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Re: Apple Stock - Seems great, right?

Of course. Apparently you missed the point: It is possible to select individual stocks with better fundamentals and valuation than the broad market. I'm not saying everyone should do so. I'm simply pointing out that it is something fairly easy to do. Making that comparison on a risk adjusted basis ...
by Clearly_Irrational
Fri Nov 21, 2014 5:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Apple Stock - Seems great, right?
Replies: 95
Views: 8787

Re: Thinking about retiring next year

How much does it cost to live the lifestyle you want?
by Clearly_Irrational
Fri Nov 21, 2014 4:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring next year
Replies: 13
Views: 1059

Re: Apple Stock - Seems great, right?

Just for fun, I sketched out a potential investment on the back of a napkin. It came down to these two options: Company A ROE: 21.22 ROA: 8.19 Price to Forward Earnings: 17.6 Company B ROE: 32.60 ROA: 18:08 Price to Foward Earnings: 14.8 Which would you rather own? Completely insufficient amount of...
by Clearly_Irrational
Fri Nov 21, 2014 11:26 am
 
Forum: Investing - Help with Personal Investments
Topic: Apple Stock - Seems great, right?
Replies: 95
Views: 8787

Re: Purchasing power parity

Then 300 pounds times .23 ounces of gold times 690 current dollars/ounce gives us $47,610 today's dollars. Whereas $1320 dollars (1800's) divided by $20/ounce times 690 current dollars/ounce gives us $45540 today's dollars. Pretty close. Just a minor detail, but the current spot price of gold is $1...
by Clearly_Irrational
Thu Nov 20, 2014 3:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Jane Austen's Economics
Replies: 55
Views: 15591

Re: Apple Stock - Seems great, right?

Short term Apple is looking a bit overbought and ripe for a small pullback amidst an overall uptrend. Medium term Apple looks fairly strong with solid fundamentals. Long term I'm worried about their rapidly slowing earnings growth and trouble developing new products now that Steve Jobs is no longer ...
by Clearly_Irrational
Thu Nov 20, 2014 2:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Apple Stock - Seems great, right?
Replies: 95
Views: 8787

Re: Apple Stock - Seems great, right?

I appreciate all the insight above. I think I am going to take some advice and divide up my 10k stock gambling money vs dumping all into one stock. Perhaps pick 3. Hey, I'm diversifying and before you know it I will just buy more TSM and forget the idea completely :-) Well, if you're going to play ...
by Clearly_Irrational
Thu Nov 20, 2014 2:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Apple Stock - Seems great, right?
Replies: 95
Views: 8787

Re: Apple Stock - Seems great, right?

rkhusky wrote:I would guess that all the top (5000? more?) stocks are analyzed by 1000's of analysts.


You would be wrong. Top 500 sure, but start getting down the list and analysis gets pretty thin.
by Clearly_Irrational
Thu Nov 20, 2014 2:34 pm
 
Forum: Investing - Help with Personal Investments
Topic: Apple Stock - Seems great, right?
Replies: 95
Views: 8787

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

No. 1 I save as much as I can that I don't need to spend on stuff so predicting expected return won't help me there I understand that, but if you assume that you have zero knowledge of the return then you have no way to know if that will eventually lead to retirement or not. With zero knowledge of ...
by Clearly_Irrational
Wed Nov 19, 2014 2:33 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 5968

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

Right or wrong I don't see any actionable use of trying to predict future returns. There are two important ones: 1) Determining your necessary savings rate 2) Deciding if a financial portfolio (stocks and bonds) is the best place for your investment funds While no one's retirement should hinge on g...
by Clearly_Irrational
Wed Nov 19, 2014 11:57 am
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 5968

Re: Affording a 1.3 million home?

