Search found 2747 matches

Return to advanced search

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: 49
Views: 2027

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: 49
Views: 2027

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: 49
Views: 2027

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: 49
Views: 2027

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: 49
Views: 2027

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: 49
Views: 2027

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: 14407

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: 49
Views: 2027

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: 1937

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: 5388

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: 5388

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: 7663

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: 221553

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: 221553

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: 221553

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: 221553

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: 15634

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: 221553

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: 221553

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: 15634

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: 15634

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: 15634

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: 15634

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

Tax loss harvesting is worth 0.4% to 0.6% annually. Aren't you overestimating this bonus since you can tax loss harvest an index fund as well? So shouldn't you really should only be talking about the net benefit of being able to harvest the true dogs vs. the whole index? I suspect the net benefit i...
by Clearly_Irrational
Mon Jan 05, 2015 7:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

It is important to fairly state the benefits of an individual stock portfolio, but we also need to be fair about the true "costs" (mostly time) of holding such a portfolio. Even if you completely throw out research, isn't there a considerable amount of record keeping involved just for the...
by Clearly_Irrational
Mon Jan 05, 2015 7:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

Volatility: I think this is the easiest. Firstly, "volatility" is a questionable risk measure in the first place. While the utility function for an investor is always somewhat arbitrary and dependent on individual preferences, I think it is almost unanimously agreed that measures like tai...
by Clearly_Irrational
Mon Jan 05, 2015 7:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

The point of the argument was that with a large enough randomly subsampled buy-and-hold portfolio of individual stocks, according to the papers on the wiki page and the factors mentioned by various posters on this thread, I concluded that I can expect significant outperformance over time vs an inde...
by Clearly_Irrational
Mon Jan 05, 2015 7:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

Each situation is different, but I think this number and my estimate of 0.7-1% annually are rather conservative. I'd agree that's a significant amount, lacking specific case examples though I don't agree your estimate is conservative for the majority of cases. For the sake of argument though, let's...
by Clearly_Irrational
Mon Jan 05, 2015 6:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

Re: WHY is retirement enjoyable / something to look forward

I think a lot of people in this thread are confusing "not working" with "doing nothing" when those aren't the same things at all. Since retirement my parents tell me they're so busy they don't know how they ever had time to go to work.
by Clearly_Irrational
Mon Jan 05, 2015 6:36 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20051

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

Smart beta funds have higher expenses and turnover. Whether or not you do it has nothing to do with the question in this thread. It only matters in that if you do smart beta in the individual stocks but not in the indexes you're comparing portfolios with different risk factors and thus different ex...
by Clearly_Irrational
Mon Jan 05, 2015 6:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

bpp wrote:So at least 0.4% in expense ratio savings, and 0.3% in tax savings. Seems worth it to me.


That's getting large enough to be significant. I have to ask though, why so many Japanese stocks, doesn't that leave you fairly undiversified?
by Clearly_Irrational
Mon Jan 05, 2015 6:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

But why would the other factors mentioned change the risk level? You mentioned several items that would give the portfolio a different set of risk factors than an index portfolio, smart beta for example. I would say tax advantages from smart splitting of the portfolio between taxable vs tax-deferre...
by Clearly_Irrational
Mon Jan 05, 2015 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

but assuming a moderate 0.7-1% additional after-tax return per year Yes, a difference that large would be significant, however some of your suggestions actually change the risk profile in which case you're no longer comparing apples to apples. If we limit the comparison to factors which don't chang...
by Clearly_Irrational
Mon Jan 05, 2015 4:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

the articles on the wiki page seem to confirm that with realistic numbers for the amount of individual stocks, and realistic timeframes, the higher expected returns outweigh the skewness issue. Wait, I haven't seen any evidence to suggest that a portfolio of individual stocks has a higher expected ...
by Clearly_Irrational
Mon Jan 05, 2015 4:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

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

The yearly compensation is relatively small, but becomes quite significant over a number of years or an individual's investment life. I think the word "miniscule" would be more appropriate. Basically you're talking about saving a fraction of a percent in management fees, plus some very mi...
by Clearly_Irrational
Sat Jan 03, 2015 11:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

Re: Is the collapse of oil price a "black swan"?

2. The event has a major effect. I would argue this criteria has not been met. "Major" in this context means something closer to "staggeringly huge". The median oil price in 2014 dollars from 1973 (first year of the oil shock) to present is $50/barrel, the current move is little...
by Clearly_Irrational
Wed Dec 24, 2014 10:38 am
 
Forum: Investing - Theory, News & General
Topic: Is the collapse of oil price a "black swan"?
Replies: 106
Views: 12055

Re: How do you define "being rich"?

If you have to work in order to make money then you're not rich, so a required qualification would be financial independence. I would argue the minimum bar is probably somewhere around 2x median household income ($51,900 in 2013) coming from safe passive investments (3% real returns), so that's arou...
by Clearly_Irrational
Mon Dec 22, 2014 7:43 pm
 
Forum: Personal Consumer Issues
Topic: How do you define "being rich"?
Replies: 127
Views: 9472

Re: WHY is retirement enjoyable / something to look forward

Bungo wrote:For me, it's simple. I want to spend my time doing what I want to do, instead of what someone else wants me to do.


