The Active Vs Passive Investing Debate

[@LifeofBoris]

I only invest in mayonez. never fails!

[@andrewashkettle]

Omg it's actually Boris

[@CaseyBurnsInvesting]

But it’s it an instrument?

[@remlatzargonix1329]

Life of Boris ....I moved to Montana and became a dental floss tycoon!

[@CaseyBurnsInvesting]

F

[@TerribleTonyShow]

I see, boris is in the master mayonez market.

[@genegieb9153]

Best intro, we require more of these in the future. The benchmark has been set.

[@Slintovski]

Me an intellectual : Buys high and sells low

[@blargor123]

The biz way

[@Cvar00]

@Luís Filipe Andrade That's the joke

[@ChrisTheCentaur]

@Luís Filipe Andrade r/whoosh

[@Patrickhh69]

Me, a galaxy brain: short low and buy back high

[@Ramxie35]

You shorting?

[@steveantonioni]

THAT INTRO! I'M DYING

[@ariavachier-lagravech.6910]

Big brain

[@jenniferl6212]

We Stan a 500IQ king 👑

[@RandyLy]

I do both so I can argue and fight with myself. When I see my index fund go up and one stock that I chose go down, I'll wonder why I thought I could beat the market. And then when one company goes up and the index fund goes down, I'll believe I'm a genius 😂

[@remlatzargonix1329]

Randy Ly ...maybe you could passively invest in one benchmark, whist actively investing by buying lotto tickets....That way, if benchmark goes up,,the consensus views are correct, and if the lotto numbers come in its all moot. 😀

[@stevenclark1123]

Some people can and do beat the market, but it is a lot of work! Much more than I am willing to do. I do index funds with 85% of my cash and use copy trading with dreamfire52 for the other 15% where they do the active trading for me. This satisfies my need to beat the market without killing myself.

[@JoelChenFa]

Sometimes in the same day?

[@FlexiFlo07]

😂😂😂😂😂😂

[@cjblazer385]

That intro… I hope this channel gets really big, it deserves to be.

[@MikeStillUK]

Congrats Richard on the huge success of your channel

[@ThePlainBagel]

Thank you very much! Very cool to receive your support :)

[@dylanbethune-waddell1254]

As someone who is almost never impressed nor entertained when educators try squeezing memes into their content, that intro was a flawless victory!

[@johnathanpenczek5499]

lol I use both strategies. I have a passive portfolio for retirement, and I have an active "fun money" portfolio.

[@TheGael128]

how much have you gotten from active ?

[@blakefisher5148]

This Is something im starting today :D

[@bicycleninja1685]

Also, stocks held less than one year are taxed as short-term capital gains, which can be about twice as much as stocks held over a year. So your winnings have to be able to offset that if you're operating as an individual.

[@TuKakaroto]

I'm actually cursing my finance master and it's really fun to be able to experience a lighter aproach to the content I study on my classes. Great content guys!

[@CocolinoFan]

I can't stop laughing 🤣🤣🤣 The intro is a 10/10!

[@TheFGrox]

Squarespace sponsorship makes me laugh too. /s

[@kekcity7770]

too much pewdiepie watch time lmao this is great

[@RedOneM]

You definitely should take advantage of both. You even could split it 50/50, half goes to long term (10y outlook, index funds) and the other half should be researched by yourself and the term of holding can be chosen (yearly/half a year/quarterly). With this strategy you would still get a chance to find the next hit company perhaps, but even if you miss it you still have 50% invested relatively safely (as long as the market stays alive).

[@endanarchy]

I have always felt that this is an instance of two animals disparaging each other without realising "Actually, the environment values both of us because we each serve our roles." I leave active investing to those with the capital, capacity, time and resources to do so. I thank them for their contribution to market efficiency, give them their alpha and then ride in that wake with my passive strategy. In the words of President Jack Nicholson before he got killed: Why can't we call just get along?

[@neal2049]

Reveal your portfolio for 1M subs mark? Also, still waiting for the Bagel Buddies series.

