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Re: Is it actually impossible to time market crashes?

I believe that most people, if they are honest, will admit they were surprised by 2008--and the ones who say they weren't were the ones who were continuously saying nothing but "if Lucy should be dead." I remember being very confused because my trading system stopped recommending new trad...
by Clearly_Irrational
Thu Feb 26, 2015 11:24 am
 
Forum: Investing - Theory, News & General
Topic: Is it actually impossible to time market crashes?
Replies: 56
Views: 2608

Re: Is it actually impossible to time market crashes?

However, does this also apply to systemic risks? Things that would affect the entire economy / stock market to the point where it's not so much trying to predict the ups and downs of an impossibly complex system of variables, but just a few main drivers? My own personal research suggest that "...
by Clearly_Irrational
Wed Feb 25, 2015 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Is it actually impossible to time market crashes?
Replies: 56
Views: 2608

Re: Dual Momentum Investing

The author re-invented using dual indicators for a trading algorithm, big deal. It still looks like curve fitting to me. If you really want to dig into that sort of thing look at http://www.wealth-lab.com and you can play with different strategies to your hearts content.
by Clearly_Irrational
Mon Feb 23, 2015 1:18 pm
 
Forum: Investing - Theory, News & General
Topic: Dual Momentum Investing
Replies: 55
Views: 4152

Re: Tesla Motors Stock

ShiftF5 wrote:Will it go up, will it go down, will it go bust? Who knows.


Well, it's down 14.19% since I said it was a bad risk.
by Clearly_Irrational
Sat Feb 21, 2015 6:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tesla Motors Stock
Replies: 232
Views: 18789

Re: When would you retire money no object?

I think for many people there's more to it than the $$. Of course there is, that's the difference between having a job and having a career. That's not the same though as saying you enjoy it so much you'd do it for free. Most people work because they don't enjoy starvation or homelessness. Given the...
by Clearly_Irrational
Fri Feb 20, 2015 12:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: When would you retire money no object?
Replies: 64
Views: 3243

Re: Career changer and choosing best option?

I can't recommend staring in IT at age 47. Corporate sales is hit or miss, if you're fantastic then the money is amazing, otherwise it's terrible. I'd stay out of truck driving, that's likely on the chopping block for automation here soon. Flight attendant would be ok if you enjoy the lifestyle but ...
by Clearly_Irrational
Wed Feb 18, 2015 6:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Career changer and choosing best option?
Replies: 41
Views: 3178

Re: Why Active Management Fell Off a Cliff

Short answer, the market has gotten more efficient over time and continues to do so. First the stock pickers had trouble, then the fund managers, and nowadays even the hedge funds are having trouble generating alpha. The only way to beat the index nowadays is to find some really obscure or really co...
by Clearly_Irrational
Wed Feb 18, 2015 12:23 pm
 
Forum: Investing - Theory, News & General
Topic: Why Active Management Fell Off a Cliff
Replies: 6
Views: 1509

Re: When would you retire money no object?

Pretty much immediately. Depending on how much money I had and the chance of ever needing to go back to work I might give two weeks notice or just walk out the door. The first six months I'd like to do nothing and lots of it. Sleep, read, video games, lounge around and watch TV, maximize my sloth. A...
by Clearly_Irrational
Tue Feb 17, 2015 12:09 pm
 
Forum: Personal Finance (Not Investing)
Topic: When would you retire money no object?
Replies: 64
Views: 3243

Re: Your Future According to Yale Star Robert J. Shiller

I try to resist pointing out typos, but I really like this one. Universal suffrage is incompatible with unequal sufferage. Is it? Universal sufferage means that everyone has the vote. (generally this is taken to mean all adult citizens, sometimes minus certain categories like the mentall ill or fel...
by Clearly_Irrational
Fri Feb 13, 2015 7:16 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10116