This!
by Clearly_Irrational
Wed Dec 17, 2014 5:55 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20051

Re: WHY is retirement enjoyable / something to look forward

expat wrote:No one has to do a job they don't like.


Of course not, I'm free to starve or be homeless. Ah...smell that freedom.
by Clearly_Irrational
Wed Dec 17, 2014 5:45 pm
 
Forum: Personal Consumer Issues
Topic: WHY is retirement enjoyable / something to look forward to?
Replies: 237
Views: 20051

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

Are index funds just easier? Yes. An individual investor could, with a lot of work, assemble a portfolio that is well diversified and gave approximately the same return as the market. That would probably consist of at least 50 stocks. When you think about the selection, monitoring and record keepin...
by Clearly_Irrational
Wed Dec 17, 2014 3:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15634

Re: What is your opinion about "tilting?"

I feel tilting is a hidden form of market timing. Only if you're changing your tilts in some dynamic way. You could possibly call it a form of stock picking, though I think that comparison is a bit weak. It's really just asset selection, something we already practice in choosing our stock/bond and ...
by Clearly_Irrational
Tue Dec 16, 2014 11:48 pm
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 9375

Re: U.S. stocks in freefall

Why is it, that, on every forum, the longest running threads are always titled: Simple, for the vast majority of investors their true risk tolerance is lower than their need for risk. Personally I'd really prefer if the maximum downside on my portfolio was about 10%, but there is no way I'm going t...
by Clearly_Irrational
Tue Dec 16, 2014 11:45 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 221553

Re: in the past there was a period when active outperformed

I wonder if these extra returns have disappeared or diminished greatly due to it being easier to invest in these market factors. It makes me quite hesitant as to whether or not I should consider adding value stocks to my portfolio. There are four possibilities: 1) The factor represents underlying f...
by Clearly_Irrational
Mon Dec 15, 2014 5:35 pm
 
Forum: Investing - Theory, News & General
Topic: in the past there was a period when active outperformed
Replies: 30
Views: 1608

Re: in the past there was a period when active outperformed

As Benjamin Graham observed--in 1976! In my experience Graham is a reliable source. Picking an exact date when passive became better than active in general would be difficult but I think sometime between 1936 and 1976 would be a safe bet. I'd argue it wasn't completely dead until much later, but th...
by Clearly_Irrational
Mon Dec 15, 2014 5:11 pm
 
Forum: Investing - Theory, News & General
Topic: in the past there was a period when active outperformed
Replies: 30
Views: 1608

Re: What is your opinion about "tilting?"

I tilt. I think the evidence is good but not ironclad. Despite that I don't think it's for everyone.
by Clearly_Irrational
Mon Dec 15, 2014 4:02 pm
 
Forum: Investing - Theory, News & General
Topic: What is your opinion about "tilting?"
Replies: 116
Views: 9375

Re: in the past there was a period when active outperformed

Active investors outperform in inefficient markets or situations that involve information asymmetry. So yes, if you go back far enough active investing was better than passive. Nowadays things have gotten so efficient that even hedge funds are getting creamed.
by Clearly_Irrational
Mon Dec 15, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: in the past there was a period when active outperformed
Replies: 30
Views: 1608

Re: You folks think the big one is coming?

There will be another market crash, it's just a question of timing. NBER recession data suggests a 95% chance that it will happen prior to May 2017. (assuming a stable normal distribution which is a big assumption) Currently my composite crash indicator is only reading 14.29/100 (over 30 is usually ...
by Clearly_Irrational
Fri Dec 12, 2014 7:44 pm
 
Forum: Investing - Theory, News & General
Topic: You folks think [a market crash] is coming?
Replies: 64
Views: 5778

Re: U.S. stocks in freefall

Latest quote from the talking heads "This event is increasing dispersion in the market which will be a benefit to people because it's now a stock pickers market". :oops: Like talking heads or not, dispersion does indeed assist active investors. Of course the evidence suggests that active ...
by Clearly_Irrational
Fri Dec 12, 2014 5:39 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 1195
Views: 221553

Re: Is the collapse of oil price a "black swan"?

Cheap dirty energy fuels more use, hastens the planet's death. That's not good for anyone of any species. In the long term I agree that using dirty energy is a problem but that doesn't refute my point that economically cheap energy = prosperity. We're veering into politics here but I'd argue that t...
by Clearly_Irrational
Thu Dec 11, 2014 3:23 pm
 
Forum: Investing - Theory, News & General
Topic: Is the collapse of oil price a "black swan"?
Replies: 106
Views: 12055

Re: Is the collapse of oil price a "black swan"?

I would argue it is no one's long term interest to have too low oil prices. No nation that is. Oil, as they say, is geomilitarily 'the blood of victory'. I strongly disagree. Cheap energy fuels abundant prosperity. Of course it's not going to be good for single revenue oil exporters but that is a m...
by Clearly_Irrational
Thu Dec 11, 2014 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: Is the collapse of oil price a "black swan"?
Replies: 106
Views: 12055
Next

Return to advanced search