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comment by kleinbl00
kleinbl00  ·  1662 days ago  ·  link  ·    ·  parent  ·  post: Ben Carlson: Debunking the Silly “Passive is a Bubble” Myth

You roll with a mutual fund because it's got active management. The people behind it can do what they want to make you money within the terms and limits of the fund's prospectus. There's usually some mealy language in there that says "if shit gets dicey we're gonna get weird with it" but by and large, they're following directions, not legally bound to create a synthetic security for you come hell or high water.

People got mad at mutual funds because (A) you have to pay someone to run them and when you're barely making 4% giving up 1% to management sucks (B) you can't day-trade 'em because the price is the price at night and that's it (C) the Bogleheads went hard into the idea that nobody has any alpha over the long run so grab all the beta you can get and shut the fuck up. These are all legitimate complaints. But the note under the note is that it's harder to make money in equities when central banks are giving money away and everybody takes on cheap fuckin' debt and buys their shares back and now your stocks are all priced as if money was free.

Apple now has $210b in cash on hand. They just issued $7b in bonds.

    With the 30-year Treasury at record lows, many companies have been able to borrow more cheaply for much longer. Apple will pay around 2.99% interest on its new 30-year bonds, compared with the 3.45% it’s paying on three-decade bonds it sold in 2015. On a $1.5 billion issue, that equates to savings of nearly $7 million of interest annually, or more than $200 million over the course of three decades.

    Today’s debt sale could help Apple refinance roughly $2 billion of debt that’s scheduled to mature this year, in addition to much of the $10 billion it has coming due in 2020, according to data compiled by Bloomberg.

They also spent $144b on stock buybacks in the past 18 months.

"How the fuck are you supposed to make money?" everyone asks. The happy answer is "ETFS!" because then you're somehow above all this shit, buying sectors. The reason this discussion is 16 posts long is that there aren't many people who actually know what ETFs are or what you're buying when you buy them - including bloggers and journalists. The real estate guys knew what a tranche was, knew what a CDO was. Nobody else did. So nobody but the real estate guys knew shit was gonna rip the minute there was a tear. What you're watching is the real-time discovery of what exactly an ETF is by people who have never wanted to know before.