w67thstreet is an incoherent homeless troll

C0C0, how many of your 12,531 posts have been about real estate?

fieldschester:
Last night turned out to be about 3hours of talking her down from her anger,frustration and resentment.
She was acting-out like a child. I once saw the SuperNanny on T.V. instructing parents of a crazed toddler who refused to go to sleep. That was the same method I used.

I was waiting at the airport for a friend whose flight was late, so I had some time for the toddler-talk-down, before his flight arrived and I drove him home. I have to work tonight through Saturday night, so it's back to you for babysitting detail.

Real estate?

Poor abused "truth". You go new streeteasy. I'm thinking this will make a great story. New Yorker maybe.

Oxy>> I'm not sure you have the data to do any calculations. I don't believe I ever stated that I never exceed +3/-1% in any month so that may help eradicate some of my risk-adjusted "outperformance".

I didn't take you to mean you were always in that range, just that you were in that range most of the time. I.e., within it all but a few months in any given year.

Bridgewater only achieved 0.7% +/- 3.2% (before fees) in their diversified All Weather fund, and that was over a period they were able to collect 0.3% a month just in interest.

They can also do 1% +/- 2% or so in their Pure Alpha fund, but that's why they are a top dog. Very few funds out there can hit that level of consistency for 10+ years with large size. And if you're doing it for 10+ years, you will be doing it in large size because you are a very attractive risk/return.

To give you a sense of the level of that consistency, there are only two funds that could do 1% +/- 1% for 10+ years and in large size. One of them was Madoff. And no one could ever figure out how he could possibly be getting the returns he was getting with the strategy he was supposedly following. Its reliability was multiples higher than anyone else's doing similar things.

>> Genuine question for Nada - are you self-taught?

Define "self-taught". I have never taken a finance, economics, investment, or statistics course. A mixture of thinking, reading, solving problems that came up, and asking questions. I guess some of that counts as self-taught, but if you get to ask questions from a knowledgeable person, does that really count?

Here's the thing about w67th. He may sound like he's spewing bravado & nonsense. Half of the time he probably is. But if you look at what he says, he knows what's going on.

For example:

>> most ninnies who spew "financial" data at the yacht club, couldn't tell me "when is diversification bad?" question.

If you want to do some self-learning, go try to figure that one out.

Nada - I suspect you could teach yourself nuclear physics if you set your mind to it, and I am always even more impressed by high level of achievement without formal training than I am with results backed by all the usual degrees. With that said, I still think you and w67th are one and the same, but, like the faithful and the atheists, when pressed I have to admit that I have no proof and cannot be certain.

has-been groupie exhibiting symptoms of drug-related brain cell die-off.

Nada - re your question of when is diversification bad, an earlier post by Oxy stated that diversification is useless if assets are 100% correlated. I would love for you two to continue conversation b/c I am finding it educational, though I am sure that both you and Oxy have better things to do than enlighten the likes of me on advanced portfolio management theory via a real estate discussion forum.

So yesterday was a blowout for yikes' candidates. In NJ, Chris Christie, the ire of teachers, entirely consistent with yikes dislike of elementary school teachers. Maybe on second thought, I'm not so sure about NYC, because with universal pre-K, that means more school teachers that yikes dislikes.

(Asterix mine for emphasis)

yikes
about 4 months ago
Posts: 951
Member since: Mar 2012
ignore this person
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vick wouldnt have served one lousy day in prison were he not some uppity multi-millionaire black football player.
and bd2103--playing football for millions of dollars is anything but a "privilege"--***you sound like some loser elementary school teacher***--it's his right to do anything he wants, within the confines of the law--he committed a crime, served his time, he's an amazing athlete, he was hired to do what he does--
his treatment of animals was abhorrent, but the severity of his punishment was exceptional, given the crime--you got a problem with him serving his time and going back to work, call your congressamn--get the laws more in line with your sentiments
and for those who dont want him playing in frt of their kids, get real--there are so many public figures who are poor models for our kids--youre nuts if you think you should be the arbiter of who can be a public figure based on what you want your kids seeing--parent your kids, so they can make judgements for themselves--

@nada - I guess my prior post was conceding that I was probably blowing my trumpet too hard. My +1 with +/-2% only has a 83% confidence if I'm outside 2 months of the year. I would hope Bridgewater is better than that. That being said, I am certainly proud of my returns. However, I'm also consistent in not believing that my past performance is a guide to the future. In the past, my bigger plays have been going very long cash in 2008/early 2009, I went long financials in 2010, housing recovery in 2012 (Pulte et al) and I've been a perma-bull on Emerging Markets (perhaps for too long but a great ride).

Unfortunately, right now, I'm short on inspiration. Getting back to the purpose of this board. Once call, I do feel confident is being long NYC real estate for 2014. I'm guessing +10% to 20%. I think prices are a lagging indicator in NY. Right now, I think the real estate community has collectively underpriced resales throughout 2013 and has been hit by a wall of demand resulting in historic low inventory and super fast absorption. Perhaps, we'll start to see some of that play out in price action in late 2013/2014.

