Search found 3091 matches

by Harold
Sun May 03, 2015 6:58 pm
Forum: Personal Consumer Issues
Topic: Will you buy self-driving car?
Replies: 235
Views: 10599

Re: Will you buy self-driving car?

Most drivers who find themselves in a self-driving car are going to be absolutely shocked by what safe driving really is. They're going to be looking for any override they can so they can cruise through crosswalks making pedestrians step back, gun it through the yellow light, speed, cut people off, ...
by Harold
Tue Apr 21, 2015 10:27 am
Forum: Personal Consumer Issues
Topic: Dealing with tourists taking photos. Etiquette question.
Replies: 34
Views: 3934

Re: Dealing with tourists taking photos. Etiquette question

I suspect you'll get different answers, or at least different perspectives, depending on whether someone walks as a primary mode of transportation (e.g. an urban resident) or sees walking as a recreational activity (e.g. suburbanite who drives everywhere). I regularly cross the Golden Gate Bridge on...
by Harold
Mon Apr 13, 2015 8:55 pm
Forum: Investing - Theory, News & General
Topic: would "flight to safety" go to bonds after all?
Replies: 32
Views: 2743

Re: would "flight to safety" go to bonds after all?

I read these threads and wonder if the investors who think bonds are less safe than stocks or whatever really even understand investing at all. All investing is a claim on future cash. Bonds are contractual/legal claims on precisely defined amounts of cash, and you even get to select the range of ri...
by Harold
Wed Apr 08, 2015 10:36 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 257
Views: 25928

Re: Do you think Ric Edelman is correct, never pay down mort

By your logic, you could say that about nearly every investor in America, including very many bogleheads: anyone who has a mortgage and also holds fixed income while not seeing that their risk level is 'higher' than their portfolio aa suggests is making a suboptimal decision in your view. It has no...
by Harold
Tue Apr 07, 2015 7:40 pm
Forum: Personal Finance (Not Investing)
Topic: Nailed it! $223,199/yr: magic# for making it in SF Bay Area
Replies: 117
Views: 12463

Re: Nailed it! $223,199/yr: magic# for making it in SF Bay A

One huge draw to the SF Bay Area is the belief that you can get rich quickly here. Many techies flock to start ups in the hopes that Google acquires them or goes IPO. The 50 person startup that got acquired by Facebook for $19 billion? They're heroes here. Nowhere else can some kid in their 20s or ...
by Harold
Tue Apr 07, 2015 7:30 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 257
Views: 25928

Re: Do you think Ric Edelman is correct, never pay down mort

but that doesn't mean taking on the risk was wrong or irrational. Of course it doesn't mean taking risk was wrong. A person's desired risk level is the fundamental decision an investor makes. High risk isn't financially wrong, low risk isn't financially wrong. Where people go wrong is thinking that...
by Harold
Tue Apr 07, 2015 3:55 pm
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 257
Views: 25928

Re: Do you think Ric Edelman is correct, never pay down mort

Harold, "People love their debt -- that's the real message from these threads." Far from it. In fact I detest debt but make the mathematically and financially optimal decision to keep my mortgage in spite of my feelings. It's fair to say your interpretation and mine of this thread and thi...
by Harold
Tue Apr 07, 2015 9:51 am
Forum: Investing - Theory, News & General
Topic: Do you think Ric Edelman is correct, never pay down mortgage
Replies: 257
Views: 25928

Re: Do you think Ric Edelman is correct, never pay down mort

People love their debt -- that's the real message from these threads. The rest is just chatter with people trying to rationalize it as being a savvy financial decision, presumably because it frees up more cash to be "in the game" and that makes people feel more like serious players. Since ...
by Harold
Sat Apr 04, 2015 3:26 pm
Forum: Personal Finance (Not Investing)
Topic: Renting in Retirement - Considerations?
Replies: 53
Views: 4665

Re: Renting in Retirement - Considerations?

