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Re: Southwest Airlines Engulfing, Reversal Candle Signals Do

It's like expecting stock prices to follow the digits of pi or something like that. Careful nisi. Pi tends to show up in the damnest of places. Here is one that you might enjoy and actually may have something to do with the stock market if you believe in the fractal theory of the markets. You know ...
by Chan_va
Mon Sep 22, 2014 8:41 pm
 
Forum: Investing - Theory, News & General
Topic: Southwest Airlines Engulfing, Reversal Candle Signals Downsi
Replies: 42
Views: 1802

Re: Does Equity Risk Decrease over Time?

It stands to reason equity risk decreases over time. The longer you're in the market, the more likely you are to get a higher expected annual return. If you're in a year, you could always endure a temporary setback. It doesn't stand to reason at all. The reason equities have a higher expected retur...
by Chan_va
Mon Sep 22, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Does Equity Risk Decrease over Time?
Replies: 20
Views: 717

Re: Planning a self pension/annuity. Mid 30s.

Given the current rates, I never thought of I-bonds for anything other than my emergency fund. You make a good point though. Wouldn't it make more sense however, given current interest rates and the fact that I won't be touching this money for the next 20 years, to first max out EE-bonds and then p...
by Chan_va
Mon Sep 22, 2014 3:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Planning a self pension/annuity. Mid 30s.
Replies: 12
Views: 856

Re: money's worth ratio (MWR) of life annuities

Thanks for the links Bobcat, I have wondered why insurance companies sell SPIA's at all - the margins seem too low to justify the product on it's own. There must be layers upon layers of risk hedging and arbitraging to get returns above the risk free rate with the initial payment. Money’s worth rati...
by Chan_va
Mon Sep 22, 2014 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Planning a self pension/annuity. Mid 30s.

Decent strategy. How large is the yearly floor of expenses you are trying to annuiatize? I would use I-bonds first instead of EE bonds to protect against inflation. That will give you an inflation indexed payment of 20k/yr from I-bonds (10k each for you and wife). It also gives you the flexibility t...
by Chan_va
Mon Sep 22, 2014 11:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Planning a self pension/annuity. Mid 30s.
Replies: 12
Views: 856

Re: Anyone know anything about diamond rings?

What is your gf's opinion on diamonds? My wife wanted me to just skip the engagement ring or get one made of cubic zircona, but I caved into societal pressure and bought a diamond ring. She rarely wears it, and in retrospect, I should have just spent a couple of hundred bucks on a cubic zircona ring...
by Chan_va
Mon Sep 22, 2014 10:58 am
 
Forum: Personal Consumer Issues
Topic: Anyone know anything about diamond rings?
Replies: 48
Views: 1435

Re: Are SPIA's fairly priced? - A quick and dirty analysis

I tried to work through this problem a few years back in this thread . Along the way, I came across this 1999 research paper by Mitchell, et al. that took a crack at the problem and here's what they found: This paper presents new evidence on the expected discounted value of payments for annuity pol...
by Chan_va
Sun Sep 21, 2014 7:20 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Are SPIA's fairly priced? - A quick and dirty analysis

To me the boundary between thinking of buying an annuity as a break-even investment exercise versus as paying a company to accept our longevity risk is the difference between financial sophistication and the lack of it. I think perhaps you've misunderstood the OP's intent. As framed in the initial ...
by Chan_va
Sun Sep 21, 2014 7:17 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Are SPIA's fairly priced? - A quick and dirty analysis

The OP analysis did not include adverse selection. The self-selected SPIA buyer lives longer than average. And modern genetic analysis is making the adverse selection problem worse. The margins are probably thin in the SPIA business, there is lots of competition and it's a commodity. The life expec...
by Chan_va
Sun Sep 21, 2014 7:07 am
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Do I Really Need a Million Bucks?

