Per Niels Bohr “Prediction is very difficult, especially if it’s about the future.”
Scrooge_McDuck88
2 years ago
For me that’s easy… private companies with great management teams and reasonable valuations. I’ve made more money investing in early stage companies the last 5 years than I could have ver dreamed of.
Workday just acquired one of my investments this past week, Zimit. 20X in less than 3 years. You can down vote as much as you like, I am not upset, because… 1. I am making a fortune. 2. I understand what I am doing.
If you did any bit of research you’d know that the largest return projections are in private equity for the next 5+ years… i.e. Private companies.
Inside the private company universe early stage companies, before they hit the growth phase is part of the value creation curve where the most money is made from a return perspective in the shortest period of time.
I understand that this isn’t for the vast majority of you, because the vast majority of you wouldn’t be able to due diligence or qualify an opportunity if you saw it. But the facts are the facts. If in any doubt, I’d be more than happy to compare my portfolio returns with any of you. 🙂
Mr. McDuck, congratulations on your investment wins. However, while you emphasize your gains, you say nothing about the risks you incurred nor do you discuss losses.
You don’t mention that private equity investments are illiquid. You can’t sell a stake in private equity to raise cash as easily as, say, a mutual fund or ETF. Up until now, you’ve been well-compensated for taking this liquidity risk. What would happen to your private equity investments if the economy sinks into recession?
I infer from your comment that you like making concentrated investment bets and, as a result, your portfolio lacks much diversification. Now that interest rates are set to rise and funding startups will get more expensive, is it reasonable to expect that the returns from private equity over the next 10 years won’t be as generous as during the previous decade of easy money?
Private equity has become a hot area for investment because past gains are well known and return projections are high. There is now much more money chasing private equity deals than before. With so many more people fishing in the same pond, is it likely that future gains won’t be as lucrative as in the past?
It’s certainly reasonable to invest in private companies “with great management teams.” But isn’t a management team ”great” only with hindsight? Can anyone know for certain that a management team will remain great in the future? Consider Enron, Worldcom, and GE. At one time, they were considered to have great management teams.
It’s great to invest in early stage companies before they hit the growth curve. But what if they don’t hit the growth curve? Don’t most startups fizzle out? I suspect that only a minority are successes. It’s the nature of media to publish stories about the winners to grab our attention. We rarely read stories about the losers.
Many startups likely gained traction during an era of low inflation and low interest rates. Was it during this time that 5-year return projections were made? Now that inflation is much higher and interest rates are set to rise, isn’t it reasonable to expect that future gains in private equity will be muted?
Just curious, but have you ever lost money investing in a private company? You made 20X investing one company, but how much of that gain was offset by losses elsewhere? Facts are facts.
What a refreshing and sobering reply to a somewhat arrogant and dismissive piece of not-so-humble bragging. You are quite correct, even in the days of the dot.com frenzy or the real estate bubble, no one discussed their losses, their ‘costly’ mistakes or mortgaging their home for a sure thing! Thank you for the reality check.
Given the enormous size of the US federal debt and entitlement costs, the Federal Reserve will have a very difficult time reigning in inflation which is now raising it’s ugly head. I don’t think there is another Paul Volker waiting in the wings with double digit interest rates.
Mike Zaccardi
2 years ago
Small cap Japanese banks.
Just kidding. Well, maybe.
I think ex-US value & small stocks will do well. That group may seem small, but the universe contains thousands of stocks. Many of which have missed out on the massive gains seen in the big cap tech space.
I’ve positioned my portfolio somewhat significantly in VSS (the Vanguard Ex-US Small Cap Fund). It avoids the US market obviously but also has no exposure to big foreign firms like Tencent, Alibaba, and Taiwan Semi.
I anticipate some reversion to the mean with respect to returns in foreign markets and US markets.
Me.
Anyone who says they can predict the future is either lying or a fool but I’m betting on dividend aristocrat no-load index funds.
Berkshire Hathaway, either class.
Jed Clampet was shooting at some food and up came a bubbling was black crude, texas tea, and off to Beverly Hills the Clampets went… and over the next decade fossil fuels will be the place to be… the drive to green everything will be slow due to logistics, supply chain problems and poor planning on the world’s part for sustainability. So don’t give up on fossil fuels just yet….
With high conviction: emerging market value stocks.
Perhaps, but I would be very cautious about investing in a market that so many feel is overdue to take off. Having “high conviction” about future prospects can also get one in trouble.