- historically, real estate prices didn't increase as much as stock returns (well, I remember reading it, but didn't gather data points) Here are the most obvious data sets to look through, the Case-Shiller home price index (inflation adjusted) and total S&P 500 return (inflation adjusted, incl...
by Harold
Wed Apr 01, 2015 11:42 am
Forum: Personal Finance (Not Investing)
Topic: Another reason why BHs pay off mortgage early?
Replies: 51
Views: 7238

Re: Another reason why BHs pay off mortgage early?

Motivation for this thread: I found in another poll, BHs tend to pay off loans early. I'm trying to explain their behavior. If the poll results are an accurate reflection of the forum in general, there's an even more simple explanation. Forum participants are more financially savvy than average, an...
by Harold
Wed Apr 01, 2015 11:16 am
Forum: Personal Finance (Not Investing)
Topic: Corporate Finance vs Personal Finance
Replies: 9
Views: 931

Re: Corporate Finance vs Personal Finance

A big one is that many people try to use a personal balance sheet to justify having debt, as if Modigliani-Miller says it doesn't matter how they structure their personal finance. The reality is that maintaining unnecessary debt is generally a suboptimal financial strategy for individuals. (I know p...
by Harold
Thu Mar 26, 2015 10:10 am
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 72
Views: 5852

Re: Why Bonds With 20 Year Horizon?

Seems INCREDIBLY likely that stocks will beat bonds over any 20 year period in the next 50 years. In the context of investors questioning whether anyone should own bonds over the longer term, I simply commented that we don't know whether stocks will outperform bonds -- and we don't even know whethe...
by Harold
Wed Mar 25, 2015 10:59 am
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 72
Views: 5852

Re: Why Bonds With 20 Year Horizon?

The reality is that we don't know. We don't know the distribution of future returns, and we don't know whether stocks have a higher expected return or not. Of course we know that stocks have a higher expected return. We know that Treasury bonds are virtually risk free and that equities are riskier....
by Harold
Wed Mar 25, 2015 10:42 am
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 72
Views: 5852

Re: Why Bonds With 20 Year Horizon?

The reality is that we don't know. We don't know the distribution of future returns, and we don't know whether stocks have a higher expected return or not. Of course we know that stocks have a higher expected return. We know that Treasury bonds are virtually risk free and that equities are riskier....
by Harold
Wed Mar 25, 2015 9:38 am
Forum: Investing - Theory, News & General
Topic: Why Bonds With 20 Year Horizon?
Replies: 72
Views: 5852

Re: Why Bonds With 20 Year Horizon?

I'm just fascinated by the confidence with which people proclaim that stocks will outperform (and in a big way). Whether it's false bravado or simply an illustration of how we fool ourselves into thinking we know more than we really do, it's quite remarkable. (And less interesting, but still predict...
by Harold
Tue Mar 24, 2015 10:22 am
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 8351

Re: The one area I disagree with Jack

Equities also provide an income stream - but just because of that feature we wouldn't think of it as bond like. What is the point of this mischaracterization? Equities are another example of a capitalized income stream -- same with real estate. The income stream doesn't make a bond a bond, it's the...
by Harold
Mon Mar 23, 2015 11:05 am
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 8351

Re: The one area I disagree with Jack

fake "bonds" You'd come across as less strident and dramatic if you focused on what your concerns apparently are, namely that Social Security isn't a marketable bond and that the use of Social Security is encouraging an unwarranted increase in risk. (I too think the constant drumbeat to i...
by Harold
Sun Mar 22, 2015 12:22 pm
Forum: Personal Consumer Issues
Topic: Restaurant tipping
Replies: 200
Views: 15165

Re: Restaurant tipping

For anyone who's counting: I tip 20%. I'd rather that money were already added into the price and we got rid of tipping. I have read that some cities (San Franciso? Portland?) have required wait staff base pay to be minimum wage or more. Are there people who live in those places or have visited and...
by Harold
Sun Mar 22, 2015 11:20 am
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 8351