I think you can, but I'm not sure you should. You're stretching quite a bit to get in this place. I think the correct course of action in this case would be a comparison of alternatives, besides buying this house what are your other choices and how do they stack up?
by Clearly_Irrational
Tue Nov 18, 2014 3:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Affording a 1.3 million home?
Replies: 119
Views: 15779

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

1/PE10 + implied Inflation (10yr Treasuries - 10yr TIPS) suggests a 5.58% rate, of course that prediction only has about 42% accuracy. There are some possible adjustments to PE10 that could increase that number, FAS 142 and buybacks for example. I'd call 7% possible but optimistic.
by Clearly_Irrational
Tue Nov 18, 2014 3:11 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 5968

Re: a look at gold and its hedging value

Question: Why does gold (or other reserves) need to back GDP? I would imagine it needs to back currency obligations, and then perhaps only foreign obligations. It doesn't directly. Money is essentially tokens we use to represent wealth. Leaving aside for a moment the weaknesses of the GDP measure, ...
by Clearly_Irrational
Mon Nov 17, 2014 4:45 pm
 
Forum: Investing - Theory, News & General
Topic: a look at gold and its hedging value
Replies: 48
Views: 3189

Re: a look at gold and its hedging value

Amazing! If gold is a stable store of value and the ultimate root source of value in currency how is it possible that Venezuela is in the middle of a currency crisis so complicated that I can't quite grasp it... Venzuela currently has 367.6 tons of gold which works out to 11763200 ounces, current s...
by Clearly_Irrational
Mon Nov 17, 2014 4:22 pm
 
Forum: Investing - Theory, News & General
Topic: a look at gold and its hedging value
Replies: 48
Views: 3189

Re: a look at gold and its hedging value

My take is that gold is an insurance/hedging asset that has the most value during times of crisis. The problem is that during good times it's fairly expensive to hold. There are basically three ways to deal with that 1) Throw up your hands, say it's too expensive and don't hold it at all (convention...
by Clearly_Irrational
Fri Nov 14, 2014 7:31 pm
 
Forum: Investing - Theory, News & General
Topic: a look at gold and its hedging value
Replies: 48
Views: 3189

Re: What NW amount makes this person financially free?

It all depends on what exactly you mean by "financially free" and what sort of lifestyle you want to live. You specified $2000 per month in spending so $24k per year is the net number we need. With that income level you'll only be in the 15% bracket which I believe means you wouldn't have ...
by Clearly_Irrational
Fri Nov 14, 2014 7:13 pm
 
Forum: Investing - Theory, News & General
Topic: What NW amount makes this person financially free?
Replies: 19
Views: 2308

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

There's no argument that U.S. Treasuries have historically provided the best portfolio protection during market corrections and periods of market stress, or that they will most likely continue to so. But the point is that other high-quality bonds (corporates, munis, international, etc.) have done a...
by Clearly_Irrational
Fri Nov 14, 2014 5:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3578

Re: Does anyone here make "fun" purchases.

EmergDoc wrote:You mean the day I wreck it or it dies? Because I don't sell cars. :) J/K


Personally I try to avoid getting to the "rebuild the engine or scrap the car" decision so I usually try to sell prior to that.
by Clearly_Irrational
Fri Nov 14, 2014 4:00 pm
 
Forum: Personal Consumer Issues
Topic: Does anyone here make "fun" purchases.
Replies: 111
Views: 6305

Re: Real estate as my "million dollar idea"

This is a significant point regarding the value of leverage to this particular OP. I agree, if we're talking about homes that cost $25k, the closing costs would outweigh the advantage of leverage. I have a hard time wrapping my head around that idea given that prices in my area are at least an orde...
by Clearly_Irrational
Fri Nov 14, 2014 2:31 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Does anyone here make "fun" purchases.

I will be the first to say $5K for curtains is not necessarily a bad purchase, if they are a classic color and design that will not go out of style. Does that include all the hardware also? Is it for every window in your home? I admit I was assuming this was for a single window. It's somewhat less ...
by Clearly_Irrational
Fri Nov 14, 2014 2:24 pm
 
Forum: Personal Consumer Issues
Topic: Does anyone here make "fun" purchases.
Replies: 111
Views: 6305

Re: Does anyone here make "fun" purchases.