[@DoddyBicaraInvestasi]

Great explanation!! Sadly, in my country, Indonesia, even the passive index funds still cost you around 1.5% of expense ratio. The active mutual funds are even worse, they cost you around 4-6% of expense ratio.

[@jonathanjeffrymulyana4390]

Coba investasi diluar negeri pak

[@alex2143]

I’m a passive investor for two reasons: - odds are the counterparty to most of the trades that you make in stocks, is an institutional investor. They’ve looked at the data and decided that it’s best to sell that stock at that time. And it’s their job to do that. It’s pretty arrogant to believe that I can make a better decision with less training, less time and less information. I don’t like those odds one bit. - if I were to become an active investor, I’d have to do a lot of research in order to make good decisions. That’d take hours. If I were honest, I’d have to charge myself for those hours worked, since I could’ve been doing something else during that time. Suppose I spend 4 hours a week doing this research... I could spend those 4 hours on a side job, and I estimate that that may make me like €10/hour. So unless I believe that the extra research is gonna be so awesome that, with my meager assets under management it’ll net me an excess of €40 per week, I’d be better off taking a side job for those 4 hours and investing that money passively. So... being realistic and humble is what causes me to be a passive investor.

[@remlatzargonix1329]

That's a wise move. The empirical results show that, after fees, the average passive investor out-performs the average active investor. Even many superstar active managers don't always beat the market consistently year after year.

[@Flamer997]

I like dividends so I like holding for a long time but that doesn't mean I'm not researching and checking on my investments, I'm checking every day and always finding stuff out about future stocks or my current ones so I am fairly active just not 24/7 active

[@flexinclouds]

I dont care for dividends because I have a really small account. But your strategy of actively picking, researching & holding is pretty solid. It takes the emotional factor out of it. Whereas I actively watch the market from before market open till after it closes (& into AH). Cause I primarily day trade/scalp higher return/more volatile stocks. But i also hold some ETF's like SPY & QQQ, and safer stocks like Google, meta, toyota etc. But I only have ⅓ to ½ of my account "in play" at once due to frequently buying & selling. But Ive been able to manage 1.5-2.5% a month with my extremely tedious strategy.😅

[@mikeno.9308]

But if a passive investor trades actively, does an active investor hear a tree fall in the forest?

[@remlatzargonix1329]

Mikey Norris ....sadly, only moments before the tree falls on him/her and crushes them into "forest pizza".

[@WeLoveValue]

lol. good question

[@spencerfluetsch67]

Intro was literally WSB

[@usaball9190]

No? More like r/finance

[@user-ro3er5wd9m]

WSB isn't investing, they're gambling.

[@efrainanaya5671]

Automatic like for intro! Always enjoy viewing your content

[@jeremythompson5151]

I do both. I have an index fund portfolio and a dividend stock portfolio. Brings me the satisfaction of passive income and the peace of mind of massive diversification. Plus it can be exciting to own companies directly.

[@jakemf1]

Yup

[@victorpopov3809]

Active investing is like playing in a casino, the casino wins 100% of the time. How can you play a game where the rules are not made by you, and can be changed at any time ? A millionaire can just swing the price and you will loose everything, trading bots will always outsmart you and many other things. Seeing as charts and TA is mostly predictions, daytrading is like betting on something, sure you might get lucky, but its just gambling.

[@noahyannis2465]

If you do you research is has nothing to do with gambling.

[@victorpopov3809]

@@noahyannis2465 you dont need to do research to understand the most basic logical concepts of economics and investing, you just need to be smart

[@John-thinks]

The middle-ground I've been subscribing to recently is that markets are efficient - but that's because there are people who earn a living buying and selling to get them to that efficiency level. And that activity needs to be compensated. So an activist can outperform the market slightly to earn some money in exchange for helping keep that ticker perfectly balanced on the efficient price for some stock.

[@MikelSyn]

That's my view point as well. The large number of active investors trying to arbitrage on their information tends to push markets close to efficiency. There's a sweet spot where any higher, fewer active investors can find arbitrage options, and any lower, more active investors will try. If I want to actively invest, I need to do better than them. If I don't think I can, I'm better off passive investing. And then of course there's the huge (and still growing) pool of completely ignorant retail traders just throwing distortions into the market, and screwing both sides up.

