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Partner wants to buy a Super Car worth 150k

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  • Avatar Tim 
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    Status: Accountant
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    Resulting is a logical flaw in decision processes.

    Leverage can be a useful tool (or not)

    Pay Off Debt Or Invest In Stocks: The Leverage Fallacy

    Regardless of the results, that doesn’t validate a process. It’s not about proving or validating results.
    Debt certain does not equal uncertain returns.

    If one can comfortably afford an exotic car, feel free.

    #236165 Reply
    Liked by Zaphod
    Zaphod Zaphod 
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    Status: Physician, Small Business Owner
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    Joined: 01/12/2016

    Interesting attempt at debt vs. invest, but of course just veers off into the absurd by comparing a mortgage or personal loan to stock futures and options. These are in no way comparable and its just plain dumb and makes anyone who tries to discuss the topic in this fashion safely ignored for the propagandist they are.

    All leverage is not created equal and that is the whole dang point in the consideration. If they cant understand that they are either blindly or willingly naive at best, or just spouting disinformation willingly.

    #236171 Reply
    Liked by Tim
    I Find This Humerus I Find This Humerus 
    Participant
    Status: Physician
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    Joined: 12/02/2017

    this isn’t directed at entrepreneurMD to be clear.

    i completely understand why people would want to keep things private, and would not post a picture of my car here.

    what is curious to me is when people say i have a mutual fund that has returned x% for the past y years.  why is that important to keep secret?  once you are in, isn’t the goal for more people to buy shares and drive up your own profit?  is there something proprietary about the selection process that might be revealed?   if more people buy, does it somehow hurt your ownership?   i have seen this a few times here, and it always struck me as curious.

    thanks!

     

    Click to expand…

    I think it’s because if I tell you I just made 100k from stock XYZ last year. And this year stock XYZ crashes, you now know I just lost a ton of money (assuming I held it). Or if I brag about my portfolio of stocks and then they perform poorly, you’ll think I’m full of dookie.

    #236181 Reply
    Avatar HumbleInvestor 
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    Status: Physician, Small Business Owner
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    Joined: 12/28/2016

    IRS looks for reasonable mode of transportation for work purposes. A $150k super car may not fit that description.

    #236200 Reply
    Liked by adventure
    Avatar EntrepreneurMD 
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    Status: Physician
    Posts: 288
    Joined: 06/10/2019

    this isn’t directed at entrepreneurMD to be clear.

    i completely understand why people would want to keep things private, and would not post a picture of my car here.

    what is curious to me is when people say i have a mutual fund that has returned x% for the past y years.  why is that important to keep secret?  once you are in, isn’t the goal for more people to buy shares and drive up your own profit?  is there something proprietary about the selection process that might be revealed?   if more people buy, does it somehow hurt your ownership?   i have seen this a few times here, and it always struck me as curious.

    thanks!

     

    Click to expand…

    I appreciate that you didn’t direct at me.

    Reality is, it doesn’t matter. It is only 10-year annualized returns over the past decade. You cannot derive anything from that moving forward, especially at this stage of the bull run. My point was, with the right skills and some tweaking one can pick top funds that stay on top years later. Translated to real numbers that means the 10 year returns were 30+ fold and 25+ fold in this case. That was just mocked until proven. I get it, many don’t want to believe you can beat the index fund portfolio over the long term (maybe 2.5-4 fold 10-year average over a standard bull cycle), because indexing is what a lot do. Doesn’t mean one needs to be intolerant of a road less traveled.

    For the next bull cycle, if tech remains on the forefront my current funds picks may or may not be the top funds. If tech is not the leader, my goal is to find the next leaders. It’s a work in progress. In reality, I think it’s not likely to be the same fund leaders. Can I repeat my quality picks? I won’t answer that given prior reactions, I’ll just do whatever I’ve been doing for the past two decades since it has worked for two decades. Easier to exchange ideas and desired information if met with civility.

    Any good financial advisor can give you names, but mastering the complexity of a dozen other factors in taking the plunge to optimize your returns at acceptable risk based on your individual circumstances is the real question to ask.

    #236266 Reply
    Avatar DCdoc 
    Participant
    Status: Physician
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    Joined: 06/14/2016

    In fairness to EMD, cloud computing and IT service sector funds could meet those historical 10 year returns. I’m a fidelity guy and just glancing at some sector funds, FBSOX is over 20% annualized for the past 10 years. I’m sure cloud computing would be even higher.

    #236272 Reply
    q-school q-school 
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    Status: Physician
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    Joined: 05/07/2017

    this isn’t directed at entrepreneurMD to be clear.

    i completely understand why people would want to keep things private, and would not post a picture of my car here.

    what is curious to me is when people say i have a mutual fund that has returned x% for the past y years.  why is that important to keep secret?  once you are in, isn’t the goal for more people to buy shares and drive up your own profit?  is there something proprietary about the selection process that might be revealed?   if more people buy, does it somehow hurt your ownership?   i have seen this a few times here, and it always struck me as curious.

    thanks!

     

    Click to expand…

    I appreciate that you didn’t direct at me.

    Reality is, it doesn’t matter. It is only 10-year annualized returns over the past decade. You cannot derive anything from that moving forward, especially at this stage of the bull run. My point was, with the right skills and some tweaking one can pick top funds that stay on top years later. Translated to real numbers that means the 10 year returns were 30+ fold and 25+ fold in this case. That was just mocked until proven. I get it, many don’t want to believe you can beat the index fund portfolio over the long term (maybe 2.5-4 fold 10-year average over a standard bull cycle), because indexing is what a lot do. Doesn’t mean one needs to be intolerant of a road less traveled.