Further, the demand for larger units is creating a strong arbitrage opportunity for smartly combining apartments. In a world without co-op boards and without huge DOB overhead, the price ppsft of a 1 bed would not be running at 75% of a similar condition 3 bed in the same building. The 1 beds would quickly be combined with 2 beds to create 3+ beds until there was some equalization of price across the city. (The developers see this. Only yesterday the owners of the Chatsworth revealed their plans to reduce the number of units from 137 to 81).

NYCNovice, if you have 2 choices with equal risk and they are 50% correlated, you should diversify (or not) depending in your outlook in them. If you think they're going to do equally-well (a fine proxy knowing nothing), you should go 50/50. But if you think one is going to outperform the other by 2x (arguably quite a strong opinion), you should go 100/0.

Oxy, it seems you believe in "timing" different markets based on how attractive things look. How is that any different than picking individual stocks? Why do you think a random person (you) has a capability to do that better than another random person (w67th) has in picking individual stocks? Just as many Harvard IB dweebs are committed to prognostication on the former as the latter.

On your 2014 NYC RE prediction, are you willing to put any money on it? Put the line at 10%, whatever amount you want per percent above/under.

It's one thing to make random prognostications, another thing to follow it up with an amount of money commensurate with the magnitude of your prediction.

But if you "think" that one is going to outperform the other without "knowing," isn't that risky such that some hedge would benefit you?

So, b/c you can never "know" (unless you are criminally trading on insider information), won't some diversification always be good?

Haha Harvard dweebs. http://streeteasy.com/nyc/talk/discussion/34852-somewhereelse-smarterbetter-investor-than-inonada

Novice, you don't need to know in advance. You can always come onto streeteasy after the fact and make your claim. Notice how 67s story frequently changes? One time "thousands of people touched his wife," other time he is all in on Apple except for an inconvenient thread that Ottawanyc found that he was 2:1 in Sprint long after Sprint had its run-up, one time he made 5000% in Apple but another time he had sold out his position in the $480s, one time he says buying is for fools but another he owns a stake in 200 condos, plus his mom's co-op and commercial property, one time he is holding up the righteousness of renters but another he cheated his former landlord out of the last month of rent.

Inoitall is not w67. Promoting that theory is silly.

You are silly.

Ok, now I am being silly. I always tell my Quora contacts that they'd be better off allowing people to be anonymous. I'd spend more time on there if I could post without clients/colleagues/friends/family knowing that I am playing on the Internet rather than giving their matters my utmost attention.

@nada - I do prefer macro bets to micro single stock bets. That being said, I'm far from all in on any particular bias. For instance, I may go 20% EM instead of a recommended 5% or 10% etc... My U.S. equity portfolio may have an over-exposure to certain sectors, cyclicals, growth vs. income etc... Whatever, I do is still going to result in a reasonably balanced, lower volatility, reduced risk portfolio than punting on individual stocks. Arguably, the biggest proponent of single stock selection, Steve Cohen is in the process of admitting insider trading. My personal view is that there are two many unknowns with single stocks that create too much risk to a portfolio. For every holder of AAPL, there are holders of JCP, BBRY who thought they had insight to think these stocks were bargains.

> For every holder of AAPL, there are holders of JCP, BBRY who thought they had insight to think these stocks were bargains.

Keep in mind, Apple is down this year. W67's claim to fame is he picked the bottom. And as I've shown, there are a number of other competitive stocks you could have bought the day chosen by w67 and outperformed or materially outperformed him. Also, he kept a greater weighting in Sprint which has done just about nothing since that date. And he sold Ford to buy Apple, which is equal in performance over that one period for a net benefit of buying Apple on that date of zero.

Still with Oxy (and FC) on this one.
FC - I might have to start calling you Markopolos.

holy crap field hamster has me figured out in a twerky 200 letter tweet....

W67 kowtows to the financial hypocrisy that is the RE Bullz mantra from day one. You gotz field hamster telling w67 what a terrible "investor" I iz..... yet nary a house mouse peep about the imbecility of "investing" in sofa surfing. What's funnier is on a relative basis, RE pumpers just kept with with their own S&P, and unless they were in the top .000005% they made squat.

It's like telling someone you can read in 2013 in NY versus telling someone you can read in 1560 in London.

Well bleed it out like the japanese... see if w67 cares. I'm getting mine.

>It's like telling someone you can read in 2013 in NY versus telling someone you can read in 1560 in London.

Great analogy.

>> But if you "think" that one is going to outperform the other without "knowing," isn't that risky such that some hedge would benefit you?

Investing is an exercise in dealing with uncertainty. I guess most people have no clue how to do that, and they have no idea what constitutes "think" from "know". Investing is making decisions (repeatedly) based on "think" and spotting the BS when given a "know".

For example, let's break down my example of two 50%-correlated assets. Let's say one of them is the S&P 500 which you think does (say) 9% +/- 18% in any given year. The other is NYC RE which does (say) 3% +/- 6% in any given year, but you lever it 3x to 9% +/- 18% (let's pretend interest rates are 0% for the example).