[@WeLoveValue]

If you know what you are doing the active investing can be the way to go! The issue is that too many people pick individual stocks without any research and would be much better off just buying the index.

[@trmibp9441]

You can make money by actively investing but you need to have 3 things on your side: 1. Time 2. Patience 3. Don’t get greedy or don’t buy into fear of losing out Remember you only become successful if you think successful. I started investing actively some years ago and not gonna lie it’s hard and I wanted to give up but I put more time in stayed patient with my trades (not day trading) and I gave up on only wanting to invest to buy a Ferrari or a mansion in some exotic place because I was greedy and that actually caused me to lose money, now after all this time I actually make good money because I know how the markets work and what drives them. Just follow the 3 things I said there and you will make money investing in the market! Best of luck to everyone out there!

[@alex2143]

Or you could just invest in an index fund

[@thebrianpaige]

This really is one of the most coherent, concise, complete channels on KZbin

[@StrikingCrayon]

I accidentally got carried away and basically wrote a blog post, but fuck it. Here it is!

[@ThePlainBagel]

Great comment, read the whole thing and completely agree :)

[@d0718]

Thank you for another amazing video :) A video idea: evaluate Benjamin Graham’s “the intelligent investor” (W.Buffet’s fave book). Key points and whether they still stand true? What are the opposing views and do they have ground?

[@hansel1611]

Benjamin Graham had the "cigar-butt" way of investing, buying fair companies at amazing prices. Warren Buffett later moved away from this and instead started buying amazing companies at fair prices

[@remlatzargonix1329]

Hänsel ....I don't want to sound like I am against active investment, because I am not, but one problem with using "guru" investors, such as Buffett or Graham, (the common ones who are used to "prove" a particular investing argument) is that we cannot rule out survivorship bias, by using the small number of significantly successful investors as examples. (By that I mean that we cannot prove statistically, deductively, or otherwise, that results obtained are due to the course of actions that they recommend. They may, indeed be correct, but the issue is of proving it. ) A secondary issue of using "gurus" which also affects the first issue is that people will follow what gurus do (or tell them what to do), further enhancing their results....This secondary issue becomes even more pronounced as the guru becomes more successful as more and more people follow the gurus recommendations. Still, if one were an investor, it might be wise to follow the guru, because if their advice makes you rich, then it might be irrelevant whether their information is true or not......The ends justify the means.😀

[@VadymSkl]

That intro is pure GOLD

[@PaulVazquezJD]

Sadly, I've never laid an egg so I don't even have egg baskets.

[@mr.xernorus4026]

I just by good moat compagnies and reinvest the dividend when they are low and never sells...since 1997. So im active investor that take is profit passively from dividends. Checkmate.

[@ZacharyLaid]

Passive Income: S&P500 ETF’s Active Income: Handpick and manage companies

[@remlatzargonix1329]

Zachary Laid Finding Freedom .....yup, and it is extremely difficult to beat the market by hand-picking individual stocks and even harder still to do it consistently over long time periods. But, some investors can and do so. The one problem with the active approach (if one does not want to simply rely on luck, and I am not poopooing luck, some people have gotten rich by being very lucky) is that the active investor will have to have some new and/or unique analysis methods/algorithms to make accurate predictions/forecasts enabling them to anticipate market movements before they happen and so profit thereby. Behavioural finance approaches can only take an active investor so far, since 1) the phenomena are well known to the market participants, and 2) some investors are, indeed, irrational, but not ALL participants are irrational. So, knowing that investor Joe suffers from irrational behavioural biases, does not mean everyone on that market is similarly deluded.

[@SynThenergy]

Great points about the two sides. One thing to note is that for every alpha-generating active firm, there MUST be a management company that generates negative alpha. These funds and companies go bankrupt due to outflows going to either index funds or "good performing" funds. As a result, alpha gets harder and harder to get and stock prices are more accurate because less-skilled management firms can't distort the market. IN other words, active managers set the price of stocks, but indexing makes them more accurate as time goes on. Eventually there will be a balance between active and passive, probably at 80% passive. Once you're beyond that, there are price distortions that can be exploited.