Re: Your Future According to Yale Star Robert J. Shiller

Since the Oughts, we have had about 10% jobs growth over 5 years. Of course that still leaves it the worst jobs recovery since WWII. http://2.bp.blogspot.com/-2VMG_t19G9g/VL5k5AuQtKI/AAAAAAAALTY/kZqSYTc7hH8/s1600/c-percentage-of-maximum-payroll-job-losses-in-post-ww2-recessions-aligned-at-maximum-j...
by Clearly_Irrational
Fri Feb 13, 2015 12:46 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10116

Re: Your Future According to Yale Star Robert J. Shiller

Well if you read the whole post you might have detected that I was somewhat tongue-in-cheek with that comment in reply to nisiprius, I just left out the smiley face. Yes, I'm quite well aware there have been a few more tech advancements then just those two items mentioned. Apparently my humor detec...
by Clearly_Irrational
Thu Feb 12, 2015 5:46 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10116

Re: Your Future According to Yale Star Robert J. Shiller

I was going to post a timeline of technological change I found on the web but upon reading it closely it would appear that since the moon landing in 69, there has been only a couple of inventions of note, the personal computer and the internet. We've been almost literally sitting on our hands ever ...
by Clearly_Irrational
Thu Feb 12, 2015 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10116

Re: Your Future According to Yale Star Robert J. Shiller

As I see it this is the argument as to why things might be different this time. 1) There are three sectors to the economy resource production, manufacturing & services 2) As we automated resource production, mostly agriculture, people moved to manufacturing 3) As we automated manufacturing peopl...
by Clearly_Irrational
Wed Feb 11, 2015 2:47 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10116

Re: I'm not a bad Boglehead

I was just discussing with a co-worker how I gladly pay the $2 for the false hope of getting away from all of this crap. :beer On occasions where the prize gets really large I sometimes buy a ticket. The hour or two worth of daydreaming is worth the price. On an amusing note, if I were to actually ...
by Clearly_Irrational
Tue Feb 10, 2015 5:43 pm
 
Forum: Personal Consumer Issues
Topic: I'm not a bad Boglehead [buying Powerball ticket]
Replies: 101
Views: 6121

Re: I'm not a bad Boglehead

artiegene wrote:But I am going to stop by the grocery store on the way home from work and ...... buy some Powerball tickets! Anyone else?


There is nothing wrong with entertainment expenses, just don't mis-classify it as investment.
by Clearly_Irrational
Tue Feb 10, 2015 5:27 pm
 
Forum: Personal Consumer Issues
Topic: I'm not a bad Boglehead [buying Powerball ticket]
Replies: 101
Views: 6121

Re: Mr. Money Mustache: Hero or Foolish?

The claim to fame is that he retired at 30 with $600k plus a paid-off house. In fact before the blog took off, he was neither retired nor financially independent. He went into the construction business. I did some back of the envelope calculations a few years back and pretty much came to the same c...
by Clearly_Irrational
Tue Feb 10, 2015 4:11 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 409
Views: 59511

Re: Is Risk Real?

Think back to 2008-2009. What do you think was the probability of a total economic collapse in the U.S.? Do you really believe it was zero? Do you believe it was less than 1%? I think myself it was 5-10%. A great point. I was getting really close to driving down to the bank to close out my accounts...
by Clearly_Irrational
Mon Feb 09, 2015 5:37 pm
 
Forum: Investing - Theory, News & General
Topic: Is Risk Real?
Replies: 74
Views: 3814

Re: Mr. Money Mustache: Hero or Foolish?

His use of the word "retirement" (he should use financially independent) seems to be the biggest sticking point with most people that are critical of him. I have even seen people claim he is not retired because he manages his own investments and manages one rental property. If those two a...
by Clearly_Irrational
Mon Feb 09, 2015 1:48 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 409
Views: 59511

Re: The cult of PE10 - so what?

PE10-triggered market timing is pseudo scientific. I fail to see how. Using data to discover relationships between variables is a classic scientific pursuit. One has to be careful to be sure it isn't just curve fitting by using out of sample data but other than that I'm not sure I understand your a...
by Clearly_Irrational
Sun Feb 08, 2015 10:32 am
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 7028

Re: Advantages of working past your number

Only two possible reasons:

1) It wasn't really your number

2) You just like what you're doing
by Clearly_Irrational
Fri Feb 06, 2015 7:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Advantages of working past your number
Replies: 53
Views: 4025

Re: Successful investing: Is it luck or skill?