Here are some stats from the Social Security Administration The average retiree monthly benefit is $1,294. Social Security benefits represent about 38% of the income of the elderly. So if you do the math, the average retiree's monthly income needs are $3,405, of which $1.294 comes from SS and $2,111...
by Chan_va
Sat Sep 20, 2014 6:56 pm
 
Forum: Personal Consumer Issues
Topic: Do I Really Need a Million Bucks?
Replies: 50
Views: 3450

Re: Are SPIA's fairly priced? - A quick and dirty analysis

I tend to agree with Prof Emeritus' sources that annuitizing is a beneficial concept but nonetheless, I would really like to know what the Insurance Company's cut on a typical SPIA is. Stated more simply: If an actuarily perfect SPIA for a certain set of conditions yields $1000 a month for life, wh...
by Chan_va
Fri Sep 19, 2014 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Are SPIA's fairly priced? - A quick and dirty analysis

Swaption- good point. Let me try and model that. Dhogson - agreed that self insurance is always cheapest. I was just trying to see how bad a deal SPIA's are. They don't seem to be all that bad. Swampy - that may be true of other types of annuities, but SPIA's seem reasonably priced. I don't think in...
by Chan_va
Fri Sep 19, 2014 2:14 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Are SPIA's fairly priced? - A quick and dirty analysis

There have been some threads recently about the "cost" of an SPIA (Single Premium Immediate Annuity), and I thought I would run some quick numbers on the data. Edited to add: The question (thanks to The Wizard) can also be rephrased as : If an actuarily perfect SPIA for a certain set of co...
by Chan_va
Fri Sep 19, 2014 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: Are SPIA's fairly priced? - A quick and dirty analysis
Replies: 75
Views: 3394

Re: Alibaba is NOT coming to an index near you

And, is this really necessary? Let's argue facts and opinions. I guess I like to think things through a little better than that but have fun being a parrot and echoing things you seemingly don't understand beyond a superficial level. Hmnn? You are stating the market can alway price things accuratel...
by Chan_va
Fri Sep 19, 2014 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 33
Views: 3483

Re: Alibaba is NOT coming to an index near you

For all the posters raising concerns about the capital structure, regulation, political climate in China etc., let me echo something that is often repeated here - "What do you know that the market doesn't?" I know that the MSCI index won't include it because it's a shell company in the Ca...
by Chan_va
Fri Sep 19, 2014 10:41 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 33
Views: 3483

Re: AliBaba

1000 shares at $75, it goes to 90 or more I sell, can't get it on 2ndary market for that price, I don't buy, I get it and goes down, hold it for long term, this is my gambling money.... Arthur, if your gambling money is $75k, you must be in a different league in net worth. If you had mentioned that...
by Chan_va
Fri Sep 19, 2014 10:11 am
 
Forum: Investing - Theory, News & General
Topic: AliBaba
Replies: 96
Views: 5697

Re: Alibaba is NOT coming to an index near you

As an index investor, should it bother you either way if its included in a broad based index. It would be such a small portion anyway, right? At it's expected IPO price of $68 a share, Alibaba's market cap will be $168B. That would make it the largest holding of the EM index (VWO). That is 1.7 time...
by Chan_va
Fri Sep 19, 2014 10:05 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 33
Views: 3483

Re: Alibaba is NOT coming to an index near you

For all the posters raising concerns about the capital structure, regulation, political climate in China etc., let me echo something that is often repeated here - "What do you know that the market doesn't?" The fact that Alibaba may be riskier is factored into the price. Any attempt to jus...
by Chan_va
Fri Sep 19, 2014 9:44 am
 
Forum: Investing - Theory, News & General
Topic: Alibaba is NOT coming to an index near you
Replies: 33
Views: 3483

Re: Amazon's new e-reader Kindle Voyage

I am thrilled that they brought back the buttons to turn pages! I have the paperwhite and I hate the touchscreen method to turn pages. It's too easy to accidentally turn a page, and it interrupts the flow. Plus I think I have carpal tunnel from the constant thumb movements reaching across the screen...
by Chan_va
Fri Sep 19, 2014 9:14 am
 
Forum: Personal Consumer Issues
Topic: Amazon's new e-reader Kindle Voyage
Replies: 11
Views: 1261

Re: Jason's Zweig's new dictionary ---enjoy

Volatility: A 4 syllable technical sounding word used by analysts to describe random price movements that sounds better than - "We have no idea why what happened happened"
by Chan_va
Thu Sep 18, 2014 4:32 pm
 
Forum: Investing - Theory, News & General
Topic: Jason's Zweig's new dictionary ---enjoy
Replies: 27
Views: 2465

Re: Jason's Zweig's new dictionary ---enjoy

Leeraar wrote:I was disappointed not to find a definition of: Hedge Fund.

L.