Now I come along and say "What if I think stocks are going to perform 2x as well at the moment?" This means I'm saying 12% +/- 18% rather than 9% +/- 18% for stocks, and 6% +/- 18% on NYC RE. Is that all that crazy a bias in view? My view on each is a 3% shift on a volatility of 18%. That's just a 1/6th bias on each, but enough to rationally shift from 50/50 to 100/0. Yet I get a mouthful about "knowing" vs "thinking" from you.

Meanwhile, Oxy says he thinks NYC RE is going to do 10% to 20% next year. This is an asset that does 3% +/- 6%, and he's shifted it (roughly) to 15% +/- 6%. That 12% shift/bias is 2x the volatility, a full 12x larger than mine at 1/6th. From a statistical sense, that 12x-larger bias can be argued as 144x more "knowing". Yet nary a peep from you, it all sounds perfectly reasonable.

>> Still with Oxy (and FC) on this one. FC - I might have to start calling you Markopolos.

This is another example of having no clue on what constitutes "think" vs "know".

Oxy comes along and claims 1% +/- 2% a month over the past decade, and it all sounds perfectly reasonable to you. If we take average interest rates over the past decade out, this amounts to 0.85% +/- 2%. That's a monthly Sharpe ratio of 0.43. Through straight diversification (which is what Oxy originally claimed, though he's now further clarified), a comparable strategy (Bridgewater All Weather) could only do about a quarter that level of consistency -- a monthly Sharpe ratio of 0.125.

Now what Markopoulos brought to attention w.r.t. Madoff was the craziness of consistency in his returns, especially compared to what similar strategies were able to achieve. If you look at Table 1 on page 4 here, you can see Madoff's returns:

https://www.google.com/url?sa=t&source=web&cd=11&ved=0CCcQFjAAOAo&url=http%3A%2F%2Fwww.wise.xmu.edu.cn%2Funcc-wise%2Ffiles%2FProgramPapers%2FBERNARD_Carole.pdf&ei=92p7UtEIwrKwBMKNgbgG&usg=AFQjCNFvZ9luFkj1MqV1ZfFy4_I3AHij5A

He "achieved" monthly returns of 0.84% +/- 0.71% from 1990 to 2008. Taking out interest rates, that translates to a monthly Sharpe ratio of 0.71 (see Table 2 on page 7). The strategy he purported to follow could at best have achieved 0.18 (Table 2 again, but even this is overly optimistic and that 0.1 is more accurate).

So we have S&P 500 at around 0.1, Bridgewater All Weather at 0.125, Madoff at 0.71, and Oxy at 0.43. Yet you have no idea whose claims on this thread would raise Markopoulos's suspicions.

Oxy>> My personal view is that there are two many unknowns with single stocks that create too much risk to a portfolio. For every holder of AAPL, there are holders of JCP, BBRY who thought they had insight to think these stocks were bargains.

Look, I have a pretty diversified portfolio myself as well. But it just doesn't take that many single stocks to get your risk level down to the level of an index. And for every overweight holder of EM stocks, there are those that thought they had insight on XYZ. So what, what's the difference? You place arbitrary bounds along some axis of where people should think they can have reasonable insight. Why should a belief that Oxy might have insight be any more reasonable than a belief that w67th has insight on a stock? Just as many people and as much money, if not more, is working on macro. I understand that Oxy has no insight on stocks, but why should that preclude w67th who proclaims no insight on macro?

@Nada - That was all very confusing and would require far too much concentration, not to mention breaking out the old statistics text, to really dissect, but again, I trust it makes sense to someone (though I would love if FC or Oxy wanted to take that project on). Can we change the subject to another subject about which I suspect you are far more knowledgeable than I: Any thoughts on Wealthfront?

>> So we have S&P 500 at around 0.1, Bridgewater All Weather at 0.125, Madoff at 0.71, and Oxy at 0.43. Yet you have no idea whose claims on this thread would raise Markopoulos's suspicions.

More data points: the endowments of Harvard and Yale are widely considered amongst the best-managed diversified portfolios out there. Rather than take a relatively fixed macro diversification approach ala All Weather, they bias it over time and have a range of stocks, bonds, hedge funds, private equity, RE, etc. to choose from. Same playground as Oxy, but with more diverse choices and a bevy of top investment managers.

Over 1985-2009, Harvard did a monthly Sharpe of 0.175 and Yale (considered the best) did 0.19. Oxy did 0.43.

Now maybe Oxy got lucky, he does after all claim that the past is not indicative of the future. But how lucky does one need to be to do better by that much for a full 10 years?

If we say Oxy was implementing All Weather plus luck, it'd be a 1-in-a-2000 shot to hit that level of luck or better. If he was as good as Harvard/Yale plus some luck, a 1-in-300 shot.

Now I'm not saying that Oxy is trying to pull a Madoff here. Rather, he is probably under-estimating the volatility of his portfolio and doesn't have good intuition as to what is reasonable volatility.

