Author Topic: Stocks  (Read 1179302 times)

Online ExGingi

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Re: Stocks
« Reply #3620 on: November 25, 2019, 11:30:18 PM »
Officially announced (subject to the usual stuff) on this Mega Merger Monday.

Who's next? A tie-up between IB an E*Trade? A takeover of one or both of those by Fidelity?

https://www.bloomberg.com/opinion/articles/2019-11-25/schwab-got-a-discount-on-a-brokerage

Interesting analysis. I don't think the others can have such advantages. IINM Fidelity and E*Trade have bank subsidiaries (or some other kind of arrangement, as they do have some kind of banking operations).
I've been waiting over 5 years with bated breath for someone to say that!
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Offline dealfinder11

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Re: Stocks
« Reply #3621 on: December 16, 2019, 03:33:12 PM »
https://www.cnn.com/2019/12/13/investing/robinhood-free-trading-fractional-shares/index.html
Significant part of this story is Robinhood plans on making fractional shares in ETFs available as well. Would totally eliminate a need for a mutual fund. Schwab said they were only planning on making regular stocks available [in fractional shares], not ETFs.

Offline dealfinder11

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Re: Stocks
« Reply #3622 on: December 20, 2019, 11:50:37 AM »
Wow . IB jumping in on fractional shares as well. Looks like we are accelerating into a new era of investing.

https://www.interactivebrokers.com/en/general/communiques/2019/2019-Q4-vol9.html#section-feature-drop

Online ExGingi

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Re: Stocks
« Reply #3623 on: December 20, 2019, 11:52:59 AM »
Wow . IB jumping in on fractional shares as well. Looks like we are accelerating into a new era of investing.

https://www.interactivebrokers.com/en/general/communiques/2019/2019-Q4-vol9.html#section-feature-drop

Indeed a new era.

What's next? 24-hour trading, making it almost like the currency markets?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online Zevwolf

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Offline ltttc

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Re: Stocks
« Reply #3625 on: January 03, 2020, 01:47:48 PM »
Do public companies have restrictions on how they can distribute their profits? (i.e. Can they give themselves raises as they see fit or does all profit have to be divided among shareholders in dividends or capital gains??)

Offline yuneeq

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Re: Stocks
« Reply #3626 on: January 03, 2020, 01:52:15 PM »
Do public companies have restrictions on how they can distribute their profits? (i.e. Can they give themselves raises as they see fit or does all profit have to be divided among shareholders in dividends or capital gains??)

The board members have a fiduciary duty to do whatever is best for the shareholders.
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Offline ltttc

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Re: Stocks
« Reply #3627 on: January 03, 2020, 01:56:55 PM »
Does that include ALL profits?  What I mean is, let's say a company goes public, does it "sell all of itself to the public" or only a %? If it's only say 40% are ALL profits "restricted"?

Offline yuneeq

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Re: Stocks
« Reply #3628 on: January 03, 2020, 02:13:34 PM »
Does that include ALL profits?  What I mean is, let's say a company goes public, does it "sell all of itself to the public" or only a %? If it's only say 40% are ALL profits "restricted"?

Does not matter what the percentage is that they offer in the IPO, they always have a fiduciary duty to the shareholders.
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Offline ltttc

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Re: Stocks
« Reply #3629 on: January 03, 2020, 02:17:01 PM »
Does not matter what the percentage is that they offer in the IPO, they always have a fiduciary duty to the shareholders.
So even if they keep 60% for themselves the BOD will have the final word as to what they can do with ALL the profits? (TIA - we're debating a topic here with some colleagues, so just need some accurate info)

Offline Ephcc90

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Re: Stocks
« Reply #3630 on: January 03, 2020, 02:58:19 PM »
So even if they keep 60% for themselves the BOD will have the final word as to what they can do with ALL the profits? (TIA - we're debating a topic here with some colleagues, so just need some accurate info)
Yes, generally, the BoD & management has the final say on all distributions (and all transactions except those required by law to be put to a shareholder vote). However, a “self-dealing” transaction can be challenged in court for a breach of their fiduciary duty by shareholders (though the law is generally very deferential to the BoD/management).

Offline ltttc

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Re: Stocks
« Reply #3631 on: January 03, 2020, 02:59:15 PM »
Thanks e/o!