HEDGE FUND: A market neutral strategy designed to make money* when the market moves up, down or sideways.

*For the fund manager
by Chan_va
Thu Sep 18, 2014 4:23 pm
 
Forum: Investing - Theory, News & General
Topic: Jason's Zweig's new dictionary ---enjoy
Replies: 27
Views: 2465

Re: FREE isn't so free. Explanation of the market

To answer your question, yes the stock can go to 0, and yes, if the company goes out of business, then your friend will lose all his $8k. The price of a stock is irrelevant. What you are buying when you buy a stock, is a share of ownership in a company. Let's say a company is worth $100 (this is usu...
by Chan_va
Thu Sep 18, 2014 4:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: FREE isn't so free. Explanation of the market
Replies: 5
Views: 689

Re: The boglehead way to buy furniture

Beautiful work! Unfortunately I was born without a do it yourself gene. Bogleheads don't pay expensive overhead, they go the Do It Yourself route: Lady's writing desk: http://home.comcast.net/~rodec/woodworking/desk/rodc_desk.jpg Kitchen table made decades ago when I was a college student and still ...
by Chan_va
Thu Sep 18, 2014 12:37 pm
 
Forum: Personal Consumer Issues
Topic: The boglehead way to buy furniture
Replies: 56
Views: 4730

Re: How to best adjust asset allocation as years pass

Any discussion of glide path (age -x in bonds, steady for a while then ramp down, etc.) implicitly makes assumptions about how the market will behave. So, just like it's impossible to pick the most efficient future portfolio now, its impossible to pick the most optimal glide path a priori. As Von Nu...
by Chan_va
Thu Sep 18, 2014 10:17 am
 
Forum: Investing - Help with Personal Investments
Topic: How to best adjust asset allocation as years pass
Replies: 21
Views: 1771

Re: Help! Are we making a huge mistake?

Is the 150K / yr pension inflation indexed in any way? Is there any pension at Option B? You can reasonably expect to draw 4% from a $3M portfolio, which is $120K. The $120K from a $3M portfolio is inflation indexed, but higher risk. I would say that from a financial perspective, the 2 choices are c...
by Chan_va
Thu Sep 18, 2014 10:00 am
 
Forum: Personal Finance (Not Investing)
Topic: Help! Are we making a huge mistake?
Replies: 39
Views: 5010

Re: Hamilton watches, worth the money?

Good choice on the smaller dial. In the photograph you posted, the second hand does not seem to line up exactly with the 12 o clock mark. It's probably just a parallax effect due to the angle of the photo, but make sure it does when you get your watch. It would drive me nuts otherwise.
by Chan_va
Thu Sep 18, 2014 9:40 am
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Question about popularity of HSAs

Hsa's hit the tax trifecta. Tax free in, tax free growth, tax free out ( when used for qualifying expenses). I don't know of any other investment vehicle that does that.
by Chan_va
Wed Sep 17, 2014 4:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Question about popularity of HSAs
Replies: 23
Views: 1372

Re: Hamilton watches, worth the money?

Should I care about mechanical? i guess mechanical movement is extremely difficult to achieve even 2 second per day accuracy, quartz is a vibrating crystal so 0.2 sec accuracy is easy, but movement is simple, hence cheaper price. As long as 700 for watch in question is a decent price at least this ...
by Chan_va
Wed Sep 17, 2014 2:08 pm
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Inflation Bonds - Staying the Course?

OP, As others have mentioned, the level of inflation protection your portfolio needs should not be dictated by what the current inflation is. It depends on your age, the composition of the rest of the portfolio, and your withdrawal needs. For example, someone with a high equity allocation does not n...
by Chan_va
Wed Sep 17, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Inflation Bonds - Staying the Course?
Replies: 43
Views: 3101

Re: Any success stories of ppl who never made >$50,000?