Apparently you make a lot more than we do, if my wife suggested we buy $5k curtains I'd laugh myself sick I am assuming that OP would pay for the curtains out of her assets rather than income. Victoria Once you're past living paycheck to paycheck there isn't really much difference. Lifestyle expens...
by Clearly_Irrational
Fri Nov 14, 2014 12:57 pm
 
Forum: Personal Consumer Issues
Topic: Does anyone here make "fun" purchases.
Replies: 111
Views: 6305

Re: Does anyone here make "fun" purchases.

Apparently you make a lot more than we do, if my wife suggested we buy $5k curtains I'd laugh myself sick. That said, as long as your bills are paid, retirement is on track, etc. why shouldn't you spend your money on things that make you happy? Isn't that the whole point?
by Clearly_Irrational
Fri Nov 14, 2014 12:15 pm
 
Forum: Personal Consumer Issues
Topic: Does anyone here make "fun" purchases.
Replies: 111
Views: 6305

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

Hard to conceive of a black swan for Treasuries that isn't a lot worse for all other types of bonds. That's my thinking. If at some point the US loses the reserve currency status or if the default risk were ever to rise considerably I'd look into changing my strategy. For now, I'm happy with 100% U...
by Clearly_Irrational
Fri Nov 14, 2014 11:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3578

Re: Dealing with pressure for "social donations" at work

It sucks, but you're probably stuck paying. Failing to participate will probably torpedo your reputation with management. I'd ask for a receipt, that way you can file for either a charity deduction or unreimbursed business expense depending on your accountant's interpretation of the event.
by Clearly_Irrational
Thu Nov 13, 2014 3:44 pm
 
Forum: Personal Consumer Issues
Topic: Dealing with pressure for "social donations" at work
Replies: 163
Views: 7741

Re: Why Not 100% Treasuries if your Risk is on the Equity Si

The default or credit risk premium is only 0.31% with a Std Dev of 4.26%. It's the least valuable premium being 3-5 times less valuable than the other premiums on a risk adjusted basis. Frankly I don't think it's worth the effort. Data pulled from the nice chart at http://www.ifa.com/12steps/step8/i...
by Clearly_Irrational
Thu Nov 13, 2014 1:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why Not 100% Treasuries if your Risk is on the Equity Side?
Replies: 40
Views: 3578

Re: Real estate as my "million dollar idea"

I would be curious to have someone explain the leverage thing to me, and how it makes such a huge difference. I'm not sure I will ever get over the risk factor involved, but can someone explain the numbers to me in depth?? Here's the quick explanation, you'll have to dig deeper for the full story. ...
by Clearly_Irrational
Thu Nov 13, 2014 11:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

hiddensee wrote:You will not exceed stock market returns by investing in property (absent luck, political corruption, other market friction)


If it's leveraged you most certainly will. Stocks come pre-leveraged, real estate you have to do it yourself.
by Clearly_Irrational
Wed Nov 12, 2014 11:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

I'd have to really think about using leverage to do this. It would be going against everything me and my wife have been taught and how we have agreed to live our lives. I just don't see it being worth the risk even if that approach does financially come out on top Without leverage real estate won't...
by Clearly_Irrational
Wed Nov 12, 2014 4:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

buddy17 wrote:I just looked at the Assessor's property card for one of his favorite properties...he paid $27,500 back in 2011 for a nice large home converted into a triplex.


I'm so jealous, in our area $27k isn't even a good downpayment.
by Clearly_Irrational
Wed Nov 12, 2014 4:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

You can certainly accumulate $1m over time as a professional landlord. You can also accumulate $1m over time as an engineer, accountant, or truck driver. Finding great deals and managing them for low costs and high occupancy is possible but is employment in my opinion rather than investing. If you'...
by Clearly_Irrational
Wed Nov 12, 2014 4:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

bluejello wrote:The only caveat I would add is not to put ALL your money in real estate.