I gotta imagine this is the part Madoff's investors missed. "Look, I think I've achieved a monthly Sharpe of 0.43 over the past 10 years (cloaked as 1% +/- 2%). Totally reasonable. Now here's a fund from Mr. Madoff, the best in the business, doing 0.71 (cloaked as 1% +/- 1%). Should the best-of-the-best be doing 65% better than me, 0.71 vs 0.43? Sure, totally reasonable!". Reality is that virtually all the best-of-the-best hedge funds with 10+ year track records (e.g., Bridgewater Pure Alpha) are doing 0.4 at best.

And lest there be no confusion - I am well aware that Nada's mind (as well as Oxy's and FC's) is firing on more cylinders than mine when it comes to quantitative matters. As a woman who was skilled in that area from a young age, I got tons of pressure to go in that direction b/c woman were so underrepresrnted, but I just had (and continue to have) no interest. I just want to know the safest way to grow my savings at approx 5% annually.

FWIW: I see your point re Oxy's returns, and I believe he has conceded that point, but Oxy's returns were not his main point. I suspect he has had returns with which I would be delighted over past 10 years with less risk than many strategies that have been pitched to me over the years.

And back to his original point - Why is w67th on here talking about single stocks, which are not comparable to real estate as an asset. To the extent that they are (and I did follow your arguments there), diversification into both is quite rational given the big picture. I remain of that school of thought that NYC real estate is an asset class unto itself.

But as final note - I think both you and w67th play a valuable role in educating first-time buyers/young professionals, that NYC real estate may not be best use of their money. I agree that it would not be prudent for anyone to put their life savings into Manhattan real estate, or perhaps any other real estate, and I think it is helpful to reeducate the country on this issue.

On Wealthfront, had never heard of it before. I just browsed their white paper, doesn't look crazy. They think they can do 5% +/- 10% in a tax-exempt account. Works out to 0.4% +/- 2.9% a month, a monthly Sharpe of 0.14 if you assume 0% interest rates and 0.09 if you assume 2%.

If 5% +/- 10% tax-exempt is good enough for you, I think you'll find lots of experts saying that's what you can expect from a diversified portfolio.

>> Oxy's returns were not his main point

When Oxy says "w67th, your S and AAPL investments are a bad risk/return idea, you should diversify, look at my risk/return" and the produces numbers that are 4x higher than should be expected by all accounts, should we not use that to take his assessment of w67th's risk/return with a grain of salt?

>And lest there be no confusion - I am well aware that Nada's mind (as well as Oxy's and FC's) is firing on more cylinders than mine when it comes to quantitative matters.

No need to give me any such intellectual credit here. I just plugged what w67 said into Yahoo and see the results. Anyone with internet access can do that and pull up old threads / quotations and come to similar conclusions about his BS: misleading statements + relative underperformance + obfuscating name calling. You don't need Sharpe ratios or comparisons to Harvard's endowment or references to Markopoulus or much of anything else. You are my jury pool, and simple is better.

death...beat it to.

over and over and over and over.

and over.

>> To the extent that they are (and I did follow your arguments there), diversification into both is quite rational given the big picture.

A single stock and a levered single home are comparable levels of volatility, much as people who shut out the numbers might otherwise feel. If you want to do better than 5% +/- 10% (say) then you have to deviate from a blind diversified portfolio.

First question: should we believe that w67th's choices have any value beyond randomness? Say that a priori 5% of people who they to actively manage actually make good decisions, 90% are just flipping coins, and 5% are making bad decisions. We've see two of w67th's predictions & outcomes. I've estimates that the likelihood of those two outcomes given w67th being "good" is 6x larger than "flipping coins", which is 6x larger than "bad". Accounting for his success, we should now think he's "good" at 25%, "flipping coins" at 74%, and "bad" at 1%.

For a person who is (say) 5/90/5, it is reasonable to say that full diversification is the best strategy. They are equally likely to have vs not have edge, and they will lose some degree of diversification.

For w67th who is now (say) 25/74/1, some degree of skew from a fully-diversified portfolio is appropriate. The degree of skew is debatable. But to argue against skew makes no sense. And to the extent he makes future calls that do well, the skew should be increased.

How else is a person looking to do better than 5% +/- 10% supposed to act?

>> I think both you and w67th play a valuable role in educating...

Glad to be of service, but it's actually a two-way street. I am guessing w67th would never have pulled the trigger on S and AAPL had he not been on this site. Seeing others' flawed thought processes can make one realize (whether the observation of flaw is right or wrong) that maybe you do have an edge beyond random person X out there.

You're a wealthy person, you have investments in the same markets as w67th, but you shrug and say "too hard" when it comes to doing the work. Others try to do the work but have seemingly a flawed analyses, and they clam up when they are made aware of this. That's gotta give w67th encouragement to make his calls.

the unique value of six-seven's stock calls is that they were made real-time. And six-seven has not described his other investments in any comprehensive way, such that to comment on his overall investment approach is not of value. He recommended two trades, which have never been underwater from the time he recommended, and which have done very well.

we know he chooses not to own his primary ny residence, and finds the concept ridiculous (at least as of now and over the last several years) and we know he made two stellar stock calls of recent. The rest of his investment world could be a complete fail, or similarly successful to the calls he has made here.