Offline Sowhat

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Re: Stocks
« Reply #3632 on: January 05, 2020, 05:20:33 PM »
General Q re fund vs. ETF.

The talking heads tout ETF's as a cheap way to beat the broad-based market, and that fund mgrs are too often wrong.  And for a while, I blindly believed it. But looking again, I see that it is not true.  Yes, the expenses may be .03 v .70, but the fund may out perform over a three year period by 5-7%.  What am I missing?

Offline dealfinder11

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Re: Stocks
« Reply #3633 on: January 05, 2020, 07:03:31 PM »
General Q re fund vs. ETF.

The talking heads tout ETF's as a cheap way to beat the broad-based market, and that fund mgrs are too often wrong.  And for a while, I blindly believed it. But looking again, I see that it is not true.  Yes, the expenses may be .03 v .70, but the fund may out perform over a three year period by 5-7%.  What am I missing?

simple math. 50 percent of trades will outperform the average return of the broad market and 50 percent will underperform. If you add in fees, you are now more likely to underperform the market vs a less likely chance you will outperform. This is aside from tax considerations which can be significant.

Offline Sowhat

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Re: Stocks
« Reply #3634 on: January 05, 2020, 08:31:49 PM »
Maybe, logically.  But pick two ETFs and compare them with two best performing funds from the same class.

Offline dealfinder11

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Re: Stocks
« Reply #3635 on: January 05, 2020, 08:33:59 PM »
Maybe, logically.  But pick two ETFs and compare them with two best performing funds from the same class.

show me one chart that suggest past performance is a good indicator of future success (in MFs)

Offline Sowhat

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Re: Stocks
« Reply #3636 on: January 05, 2020, 08:42:11 PM »
I don't understand you.  No fund, stock or etf is gt'd to do anything tomorrow.  My question is very simple.  Compare a top-tier (based on returns) large stock fund with a S&P 500 ETF.  Look at the the 1, 3, and 5 year returns.  Which one has the higher return--the ETF or fund?  Yes, the ETF fund is cheaper and MAY have better tax treatment, but at what cost?

Offline yuneeq

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Re: Stocks
« Reply #3637 on: January 05, 2020, 09:07:57 PM »
General Q re fund vs. ETF.

The talking heads tout ETF's as a cheap way to beat the broad-based market, and that fund mgrs are too often wrong.  And for a while, I blindly believed it. But looking again, I see that it is not true.  Yes, the expenses may be .03 v .70, but the fund may out perform over a three year period by 5-7%.  What am I missing?

Your term is too short.

https://www.investopedia.com/articles/investing/030916/buffetts-bet-hedge-funds-year-eight-brka-brkb.asp
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Offline dealfinder11

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Re: Stocks
« Reply #3638 on: January 05, 2020, 09:28:33 PM »
I don't understand you.  No fund, stock or etf is gt'd to do anything tomorrow.  My question is very simple.  Compare a top-tier (based on returns) large stock fund with a S&P 500 ETF.  Look at the the 1, 3, and 5 year returns.  Which one has the higher return--the ETF or fund?  Yes, the ETF fund is cheaper and MAY have better tax treatment, but at what cost?

the premise for your question is flawed. You are attempting to select a Mutual Fund that has beat the S&P based on previous returns/success. Historically, that is a very weak barometer to use in terms of predicting future returns. In fact success often leads to higher fees, thereby putting you at an even greater disadvantage.

And don't be dismissive of tax implications. One example to illustrate : in 2018 the market was down around 6%, yet many MF owners had to pay 5% in realized gains. (This is due to the fact that MF managers don't like to sell position at a loss and therefore have a tendency to hold on to losing positions until they reverse, meanwhile realizing the gains of winning positions when they can.

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Re: Stocks
« Reply #3639 on: January 05, 2020, 10:39:31 PM »

And don't be dismissive of tax implications. One example to illustrate : in 2018 the market was down around 6%, yet many MF owners had to pay 5% in realized gains. (This is due to the fact that MF managers don't like to sell position at a loss and therefore have a tendency to hold on to losing positions until they reverse, meanwhile realizing the gains of winning positions when they can.

Vanguard seems to have figured out a way to avoid such a scenario.

https://forums.dansdeals.com/index.php?topic=13937.msg2089278#msg2089278
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan