LOL, So This Is What Mutual Funds Really Are…
Posted by Timothy Sykes on Fri 29th of Aug, 2008 04:08:01 PM
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Thanks to BP, I saw this amazing tidbit HERE:
“Out of almost 2,100 diversified retail U.S. stock mutual funds that are open to new investors, just 17 have positive returns for both the past 12 months and year-to-date, according to investment researcher Morningstar Inc.”
Wow.
Now some people have told me I’m wrong for calling finance a joke of an industry…this stat proves my point rather nicely.
Forget all their glossy marketing materials and polished ads and ignore when these managers speak to the press about what they’re investing in, 99.2% of the multi-trillion mutual fund industry has lost their investors money over the past year.
They should be ashamed.
They should give back the fees they have stolen from their investors.
People, learn PennyStocking or suffer the consequences.
That’s what it comes down to.
I’m an absolutely terrible timer, spend less and less time trading (more on writing/researching/emailing…) and I’m up over 100% in the past 9 months.
My TIMalert subscribers and Pennystocking DVD students are doing even better…I dare you to find me one who’s lost a lot/anything if they stick to the rules outlined in my dvd….I double dog dare you!
These mutual fund monstrosities have made people decent to great money over the past few decades in an absolutely blazing bull market, but there comes a time when you must realize the good times can’t last forever.
Adapt or perish.
This is why I’m on track for a record month in August…it’s almost too easy.
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| July 2 | KIRK | $10.60 | $11.53 | $1377 |
| June 30 | ISRL | $107.97 | $118 | $985 |
| June 24 | LZB | $4.53 | $4.81 | $1240 |
| June 17 | GWSC | $1.86 | $2.76 | $2679 |
| June 15 | SHZ | $1.66 | $1.83 | $280 |
| June 15 | SPNG | $0.11 | $0.18 | $630 |
| June 12 | JAZZ | $2.84 | $3.26 | $380 |
| June 12 | MAPP | $9.68 | $10.07 | $565 |
| June 8 | HEB | $3.00 | $4.18 | $334 |
| June 3 | GROW | $8.64 | $8.96 | $740 |
| June 3 | SYMX | $1.21 | $1.11 | $940 |
| June 1 | USCN | $0.55 | $0.86 | $260 |
Total: $65,674 (421%)
Tim,
I’m not knocking your style here but you tell everyone to learn PennyStocking like it’s the only way to make money in the market. There is a style and strategy for everyone, and it’s not pennystocking. That’s your style and it fits you well, but you speak like it’s the only way to make money consistently. Maybe it’s just you trying to push your product, but if you really care about being a good teacher and not just a salesman, you would encourage people to find the style that fits them, not just tell everyone to go “pennystocking”.
Yes Tim, totally agree with you and mutual funds.
Waste of time, waste of money, I’m better off on a 4% savings account. My mutual funds are garbage, plus ETF’s historically perform better than them, plus you can get in and out whenever you want without penalty. And the fees are much less.
What’s even scarier is that money managers are actually feeling good about loosing less than the dow and S&P. They feel that being down 8% is doing very well compared to down 12.
I wonder how long they can keep “doing well” at an 8% loss every quarter
He isn’t saying it’s the only way to make money, he is contradicting the populist view that you should just put your money in mutual funds and sit on it for years and years. By taking control of your money yourself and finding a system that works for you, you only have yourself to blame for losing money.
Simon- Tim has repeatedly said that people can and should do better than him. Specifically by learning to go long and short. He never claimed his methods were the only way to make money. His shorting of pump and dumps has been working consistently for him and he has demonstrated their usefulness. it’s a proven niche that works well for smaller accounts with repetitively minimal risk
Furthermore, there are MANY MANY RIAs who still have large AUM who are going against the buy and hold grain that mutual funds epitomize. Tim is certainly not the only one saying this
A nice ‘in your face’ I would say. Forget mutual funds as turns out the majority of them are not worth the paper their sales pitch is printed on.
actually at one point Tim mentioned it is possible to make money through value investing, but can “never achieve the same returns as PennyStocking“
beg to differ - just gotta know where to look for them and not be afraid to take a stab at the obscure ones contrary to stupid advisers opinino!