Emerging Markets. The demographics favour them. Blue Chip U.S. stocks that are fairly valued (yes, they do exist).
No doubt there will be unexpected events over the next ten years that will render any predictions useless
Isn’t the point of investing in broad market index funds a recognition that no one can predict with certainty what investments will outperform in the future? Isn’t that why we diversify broadly, so we can have at least some exposure to the market’s future winners, whatever they may be.
I think you nailed this question. Per Niels Bohr “Prediction is very difficult, especially if it’s about the future.”
For me that’s easy… private companies with great management teams and reasonable valuations. I’ve made more money investing in early stage companies the last 5 years than I could have ver dreamed of.
Workday just acquired one of my investments this past week, Zimit. 20X in less than 3 years. You can down vote as much as you like, I am not upset, because… 1. I am making a fortune. 2. I understand what I am doing.
If you did any bit of research you’d know that the largest return projections are in private equity for the next 5+ years… i.e. Private companies.
Inside the private company universe early stage companies, before they hit the growth phase is part of the value creation curve where the most money is made from a return perspective in the shortest period of time.
I understand that this isn’t for the vast majority of you, because the vast majority of you wouldn’t be able to due diligence or qualify an opportunity if you saw it. But the facts are the facts. If in any doubt, I’d be more than happy to compare my portfolio returns with any of you. 🙂
Mr. McDuck, congratulations on your investment wins. However, while you emphasize your gains, you say nothing about the risks you incurred nor do you discuss losses.
You don’t mention that private equity investments are illiquid. You can’t sell a stake in private equity to raise cash as easily as, say, a mutual fund or ETF. Up until now, you’ve been well-compensated for taking this liquidity risk. What would happen to your private equity investments if the economy sinks into recession?
I infer from your comment that you like making concentrated investment bets and, as a result, your portfolio lacks much diversification. Now that interest rates are set to rise and funding startups will get more expensive, is it reasonable to expect that the returns from private equity over the next 10 years won’t be as generous as during the previous decade of easy money?
Private equity has become a hot area for investment because past gains are well known and return projections are high. There is now much more money chasing private equity deals than before. With so many more people fishing in the same pond, is it likely that future gains won’t be as lucrative as in the past?
It’s certainly reasonable to invest in private companies “with great management teams.” But isn’t a management team ”great” only with hindsight? Can anyone know for certain that a management team will remain great in the future? Consider Enron, Worldcom, and GE. At one time, they were considered to have great management teams.
It’s great to invest in early stage companies before they hit the growth curve. But what if they don’t hit the growth curve? Don’t most startups fizzle out? I suspect that only a minority are successes. It’s the nature of media to publish stories about the winners to grab our attention. We rarely read stories about the losers.
Many startups likely gained traction during an era of low inflation and low interest rates. Was it during this time that 5-year return projections were made? Now that inflation is much higher and interest rates are set to rise, isn’t it reasonable to expect that future gains in private equity will be muted?
Just curious, but have you ever lost money investing in a private company? You made 20X investing one company, but how much of that gain was offset by losses elsewhere? Facts are facts.
What a refreshing and sobering reply to a somewhat arrogant and dismissive piece of not-so-humble bragging. You are quite correct, even in the days of the dot.com frenzy or the real estate bubble, no one discussed their losses, their ‘costly’ mistakes or mortgaging their home for a sure thing! Thank you for the reality check.
Ironic that you are posting on a site called “Humble Dollar”
Methinks though doth protest too much. 🙂
VAW – the Vanguard Materials Index ETF.
Given the enormous size of the US federal debt and entitlement costs, the Federal Reserve will have a very difficult time reigning in inflation which is now raising it’s ugly head. I don’t think there is another Paul Volker waiting in the wings with double digit interest rates.
Small cap Japanese banks.
Just kidding. Well, maybe.
I think ex-US value & small stocks will do well. That group may seem small, but the universe contains thousands of stocks. Many of which have missed out on the massive gains seen in the big cap tech space.
I’ve positioned my portfolio somewhat significantly in VSS (the Vanguard Ex-US Small Cap Fund). It avoids the US market obviously but also has no exposure to big foreign firms like Tencent, Alibaba, and Taiwan Semi.
I anticipate some reversion to the mean with respect to returns in foreign markets and US markets.
Just my 2 cents.
What are your thoughts on the Avantis International Small Cap ETF (AVDV)? Do you prefer VSS because it is passive?