Re: The one area I disagree with Jack

Assets are assets and streams of income are just that. For insight into why some pretty smart people think otherwise, consider that all true investments are streams of income: Stocks - dividends/earnings, Bonds - dividends, Real Estate - rents. The price of each investment "asset" is the ...
by Harold
Sat Mar 21, 2015 4:40 pm
Forum: Investing - Theory, News & General
Topic: The one area I disagree with Jack
Replies: 93
Views: 8351

Re: The one area I disagree with Jack

Since capitalizing Social Security (or any income stream) is mathematically straightforward, that part is trivial. Whatever floats your boat. However, your asset allocation should differ depending on which approach you take. That is, whether you capitalize or not shouldn't change the assets you are ...
by Harold
Mon Mar 16, 2015 8:11 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

he would have significantly less risk by having a house, a mortgage, and a portfolio with some bonds and some stocks And if he doesn't make his mortgage payments, he risks losing a half million dollar asset. Is it even a serious argument about which approach is more prudent ? It's not an argument a...
by Harold
Mon Mar 16, 2015 7:29 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

Under the conditions stated by countmein in the original post, financially speaking he should sell bonds to pay for the house. A prudent investor doesn't willfully choose to lose money. (If he takes on the mortgage, he loses money whether he compartmentalizes his investments or not.) So, you actual...
by Harold
Mon Mar 16, 2015 7:17 pm
Forum: Investing - Theory, News & General
Topic: Poll: When to pay down debt rather than invest
Replies: 49
Views: 4478

Re: Poll: When to pay down debt rather than invest

Why would the interest rate matter? Interest rates are the result of what the market is willing to pay for cash flows at varying levels of risk. At any given time, your debt is either costing you in comparison to investments of equivalent risk, or it's making you money (most likely the former). Or m...
by Harold
Mon Mar 16, 2015 7:02 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

Johno, TS has 1 millions in investment asset. Follow your logical thinking, he should sell his bond to pay for the house. So, he has a 400K house and 600K investment. Now, does this make any financial sense?? KlangFool To others, Is this financially wrong? Can anyone enlighten me? Under the conditi...
by Harold
Mon Mar 16, 2015 9:52 am
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

If it's already been made, then what is there to talk about ? Seems clear to me he's asking whether to sell his bonds to buy the house, or whether to take out a mortgage instead. Further he says the mortgage is at a significantly higher interest rate than the bonds are paying, and that tax/capital ...
by Harold
Sat Mar 14, 2015 7:38 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

My way out is simply to declare that the house is something special and not incorporate it into the AA. After all, it is saving you rent and that rent wasn't part of the AA either. (I am not confusing the house asset with the mortgage asset here -- it's the former that's saving you rent, not the la...
by Harold
Sat Mar 14, 2015 7:18 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

My way out is simply to declare that the house is something special and not incorporate it into the AA. After all, it is saving you rent and that rent wasn't part of the AA either. (I am not confusing the house asset with the mortgage asset here -- it's the former that's saving you rent, not the la...
by Harold
Sat Mar 14, 2015 6:02 pm
Forum: Investing - Theory, News & General
Topic: Should you hold bonds and a mortgage at the same time?
Replies: 90
Views: 8573

Re: Should you hold bonds and a mortgage at the same time?

2) There's absolutely no way that you could justify, on the merits, 1:1 fungibility between a house and bond investments. House values are far more volatile than bond prices. A major function of bonds is to provide ballast to what would otherwise be a very volatile portfolio. Your new house will no...
by Harold
Thu Mar 12, 2015 3:45 pm
Forum: Personal Finance (Not Investing)
Topic: What are some common misconceptions found in this forum?
Replies: 209
Views: 19629

Re: What are some common misconceptions found in this forum?