[@akaman85]

Bryce I think you’re conflating a ton of economic theories into your version of the you truth, but your theory misses some huge factors. Namely, index funds are not all created equal. Not all indexes reflect the S&P or an S&P TSX composite...which ultimately is what a lot of passive theories are based on, historical returns of US benchmarks (which also do not factor passive fees). Past returns are not indicative of future returns. Further, passive theories have their own biases. Further, index funds carry their own strategies, and unless you are invested into an index which somehow has equal weighting across all world markets (which in itself is arguably not the best strategy) you are always biased towards one market or another.

[@παυλοςψαθας-ω1δ]

when the intro hitted the "imbecile", i died laughing xD

[@monkeytron5061]

You can do both. So long as you keep those accounts ABSOLUTELY separate! Great video.

[@tictoc5443]

Why separate

[@sevenbullsinc]

Love the channel! No fancy graphics just straight to the lessons. 👍

[@CrimsonFox36]

REAL Active Investment has never been tried before!

[@navi_navi_]

Thx for releasing that right AFTER my exam on investments :))))

[@ThePlainBagel]

Big oof

[@dumolollen7676]

It's depends on the participants as their approach with regards to Active n Passive investing I would like to a combination of both of the approaches

[@scoobydoobers23]

My favorite irrational concept of active investing is that the market is irrational but me as a market participant am rational. . . . All of us bring our biases and ideas to bear that make us imperfectly rational.

[@ZenTradeGame]

As always......great video sir !

[@pratikjain9018]

Market are inefficient in the short run but efficient in the long run. Thats why buffet say that the best way to make money for know nothing investor is index fund , yet he still does active investing.

[@OopsFailedArt]

Very well done video. Also remember that active mutual funds inherently have a handy cap that shows negative returns. When they do well, investors surge money in causing the manager to make trades at higher prices than they normally would have. This is repeated on the downside. Wall street journal actually did a study accounting for this and found that the average active mutual fund outperformed its index by about 0.5-1.5%. It's very hard to track. It also suggests that if you want the benefits of active management you may need to either do it yourself or invest in a hedge fund where they have more control on flows of funds. Personally, as an active investor, I believe most people benefit from a passive approach as it takes years to master the skills for consistent outperformance. You can't just watch a video or read one book. It's like any other skill. It takes time

[@sweasyco]

Hey could perhaps link the study. Would be very appreciated

[@OopsFailedArt]

@@sweasyco man I wish I linked it. I’m trying to find the specific study. I no longer have the Wall Street Journal and I think that’s where I read it. Totally forgot about this so if I find it again I’ll post it here. That’s one I should have printed out.

[@alex2143]

I have some doubt about the average active mutual fund outperforming its index at all. The SPIVA scorecard shows that, over 15 years, about 95% of active mutual funds underperform their index. Whatever the reason doesn't really matter. As an investor, the only thing that matters in the end is total returns.

[@OopsFailedArt]

@@alex2143 that’s true. However, there’s an interesting point on that. I did a study recently on 450 equity funds roughly. What I found was that while large cap funds substantially under perform, mid cap and ESPECIALLY small cap have a habit of being even or out performing their index fund rivals. The largest average outperformance was in small blend funds where the active manager had access to all strategies. This is because the pricing information is far less efficient outside the large cap funds. Moral of the story: if you’re buying a large cap fund, go with the index, mid cap do your research but likely index, small cap very likely to do actively managed (also far lower volatility).

[@sfl5086]

I like your content overall but I don’t agree w you on this. Not that there isn’t a place for active investment but the data clearly shows passive index fund investing is superior to active management. Not even close over time.

[@palermodpr]

This channel is awesome! Keep up with the great work.