This is the chart on my 2 main holdings in my RRSP (401)
Based on $10000 initial investment - first one has a 20 year average of 17%…down this month thou
http://freechart.globeinvestor.....wDate=true
(this one is conservative)
http://freechart.globeinvestor.....wDate=true
Face it, even Timmy’s methods aren’t going to provide continuous gains year after year after year…he will be the first to tell you that based on his history
is that predictable though kcprinters?… no
look how many years your investment was flat…
Of course not, but neither is ‘PennyStocking‘…take NCEN for example - has many baffled and probably caught lots of early shorts. Trouble with the questionable stocks is you don’t know what is going on behind the scenes - there is usually manipulation and often with much deeper pockets than you’d expect. You are at their mercy until they move on or finish doing what they are doing….this stuff ain’t foolproof and can turn ugly quickly, but 17% average over 20 years is pretty damn good and shouldn’t be totally discredited as another good investing scenario as well.
Not saying mutuals are golden, but there are some golden ones out there if you look hard enough
ye abut you cut losses quickly…and move on..you cant do that in investing..
when you invest you should be buying more when it goes against you, i would think. if you have such a conviction in a stock, ya may as well just buy when it goes lower. you dont do that in PennyStocking
money can be put to better use than sitting in a fund for 4-6 years HOPING that it’s golden. you can be hoping in a mutual fund for 20 years and still be even.
Even bette, 2 years agos I was insistently offered by a sales guy to buy this leveraged funds. THe same company that sells you the funds offered me a $50 k loan to invest on them, then I will “only” have to pay the interest.
I went into this discussion with this guy on how I would be screwed if markets headed down and he replied that historically funds have returned much more than the interest they were charging. That blew my mind, they were trying to duble dip on me, on the interest and on the management fees. Soooooooo happy I sent him for a walk
well, last on this argument…some of us can’t spend 24 hours a day studying charts and running scans, some of us have full time jobs where we can’t pay close enough attention, some of us are 70 years old and shouldn’t be screwing around trying to short some whacked out otc stock, some of us don’t want to be exposed to losing $700k on one stock (like Sykes did).
Investing should be about diversification because nothing is golden - I run about 60% mutuals, 40% stocks…I am fine with not having to manage the mutual side of things - I am fine with that side averaging 10-20% annually (if it was losing 10-20% annually, I’d be sure as hell out of that one and on to a better performing one). I work full time and can’t pay enough attention. Even if I could, I wouldn’t have the balls to rely on trading as a full time career. To tell everyone that ‘PennyStocking‘ is the only way though, is just wreckless and its not for everyone - I’m sure Sykes would agree…all depends on level of risk tolerance - some have more than others.
Anyhow, if pennystocking works for ya, great…for others, its just not feasible…dats all! We can agree to disagree!
Zykosis, the big problem is that mutual fund manager’s are tied and incentives are evil.
Even if they are convinced that the market is going down they can not tell you to stay on cash, or they’ll loose their job at that very moment. I am sure that most of them told there moms not to buy at a certain point and stay in Term Deposits at the same time that they are shouting out of there lungs that stocks are oversold an due for a correction.
hey KC, completely agree in the point that not everybody, has the time, nor the inclination, nor the emotional strenght, nor even the neurons required to go for penny stocking.
However, it is absolutely ilogic to always have to be long. It is very basic to be able to spot a downtrend in a major index, you can read about it and get it really clear in an hour or so.
THerefore when a downtrend is on place you should take the option of either staying in cash or buy a short index fund.