Even that is unproven. Economics would suggest that the price increases to capture any excess expectation due to risk. An open question is that if it doesn't (i.e. if a positive expected return remains) why? There are varying estimates of how much expected return should remain -- including zero, wh...
by Harold
Thu Mar 12, 2015 3:36 pm
Forum: Personal Finance (Not Investing)
Topic: What are some common misconceptions found in this forum?
Replies: 209
Views: 19629

Re: What are some common misconceptions found in this forum?

Higher risk means higher expected returns - Past data says yes, economic/financial principles say no I thought that's the investments principle. What does the economics say? The economic principle is higher undiversifiable risk means higher expected return. That adjective makes all the difference (...
by Harold
Thu Mar 12, 2015 2:46 pm
Forum: Personal Finance (Not Investing)
Topic: What are some common misconceptions found in this forum?
Replies: 209
Views: 19629

Re: What are some common misconceptions found in this forum?

You all are going for the lighter topics, but I prefer to remove bricks from the foundations of investor psyches: Higher risk means higher expected returns - Past data says yes, economic/financial principles say no -- and perhaps the biggest open problem in finance to prove one way or the other. Sto...
by Harold
Mon Mar 09, 2015 10:20 pm
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

basspond wrote:Thanks for setting me straight on this. My actual personal finances aren't in the same shape as my government's, because I do not count these virtual savings.

You're still completely missing the concept, and quite frankly you're very likely making financial mistakes that could be avoided.
by Harold
Mon Mar 09, 2015 7:18 pm
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

All the reasons I have seen to classify debt payments as savings just don't add up in the real world. The virtual world, maybe. No, they align perfectly in the real world. It's a crisp and clear method of classifying income that serves many people well (and serves governments well, in the accounts ...
by Harold
Mon Mar 09, 2015 3:50 pm
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

No it isn't. Most loans are taken out by consumers to buy stuff with. I took a $60 loan on my Visa card last night to buy dinner with. In fact, I will essentially SPEND some of my retirement savings to pay that short term loan off... My response was in the context of the traditional definition. You...
by Harold
Mon Mar 09, 2015 9:42 am
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

maybe the problem is people cannot get their heads around 2 separate but related things? - paying down a loan (which is a form of investing) - increasing your housing equity (which is a volatile asset) You can pay down your mortgage but still lose money if the housing market drops. It's probably th...
by Harold
Mon Mar 09, 2015 9:27 am
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

since a reply implies some form of debate And Amen to that! Folks here will endlessly argue fully known topics, as if they were some modern-day Thales needing to make sense of the world around them without using a framework established by prior thinkers. (And it's not like there aren't topics that ...
by Harold
Mon Mar 09, 2015 9:22 am
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

Paying down the mortgage is economically equivalent to investing in stocks, or anything else you might do with savings. By your own definition, paying down the mortgage is equivalent to spending, since spending is, after all, "something you might do with your savings". Paying down the mor...
by Harold
Sun Mar 08, 2015 11:55 am
Forum: Personal Finance (Not Investing)
Topic: Do you consider mortgage payments as savings?
Replies: 410
Views: 23718

Re: Do you consider mortgage payments as savings?

With all this discussion, you'd think this was about the greatest unsolved economic problem of all time! The fields of economics and finance have already arrived at solid definitions providing a useful framework for organizing our economic and financial lives, from the global affairs of nations to t...
by Harold
Wed Mar 04, 2015 4:33 pm
Forum: Personal Finance (Not Investing)
Topic: Not Interested in Ever Owning Real Estate
Replies: 35
Views: 3725

Re: Not Interested in Ever Owning Real Estate

You can put your mind at ease. Financially speaking, if you're a disciplined saver it flat out doesn't matter. (Well it does matter, but there's no way to know now whether buying or renting is the better choice, just as you don't know whether domestic or international stock investing is the better c...
by Harold
Thu Jan 22, 2015 7:37 pm
Forum: Personal Finance (Not Investing)
Topic: What counts as "saving"?
Replies: 128
Views: 7375

Re: What counts as "saving"?

