1. Most Discussed
  2. Gainers & Losers

Occam Logic, Another... 31/01/2017, 22246292

  1. Occam Logic,

    Another great post. I enjoy the level of sanity you bring to the threads.
    Assessing risk is something that many investors do poorly, whether out of ignorance or sheer exuberance . A person only has to look back to the bull market before the GFC to see the many risks that were overlooked. I remember companies like Babcock and Brown, Allco Finance, MFS, ABC learning, and the managed investment schemes into agricultural products. I will never forget people leveraged to the eyeballs, through margin loans, into companies that were also leveraged to the eyeballs. The years leading up to the GFC, particularly 2004 to 2007, in my view, saw the greatest "turn a blind eye" to risk that I have ever witnessed, and it certainly shows how people can be blindsided when they get greedy.

    I don't for one minute put HML in the same category as the companies above, but I do believe that the risk must be amped up to produce these sort of returns. To suggest that risk doesn't go up proportionately to the returns that they are producing goes against everything that I have ever learnt. If Stuart is some sort of freak genius that can continue to produce these returns year after year, there is plenty of time to bet the house. It will be interesting to see what happens in the future.

DISCLAIMER:
Before making any financial decisions based on what you read, always consult an advisor or expert.

The HotCopper website is operated by Report Card Pty Ltd. Any information posted on the website has been prepared without taking into account your objectives, financial situation or needs and as such, you should before acting on the information or advice, consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs. Please be aware that any information posted on this site should not be considered to be financial product advice.

From time to time comments aimed at manipulating other investors may appear on these forums. Posters may post overly optimistic or pessimistic comments on particular stocks, in an attempt to influence other investors. It is not possible for management to moderate all posts so some misleading and inaccurate posts may still appear on these forums. If you do have serious concerns with a post or posts you should report a Terms of Use Violation (TOU) on the link above. Unless specifically stated persons posting on this site are NOT investment advisors and do NOT hold the necessary licence, or have any formal training, to give investment advice.

Top