It doesn’t make sense to have to be long all the time “there is a time to buy, a time to sell and a time to rest”. How mutual funds are structures is bsed in the premise that it is always a time to buy and the only concern should be what to buy.
you just need patience to wait for the perfect opportunities that you yourself recognize and are confident in “playing”. you only need a few minutes a day to go through charts that look interesting to you, and then a few minutes to look at the news and fundamentals of the company per day.
seems dumb to me to hold onto a mutual fund and watch it go down 8% in a year and say to myself, “well i hope it goes up next year.” why not just learn the actual game for yourself, get your own style, and play it the way you want to play it. “PennyStocking” is one way, and it’s essential to learn the variables in pennystocking. it applies to all stocks/funds.
it’s risky doing anything with money. but if you learn the game yourself, you can improve your odds and control it yourself and do it in a short period of time. why sit in a mutual fund that’s down 8% or up 2% in a given year when you can be in and out of any particular stock in play for any period of time.
you said “Investing should be about diversification because nothing is golden.”
you’re right, nothing is golden. but if you have the drive to learn how to trade or invest yourself, you don’t need to be diversified. diversification is for people who are too lazy, have no time for research or making trade decisions, or just have no desire to actually learn what’s going on in their stocks. probably a little ignorant, but it’s one way to look at it. :)
Hey Tim,
I wrote a blog about new traders and a couple of problems they have. I mentioned you and your book in it so maybe it will give you press when I get more people to the blog. Go check it out at http://snafuleadstheway.blogspot.com
this site is really good
i like reading all the posts
mutual funds sucks big time
i have my own fund
+34 YTD
_________
BOJO 2008
yah dont get me wrong, PennyStocking is just one way to make $…just gotta make it as mainstream as mutual funds considering how right it is for soooo many people who dont even know it….yet
Tim Sykes, I wrote a post on my website which explains what went wrong with my UVSE trades. I wanted to clarify that I DID NOT “lose everything” with UVSE, and I have just pointed out all the mistakes I made in the post. If you do care about what really happened, and I do not expect you to, I invite you to skim through the post:
http://benbien.com/?p=203
P.S. I do not expect or pretend to think that anyone cares about what I do, so if you do not care then that is fine and I am not asking for anyone to read my work. I plan to write my trading log entries for the primary reason of improving as a trader, because when I write out the posts it helps to realize the mistakes I made. If you do not care, that is fine and I do not expect you to check out my site. Thanks!
If you wanna do long term, use index funds … I use them. 97% of managers underperform their benchmarks and the rest get lucky. I prefer index ETFs so I can hold them in my trading account.
As i said before / the more money you have to trade the harder it is to make large percent/ you said its the same. bs. try with 12mil and see what % you have. You should know about that from ur hedgy fund.. nuf said.. im not bashing you down. ur doing great for 12 thou and you;re doing much better than me.`
yes exactly kawatan, and people with small acocunts should realize they shouldnt be in mutual funds cuz they can use their small size to their advantage
So just pick the 3% who outperform. That’s like saying im not gonna worry with searching out the best stocks in this environment because most will go down anyways. Here is a list, doubt these guys are just getting lucky. PRPFX, CGMFX, FAIRX, OAKBX.
No reason for everyone to be cynical about funds. There are some really smart guys out there running them. I.E. Bruce Berkowitz, Ken Heebner, etc…
As for
Hey KC, whats the ticker on your funds? The top street growth did really well.
BTW check the 10 year annualized on a S&P Index Fund. You can read 5 minutes in Money Magazine and find 59 funds who destroy that.
hey lance…its up in canada - not sure if it would be US eligible - symbol in my system is TCM202. The fund groups special op fund has done even better lately (TCM302). Here is the breakdown of the two
http://www.globefund.com/servl.....3212348814
http://www.globefund.com/servl.....3212367924
Hey, and Sykes, you never mentioned if you were renting a car and were able to boot up to Kelowna….Penticton is just not a happening place in comparison
new post:
http://www.timothysykes.com/ti...../who-said-PennyStocking-works-only-for-idiots-poor-people/
doesnt matter, those PMs will still get paid even with negative returns. That is the problem with the MF biz: you can relatively outperform and make a bundle (that is: lose LESS $ than the other guy and still get a pat on the back)….then again, without MFs dropping the ball like this, you would never have a need for absolute return strategies i.e hedge funds…