Argument clarifies ideas. Have no idea why you view that as negative. Quite honestly, I don't see ideas being clarified. I see muddled thinking and hardened "argue to win, rather than patiently learn where one is mistaken" stances. If you like that, that's fine -- but to most rational peo...
by Harold
Thu Jan 22, 2015 6:10 pm
Forum: Personal Finance (Not Investing)
Topic: What counts as "saving"?
Replies: 128
Views: 7375

Re: What counts as "saving"?

What benefit do you get from calling loan prepayment "savings"? You pose the question as if you are looking for an answer, but the tone of your responses suggest you may be merely interested in arguing. I'll respond in the spirit of the former, but have no interest in the latter. Using th...
by Harold
Tue Jan 20, 2015 8:09 pm
Forum: Personal Consumer Issues
Topic: Why are fruits not cheaper in California?
Replies: 28
Views: 1860

Re: Why are fruits not cheaper in California?

You obviously haven't tried shopping for produce in San Francisco's Chinatown.

It's a wide variety being sold under pure frenetic competition, and the prices reflect that.
by Harold
Tue Jan 20, 2015 8:07 pm
Forum: Personal Consumer Issues
Topic: Florida in the summer
Replies: 81
Views: 5971

Re: Florida in the summer

isn't there also a cognitive bias that you think we are trying to defend our choices of suffering through a miserable summer, because we feel we have to defend where we live as being perfect? Perhaps. For whatever reason, whether on my end or theirs, I'm fascinated by the phenomenon. People everywh...
by Harold
Tue Jan 20, 2015 12:06 pm
Forum: Personal Consumer Issues
Topic: Florida in the summer
Replies: 81
Views: 5971

Re: Florida in the summer

cognitive biases Remarkable how biases shape how people think and view the world around them. The "Florida defense" is indeed a good illustration, and quite frankly the main reason I continue reading this forum is because I'm enthralled by the behavioral finance cognitive biases continual...
by Harold
Tue Jan 20, 2015 10:42 am
Forum: Personal Consumer Issues
Topic: Florida in the summer
Replies: 81
Views: 5971

Re: Florida in the summer

If you want wonderful year-round weather, move to California. If you can tolerate miserable summers (and they are miserable) move to Florida. If you can tolerate brutal winters, stay where you are. Of course climate control helps with both the Florida summer and the northern winter. No doubt Florida...
by Harold
Tue Jan 20, 2015 10:32 am
Forum: Personal Finance (Not Investing)
Topic: What counts as "saving"?
Replies: 128
Views: 7375

Re: What counts as "saving"?

From an Economics perspective, saving is very clearly defined as deferred consumption. One is either spending his income on consumption, or he is saving it for future consumption. Debt repayment is, from an Economics perspective, saving. That isn't merely semantics valid in an abstract academic worl...
by Harold
Tue Jan 13, 2015 8:41 pm
Forum: Personal Finance (Not Investing)
Topic: Will young get social security?
Replies: 13
Views: 1277

Re: Will young get social security?

I would expect anyone forced to pay into a system to demand their due share as an entitlement People would be far less angry if they used language displaying an understanding of the system. Rather than being "forced to pay into a system", they are being taxed -- and presumably they don't ...
by Harold
Fri Jan 09, 2015 8:55 pm
Forum: Investing - Theory, News & General
Topic: Help clarify "expected future return"
Replies: 12
Views: 790

Re: Help clarify "expected future return"

Say a stock trading at $100 a share is expected to earn 10% annually. That is, at some point we expect 10% annual returns to be realized. To keep it simple, let's say we're expecting the share to be worth $110 a year from now. Now, let's say halfway through the year the share price has dropped 1.6% ...
by Harold
Fri Jan 09, 2015 1:05 pm
Forum: Investing - Theory, News & General
Topic: The Callan Periodic Table of Investment Returns 2014
Replies: 26
Views: 4356

Re: The Callan Periodic Table of Investment Returns 2014

Aptenodytes wrote:Here's a quickie I threw together

Thanks.

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