The best argument ever for trackers

[OhNoNotimAgain]

The highest wisdom is to know that you know nothing" - Socrates.

[MartynC27]

The highest wisdom is to know that you know nothing" - Socrates.

I believe that by the time we know something the professionals in the City would have already reacted to it with their superfast computers so any 'open information' will have been priced in before we can even log in. - So why bother trading. All we can do is take a long term view. Trackers are a good long term vehicle for this. Do you agree ?
MartynC

[GoSeigen]

The highest wisdom is to know that you know nothing" - Socrates.

Apart from the inherent paradox in this trite cliche, and the fact that as written it doesn't accurately reflect even what Socrates is reputed to have said...

How does it become the best argument ever for trackers? Surely it's as much an argument for, I dunno... wrapping one's cash in a banana skin and feeding it to a goat?


"The highest wisdom is to know that bananas know nothing." - GoSeigen, Sep 2017

or to paraphrase:

"It might be a bloody wise goat!"


GS
Who values human intelligence over the wisdom of goats...

[Clitheroekid]

I believe that by the time we know something the professionals in the City would have already reacted to it with their superfast computers so any 'open information' will have been priced in before we can even log in. - So why bother trading. All we can do is take a long term view. Trackers are a good long term vehicle for this. Do you agree ?

I'm not sure which proposition you're seeking agreement for. However, if it's

So why bother trading. All we can do is take a long term view.

then no, I don't agree.

Whilst many people have no inclination to trade those who do (including myself) can make good returns, and significantly more than by simply buying and holding.

Successful trades don't depend on reacting instantly to information, though there are obviously instances when that can produce high profits. I don't watch the markets like a hawk, so I probably wouldn't be aware of such information until it had been in the public domain for some time anyway. However, many successful trades that I've carried out are recognising when a company has been oversold on bad news - Petrofac and Provident Financial being two recent examples - and buying in as close to the bottom as possible, then selling on the rebound.

I suspect that a lot of that overselling is entirely due to `superfast computers' that are reacting to a falling price by joining the other lemmings. That's when a human mind can be superior to an artificial one.

But I do agree with you that professional traders are likely to have a better view of what's happening than I do, which is why I am very wary of buying shares where there's a substantial short position. This is one of the (several) factors that deterred me from buying into Carillion after their big initial drop, and why, despite the bid rumours, I'd still steer clear of them (though if I'd bought yesterday I'd be smiling!)

If you're asking for agreement to the proposition that trackers are a good long term vehicle for those who take a long term view (i.e. those who aren't interested in trading) then yes, they obviously are. Very dull though!

[colin]

All we can do is take a long term view. Trackers are a good long term vehicle for this. Do you agree ?

Yes absolutely.

An example from the current unfolding of history which vexes my imagination as to how the mid term future will unfold: the energy sector comprises nearly 15% of the FTSE 100 most of which I assume consists of oil companies, I assume that oil will be far less in demand in 20 years time than it is today, but people will still use energy, maybe that energy will be cheaper than today, maybe energy efficiency measures will result in us using less of the stuff, or maybe someone will work out a way of using oil which prevents the carbon from polluting our atmosphere. Whatever happens a portfolio of index trackers (or just one) is versatile enough to capture global economic growth and there is no way my imagination can cope with just that one issue.
Shell really did once sell sea shells on the sea shore, and look what happened to them!

[Hariseldon58]

I suspect the need for energy will not be reduced, the question is where that energy will come from. I doubt if it all will be solar and wind, oil does does offer a high density of energy.

Eg 50 litres of diesel will take a car a lot further than an equivalent weight of batteries (approx 42.5 kg) , these things tend to make progress a lot slower than might be commonly assumed.

The lo cost diversified tracker is a pretty good investment vehicle for most, it will reflect the overall market without making any judgements....adapting to changes in technology etc...for every active buyer there is a seller, each think they are on the correct side of the deal.

[OhNoNotimAgain]

It is reminiscent of the apocryphal story of the old lady who visited the Stock Exchange, when there was one. She asked her guide what everyone was doing.
He replied they were buying and selling shares.
After a long pause she then asked
"And which one is right?"

[DiamondEcho]

I remember visiting the LSE floor in about '83/84, it was a kind of posh organised chaos. Many people seemingly loafing about 'having a laugh'. Chaps playing 'golf' with up-ended embrellas knocking rolled up balls of paper around. Amazingly recreational to the passer-by.
Others in top hats seemed very busy. Apparently they were the 'Queen's brokers', Schroders IIRC. It was an unusual scene to me, tribal, yet leisurely in appearance - it crossed the classes.

I wasn't 'connected enough' to get a job offer there, and started my career on the LIFFE floor, which was a pretty gruelling induction. No top-hats there lol, more like discreet but violent fists when the pit-moderators weren't looking.