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Re: The 2 comma paradox

This thread is about a paradox of thinking. Paradoxes are human and they are interesting . In fact, paradoxes are far more interesting than recitals of mantras such as "I am fine," "I am happy," "Stay the course," etc. This Forum is dedicated to discussions of investme...
by 555
Sat Jun 14, 2014 2:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: If chasing market performance is bad...

555 wrote:In a typical zero sum game, most participants lose.


Okay, let's try this. If you want some return-free risk, make a fair bet on a fair coin toss and choose heads. If you want to be contrarian choose tails.

DO YOU GET IT?
by 555
Sat Jun 14, 2014 1:16 am
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4713

Re: 2nd part of int'l diversification series on ETF.com

Suppose I want to just use total funds TSM, and TISM. Suppose I work in USA and earn US$, and spend US$. I understand the idea of starting with world market weighting, and then shifting towards TSM since I use US$. But how do I quantify that shift? How do I figure a TSM:TISM weighting? Does it depe...
by 555
Fri Jun 13, 2014 11:26 pm
 
Forum: Investing - Theory, News & General
Topic: 2nd part of int'l diversification series on ETF.com
Replies: 18
Views: 1196

Re: 2nd part of int'l diversification series on ETF.com

Suppose I want to just use total funds TSM, and TISM. Suppose I work in USA and earn US$, and spend US$. I understand the idea of starting with world market weighting, and then shifting towards TSM since I use US$. But how do I quantify that shift? How do I figure a TSM:TISM weighting? Does it depe...
by 555
Fri Jun 13, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: 2nd part of int'l diversification series on ETF.com
Replies: 18
Views: 1196

Re: How to pay ZERO taxes in retirement with 6-figure expens

When they do the Roth conversion in 2012 they could do it in January of 2012 so they could recharacterize it back to a IRA until their filing deadline the next year which if I remember correctly is as late as October 2013 with extensions. With different his and her accounts can they do two Roth con...
by 555
Fri Jun 13, 2014 8:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: How to pay ZERO taxes in retirement with 6-figure expenses
Replies: 154
Views: 41226

Re: 2nd part of int'l diversification series on ETF.com

Suppose I want to just use total funds TSM, and TISM. Suppose I work in USA and earn US$, and spend US$. I understand the idea of starting with world market weighting, and then shifting towards TSM since I use US$. But how do I quantify that shift? How do I figure a TSM:TISM weighting? Does it depen...
by 555
Fri Jun 13, 2014 6:57 pm
 
Forum: Investing - Theory, News & General
Topic: 2nd part of int'l diversification series on ETF.com
Replies: 18
Views: 1196

Re: Should risk be stated in dollars terms instead of AA %?

but the question is: If I used to have an 80/20 portfolio of $400k stocks/$100k bonds, and now I have a 50/50 portfolio that is $1,000,000 stocks/$1,000,000 bonds, is my portfolio more or risky than it used to be? Yes because the risk is in dollars - losses and gains are in dollars that you could s...
by 555
Fri Jun 13, 2014 6:15 pm
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

Math is pretty easy. I can mentally go back and forth between % and dollars, and even between AA% and dollars without tremendous difficulty. There are all kinds of facts and figures you can state about a portfolio, and the rest of a person's financial picture, that can be stated in terms of $ or % ...
by 555
Fri Jun 13, 2014 5:47 pm
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Probability of Success

A couple of points. The possibility of longevity insurance (e.g. SPIAs) renders much of the conversation moot. Also, it's interesting to seewhat has a 50% chance. E.g. here https://personal.vanguard.com/us/insights/retirement/nearing/when-can-i-retire enter 100% stock, 50 years, 6% withdrawal, and y...
by 555
Fri Jun 13, 2014 2:22 pm
 
Forum: Investing - Theory, News & General
Topic: Probability of Success
Replies: 4
Views: 638

Re: Should risk be stated in dollars terms instead of AA %?

There are all kinds of facts and figures you can state about a portfolio, and the rest of a person's financial picture, that can be stated in terms of $ or % or both (and you can translate between them). So "either % or $" is a straw man. It doesn't matter. You want to figure out how to sa...
by 555
Fri Jun 13, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

StarbuxInvestor wrote:
555 wrote:
StarbuxInvestor wrote:So it sounds like a concensus that risk should be looked at in terms of the loss in value you can tolerate measured by dollars and that can be used to figure out the proper AA instead of vice-versa.

No.

Please explain.

Read the other posts. They're not saying what you're saying. Not at all.
by 555
Fri Jun 13, 2014 11:38 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

StarbuxInvestor wrote:So it sounds like a concensus that risk should be looked at in terms of the loss in value you can tolerate measured by dollars and that can be used to figure out the proper AA instead of vice-versa.