I will certainly trade his next stock call. That I run with six seven on hot trades he rec's does not express my investment approach either.

And fieldmoron's illumination that there have been better stocks to own during the runs in S and AAPL is too laughable to waste time addressing.....like all of his infinite posts which are useless unto themselves, but express the uselessness of his life. Get outside, get help. If you are a quad, stuck inside, I apologize.

A quad? Is that what you call inoitall's friend?

As for you trading his next stock call - why didn't you trade Sprint? Why did you buy Apple and sell in the $430s? Chicken?

>A single stock and a levered single home are comparable levels of volatility

The volatility of a home. What a concept.

> I am guessing w67th would never have pulled the trigger on S and AAPL had he not been on this site.

Really? That's more absurd than Novice thinking you are 67. More absurd than yikes thinking he could get along with anyone who crosses his path in life - from teachers to a spouse to a business partner to people he does a RE deal with - it probably all started with his mother

you spend alot of time imagining my life, field-dope--you should log off and get outside.

Why not? chicken?

Like I say, if you are a quad, or confined to one space, for a medical reason, I apologize. Though compassion would say that, even were that the case, and your only outlet were the internet, it would behoove you to branch out.

Whatever the case, it is clear that you (and SE) would benefit if you swore of SE for a while.

Otherwise just mire in your illness---NBD to me--pretty serious for you.

@nada, I don't believe my returns are 4 x greater than otherwise predicted. Are you saying I should have yielded 2.5% p.a. if typical volatiltiy is +/-2% 10 months out of 12?

I am still not a subscriber to the single stocks are equally volatile to real estate. I think I gifted you a stat by offering up 40% spread annually for a single-stock. This of course, ignores the much greater volatility to month to month of real estate vs single stocks. I think we need to look at standard deviations or other measures to really assess whether levered real estate is comparable to single stocks. I think we'll find they're not. I concede that single stocks are not far, far more volatile than levered equity, however.

Yikes - I agree that we have no way of telling whether 67s overall portfolio history over the long term has been good bad or indifferent. Of course, my point has always been that bets on single stocks are are a risky game to play that 99 out of 100 fund managers fail to beat the index over a period of 15 years or so. Mind you, I'm always open to reading about the logic behind a potential trade or theme. I may not play it in the same way but it's always interesting to understand why people think certain markets or stocks are over/undervalued and why the market has got it wrong.

@nada. P.S. I have forgotten your suggestion of putting my money where my mouth is on my 2014 RE prediction. I'm just thinking about the right metric since it appears that all NYC RE stats have flaws of some kind. I just don't want to lose because I choose the wrong metric! e.g. I have no idea if the SE index is going to fall because of shift in the pattern of new develpments etc.. My inclinatinos would be to go with a ppsft metric but that's only reliable for condos and they only form a small portion of the market.

LOL OMG NDB like yikes, I'm the creepy guy who tries to be friends with my teenage daughters' friends. That will show my ex-wife

no, youre the creepy guy who has spent the last 5 years of your life trolling SE 24/7, using innumerable aliases, etc..

this all who read here know to be fact.

clearly you know little to nothing of me. for some reason you choose to imagine things. if that floats your boat, so be it.

no worries yikers... in the kingdom of Troll, field hamster is king, queen and cat fker extraordinaire!

Bingo! nada.... w/o the insanity of the foolz on SE, AKA Team RE.. .UD, w81, Keith, Ali, 30yrs, Petridish etc.. w67 would not have gotten himself into a lather....

w67 has evolved. w67 now understands the minions that suckle on the teet of the RE Gods cannot handle a quick pull of the bandaid. So it is written that a slow blood letting is occurring and will occur for the next 10 years. I can point to the exact moment when Nada pointed to ConEd and my realization... "you don't need to extinguish other kids bday candles to make yours shine brighter moment." Fk them.

W67 is getting mine... GO TEAM RE. The longer you stare at your candles.. .the bigger my candle is getting. FK them all.

Yikes seems more angry than usual. I'm guessing one of his daughter's friends ignored the nasty Snapchat he sent, or rejected some other inappropriate activity he tried to pull.

Yikes, you can't deny your acrimony towards too many people to count - you've posted about it at some time or another on streeteasy. From school teachers to ex-Mrs. Yikes to people you sold your apartment to, to your former colleagues and business partners, safe to assume there are many others.

67, who knew? Inoitall was right but i was trying to give you more credit than I guess you deserved: I thought you made your Sprint call on your own. Now I know I played a role.

Nada - I see your logic/point but need to do some independent research re relative volatility.

FC - I hope you appreciated full import of w67th's post. If you didn't, I am downgrading you from brilliant to clever.

W67th - When you are not being crude, I do find you hilarious with an obviously high level of intelligence. Moreover, the evolved w67th seems to have absorbed my point. Can't you just give us the stock tips without calling us morons?