It does make me wonder why we have so many lengthy discussions on tilting. Are there a lot of posters here who are honing in on the trees and not seeing the forest? I see two main reasons: 1) We need something to talk about and most of the other items are already settled so we tend to discuss the e...
by Clearly_Irrational
Fri Feb 06, 2015 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Successful investing: Is it luck or skill?
Replies: 26
Views: 2557

Re: Successful investing: Is it luck or skill?

Personally my investments are more complicated than they should be but nowhere near as complicated as they might be, and I am fairly proud of the substantial simplification I've achieved between 2007 and 2015. Although my current strategy more complicated than most around here, compared to the way ...
by Clearly_Irrational
Thu Feb 05, 2015 5:08 pm
 
Forum: Investing - Theory, News & General
Topic: Successful investing: Is it luck or skill?
Replies: 26
Views: 2557

Re: What exactly is "wealthy?"

Johno wrote:Though 'millionaire' isn't what it used to be, again I think it's stretching things to say that people at that level aren't wealthy


At a million you're likely not even financially independent nowadays. Inflation is rough.
by Clearly_Irrational
Tue Feb 03, 2015 7:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: What exactly is "wealthy?"
Replies: 47
Views: 4021

Re: What exactly is "wealthy?"

bigred77 wrote:I'll call it at $2.5M in net worth.


If you've got more than 30 years life expectancy remaining the withdrawal rate on that amount isn't going to make you feel very wealthy outside of some pretty remote areas. Financially independent and comfortable sure, but not wealthy.
by Clearly_Irrational
Tue Feb 03, 2015 3:51 pm
 
Forum: Personal Finance (Not Investing)
Topic: What exactly is "wealthy?"
Replies: 47
Views: 4021

Re: What exactly is "wealthy?"

My personal definition goes something like this: "If you have to work for a living you're not wealthy" If you have enough income from from investments that working is optional for you then that's the minimum requirement in order to be considered "financially independent" which is...
by Clearly_Irrational
Tue Feb 03, 2015 2:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: What exactly is "wealthy?"
Replies: 47
Views: 4021

Re: The cult of PE10 - so what?

The question I have for all these quantitatively-minded number-crunchers is if changes in GAAP over their period of study are material or not. I haven't yet found a consistent way to adjust for the two main changes (FAS 142 goodwill impairment vs. amortization & buybacks vs. dividends). I agree...
by Clearly_Irrational
Tue Feb 03, 2015 11:56 am
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 99
Views: 7028

Re: How do you "Stay the Course"?

1) Have some rules you believe in (don't take this step lightly)
1a) You should have a rule about when it's permissible to change your rules
2) Write them down
3) Follow what you wrote down

Your rules don't have to be the same as everyone else, mine certainly aren't
by Clearly_Irrational
Mon Feb 02, 2015 7:43 pm
 
Forum: Investing - Theory, News & General
Topic: How do you "Stay the Course"?
Replies: 71
Views: 6626

Re: The missing value premium- a 10 year global lookback

~0% (or worse) equity returns: I said globally. Obviously individual economies can stagnate, as you showed that's not even uncommon given the right circumstances. Capitalism can be thought of as a system of interconnected optimizers, if returns in one area stagnate the investments go elsewhere. Als...
by Clearly_Irrational
Fri Jan 30, 2015 6:17 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: The missing value premium- a 10 year global lookback

Not at all true. Our population can decline and we can receed until the cows come home. Same for the rest of the world, in aggregate. 50 year stagnation periods are pretty common when you look at history, so it just doesn't make sense to say that it can't happen. Name one period where that happened...
by Clearly_Irrational
Fri Jan 30, 2015 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: The missing value premium- a 10 year global lookback

