Jurgis

If IBKR has spent tons of money for their backend in order to provide cheap trades, why don't they spend some money on improving the UI? Having good front end is cheaper than their backend systems and it would attract more customers. Right now their interface is atrocious. I would not recommend them to anyone except day traders desperate for low commissions. Fidelity experience is light years above IB. And I am fine with paying Fidelity commissions: it's still less than 0.2% drag on something like $5K trade, much less for bigger ones. (Yeah, I know IB has couple advantages: some international markets with cheap commissions, international positions in IRAs, cheap options, great margin rates. Almost none of these apply to me or most people)

Oddball, You assume that "fool" just means low intelligence and then you make two mistakes: First, of course CEOs are not necessarily Stephen Hawking intelligence level geniuses. But they are not fools either. They are above average in intelligence. Second, "fool" in the quote meant "not a good leader, manager" too. And you say yourself that the CEO has to be a good leader and manager. Furthermore, I disagree with you that above average intelligence and above average people management skills are enough to make a great CEO. It is actually a rather unquantifiable mix of the two and some other things including being in the right place at the right time with the right mindset. I agree with you that CEOs are not superhuman. But good ones are not average schmoes either.

Most of the people who have to go to office aren't very good at filling their time with things that bring deep satisfaction either. Stopping for a moment to consider the meaning (or meaninglessness) of your life might be harder and quite uncomfortable compared to just chugging along to the office ... or to a golf course. ;)

Good observation bizaro86

Any company can be destroyed by inept management. If not destroyed, at least the capital can be squandered, moat diminished, and shareholders can suffer permanent loss of capital. There are companies where mediocre management can keep company running and even outperforming benchmarks a bit because of moat. It is still not clear whether it's worth buying stock in such company at a "good" price. (At "great" price - sure ;) ). But overall, the bigger issue with "even fool can run" statement is that it draws attention away from evaluating the management more precisely than fool or not fool. It's relatively easy to say whether management are fools or not - most of the time they aren't. However, evaluating if they are mediocre or great is much tougher. This can be witnessed by various opinions about Dimon, Moynihan, Ballmer, etc. I can think of the following situations where management evaluation is tough: - "Stable" company: i.e. company is chugging along, there is no big loss or big gain, but perhaps with great management it would do much better. Boring examples are in insurance: AXS, RE. Perhaps not boring example: MSFT. :) - "Super" company that has not experienced downturn. Most people think that Musk, Page are great managers, but what happens when TSLA, GOOGL go into downturn? Would they be great then? (Both of these examples might be controversial :) ). - Company that hits externally caused downturn. Is the management great but suffering because of things they can't control? Or are they lousy because they did not position the company correctly? Examples: MSFT again perhaps, oil companies right now (NOV - wasn't the management "great" so far, but now BRK is selling shares and nobody thinks management is great anymore?), banks in banking crisis, perhaps KO now - is the current CEO mediocre or is the soft drink crisis unavoidable?

I still think that you are about 4 years too late. (Not that I participated: I missed HD and I missed cheapo Florida houses). I have not seen anything cheap and with long term potential recently. But I am willing to listen to ideas. :) Home builders might be a trade since they have not run up. They are not hold-forever investment IMHO.

Aren't you guys about four years too late? Shoulda bought HD in 2009-2010, no? http://finance.yahoo.com/echarts?s=HD+Basic+Tech.+Analysis&t=10y Is this thread just "I missed the run up of great housing stocks, so I want to buy crappy homebuilders instead"? 8) Serious question. I am not trolling :)

Great article. This still suffers from a "trend" fallacy: that there has to be a trend to which the prices (or numbers in general) revert to. In fact, linear trend is completely artificial artifact of finding least squares linear approximation for series of numbers. It does not represent a causal or explanatory law (or even a theory). Like author shows himself, the numbers are not linear and only adjustments to numbers make the linear approximation more coherent. So unless there is a reason for the line other than "we took least squares approximation", there is no law that prices have to revert to it. They likely will, but it's possible that they won't and the least squares approximation will shift a bit instead. Edit: note to myself: I have to remember the "the massive drops seen in 2003 and 2009 were the result of the application of accounting standards that were not applied to prior eras and that do not reflect true earnings performance".