Make sure that you are factoring in inflation in your responses. 50k/yr in 2014 equates to 6.2k/yr in 1960 8.1k/yr in 1970 17.3k/yr in 1980 27.4k/yr in 1990 36.2k/yr in 2000 Another way to look at it is how much you earned in 2014 $, if you earned 50k/yr at different points in time 50k/yr in 1960 is...
by Chan_va
Wed Sep 17, 2014 11:15 am
 
Forum: Personal Finance (Not Investing)
Topic: Any success stories of ppl who never made >$50,000?
Replies: 149
Views: 9870

Re: The boglehead way to buy furniture

Thanks for the tips folks. The consensus seems to be to slowly collect quality pieces rather than try to buy it all at once. Also, we have young toddlers in the house, so that's another decision point in terms of when to buy stuff that they will potentially ruin.
by Chan_va
Tue Sep 16, 2014 11:22 am
 
Forum: Personal Consumer Issues
Topic: The boglehead way to buy furniture
Replies: 56
Views: 4730

The boglehead way to buy furniture

I am ashamed to admit it, but my wife and I are in our late 30's, and our house looks like it was furnished by a color blind grad student crunched for time. Mismatched furniture, old ratty couches, worn down rugs. It's got to the point where I am slightly ashamed to invite people over. I want to upg...
by Chan_va
Tue Sep 16, 2014 9:49 am
 
Forum: Personal Consumer Issues
Topic: The boglehead way to buy furniture
Replies: 56
Views: 4730

Re: Hamilton watches, worth the money?

OP, based on your requirements, I wouldn't recommend an automatic watch. Spend the money instead on a high quality quartz dress watch. Seiko makes some really nice looking dress watches. Also look at Skagen. I am not set on automatic. Does Seiko make watches in Japan still? Skagen I am not familiar...
by Chan_va
Mon Sep 15, 2014 4:27 pm
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Hamilton watches, worth the money?

OP, based on your requirements, I wouldn't recommend an automatic watch. Spend the money instead on a high quality quartz dress watch.

Seiko makes some really nice looking dress watches. Also look at Skagen.
by Chan_va
Mon Sep 15, 2014 3:55 pm
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Hamilton watches, worth the money?

those who don't care about watches wont care, and those who do, wont be impressed. Good point... Seems to be a good case to skip a watch entirely. Besides, who cares if the people who care about watches are impressed or not? I don't know about that. If all I knew about someone was that they wore a ...
by Chan_va
Mon Sep 15, 2014 1:53 pm
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Randomly-weighted stock portfolios beat the index

The other interesting note in this paper to show that the value weighted portfolio is nowhere close to "optimal". Now of course, the truly global optimal portfolio is only known in retrospect, and is probably something like 100% Apple stock for the time period in question. But I would have...
by Chan_va
Mon Sep 15, 2014 1:38 pm
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1991

Re: Should I step in to help my in law pay off credit card d

You will need a lot more info on your MIL's income and assets to accurately answer this question. In most cases, SS is protected from garnishment by creditors. It sounds like your MIL spent the money on a worthy cause, and is otherwise not extravagant. If that's true, I would be inclined to be chari...
by Chan_va
Mon Sep 15, 2014 12:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Should I step in to help my in law pay off credit card debt
Replies: 31
Views: 2597

Re: Randomly-weighted stock portfolios beat the index

Tantalizing abstract. Read it through very quickly. My first thought is that this is simply a rehash of the finding that equal weights beats market-cap weights, because equal weights is a form of small-cap tilt. He has a slight twist by, instead of assigning literally equal weights, he assigns weig...
by Chan_va
Mon Sep 15, 2014 10:45 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1991

Re: Buying Annuity at Young Age for Retirement?

The best way to do this is through i-bonds. Buy 10K of iBonds every year, and 30 years from now, you have essentially bought yourself a low risk 10k/year inflation indexed income stream.
by Chan_va
Mon Sep 15, 2014 10:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Buying Annuity at Young Age for Retirement?
Replies: 6
Views: 643

Re: Hamilton watches, worth the money?

Hamilton is the equivalent of an off the rack Macy's suit in the ranking of fine mechanical watches. If you need something that would match a Zenga suit, you will need to spend 7-10k at least. Nothing bad about a Hamilton, but those who don't care about watches wont care, and those who do, wont be i...
by Chan_va
Mon Sep 15, 2014 9:53 am
 
Forum: Personal Consumer Issues
Topic: Hamilton watches, worth the money?
Replies: 219
Views: 7972

Re: Clean, quiet, safe and cheap. Is there such a travel pla

From what I read, a high percentage of the food product (again both manufactured and agricultured) in China are either tainted or composites of ingredients you've never heard of. The most recent case I heard is the sewage being harvested, filtered, and re-sold back to the market as cooking oil. Not...
by Chan_va
Fri Sep 12, 2014 12:51 pm
 