A total lack of positive net present value projects doesn't have to mean the end of capitalism at all. It is very easy to stagnate/deflate, in fact we've witnessed it in Japan and seem to be witnessing it again globally. You're confusing a stagnant local economy with a lack of +NPV projects. They'r...
by Clearly_Irrational
Fri Jan 30, 2015 4:05 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: The missing value premium- a 10 year global lookback

I don't expect stocks to return more than 0% for the next 100 years. That would require faith, not logic. For stocks to return zero percent over the long term it would mean that there was a total lack of positive net present value projects. That would pretty much be the end of capitalism and it wou...
by Clearly_Irrational
Fri Jan 30, 2015 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: The missing value premium- a 10 year global lookback

Sorry, but not so. VBR and VBK are very nearly tied over the past four years 4 yrs +0.7% ahead 3 yrs +5.4% ahead 2yrs +3.1% ahead 1yr +5.2% ahead So yeah, what I said was that small value pulled ahead of growth about four years ago. Look, all of this is quibbling, you're not going to be able to tel...
by Clearly_Irrational
Thu Jan 29, 2015 10:07 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: The missing value premium- a 10 year global lookback

countmein wrote:I'm not seeing it...


You're using different funds and a different comparison. Try VBR vs. VBK for last four years. *shrug* It's a small effect, dates, fund selection, etc. will have a strong impact.
by Clearly_Irrational
Thu Jan 29, 2015 9:10 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: Harry Browne’s Permanent Portfolio

The Simba spreadsheet has everything you'd need to make a reasonable comparison. http://www.bogleheads.org/wiki/Simba%27s_backtesting_spreadsheet
by Clearly_Irrational
Thu Jan 29, 2015 6:42 pm
 
Forum: Investing - Theory, News & General
Topic: Harry Browne’s Permanent Portfolio
Replies: 130
Views: 14529

Re: The missing value premium- a 10 year global lookback

Outpeformance of growth or value tends to be cyclical and the cycle is pretty long. Overall value seems to come out ahead more often than growth but it can take a while for the effect to catch up with you. Over the last ten years growth was winning but starting four years ago value pulled ahead and ...
by Clearly_Irrational
Thu Jan 29, 2015 6:34 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3299

Re: What to do with spare cash?

1) Paying off your debt is a high priority but you're debt free. 2) Using all of your tax advantaged space is a good bet but you've already done that. 3) Sizable emergency fund, check Given your situation I'd start saving for a house. Your available surplus isn't particularly huge so this is going t...
by Clearly_Irrational
Thu Jan 29, 2015 6:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: What to do with spare cash?
Replies: 22
Views: 2047

Re: Salary to Home Value/Mortgage Ratio?

Beyond that, you're looking at 2+ hours/day commute, and prices don't get any better until you take on a 3+ hour/day commute (Riverside County, Temecula, Coachella Valley, etc). Most of the cities there I deem "middle class" are $600k+ and up, which is not easy to do with a 3:1 ratio. Hou...
by Clearly_Irrational
Mon Jan 26, 2015 4:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Salary to Home Value/Mortgage Ratio?
Replies: 50
Views: 5487

Re: Salary to Home Value/Mortgage Ratio?

1:1 :dollar That would be amazing, but in my area you can't even buy bare land for that. Some median home prices for where I live: Close in: Portland $310k Beaverton $295k Tigard $316k Lake Oswego $483k Milwaukie $246k Farther out: Hillsboro $263k Sherwood $329k Tualatin $343k Oregon City $289k Rea...
by Clearly_Irrational
Mon Jan 26, 2015 2:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Salary to Home Value/Mortgage Ratio?
Replies: 50
Views: 5487

Re: Gotta Be a Bear Market Coming

There is a bear market coming eventually, when is the big question. For the most part bear markets can't be predicted in time to do anything useful about it with any sort of reliability. There is possibly a small exception for periods in which there has been significant Federal Reserve involvement a...
by Clearly_Irrational
Fri Jan 23, 2015 5:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Gotta Be a Bear Market Coming
Replies: 64
Views: 7767