[@KarlWacker1]

I don’t think all passive investors buy into the Efficient Market Hypothesis. I don’t. Markets are quite irrational, since they are driven by the emotions of human beings. However, low fees, positive tax advantages, and broad diversification all make index funds more appealing compared to actively managed funds. It’s too hard to know which stocks to dump from the index, ergo simply holding the index wins most of the time. Just my two cents

[@troypresley]

Really love your videos!! What about the concept that the time and effort spent chasing alpha has to pay off vs other ways to spend your time? If I make more at my day job per hour than the alpha I get from researching investments, then passive is objectively the logical choice.

[@HarshColby]

8:33: I wonder what percentage of investors do what you do: actively choose stocks, but then sit on those picks for a long time. I ask because I do this, and I just assumed a large portion does. People with no time or no confidence should probably stick with index based ETFs. People with lots of time and expertise, should probably be more active. But everyone in between, should probably be more like you (and me). I carefully chose my stocks, but then hold them for at least a year to take advantage of the cap gains rate.

[@Yellowbacon25]

Active vs Passive is how quickly your portfolio turns over, nothing to do with how much you research or how much you diversify. You're jumbling stuff together... There are long term passive investors that actively research, hardly diversify and barely trade Similarly, there are active traders that are highly diversified and do 0 research

[@TreadNShred]

I would say as a passive investor I'm actually both. I spend time looking at the fundamentals of a business, its balance sheet and other things. While, also trying to outperform the market in a passive manner. Achieving this by buying quality companies for less than their intrinsic value.

[@hail_seitan_]

The eye shine coupled with the moderately passionate "IMBECILE" might be one of the funniest I've ever seen in an investing video

[@patrickhenry4874]

Active investing keeps market efficient so passive investing works

[@LockCard]

both they are both good day trading and swing trading are really useful, and passive income helps build over time regardless of the market. the goal of investing is not to beat the stock market but to go with its ebb and flow.

[@John-thinks]

Also FYI i loved the humor worked into this one! haha

[@nicksantillano8553]

Fantastic job, great use of visuals and humor.

[@choreomaniac]

The funny thing is, those who hand their portfolio to an active manager tend to be the most passive. People who only have 2-3 index funds often are more involved in their investment decisions than someone who pays a manager to invest for them. The worst of all worlds is to pay a management fee to someone who invests in mutual funds.

[@alex2143]

Mostly agree, except I do see some value in an advisor helping pick the index funds that someone should invest in based on their goals, risk tolerance and investment horizon. Such an advisor would probably only have to spend a relatively small amount of time on each client, so they might only have to charge a small fee to cover their expenses, and they might be able to provide access to additional financial advice when needed.

[@zinebibanez8440]

Watching one of your 10min videos is like reading 3 books on the matter......twice!!!! Thanks for making them.

[@StatsMass]

I think it's important to note that the difference between active and passive is more substantial when you consider net performance over a lifetime of investing. Net performance because active investing by nature requires higher portfolio turnover than the index. This results in a higher tax drag as well as transaction costs. Additionally, active management requires resources to research opportunities and execute the trades. Even if the manager operated as a non-profit (although I'm not aware of any that aren't for-profit)... because there are a large number of managers, the assets to cover these expenses at each firm are relatively small: higher expense ratios. A lifetime of investing. At any one point in time, an active manager can beat the benchmark. But because markets favor different styles over time and no single manager is competent in every market. At some point, they may not beat the benchmark sustainably. The investor is left to hope they picked the right manager at the right time. If they're wrong, switching to another manager can incur large transaction fees, termination fees, load fees, and taxes. Even in a no-fee and tax-advantaged scenario, performance chasing often leads to underperformance.

[@Fortzon]

So many memes in that intro :D

[@AlejandroVargas-mh5bt]

Excelent topic and helpful information. I would love to see you do a video about how the trading of commodities affects the retail price of such

[@k.h.6991]

I don't think passive investing is about believing in the (short term) efficiency of the market. It's about recognising what you don't know - and the impossibility for the average joe to figure out what a good (active) fund is. As well as not having a crystal ball in general. Most lay-investors perform worse than the market. Professional investors generally don't beat the market either. Unless you think you can be (or imitate well enough) a Warren Buffet, passive investing just makes sense. Except right now, I think I would recommend waiting 6 months LOL (which is an active play...)