No.
by 555
Fri Jun 13, 2014 11:31 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

I am a fan of dollars. I will use dollars in retirement to buy food. I like to eat. Dollars are the way to go in my opinion. When the stock market drops, do you go hungry? No, because I keep dollars that are not invested in stocks. In fact, I keep enough of them that I will be able to eat for many ...
by 555
Fri Jun 13, 2014 11:17 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

sscritic wrote:I am a fan of dollars. I will use dollars in retirement to buy food. I like to eat. Dollars are the way to go in my opinion.

When the stock market drops, do you go hungry?
by 555
Fri Jun 13, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: Should risk be stated in dollars terms instead of AA %?

Losing dollars is when cash disappears from your mattress.

The market dropping is something different.
by 555
Fri Jun 13, 2014 10:27 am
 
Forum: Investing - Theory, News & General
Topic: Should risk be stated in dollars terms instead of AA %?
Replies: 54
Views: 1374

Re: If chasing market performance is bad...

In a typical zero sum game, most participants lose.
by 555
Fri Jun 13, 2014 10:11 am
 
Forum: Investing - Theory, News & General
Topic: If chasing market performance is bad...
Replies: 85
Views: 4713

Re: College & PhD vs $250k working

What accounts for the large difference between employee salary and total compensation? When I look at UC-San Diego, the average full professor salary is $148k, but average total compensation is $199k. On top of 9 month salary Summer research and/or teaching. Employer contributions to retirement, he...
by 555
Wed Jun 11, 2014 5:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: College & PhD vs $250k working
Replies: 104
Views: 7405

Re: Apple looks interesting right now

I never bought a single stock in my life, but I have to say Apple looks interesting right now. Does anyone else feel this way with the recent split. This post is so ridiculous for this forum, especially for someone with over 2000 posts, that I wonder if you are just intentionally wasting everyone's...
by 555
Wed Jun 11, 2014 5:20 pm
 
Forum: Investing - Theory, News & General
Topic: Apple looks interesting right now
Replies: 35
Views: 2393

Re: The 2 comma paradox

Sorry Victoria - let's agree to disagree. Someone telling YOU your items are worth more than the villagers belongings is one thing, someone bragging themselves that they can lose more in one day than the "average Joe" makes [correction: "can contribute"] in one year strikes me a...
by 555
Wed Jun 11, 2014 4:58 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: College & PhD vs $250k working

At our local university, profs making six figures are small minority (though it depends on subject). The data are easily available: http://chronicle.com/article/2013-14-AAUP-Faculty-Salary/145679?cid=megamenu#id=table Average total compensation for Full Professors even at the lowest paying US PhD-g...
by 555
Wed Jun 11, 2014 4:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: College & PhD vs $250k working
Replies: 104
Views: 7405

Re: College & PhD vs $250k working

At our local university, profs making six figures are small minority (though it depends on subject).
by 555
Wed Jun 11, 2014 2:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: College & PhD vs $250k working
Replies: 104
Views: 7405

Re: Apple looks interesting right now

I never bought a single stock in my life, but I have to say Apple looks interesting right now. Does anyone else feel this way with the recent split. This post is so ridiculous for this forum, especially for someone with over 2000 posts, that I wonder if you are just intentionally wasting everyone's...
by 555
Wed Jun 11, 2014 7:44 am
 
Forum: Investing - Theory, News & General
Topic: Apple looks interesting right now
Replies: 35
Views: 2393

Re: The Biology of Risk

Humans can plan.
by 555
Wed Jun 11, 2014 7:42 am
 
Forum: Investing - Theory, News & General
Topic: The Biology of Risk
Replies: 91
Views: 4368

Re: does frugality result in lower career ambition?

Go Blue 99 wrote:Do you believe that living a frugal lifestyle can sometimes result in having less career ambition?

Aha, I see the word "sometimes". And "can".
I suppose I have to answer "yes". It's possible.
by 555
Tue Jun 10, 2014 11:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: Bernstein - Volatility Beneficial for Accumulators

minesweep wrote:
555 wrote:
rca1824 wrote:unit root

What's that?

