4/18/05 Comments Error

**tsptalk** · 04-18-2005, 03:14 PM

Did anyone notice the error I had in the comments?(I haven't read the board to see.) It dawned on me in the shower this morning. The 2nd paragraph should read...

"Some would say playing blackjack or poker is gambling. But what if the odds are in your favor? Let's say you are playing blackjack. You have a 14 and the dealer's up card is a 10. You have been counting the cards and you know that there are 12 cards left, 8 that will improve your hand and only 4 that will bust you. That's a nice 2 to 1 advantage that your hand will improve. Does that mean you will improve your hand? No. Like the market, there are no guarantees. But if you had this same situation over and over, in the long run you would improve your hand 67% of the time and you would bust the hand 33% of the time. The best play is to take the card even though you could bust."

**Rod** · 04-19-2005, 03:24 AM

No, not at all... too many numbers for me...

**IBD Fan** · 04-19-2005, 05:54 AM

the odds are two to one but the percentages you gave of 67% to 33% is not two to one.

**Spaf** · 04-19-2005, 06:36 AM

tsptalk wrote:

The best play is to take the card even though you could bust."

Respectfully disagree. The reason is that some of us near retirement should not be taking this type of a risk without knowning the risk/rewards.

IMHO: 100 minus your age should be in the safe funds. Consideration should be given on how much of the remaining funds can you afford to lose. What do you know abut the market? Position trading, swing trading, day trading? Remember the concept of buy and holding forever died after the stock crash of 2000. Been there done that! And, as the raven says "never more".

TSP is hard to position/swing trade with the 1 - 2 day transfer time. And, the funds are geared for novice investors. Playing with the market invites disaster, that's the reason the Presidents (GWB) plan to remedy SS is: doomed. Of course he listens to government advisors, the same advisors ( I assume) that invented TSP.

Thanks Tom for this site, that resides in a lake of muck!

Rgds :? Spaf

**cowboy** · 04-19-2005, 02:29 PM

Spaf wrote:

tsptalk wrote:

The best play is to take the card even though you could bust."

Respectfully disagree. The reason is that some of us near retirement should not be taking this type of a risk without knowning the risk/rewards.

IMHO: 100 minus your age should be in the safe funds. Consideration should be given on how much of the remaining funds can you afford to lose. What do you know abut the market? Position trading, swing trading, day trading? Remember the concept of buy and holding forever died after the stock crash of 2000. Been there done that! And, as the raven says "never more".

TSP is hard to position/swing trade with the 1 - 2 day transfer time. And, the funds are geared for novice investors. Playing with the market invites disaster, that's the reason the Presidents (GWB) plan to remedy SS is: doomed. Of course he listens to government advisors, the same advisors ( I assume) that invented TSP.

Thanks Tom for this site, that resides in a lake of muck!

Rgds :?

Spaf

I don't disagree with you Spaf but are you saying the TSP is not doing a good enough job. I know other people that have other jobs that have told me their savings plans are not as near as friendly as the TSP. Any time you make a transfer it will take some time and I think TSP is doing a fine job of keeping up with the volumn and accounts at this time. Although I have had transfers not go through I think it is more operator (mine)default than theirs. I agree that playing with the market is inviting disaster but allowing those to take the risk on 20% in a fund index is more like diversifying an account such as a buy and hold at 20% across the board.

**grandma** · 04-19-2005, 02:30 PM

Spaf wrote:

Respectfully disagree. The reason is that some of us near retirement should not be taking this type of a risk without knowning the risk/rewards.

IMHO: 100 minus your age should be in the safe funds. Consideration should be given on how much of the remaining funds can you afford to lose.
Rgds :? Spaf

Spaf, did you word the above wrongly? On Sunday evening you wrote: Consider your age. Keep assets equal to your age in the G or F fund. Diversify the stock funds by how well theyperform.

**tsptalk** · 04-19-2005, 02:33 PM

IBD Fan wrote:

the odds are two to one but the percentages you gave of 67% to 33% is not two to one.

That wasn't the mistake, but if it makes you happy....66.66667% to 33.33333%

**tsptalk** · 04-19-2005, 02:37 PM

Spaf wrote:

tsptalk wrote:

The best play is to take the card even though you could bust."

Respectfully disagree. The reason is that some of us near retirement should not be taking this type of a risk without knowning the risk/rewards.

Good point spaf. This advice is for the aggressive investors. But if you are in the casino, take the hit, no matter how old you are.

**CSI** · 04-19-2005, 03:12 PM

For those who have played blackjack at a casino very much, how many times have you not taken a hit in Tom's example and had the next card turn out to be a 7. Even if you are not counting cards, the correct play would be to take a hit. If the dealers up card is a 10, you should always hit anything in your hand below 17. You have to assume the dealer has 17 or better. If you have 15 or 16 and the casino allowes it, you should surrender your hand and take a loss of 1/2 of your bet.

Gambling, like investing in stocks, is all about money management. Without it, you are sure to go broke. If you run out of money, it does not matter what happens because you will not be part of the action. Each person must develop a money management strategy that they feel confortable with.

There is not onehuman alive or that has lived or that is yet to be born that can pick winners all the time.Results can be deceiving at times.

**Spaf** · 04-19-2005, 03:31 PM

tsptalk wrote:

Good point spaf. This advice is for the aggressive investors. But if you are in the casino, take the hit, no matter how old you are.

Casino ? All I want to do is catch a fish or 2 or 200 or 2000 or.... Can't walk on water, so I guess I need a boat! Got to bring the bait, the beer, the lady, the BBQ, the shade, more beer. Heck, this gets expensive!

**Spaf** · 04-19-2005, 03:52 PM

grandma wrote:

Spaf wrote:

Respectfully disagree. The reason is that some of us near retirement should not be taking this type of a risk without knowning the risk/rewards.

IMHO: 100 minus your age should be in the safe funds. Consideration should be given on how much of the remaining funds can you afford to lose.
Rgds :? Spaf

Spaf, did you word the above wrongly? On Sunday evening you wrote: Consider your age. Keep assets equal to your age in the G or F fund. Diversify the stock funds by how well theyperform.

I worded it correctly, but the computer printed it wrong! It's the puters fault!

Bad puter, bad puter

EDIT, edit, tide, tide......See that!

The real meaning: 100 - age = investment play. Thus if I was 40 years old, 40% would normally be in the G-fund and 60% in stocks. But, I said normally, times might say 100% G-fund. Other times, being very good in a bull christmas season might be 99.999% stocks. My concern was knownin your risk-reward.

At a month before retirement U dont want to be 100% in the I-fund with a bear market.

So, my normal play is 60/40. I vary from that point by what the market tells me. However ,TSP is a retirement sideline. I'm not in competition for great returns, just good returns and capital preservation. Now Scottrade is an entirely different story!

Rgds!

Spaf