    For the next bull cycle, if tech remains on the forefront my current funds picks may or may not be the top funds. If tech is not the leader, my goal is to find the next leaders. It’s a work in progress. In reality, I think it’s not likely to be the same fund leaders. Can I repeat my quality picks? I won’t answer that given prior reactions, I’ll just do whatever I’ve been doing for the past two decades since it has worked for two decades. Easier to exchange ideas and desired information if met with civility.

    Any good financial advisor can give you names, but mastering the complexity of a dozen other factors in taking the plunge to optimize your returns at acceptable risk based on your individual circumstances is the real question to ask.

    Click to expand…

    That’s fine.  What’s the problem with revealing the stock pick?  I’m not asking for receipts, i’m just asking which one it was?

    Again, it’s not just you, but lots of people come on and claim this return and that return, but won’t tell which fund it was.  I don’t see any cost to revealing the historical pick.

    #236273 Reply
    Liked by childay
    fatlittlepig fatlittlepig 
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    Status: Physician
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    Joined: 01/26/2017

    Don’t confuse being lucky with having “the right skills”
    I’m guessing it was some sort of leveraged or concentrated tech mutual fund. Making large returns on an investment doesn’t make said investment a wise choice, it just means you got lucky. If I buy a thousand out of the money calls on google and it goes up and I get rich, that doesn’t make me a skilled investor it just makes me a lucky one.

    #236274 Reply
    Liked by Zaphod, abds
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 2858
    Joined: 09/18/2018

    Sorry. With the lack of a specific plan of investment plan that specifies the criteria for entry and exit that is disciplined and can be backtested, there is not much other than trust. Trust but verify seems a reasonable way to manage one’s finances. Mutual fund managers have been around for a long time. Finding those select performers is going to be interesting. To be honest, way too much narrative without enough facts that can be verified or tested. Not an insult, just taking a pass.

    #236327 Reply
    Avatar Panscan 
    Participant
    Status: Resident
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    Joined: 03/18/2017

    What is the point looking for a top funds and risking being wrong if already having enough money?

    #236362 Reply
    Avatar Panscan 
    Participant
    Status: Resident
    Posts: 1018
    Joined: 03/18/2017

    Maybe the fund did meet those numbers. I have no idea the reluctance to prove it. It’s really strange to throw that out and then refuse to point it out. Everyone knows past performance doesn’t mean future results

    #236363 Reply
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2428
    Joined: 05/01/2017

    Maybe the fund did meet those numbers. I have no idea the reluctance to prove it. It’s really strange to throw that out and then refuse to point it out. Everyone knows past performance doesn’t mean future results

    Click to expand…

    It’s not strange at all if you understand what’s going on.

    #236375 Reply
    Liked by Lordosis
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 2428
    Joined: 05/01/2017
    medical school scholarship sponsor

    this isn’t directed at entrepreneurMD to be clear.

    i completely understand why people would want to keep things private, and would not post a picture of my car here.

    what is curious to me is when people say i have a mutual fund that has returned x% for the past y years.  why is that important to keep secret?  once you are in, isn’t the goal for more people to buy shares and drive up your own profit?  is there something proprietary about the selection process that might be revealed?   if more people buy, does it somehow hurt your ownership?   i have seen this a few times here, and it always struck me as curious.

    thanks!

     

    Click to expand…

    it’s the same reason that Dave Ramsey won’t give examples of his “not that hard to find” funds that return >10% year after year.

    #236377 Reply
    Liked by CordMcNally
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 2858
    Joined: 09/18/2018

    a) “claiming the profits were the result of his own unique “split-strike conversion strategy”.”

    b) Day Trading Academy

    c) DraftKing and FanDuel

    d) Home Flipping

    Each has documentation of the fantastic returns, account statements, fancy cars and money in the bank to “prove it”. Actually, some even have “unpaid testimonials” from some very very astute and famous people.

    There are many many ways to make money pretty easily.

    a) Bernie Madoff, take your choice.

    #236402 Reply
    Avatar EntrepreneurMD 
    Participant
    Status: Physician
    Posts: 288
    Joined: 06/10/2019

    Sorry. With the lack of a specific plan of investment plan that specifies the criteria for entry and exit that is disciplined and can be backtested, there is not much other than trust. Trust but verify seems a reasonable way to manage one’s finances. Mutual fund managers have been around for a long time. Finding those select performers is going to be interesting. To be honest, way too much narrative without enough facts that can be verified or tested. Not an insult, just taking a pass.

    Click to expand…

    Absolutely correct. That’s why it doesn’t do anyone any favors to be given the names or for them to even find them online without a fundamental understanding of how to do this – and that takes years to master.

    What I include in my “a dozen other factors” statement (in my last post here) are the entry and exit strategy you speak of which are obviously critical. Then you get accusations of market timing from the dollar cost averaging crowd. No need for that conversation again.

    I’m glad you’re taking a pass, most should. Indexing is fine for most. I’m a seller with each new market high at this point. As Panscan noted, no need to risk on at this stage of the bull (exit strategy). I don’t need trust or verification, I need to repeat my fortunes after the next major recession (entry strategy). Already started? Maybe, maybe not. Treasury yields have inverted. Discipline to deploy that outsized emergency fund when risk is lowest and reward is greatest. Can a different strategy give a better chance at upward mobility? – provoking some thought. Maybe, maybe not. I’m always questioning myself but so far it’s been working out.

    Most should pass on the supercar too, given it’s not their passion. But not appropriate to call those of us dumb for having that passion (not directed at you). To keep with that theme, you’ll pass on sector investing, I’ll pass on index investing. No one is dumb. No need for either to prove anything, but just continue the prosperity as proof for ourselves.

    #236434 Reply

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