You might be sorry you asked:
Unit root

I'm happy I asked. :happy
by 555
Mon Jun 09, 2014 2:42 pm
 
Forum: Investing - Theory, News & General
Topic: Bernstein - Volatility Beneficial for Accumulators
Replies: 7
Views: 1202

Re: I Learned a New Term Today: "Dominated Funds"

...but it is true that crappy 401k plans only offer one or two index options to satisfy the DOL. I'll say one thing. One or two index options is much better than having none. At least you then have something to invest in, some chance to escape high fees. Even better is to have a few index options t...
by 555
Mon Jun 09, 2014 2:37 pm
 
Forum: Investing - Theory, News & General
Topic: I Learned a New Term Today: "Dominated Funds"
Replies: 19
Views: 1320

Re: Bernstein - Volatility Beneficial for Accumulators

rca1824 wrote:unit root

What's that?
by 555
Mon Jun 09, 2014 2:40 am
 
Forum: Investing - Theory, News & General
Topic: Bernstein - Volatility Beneficial for Accumulators
Replies: 7
Views: 1202

Re: College & PhD vs $250k working

Grad student stipends can be deceptive... I'm currently making 36k a year, but I don't pay state, medicare, or social security taxes. The flipside of this is that I have no social security credits :( If you go into academia you might never have social security credits. Your probably better investin...
by 555
Mon Jun 09, 2014 2:10 am
 
Forum: Personal Finance (Not Investing)
Topic: College & PhD vs $250k working
Replies: 104
Views: 7405

Re: I Learned a New Term Today: "Dominated Funds"

...but it is true that crappy 401k plans only offer one or two index options to satisfy the DOL. I'll say one thing. One or two index options is much better than having none. At least you then have something to invest in, some chance to escape high fees. Even better is to have a few index options t...
by 555
Mon Jun 09, 2014 12:22 am
 
Forum: Investing - Theory, News & General
Topic: I Learned a New Term Today: "Dominated Funds"
Replies: 19
Views: 1320

Re: The 2 comma paradox

100 years ago a millionaire was very wealthy, but in 2014, having $1M just means that you are probably on a solid financial footing, but, depending on other factors, you're going to have to keep working a while to reach financial independence. With no pension nor SS, and a family to support, I figur...
by 555
Sun Jun 08, 2014 6:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: Am I thinking this correctly? Reinvesting in IRA's

hunter1801 wrote: So how will I know the difference between my earnings from dividends/capital gains vs the money I made because of share prices going up?

You can't because there's no such thing.
by 555
Sun Jun 08, 2014 2:54 am
 
Forum: Investing - Theory, News & General
Topic: Am I thinking this correctly? Reinvesting in IRA's
Replies: 21
Views: 1264

Re: Age in Bonds (The Bogle Rule)

Age in bonds seems to be one of those rules that has been widely adopted without ever having been subject to serious scientific scrutiny. It runs contrary to the findings of Nobel prize winning economists Samuelson and Merton who proved that for individuals having a constant relative risk aversion ...
by 555
Sun Jun 08, 2014 2:16 am
 
Forum: Investing - Theory, News & General
Topic: Age in Bonds (The Bogle Rule)
Replies: 135
Views: 10949

Re: The 2 comma paradox

sambb wrote:i find i worry more at market highs rather than lows. At the lows, I don't check the balance as often. But there is some psychology of not wanting to go below the two commas. I get it.

I wouldn't mind dipping back below two commas (it's not far) to do some cheaper accumulating.
by 555
Sat Jun 07, 2014 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: Age in Bonds (The Bogle Rule)

I think it is a very good starting point. It also keeps a focus on reducing equity allocation as you age -- whether or not you keep strictly to the age in bond "rule". If you are far of from this "rule" you should have a good reason. I disagree (with 1st and last sentence). As I...
by 555
Sat Jun 07, 2014 9:51 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Bonds (The Bogle Rule)
Replies: 135
Views: 10949

Re: The 2 comma paradox

It's not the commas that matter. It's the digits.

Also when you have a bigger balance, there's more noise to tune out.
by 555
Sat Jun 07, 2014 4:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: The 2 comma paradox

chaz wrote:
VictoriaF wrote:
chaz wrote:I don't worry. I'm happy with 2 commas.

We should change the expression "my two cents" to "my two commas."
Victoria

Victoria, you have a great sense of humor. Just my $0.02.

You can have both. Just my $0,000,000.02.
by 555
Sat Jun 07, 2014 3:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14245

Re: Age in Bonds (The Bogle Rule)

mptfan wrote:
manwithnoname wrote: Why invest in bonds that are going to yield 3% at best for the next 5 or so years?

You can invest in bonds that are yielding 5.44% right now. Take a look at Vanguard's high yield corporate bond fund.

What do you mean by "yield"?
What about other meanings of "yield"?
by 555
Sat Jun 07, 2014 2:16 pm
 
Forum: Investing - Theory, News & General
Topic: Age in Bonds (The Bogle Rule)
Replies: 135
Views: 10949

Re: does frugality result in lower career ambition?

sscritic wrote:...laziness...