Forum: Personal Consumer Issues
Topic: Clean, quiet, safe and cheap. Is there such a travel place?
Replies: 75
Views: 5725

Re: Clean, quiet, safe and cheap. Is there such a travel pla

Nepal in the mountains. If you are in reasonable shape, I cant think of a better way to spend a few months than to hike from village to village in the Himalayas. It is beyond beautiful, it is mystical.
by Chan_va
Fri Sep 12, 2014 10:56 am
 
Forum: Personal Consumer Issues
Topic: Clean, quiet, safe and cheap. Is there such a travel place?
Replies: 75
Views: 5725

Re: Take money from investments to get better rate on refi?

Seems to make sense. Couple of thoughts - Is the 30k going to come out of your bond allocation? Or will you re balance back to your original allocation? - Will you reinvest the $2400 that you will now save? - Your $2400 savings are not inflation indexed. So, your 8% return will gradually erode over ...
by Chan_va
Wed Sep 10, 2014 11:29 am
 
Forum: Personal Finance (Not Investing)
Topic: Take money from investments to get better rate on refi?
Replies: 14
Views: 653

Re: What are the benefits of a good credit score?

Employers often perform a credit check as part of their verification. A bad score would disqualify you from many positions that involve dealing with money.
by Chan_va
Wed Sep 10, 2014 11:09 am
 
Forum: Personal Finance (Not Investing)
Topic: What are the benefits of a good credit score?
Replies: 16
Views: 1235

Re: Hiring your kids

Anyone ever do this? I am not sure about the laws on hiring them and also paying them way above what the work they are doing is worth. I don't know if the IRS scrutinizes this type of thing as in a way it is pushing income away from myself which is taxed at a higher rate and giving it to a child wh...
by Chan_va
Wed Sep 10, 2014 10:44 am
 
Forum: Personal Finance (Not Investing)
Topic: Hiring your kids
Replies: 34
Views: 2099

Re: Repair/maintain the BMW or get a new car?

I have owned used BMW's for the past 15 years. BMW's are as reliable as other cars if maintained properly. 1. Expect to spend about 1-1.5K / yr on maintenance costs. 2. Don't skimp on routine maintenance 3. Find a good independent mechanic who know's BMW's and has the latest diagnostic computers. A ...
by Chan_va
Wed Sep 10, 2014 10:35 am
 
Forum: Personal Consumer Issues
Topic: Repair/maintain the BMW or get a new car?
Replies: 24
Views: 2169

Re: Besides pay and mobility, great job: What to do?

Couple of things to consider. 1. It's true that the grass always looks greener on the other side, but till you have gone over to the other side, you don't really know. 2. How would you feel if the he/she roles were reversed? Make sure that gender is not sub consciously playing a role in both your de...
by Chan_va
Wed Sep 10, 2014 10:18 am
 
Forum: Personal Consumer Issues
Topic: Besides pay and mobility, great job: What to do?
Replies: 11
Views: 1136

Re: invest in this 401K or not

What are the investment options inside this 401k, and what is your tax bracket? The tax sheltering alone may be worth it if you have decent investment options. Let's say you are in currently in the 33% marginal bracket, and you will withdraw in the 25% bracket. If you contribute 17.5k a year, you ar...
by Chan_va
Wed Sep 10, 2014 10:09 am
 
Forum: Investing - Help with Personal Investments
Topic: invest in this 401K or not
Replies: 22
Views: 1057

Re: V6 or V8 engine for new Chrysler 300

I test drove a Chrysler 300 and liked the feel. I have been driving Crown Vics for years. They don't make Crown Vics anymore and I guess the Chrysler had a similar feel and that is why I liked it. I am tall and have long legs and want a car with lots of driver leg room. The Chrysler 300 had that, a...
by Chan_va
Mon Sep 08, 2014 5:01 pm
 
Forum: Personal Consumer Issues
Topic: V6 or V8 engine for new Chrysler 300
Replies: 25
Views: 1679

Re: How many books at one time?

I typically have 3 subject areas that I am interested in at any given time, with 1 book per subject area.
by Chan_va
Mon Sep 08, 2014 1:28 pm
 
Forum: Personal Consumer Issues
Topic: How many books at one time?
Replies: 16
Views: 646
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