Oxy - my money is on you in contemplated wager (nothing against Nada, who is, as I have previously noted, one of my favorite posters - just that my heart is with the bulls), so now you have added pressure from the audience to choose the right metric!

No

excellent.

Hi C0C0, how was your day?

Oxy>> @nada, I don't believe my returns are 4 x greater than otherwise predicted. Are you saying I should have yielded 2.5% p.a. if typical volatiltiy is +/-2% 10 months out of 12?

I am saying your volatility is likely off. Take your returns (1%), subtract interest rates (average of 0.12% a month over the past decade) and subtract. This is your monthly "excess return": 0.88%. Divide by your monthly volatility (standard deviation of monthly returns), which I am assuming is 2% (about 70% of months fall within that range). This gives you a monthly Sharpe ratio of 0.88/2 = 0.44. If you want to annualize, multiply by sqrt(12) to get to 1.52. This means your annual returns are 12% (of which 1.5% is interest rate) +/- 6.9%. This means you should have a flat or losing year once every 25 years with 1.5% interest rates.

divide by zero

Oxy>> I think we need to look at standard deviations or other measures to really assess whether levered real estate is comparable to single stocks. I think we'll find they're not.

That is probably the most shocking thing you've said so far. You actually think I hadn't already done that in my first post where I quoted the volatilities?

Why is volatility the measure of comparability?
What is volatility?

Oxy>> Of course, my point has always been that bets on single stocks are are a risky game to play that 99 out of 100 fund managers fail to beat the index over a period of 15 years or so.

And yet your claim is that you beat them by wide margins. You do more than 2x better in return/volatility than Harvard & Yale, 4x better than diversified portfolios. The margin and track record are so wide and long, there should be little room for doubt that it was luck. But you don't seem to understand any of it. Therein lies the irony.

I should step back. This sounds like a really important, detail-oriented discussion.

http://streeteasy.com/nyc/talk/discussion/36958-volatile-home-comparing-apartments-to-stocks

Oxy>> I have no idea if the SE index is going to fall because of shift in the pattern of new develpments etc. My inclinatinos would be to go with a ppsft metric but that's only reliable for condos and they only form a small portion of the market.

The SE index is same-home resales. New developments by definition won't mess with them. Ppsf, on the other hand, is dependent on what new developments are selling at the moment.

>> Oxy - my money is on you in contemplated wager

You can place your own side wager, there's plenty of Inonada to go around.

If you bet on inoitall, be sure to figure out how I'm going to goad him first. Remember, inoitall told us that he only bought Apple the second time because of what I said.

>> Why is volatility the measure of comparability?

Not sure, the first mention of it on this thread was from Oxy. Maybe he goaded me into focusing on it. Either that, or else maybe it has something to do with a 1990 Nobel prize. Alfred Nobel invented dynamite, dynamite is most certainly volatile. Maybe that's got something to do with it. Maybe we should run a standard deviation on HB's posting frequency?

>> I can point to the exact moment when Nada pointed to ConEd and my realization... "you don't need to extinguish other kids bday candles to make yours shine brighter moment." Fk them.

You know when you said your net worth today is 20x what it was in 2007, I'm guessing most people here took that as BS. For the record, Inonada doesn't think you were joking.

>Maybe we should run a standard deviation on HB's posting frequency?

Great idea. Change the subject.

W67 don't joke about money, grew up too poor to take financial matters too lightly. But everything else is fair game. Btw w67 liked DDD about the same time as Sprint. It's had a decent run, not as hot as sprint but decent enough. Ooooopps. That's retrospective investing. Never seen Etrade give me $$$$ for that kinda trade.... Oh I also liked Etrade as a stock back then. Don't know why I didn't pull trigger on Etrade/DDD on scale back then. But the. Again coned has doubled since your recommendation nada. -shrug-

My only consolation.... Watching team RE still sitting on the sofa looking for the remote. If one of you would actually get up, you might find it easier to look under the cushions. Oh well. Hint. The remote's not near the sofa.

>Btw w67 liked DDD about the same time as Sprint. It's had a decent run, not as hot as sprint but decent enough.

Better than Apple.

How poor exactly did you grow up, whereabouts do you think your parents' income was growing up?

Let me say that even 'rich' kids can feel poor and own experience may be heightened or lessened with time. -shrug- it's just w67 44yo trying to project w67 11yo.

But suffice it to say, my brothers, sisters and I sat around the dinner table making beaded jewelry that were sold on w27th street to make ends meet. Remember very vividly having my brother calling my mom to tell her we were hungry and there was no food in the house. They came home 5 hours later. I've had to go to hunt's point with my dad at 4am bc there was no one to watch us.

I'm not complaining. Kids don't know they are below the poverty line, when all your peers are pretty similar. But for a good 7yrs of my formative years, $$$$$ was always a point of tension with my parents. We had family in the old country that we were supporting. We starved so they would starve a little less.

But fk. We all rich in this country. We make coin sofa surfing!, beytches. 6% on $2mm!!!!! I guess I'm just jealous that there was this easy way to make money. My parents did not have the language skills nor the inside scoop. They and I thought Success in Amercia involved child labor, 100hr work wrk for $3/hr. Get yourz team fk RE! I'm getting mine.