That's good advice.
by Clearly_Irrational
Wed Nov 12, 2014 4:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Real estate as my "million dollar idea"

We no longer manage the properties ourselves, for the most part. We did for many years, but we clear enough even with management fees that we are happy to pay the young guys to take care of the problems. If people talk about getting into rentals I tell them to do the management themselves for a whi...
by Clearly_Irrational
Wed Nov 12, 2014 3:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: Real estate as my "million dollar idea"
Replies: 78
Views: 6292

Re: Gathering thoughts vs. Market Timing

If you were going to market time you would want to write down your timing system and post a backtest. You need to prove it worked in the past or it's very unlikely to work going forward. If you can't manage at least that much rigor then you have no business gambling with your retirement money. Timin...
by Clearly_Irrational
Tue Nov 11, 2014 5:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Gathering thoughts vs. Market Timing
Replies: 56
Views: 2785

Re: Happy Birthday, Marines!

Semper Fi

Corporal, 4th Marine TOW and 3rd Light Armored Recon, 1993-1997
by Clearly_Irrational
Mon Nov 10, 2014 1:18 pm
 
Forum: Local Chapters and Bogleheads Community
Topic: Happy 239th Birthday, U.S. Marine Corps
Replies: 20
Views: 755

Re: The Sky is Falling

jdb wrote:Enquiring minds are curious about the workings of your composite crash indicator.


Here's a thread where I talk about it:

http://www.bogleheads.org/forum/viewtopic.php?f=10&t=142545&hilit=+composite+crash+indicator
by Clearly_Irrational
Sun Nov 09, 2014 12:45 am
 
Forum: Investing - Theory, News & General
Topic: The Sky is Falling
Replies: 36
Views: 4908

Re: The Sky is Falling

HomerJ wrote:If you can't trust the swirlogram, who can you trust? :)


What can I say, I like pretty graphics. All those business classes must be rotting my mind.
by Clearly_Irrational
Fri Nov 07, 2014 5:31 pm
 
Forum: Investing - Theory, News & General
Topic: The Sky is Falling
Replies: 36
Views: 4908

Re: The Sky is Falling

nisiprius wrote:The stock market is... sort of like having a very strange father who says "I will pay you a generous allowance, but only on condition that you put half of it into pyramid clubs, Ponzi schemes, and chain letters."


Hah, I like that one.
by Clearly_Irrational
Fri Nov 07, 2014 5:02 pm
 
Forum: Investing - Theory, News & General
Topic: The Sky is Falling
Replies: 36
Views: 4908

Re: The Sky is Falling

Not that it matters as everyone here is diversified and buy/hold investors, but..... I told myself that next time we were in a crazy stock bubble, I would realize it. Now I look at the crazy IPO's going on with companies that have no earnings or chance of earnings for a long time raising millions. ...
by Clearly_Irrational
Fri Nov 07, 2014 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: The Sky is Falling
Replies: 36
Views: 4908

Re: 22, I want to be rich, looking for a high reward fund

If you want to be rich then the market is the wrong place for your money. You need to start a business. It's higher risk, but potentially much higher reward.
by Clearly_Irrational
Thu Nov 06, 2014 6:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: 22, I want to be rich, looking for a high reward fund
Replies: 67
Views: 6132

Re: Headed for a 300+ point loss today?

Clearly_Irrational my next DCA is 11/10, do you predict any better days around it like you did last month? RSI is positive but still under overbought. Price pattern is roughly following the upper bollinger band though starting to diverge a bit. MACD width is high but falling. Chaikin Money flow is ...
by Clearly_Irrational
Thu Nov 06, 2014 6:21 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Headed for a 300+ point loss today?