Re: U.S. stocks in freefall

11) Vanguard Rainfall Correlation: According to this morning's WeatherChannel report, extreme drought in California increased from 13% last year to 39% this year, so it is time to sell California stocks. I pulled drought data from http://droughtmonitor.unl.edu/Home/StateDroughtMonitor.aspx?CA and S...
by Clearly_Irrational
Thu Jan 15, 2015 4:35 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: U.S. stocks in freefall

do you believe that stuff or are you joking? Back when I was actively trading I found it to be quite reliable within the predicted accuracy levels. (which while greater than random chance are no where near certainty) The problem is that it's not fully mechanical and thus open to bias and errors in ...
by Clearly_Irrational
Wed Jan 14, 2015 5:43 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: U.S. stocks in freefall

We won't know for sure till end of day, but at the moment it looks like the breakdown in prices has now occurred. Intra-day prices suggest a double bottom breakdown with a downside target of 1910. First resistance level at 1973 or so, blowing through that would be a strong confirmation of the new tr...
by Clearly_Irrational
Wed Jan 14, 2015 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: U.S. stocks in freefall

Clearly_Irrational, I put in my last but one DCA orders in today. How did your prediction do today? The recommendation was made that Jan 6th was probably not optimum and that a date somewhere around Friday the 9th or so would be slightly higher odds but prediction accuracy was said to be mediocre. ...
by Clearly_Irrational
Fri Jan 09, 2015 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: Why a Boglehead doesn't invest in individual companies?

Multiple cost bases can be avoided by always directing new money to new companies, so there is only one cost basis per company. If you invest monthly, which is common, then your total number of stocks could get very high over an investing lifetime. (if you start at 22 and retire at 67, you could ha...
by Clearly_Irrational
Tue Jan 06, 2015 6:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15983

Re: U.S. stocks in freefall

I'm curious also about this freefall today. I had planned to buy some ETFs today (ITOT and AGG) but seeing the declines I'm wondering if I should wait to see if things go lower. I'm not a fan of timing the market as I have learned thru this forum but would it be reckless for me to invest now? You'r...
by Clearly_Irrational
Tue Jan 06, 2015 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: U.S. stocks in freefall

Oh, gee. here we are at 1:30 Wall Street time and the DOW is down another 210 points on top of -330 yesterday. That's 540 points so far and the day isn't done! Have we established any criteria for a "freefall"? Personally I'd use greater than four standard deviations as a minimum threshol...
by Clearly_Irrational
Tue Jan 06, 2015 2:57 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 222274

Re: Why a Boglehead doesn't invest in individual companies?

If you elect to give your individual stock portfolio equal weights, and that happens to cause a small or value tilt, that may be an additional bonus, but can certainly be avoided if desired. All that however has nothing to do with the excess returns originating from the various tangible benefits of...
by Clearly_Irrational
Tue Jan 06, 2015 11:52 am
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15983

Re: Why a Boglehead doesn't invest in individual companies?

I expect a random individual stock portfolio based on a tilted index to have expected returns equal to the expected return of the beta tilted index I would disagree, a semi-random selection (random stocks, diversified sectors) of equal weighted stocks is going to favor small and value factors vs. a...
by Clearly_Irrational
Tue Jan 06, 2015 1:17 am
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15983

Re: Why a Boglehead doesn't invest in individual companies?

Calculating distributions of beta factors resulting from subsampling would be an academic exercise, but of no real-world importance with respect to a utility function, other than the return distributions already presented in the articles. The importance would be determining if the excess returns fr...
by Clearly_Irrational
Mon Jan 05, 2015 11:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15983

Re: Why a Boglehead doesn't invest in individual companies?

I think you read my posting wrong, or there is some miscommunication. I didn't say the "likelihood that the risk factor profile will match that of the market is low" or anything like that. I wasn't trying to put words in your mouth, I was saying that myself. Pending a precise definition o...
by Clearly_Irrational
Mon Jan 05, 2015 7:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15983
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