[@andreimircea2254]

I like to call myself a Passive investor, mainly because I like to invest in stocks for the long run, and before buying a stock I love to research it in order to ensure it will be stable or grow in the long term (At least 5 years)

[@sweasyco]

Well you can call it whatever you want but thats active investing

[@andreimircea2254]

@@sweasyco I don’t know how investing for the long term in stocks without trying to outperform the market can be called active investing, but you do you jam.

[@sweasyco]

@@andreimircea2254 Because you have to actively research and pick stocks, even if you dont do it often, action is required.

[@sweasyco]

@@andreimircea2254 And why would you ever pick stocks if you dont think theyre gonna outperform the market? ETFs would be the obvious choice

[@PassiveIncomeTom]

*Great comparison between these two!* 👍

[@dimbasick]

The core of all these intrinsic value/fair price theories is in the assumption that there is one. But to me it sounds like a logical paradox. The price of an asset is defined by a market, i. e. by how many people want to sell or buy the asset. So its current price IS THE fair price. And how one could argue that this market price deviates from the real fair price? Let's say now you think the asset is priced too high. And let's say later the price goes down. What makes you think that now this is the FAIR price? Just because it went down and you thought it would? Hah. What about millions of other people who thought id'd go up? And what if next time you'll be wrong about the price? Why don't we just stop for a moment and recognize that there is no real FAIR price. To anything. The concept of the market doesn't even need it. The price itself is determined by supply and demand. And if anything is of great value to you, it doesn't mean that it should be expensive. The price will be simply defined by the relation of supply and demand for that. Let's take an abstract company A for example. Let it produce apples. Do you believe it has an intrinsic value? Ok. What if two other companies start producing apples and find a way to make it cheaper? Did something change about the company A? No. WIll it loose a portion of the market and therefore profits? Yes. Will its price go down? Yes. Did this company changed? No. So... what the heck? How can we speculate about an INTRINSIC value that's easily influenced by external conditions. Not even only these conditions, but by current fashion or mood in the society. If suddenly some people stop eating apples and start eating pears... We can not assume that some intrinsic value or fair price of anything even exists, because there's no such thing as objective utility or usability or value of anything. The value of anyting is deined by it's necessity right now. What was the intrinsic value of oil 200 years ago? Zero. Nevertheless, Brent costs a few dollars now. What will be the value of oil in 200 years from now? Probably zero. Again. So what is the intrinsic value of oil? It hugely depends on a time period and the demand for it. Does that sound obvious? Duh. Of course. Because there is no such thing as intrinsic value. And I didn't even mention different sorts of government regulartions, hype and unpredictable inventions that might influence value anything.

[@noel3700]

What about high frequency trading? These algo's beat the market by active investing/trading

[@monkeytron5061]

“Regret Aversion” I like that! I call it “Revenge Trading”.

[@Bou89]

Content is getting better.

[@surbhisawant3546]

Love your videos! Please do one on the current market situation. Thanks!

[@blazingcoder3196]

Give your editor a raise.

[@user-go7mc4ez1d]

I think the market is very inefficient. I just don't have the ability to second-guess it.

[@ultramadscientist]

Are active investors who do achieve alpha making most of that money off of other active investors who are failing to?

[@flexinclouds]

Likely. But theyre not just making money off other active investors.. But anyone who's losing on a position they're profiting from. For someone to make money in a stock, someone else has to be losing it. Theres no way for everyone to profit on any given stock. So im not sure how the market as a whole, gains 10-20% every single year. Unless more people & $ is always flowing in.. vs selling. (Also im sure plenty of accounts & big holders die, their accounts go dormant, & their money stays put)😅🤷‍♂️

[@elliottmiller3282]

Food for thought. A lot of 'passive' investors market time, have real estate, or sepertate accounts to trade stonks. A lot of active investors are really just following a growth or value strategy and rebalancing . Since the market constantly moves, no one strategy will ever win. So maybe they arent so different.

[@desiv1170]

I agree, it's important to be fair to both sides. Whether they are passive investors, or if they are wrong. ;-)

[@noahi.1381]

Do both, but adjust to your strengths and weaknesses.

[@panamahub]

Do both! Rebalance when the storm (crash or covid) comes or don't trade! Active investing is to have monthly cash.

[@abdelsalam50]

Please do more of these Intros :D

[@swissarmyknight4306]

You can blend the strategies. I'm 75% in index funds and 25% in individual stocks that I pick. I try to make value and growth plays for companies that are not on the S&P 500, which I think are the most overvalued companies. If I wanted to own more Apple, I would just buy more S&P 500 index rather than the individual stock.

[@AxelQC]

The real problem with active investing is fees. Passive investing is typically far cheaper. If you factor in fees, it's very hard for active investing to beat passive index investing.

[@hansel1611]

You can remove fees from active investing altogether if you do everything yourself. You don't need a fund manager to tell you how to find the fair value of a stock. The math is easy and everything is available online now

[@sid35gb]

Well there’s a few active investments that outperform the usual benchmarks by quite a bit but not all the time and it’s difficult to find a good one that will produce good returns in the future. But passive investors need active investors because the volatility they cause benefits the dollar cost averaging done when you’re investing a monthly amount from your salary.

[@MikaylaRose420]

I think Im a hybrid of the two. I actively invest, as I do analyze stocks to find buying opportunities. But I also do diversify across multiple stocks. I want to diversify, for passive exposure, but I will only invest in companies that I can see are paying their debts, growing their cash on hand, growing their customer base, and has a decent roic, and I mix it up with penny stocks and mature companies. All based on the same criteria, thus hopefully minimizing the risk when investing in penny stocks.

[@mitch5662]

I gotta say, I did not expect to laugh as much as I did. Excellent video, keep up the great work!

[@ThePikmania]

Man great video. I'm conflicted, I'm a passive investor but I actually think the market isn't rational. The problem is I don't have a clue how to evaluate companies so I wouldn't be rational either as an active investor

[@hansel1611]

Look into Peter Lynch's book One Up On Wall Street. He reasons that the average investor can beat "professionals" and that if you passed the 5th grade, the math isn't difficult at all

[@ThePikmania]

@@hansel1611 thanks, I'll take a look

[@roberteischen4170]

That Intro was dope bro.

[@InfiniteQuest86]

I would say that passive investing includes people who research their stocks and then invest in them over the long term without worrying about day to day fluctuations. They aren't necessarily trying to only get the market return. They just aren't trading in and out 'actively' as one might say.

[@Erewhon2024]

People who have a day job outside of finance will often benefit from doing the majority of their investment at the passive end, dollar-cost-averaging into good mutual funds (or ETFs) because 1. they tend to work and can't ethically trade during the times local stock markets are open (so market timing is even more of a lost cause than usual) and 2. they need to devote the majority of their time to their craft (their day job and skills that would help them improve and advance) and their free time to family and self-care (hobbies, sleep, etc) leaving little time for very thorough analyses. Changing the subject, where are you from? Usually you have a standard American accent, but I have never heard "ee-rational" before (it sounds a bit like AI: e-commerce is electronic/internet business, e-rational could be internet-enabled logic routines). I have always pronounced irrational more like ear-rational.

[@jacobspeirs6647]

Great Video. Thank you for sharing.

[@minaise]

Like your style. Keep doing what you doing

[@TheRepublicOfUngeria]

I think that the answer is like any other specialization based consideration: invest in your own notions if you know what the fuck you are doing, invest in someone elses if they do. If you don't want to learn how to make your own ice cream: go to Baskin Robins, if you are willing to take the time out of the day to make your own ice cream: okay, but it costs you time you don't get to spend on other things. If you don't want to sub specialize into investing: okay, that's fine, just have someone or something else invest on your behalf into something that has a proven track record. The benefit is that you get to spend the rest of your time doing a hobby, or some other skilled specialization, or drugs and porn, I don't know: but you get that time for something else. The tradeoff is maybe you can't beat The Market: but so what? If everyone sub specialized into investing, the market would, ironically, crash, because now no one is out spending money on goods and services because they are too busy stuck in their house pouring over income statements and specific news.

[@rex.2053]

god that intro had me dying LMAO

[@arcmassif2163]

So you've admitted it, you're an active investor. What data sources to you rely on and do you pay for real-time pricing updates and analysis?

[@ThePlainBagel]

I work for an active firm so I myself am not paying for my resources but the company does. We use a variety of sources, but we use a program with Thomson Reuters data for a lot of our research (similar to a Bloomberg terminal)

[@portumaan]

Eikon :)

[@remlatzargonix1329]

The Plain Bagel ....so, is your firm's competitive advantage comprised of their superior information/data?....In addition to the data, do they also have/ use superior algorithms/analysis/models as part of their competitive advantage? If the answer is superior data, then how is the data obtained? (I.e. How does your data differ from that of an ordinary market participant?) I ask this question for a few reasons; first, it would clearly imply that markets are, in fact, not efficient, since some market data is not transmitted to the market as a whole; second, if other participants find a way of obtaining the same market data, then would your firm's competitive advantage disappear?...this would imply that market efficiency is at work. Third, if the market data is not available to other market participants, the why is that so?....If it involves privileged information (and I am not suggesting that it does, since that would be illegal) then the competitive advantage would disappear once the method of obtaining such data was revealed. I am interested in these issues because I am looking for a job in the investing world and I am trying to increase my knowledge of investing and markets. Thank you.

[@arcmassif2163]

@@ThePlainBagel In the interest of fanning a potential flame war;-) I will publicly admit I am in the passive camp. Not because I think it is superior or because I am incapable of evaluating an investment. I am passive because I am an individual investor with a modest portfolio. The basic tools provided by my brokerage are the only cost effective tools I have found and I find the suitable for a passive strategy only. Are there other tools or resources out there that are cost effective enough for a passive investor like me to become active?

[@mjlyco9752]

I think you missed a big component of passive investment. If you hold a total stock market (market cap weighted) index, you (mathematically) will get the average return of every active investor. You would have to put a larger percentage of your money in places that other investors are not, and then be correct that they are wrong and you are right. Not just right in some reasoned sense like P/E ratio. "Right" here means people follow you and put their money in that same thing, driving up it's price more than average. You also have to do that while defeating overcoming tax drag, trading costs, bid/ask spread, etc. Seems like a big hassle for a few basis points and a less reliable outcome.

[@Argenswiss]

My opinion before watching? Invest passively a large amount of your money, the money you can't afford to lose in its entirety, and let it compound over time. If you have extra money over that, invest it actively until you have enough to buy Assets like Real estate

[@f3wbs]

TPB channeling his inner PewDiePie is the one thing I didn't know I needed.

[@dartek14]

I would like you to review the book by Peter Mallouk "5 Mistakes"-2014 or have him call in because his book showing the truth about how many hedge funds and Mutual funds fail to perform is a powerful disclosure.

[@pacifist_yi]

People don’t realise active managers do this as a full time job yet rarely outperform the market consistently (I.e. on consecutive 5 year periods the active managers that outperform the market rarely stay the same). This would suggest that to have any hopes to achieve such a goal one must allocate a lot of time to do so. Opportunity costs start to build up. Passive investing allows you to use that time to make money elsewhere. I think even ignoring the fact that passive generally outperforms active, if you factor in the opportunity cost in, there’s no way active is more profitable.

[@jakemf1]

As a beginner why not do both? Buy individual companies buy also have ETF’s

[@beaviswealth]

😂👏🏻👏🏻

[@andrewwhitcomb4857]

My strategy: buying and holding for the super long term, only selling if the company no longer is exuding qualities of my original investment thesis in a negative manner. Diversifying with the following asset allocation goal: 20% private single family rentals 20% REITs 20% fixed income securities 20% stock indexes 20% individual stocks held for the long term

[@DanHominem]

I do both. I have a passive long term snp portfolio and i also invest in my own stocks. Monetariliy, im 9/10 passive 1/10 active mostly because im new to active. Even then, im not day trading or anything, just choosing my own companies to invest in