There is also deferred laziness. If I spend less laziness now (work more, get more money), then I can afford more laziness later (work less or retire, don't need money).
by 555
Sat Jun 07, 2014 11:40 am
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: How much does cost matter? (Plotting ER vs. Alpha)

For an individual fund, you can think of Alpha as being variable and temporary. You should think about the expense ratio as being constant and permanent. While that model is not exact, it's close enough to the real world for a decision making model. Moreover, Alpha may be sometimes positive and som...
by 555
Sat Jun 07, 2014 11:34 am
 
Forum: Investing - Theory, News & General
Topic: How much does cost matter? (Plotting ER vs. Alpha)
Replies: 15
Views: 1092

Re: How much does cost matter? (Plotting ER vs. Alpha)

Actually expense ratios (which are often discussed here) are likely to have far far less impact then 1. saving more, 2. living at a reasonable means 3. asset allocation. 4. Being successful at your job, or ensuring job longevity 5. Picking the right partner or spouse, or at least having adequate pr...
by 555
Sat Jun 07, 2014 1:07 am
 
Forum: Investing - Theory, News & General
Topic: How much does cost matter? (Plotting ER vs. Alpha)
Replies: 15
Views: 1092

Re: Real wages in Stockholm 1540-1900

protagonist wrote:-After 1850 the rise was meteoric and steady.

Hmmm, looks like about 1% real per year.
(Anyway, the graph is bogus. It doesn't use a log scale on the vertical axis.)
by 555
Sat Jun 07, 2014 12:57 am
 
Forum: Investing - Theory, News & General
Topic: Real wages in Stockholm 1540-1900
Replies: 13
Views: 1552

Re: Google Voice Not Supported on OBi Devices After May 15 2

Phone still works with Google Voice on OBi.

But this is weird. I noticed a plugin that I didn't download.
Google Talk PluginVersion 5.4.1.18709

What is it, and how did it get on my computer.
by 555
Fri Jun 06, 2014 10:52 pm
 
Forum: Personal Consumer Issues
Topic: Google Voice Not Supported on OBi Devices After May 15 2014
Replies: 88
Views: 8458

Re: does frugality result in lower career ambition?

I'm going to agree with the OP's premise. By starting as a teenager and always saving 30-50% of my income, I'm not even tempted by other positions that have higher pay with more stress. My 'friends' and coworkers encourage me to take management training, take on a new committee, etc., and now it's ...
by 555
Fri Jun 06, 2014 1:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: does frugality result in lower career ambition?

I read the book too long ago to recall specific statistics, but I believe two of the main points of the book "The Millionaire Next Door" are, one, that a strong majority of millionaires are ambitious, hard working people who love their work and love autonomy and, two, that they're frugal ...
by 555
Fri Jun 06, 2014 1:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: Can we have negative interest rates?

dumbmoney wrote:In short, it's not going to happen.

It did happen.
It's happening right now.
by 555
Thu Jun 05, 2014 11:58 pm
 
Forum: Investing - Theory, News & General
Topic: Can we have negative interest rates?
Replies: 33
Views: 3129

Re: does frugality result in lower career ambition?

Sunny Sarkar wrote:I'm finding out the hard way about the paradox of career ambition: pay grows linearly, but stress grows exponentially.

If those pay increases were imaginary, then your stress would go round and round in circles.
by 555
Thu Jun 05, 2014 10:33 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: Keeping up with the neighbors and Balance

I just spent most of May looking at houses. Not 1 or 2 a week like most folks do - I went on a blitz so that I can get out of my 5th wheel traveling space and into a home. Woman on a mission and all that stuff. I drove by at least 60 houses and went inside 35 or 40. Maybe more. There is no new cons...
by 555
Thu Jun 05, 2014 3:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Keeping up with the neighbors and Balance
Replies: 95
Views: 9698

Re: does frugality result in lower career ambition?

I'd say the frugality effect on career ambition varies from individual to individual, but generally it probably does result in reduced career ambition. For many consumers, the utility of income curve would tend to be very convex. I suspect for the very frugal it's concave. For those who are lucky e...
by 555
Wed Jun 04, 2014 9:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330

Re: does frugality result in lower career ambition?

Desire for financial independence results in both frugality and higher career ambition. Yes - but now solidly FI, I find myself rejecting work I would have been all over back in the day. Then that's a case of (achieved) financial independence results in lower career ambition. For me, when I figure ...
by 555
Tue Jun 03, 2014 12:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: does frugality result in lower career ambition?
Replies: 113
Views: 8330
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