Tell us more stories w67. Tell us about the mean white ladies too.

Volatility is focus b/c it is a measure of risk; individual stocks more volatile than real estate (need to check NYC real estate, which may be comprable volatility; have not done this yet). And I think it is important to look at volatility of particular individual stock comapred to particular segment of NYC real estate market. What is beta of Apple? I won't have time to really focus on this in foreseeable future, and I suspect we'll lose Oxy, but I will definitely continue reading to see if someone can methodically point out flaws in Nada's argument. FC - I suspect you could, but I also suspect you don't really care.

>need to check NYC real estate, which may be comprable volatility;

Go check your apartment, see if it's smoking or wobbling.

One thing I've learned over the years, w67th, is that things correct themselves over time.

Some idiot who can't add finagles themselves into a high-paying job. Good for them, but it don't last forever. They jockey from one place to another, eventually price themselves out of the market. But deep down, they know they're an overpaid idiot. At the end of the line, they worry (correctly) that if they lose _this_ job, the next one is going to only pay a quarter. They get defensive, eventually lose the job and bemoan their fate. Should I feel bad? I dunno, I'm thinking about how they were being paid 4x all those years for nothing. Presumably there was someone more deserving of the job & income, someone who would add value for the 4x they were being paid.

Same thing with investment, it's a long game. There are those who made their money through one shot of luck. Couch surfing, say. All haughty about their $1M 1BR they bought 20 years ago. Who cares? You are still living in the same 1BR you were in 20 years ago. You haven't made any coin for the past 8 years. But they think they're an investing genius, found the sure way to money w/ no risk. But deep down they know they got lucky and play it scared. Can't pull the trigger when opportunity comes up. Maybe you didn't believe in Buffett's (and inonada's) all-in stocks call in late 2008 / early 2009. Maybe you didn't believe in my ConEd call. Maybe you didn't believe in w67th's Sprint call. Maybe you didn't believe in our AAPL calls. Well shit, what exactly did you believe in, and where is your net worth relative to 2006?

Meanwhile, w67th has 20x net worth through a combination of hard work and investment. All during the worst economic period in nearly a century.

>But deep down, they know they're an overpaid idiot. At the end of the line, they worry (correctly) that if they lose _this_ job, the next one is going to only pay a quarter. They get defensive, eventually lose the job and bemoan their fate. Should I feel bad? I dunno, I'm thinking about how they were being paid 4x all those years for nothing.

This is the type of thing you worry about? You are neither this person's friend, colleague, relative, or employer, but you worry about this person's income and value add?

>All during the worst economic period in nearly a century.

Not at all. We've had a strong stock market as clear evidence things are good for those in business and making investments.

We were net worth x in 2006 and now we are at 18x. Combination of investment and business income doing what we like to do. Will this growth last? We don't count on it. No idea if it is talent or luck, or, as is highly more likely, some combination of the two. Neither I nor my husband taunt others who are either less talented or less fortunate. This is my problem with w67th. Moreover, were I inclined to taunt someone, I would choose a forum where I was fairly certain that majority of participants were plaing same game.

Nicely put NYCN.

Taunting? Hahahahahhaaaaa. Hold on a sec. Hahahhahahhahhahahhaahaaa. Let me get a tissue. Hahahhhahahahhahahahhhaaa.

-rolling on floor- hahahahahhahhHaaaaaaaa. Omfg! I've peed in my pants. Hahahahahhhaaaaa.

Taunting is when a thousand swastika wearing 12 yo boys run around trying to pin a yellow star on a 9yo girl and her 7yo brother thru the streets of Berlin with 20k adult nazis egging the boys on!

A poor immigrant w67 who sees 'the meritocracy' of America he so wholly bought into hook line and sinker, be exposed as nothing more than what a loser Harvard educated Borker deems an 'investment' in order to advance her pathetic little soul pains me more than you know. Btw w67 got rejected from Harvard. Have you stopped talking about RE as an investment?

Laughing at 18x net worthers who still don't understand 'risk,' and RE leeches that make money turning keys instead of making beaded jewelry is NOT taunting. Flmaozzzzz.

Ya fking morons.

NYCNovice, that'd be a very fine point if you had your head stuck in the sand. However, note the title of this thread: "W67THSTREET IS AN INCOHERENT HOMELESS TROLL."

Note the first post: "Look at that idiotic post below. Does anyone actually think this blubbering moron has even 2 nickels to rub together, let alone to have $400 to buy a share of AAPL? FLMAOZZzzz, as that imbecile would say. No one here believes a single thing you say about pretending to buy stocks. You're either homeless using a public Wifi, or posting from a mental hospital. Take your meds, you troll freak."

What a joke of a post. But if the taunting is working, I'm sure that's happy feedback for w67th.

It's a good way to see it nada. Reversion to the mean for the accidental investor. Have to get to the Netherlands to see the tulips at the right season. Maybe go back to the Anne frank museum. Highlight for my daughter. I'm teaching her values, work ethic and the proper way to measure opportunity cost, risk/return and life in general. Hopefully she'll be funny as w67, analytical like nada wo the hurt of 9yo w67.

Go Team RE.... There's a little tear in my right eye. - seriously- go fk yourselves team re.

So much to prove

yet...you haven't proven anything.

>> Neither I nor my husband taunt others who are either less talented or less fortunate. This is my problem with w67th. Moreover, were I inclined to taunt someone, I would choose a forum where I was fairly certain that majority of participants were plaing same game.

What are we talking about here? Median sales price in Manhattan is around $1M. It takes an income around $250K to buy that, puts buyers in the top 2% or so. Nearly all college-educated, more likely than not at a good school like Harvard. Some are IB Equity Analyst dweebs, others are lawyers, other are borkers. I don't think we're talking about firefighters, teachers, and housekeepers here.

So do we really need to tippy-toe around top-2% couch surfers? Must w67th only taunt back at the fraction of couch-surfers who are in the top-0.1%? Screw them, I'll save my "less talented or less fortunate" for the 50th percentile, not the 98th percentile.

And nycnovice. If you are gonna make shit up, why not say 21x? When my son and his friends talk about which animal is stronger it's not like that are sandbagging themselves to have more credibility. My son doesn't say an elephant can move a car and is the strongest animal in the world. His friend doesn't one up him by saying 'a hippo can move a chair!' His friend says a 'bus!' That's how you egg, taunt, flaunt.... Esp on an anonymous forum.

But we are NOT all anonymous are we?

Taunting is a two way street. The best taunters are those who were taunted the most. Your problem nycnovice... Your husband made all the coin. You picked the right loin to latch onto and just haven't been taunted enough. Have more sex and stop coming to SE. It'll improve your marriage in which $$$$ makes up too much of the background. Go on a trip. Buy a larger dildo. No no. Go for the BIG one. Enjoy. And btw uti(s) just a by product of a good nite.

There cream for that.

Fking English as a second language!
-there's cream for that-

w67th - No, we are not all anonymous. Both Nada and FP know my real identity, so I am not inclined to make anything up. You, on the other hand, do appear to be anonymous, plus you have previously admitted to making stuff up.

Nada - We are talking past each other. I wish aboutready would weigh in; I believe she is a prime example of someone whose investment in NYC real estate is a small portion of a rationally diversified portfolio (I don't know - maybe it represents her life savings but I seriously doubt that). W67th's tiresome point seems to be that a single family residence in NYC can not be an investment, and that is simply not true; maybe not the "best" investment, but it can be an investment that makes money nonetheless.

Oh my mom made us bead jewelry
My dad died early
Someone else got into Harvard but I could only go to Columbia Business School
The students in my class were all stupid but I had to be the TA since I was the immigrant
I didn't even go to business school, I'm self taught
Someone else earns 4x as much as I do and doesn't deserve it
My landlord owns a big apartment for a long time so he deserves to subsidize me
I'm worth 20x even though I started as a hungry child
I have a friend who is a quadriplegic
English is my second language

PS to Nada - I don't taunt anyone who is less fortunate/lucky or less talented, no matter their pedigree. I have been taunted myself by clueless individuals, not often, but it has happened; I just walk on.

>I wish aboutready would weigh in; I believe she is a prime example of someone whose investment in NYC real estate is a small portion of a rationally diversified portfolio

She could barely put enough down on her purchase and was rejected by Chase.

>W67th's tiresome point seems to be that a single family residence in NYC can not be an investment

A single family residence is a single family residence. Why is it so complex? Where is this "volatility" everyone is talking about - some days your apartment or house gets smaller, some days it is bigger?

>PS to Nada - I don't taunt anyone who is less fortunate/lucky or less talented, no matter their pedigree.

What about a witness for the other side?

Let me let you in on a little secret. The couch-surfing bubble saw around $15 trillion added to the values of US real estate in real terms (i.e., inflation-adjusted). That's about a full year's worth of GDP, the entire economic activity of the country.

This money did not come from anything of economic value. It did not come from new construction. It's the same home whose utility (putting a roof over one's head) did not increase: it's the same old couch. This is different than (say) investing in companies who can now produce more crud people find of economic value, like iPhones. But this $15 trillion is paid for, and it's paid for out of GDP. In aggregate, we took full year of everybody's economically-valuable work (i.e., the income of 50th percentile folks) and put it into the hands of couch-surfers. This didn't happen instantaneously, but it happens over time as people buy & sell.

Now I'm sure you've read about the stagnating wages of our middle class. Perhaps if we don't return to an era of couch-surfing nirvana where home prices outstrip inflation, then we can avoid taking another year's worth of income ($15 trillion) out of workers who provide economic value and putting it into the hands of couch-surfers.

So you carry on rooting for top-2% couch-surfers while pretending you care about the middle class, and w67th will carry on taunting them when they do not suck $15 trillion out of the hands of workers as they had hoped.

I know I've got my opponent on the ropes when he resorts to sexual harassment. I am amazed at how many men still can't handle being beaten by a woman.