I enjoy reading your forecasts for entertainment value. Thanks! Anyone that followed my posts would realize that that's the only reason I make them since I'm indexing and passive buy/hold nowadays. My own forecasts are always correct, except for two minor problems; magnitude and direction. :twisted...
by Clearly_Irrational
Thu Nov 06, 2014 12:07 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Making 8 "horrible" investments will beat the index, rig

1) I think something very very different from everyone else in the market, and 2) I am right, and 3) Everyone else is wrong. Either this or you're digging around in places where other people aren't paying much attention. For example, your chances of producing a more accurate valuation for IBM are v...
by Clearly_Irrational
Tue Nov 04, 2014 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: Making 8 "horrible" investments will beat the index, right?
Replies: 35
Views: 3771

Re: Shiller PE10 - by the numbers

Larry, Can you point me to a longer article where you've discussed this topic in depth? I'd like to read up on it. I'd like to read that myself. In the meantime, here is an old thread that discusses an article that talks about many of the same issues: http://www.bogleheads.org/forum/viewtopic.php?f...
by Clearly_Irrational
Mon Nov 03, 2014 7:03 pm
 
Forum: Investing - Theory, News & General
Topic: Shiller PE10 - by the numbers
Replies: 26
Views: 2738

Re: "Smart" Beta - general consensus?

The term is a marketing phrase, unlike beta it doesn't have a mathematical definition. On top of that, most of the things they are marketing as smart beta don't have anything to do with the beta concept. Mostly they're just various ways of saying "we did some things to select stocks in a partic...
by Clearly_Irrational
Mon Nov 03, 2014 6:53 pm
 
Forum: Investing - Theory, News & General
Topic: "Smart" Beta - general consensus?
Replies: 17
Views: 1455

Re: Why do Engineers Think They’ll Be Good at Picking Stocks

I think they both have a place, and perhaps they are just two different modes of approaching the problem of generating alpha In my experience you get the best results when you do it both ways and compare. Cross checking is an incredibly powerful tool and I don't understand why so many don't seem to...
by Clearly_Irrational
Mon Nov 03, 2014 3:57 pm
 
Forum: Investing - Theory, News & General
Topic: Why do Engineers Think They’ll Be Good at Picking Stocks?
Replies: 135
Views: 10618

Re: Headed for a 300+ point loss today?

denovo wrote:450 posts about the biggest non-event.


Well there is only so much you can write about a regularly rebalanced three fund portfolio. Board members like to talk about the edge cases to make things interesting.
by Clearly_Irrational
Mon Nov 03, 2014 2:06 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Headed for a 300+ point loss today?

I followed your forecast. You mean it was wrong? Dang! Forecasts of that nature are almost never completely "right" or "wrong" and always have to be adjusted as new data comes in. So far, the direction and pattern are unfolding as predicted but the magnitude is higher than expec...
by Clearly_Irrational
Mon Nov 03, 2014 12:34 pm
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Headed for a 300+ point loss today?

Subsequent price action combined with a P&F double top breakout on Oct 28th with a 2410 price objective have reduced the accuracy of my previous forecast. While I got the direction right, the magnitude is much larger than anticipated, throwing the rest of it into question. At this point I wouldn...
by Clearly_Irrational
Mon Nov 03, 2014 11:59 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Relatively new here. What did you do in 2008/09

letsgobobby wrote:In general I think PE10 is only good in extreme situations


I like PE10 but I would agree with that assessment.
by Clearly_Irrational
Mon Nov 03, 2014 11:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 130
Views: 9926

Re: Relatively new here. What did you do in 2008/09

Bustoff wrote:Fear sure can be irrational. Heart disease kills over 600,000 citizens each year in the United States, but one person dies from Ebola and that's all we hear about 24/7 on the news.


Well, to be fair heart disease isn't contagious.
by Clearly_Irrational
Mon Nov 03, 2014 11:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Relatively new here. What did you do in 2008/09
Replies: 130
Views: 9926

Re: Blog: Harry Browne's Permanent Portfolio

I need a lesson in real interest rates 101. Well, there are a couple of different ways. For this particular purpose I use the federal funds rate minus inflation. Do you increase your gold holdings when the rate is positive, or when the rate is negative?, and by how much? How did you set the initial...
by Clearly_Irrational
Sun Nov 02, 2014 2:28 am
 
Forum: Investing - Theory, News & General
Topic: Blog: Harry Browne's Permanent Portfolio
Replies: 79
Views: 7986
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