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Gah, I am sick of this subject and all of the dogma surrounding it. Maybe MFO (meaning DS) and Waggoner can join forces to nuance this and put it in usable (actionable) language. **Of course it is predictive, how can it not be?** Of course it is chancy and dicy and of limited use. Are people dumb about the meaning of 'guarantee', what it is and is not? And of course we all use the past predictively all the time. Sun rising, etc.
Can we please granularize and nuance it? I like the suggested language. The current kneejerk broad crap language in prospectuses is no real help to anyone who is not a dolt, and even them. I love 'Do not expect'. It should be 'Do not count on.'
But do we tell our kids not to invest, meaning NOT in the hope that thus and such is the outcome? Of course not. No more than we told them, 'Do not count on crossing the street safely.' Of course as we age we should not COUNT on crossing the street safely, whatever that means, but we do. Does this mean no life insurance, or mandatory? No wills and PoAs, or mandatory? Come on.
I cannot believe academics seriously parse this stuff. How to measure dissuasion of reliance on past performance. Seriously? It is like something out of Swift, making sunbeams from cukes. Dissuasion of reliance, how does that translate into helpful behaviors and advice on behaviors? Be specific. Save in a mattress and spec only with the fringes?
In any case, what is the bottom line? If I truly and sophisticatedly believe in the 'Do not expect' new cool warning, what do I do? Do I not invest? Shd I not avoid index ETFs and that are cheap and blessed by boglers? Why? Why not? How do I seek protection? Does it exist?
I mean, I know the answer to all these questions, and so do you, but the point is, they are NOT good questions. This is like Talib's thing of most in actual bonds with a smidgen in ultrahigh spec.
Gah, it is enough to make one rant. Okay, backing away from podium now, knuckles ungripping lectern.
Reply to @davidrmoran: The one past performance you can rely on is the success of finance writers in recycling stupid themes at least once a year (per writer).
I suspect the US News site on average is visited by less sophisticated investors than this great site. With that understanding , I think the article has a good deal of value even though I may believe tht all who comment on THIS thread can do a decent job of picking funds.
Comments
Can we please granularize and nuance it? I like the suggested language. The current kneejerk broad crap language in prospectuses is no real help to anyone who is not a dolt, and even them. I love 'Do not expect'. It should be 'Do not count on.'
But do we tell our kids not to invest, meaning NOT in the hope that thus and such is the outcome? Of course not. No more than we told them, 'Do not count on crossing the street safely.' Of course as we age we should not COUNT on crossing the street safely, whatever that means, but we do. Does this mean no life insurance, or mandatory? No wills and PoAs, or mandatory? Come on.
I cannot believe academics seriously parse this stuff. How to measure dissuasion of reliance on past performance. Seriously? It is like something out of Swift, making sunbeams from cukes. Dissuasion of reliance, how does that translate into helpful behaviors and advice on behaviors? Be specific. Save in a mattress and spec only with the fringes?
In any case, what is the bottom line? If I truly and sophisticatedly believe in the 'Do not expect' new cool warning, what do I do? Do I not invest? Shd I not avoid index ETFs and that are cheap and blessed by boglers? Why? Why not? How do I seek protection? Does it exist?
I mean, I know the answer to all these questions, and so do you, but the point is, they are NOT good questions. This is like Talib's thing of most in actual bonds with a smidgen in ultrahigh spec.
Gah, it is enough to make one rant. Okay, backing away from podium now, knuckles ungripping lectern.