You have to grow your investments exponentially, not linearly man. 8)

I always found the attitude of raising and managing family/friends' money amazing. There is a saying to never do business with a friend, since soon you either won't have business or you won't have friend or both. At least if your anonymous clients are not happy, you can tell them to go and screw themselves. ;D And they will only take their money when they leave. Family and friends on the other hand can leave you with a decades of hurt feelings and other crap. Oh well, shows why I am not in marketing and I don't manage other people's money. ;)

OT It is not at all clear that "confident candidates (beyond displaying required knowledge)" would bias the result towards "idiots". (BTW, "idiots" is a wrong word, since you assume that they do display required knowledge that may make them way above average person). Assuming a population of candidates X who all have knowledge above level Y, you assume that the knowledge distribution of confident candidates is lower than knowledge distribution of not confident candidates. I assume you believe this as an outcome of Dunning-Kruger effect. There are at least two issues with your claim: 1. It is not clear whether Dunning-Kruger effect works within a population pre-selected to be above level Y. 2. It is not clear that interview situation where people know that it's beneficial to show confidence actually reflects the confidence.

An African or European swallow? :D I meant USD or CAD? ;D

In current rate situation, bonds are not obviously better than cash unless we talk about short-term bonds held to maturity. Very few people hold actual short-term bonds to maturity. So the roboguys are actually suggesting that bond funds are better than cash. This is a bond market call at the time of super low bond rates and not necessarily true. So suggesting someone to hold cash instead of bond funds is not automatically stupid. It might be quite smart for some possible scenarios. Shannon strategy would make money, but so would a stock/bond-rebalancing portfolio. In normal times when bond rates are rather high, stock/bond-rebalancing portfolio is likely to outperform Shannon stock/cash-rebalancing portfolio handily. However, currently, that might not be true. I like Graham's suggestion of 50/50% stocks/bonds up to 75/25% stocks/bonds with a twist that now I'd go for 75/25% stocks/cash unless the investor is enterprising enough to pick their own bonds and their maturities accordingly. This is what I suggest to my non-stock picking friends when they ask. :)

This thread is a great read for anyone interested in cognitive biases and reasons why investors get whipsawed out of their positions. /gets more popcorn/

But you have to admit, someone just had to ask, it was too obvious :D I wish I did, I would not have to hang out on this forum then. Just roll in moolah. ;D

To paraphrase Will Rogers: Clone picks. When they go up, sell them. If they don't go up, don't clone them. ;D

So you work in HFT, eh? I don't have to answer this, but no. And my opinion about him was the same before "Flash Boys"

Congrats twacowfca! Great thesis and great purchase.

Pray tell how you made money from listening to his "7-10 predicted returns of various assets over the past 15 years". Some facts please. I'm not sure about the interim predictions, but if you followed their forecasts from late 90s you would have bought REITs and emerging market equities and done very well, avoiding the S&P which they predicted would have a negative return for the decade. Their return projections in the depths of the recent crisis would have led you to re enter the U.S equity market. I am sorry, I think you are data mining here. But I agree that it's a tough question to ask since everyone will data mine to support their opinion. I withdraw the question. 8) Peace. :)

Pray tell how you made money from listening to his "7-10 predicted returns of various assets over the past 15 years". Some facts please. Edit: question withdrawn as not quantifyably answerable.

I find Michael Lewis to be pompous, self important, sensationalist prick. Despite his proclaimed self-righteousness, he fit Salomon very well.

That's Jeremy Grantham I remember: if you listened to him, you would not have made money for the last 20 years. Except for two crashes, perhaps.

LOL, RichardGibbons, made my day. A quote to live by. 8)

Oddball, The funny thing is that if people have to hate, they should hate tech people instead of hating finance people. But they don't - apart from SF Google bus incident, I guess. Anyway, I'm too lazy to write about this, it's more of a conversation over beer rather than message board writing piece. 8) Edit: in short: I disagree with your arguments and your conclusions. Technology is a bigger cause of inequality than finance. They are intertwined though. There is also USA politics... well I should not start on that. ;)

LOL, poor Tilson, he's not a high roller he thinks he is... can't get Palladium card... LOL ;D