Search found 2298 matches

by JoMoney
Thu Jul 02, 2015 7:57 pm
Forum: Investing - Theory, News & General
Topic: Warning Signs
Replies: 242
Views: 25814

Re: Warning Signs

In terms of the FRED recession probabilities, I think it's accurate to say that if it passes 10, there will probably be another recession in the next 2+ years. ...The probabilities of recession posted on Fred are ‘smoothed probabilities’, that is, smoothed away from all past kinks that we find in r...
by JoMoney
Thu Jul 02, 2015 7:52 pm
Forum: Investing - Theory, News & General
Topic: Shiller : US stocks pricey; time to think international
Replies: 21
Views: 2668

Re: Shiller : US stocks pricey; time to think international

Someone who bought the 'Value' style in the late 1990s up until mid-2001 would be doing better currently
Someone who bout the 'Growth' style since mid-2001 would be doing better currently
S&P SmallCap Value/Growth Chart
by JoMoney
Thu Jul 02, 2015 6:58 pm
Forum: Investing - Theory, News & General
Topic: Shiller : US stocks pricey; time to think international
Replies: 21
Views: 2668

Re: Shiller : US stocks pricey; time to think international

Maynard, what you're looking at is simply the outperformance of mid-cap stocks over the past 30 year period, which although undeniably happened, it doesn't say anything about the future returns. Your portfolio allocations make the portfolio VERY heavy in mid caps, not just because of the 34% relativ...
by JoMoney
Thu Jul 02, 2015 6:33 pm
Forum: Investing - Help with Personal Investments
Topic: value over growth ?
Replies: 13
Views: 704

Re: value over growth ?

Is Warren Buffett a value or a growth investor? Hint: he doesn't like investing in companies with high P/E no matter what the growth prospects. That may be true, but there is no value mutual fund or index that does what Buffett does, and he has repeatedly spoke about how these valuation metrics peo...
by JoMoney
Wed Jul 01, 2015 3:14 pm
Forum: Investing - Theory, News & General
Topic: Shiller : US stocks pricey; time to think international
Replies: 21
Views: 2668

Re: Shiller : US stocks pricey; time to think international

Consider the risks, and the expenses, come up with an allocation you can "stay the course" with and stick with it.
If you consider yourself a tactical investor who jumps back and forth between assets, is following pundits on financial news the way you want to go about it?
by JoMoney
Wed Jul 01, 2015 5:11 am
Forum: Investing - Theory, News & General
Topic: Bond ETF Thoughts
Replies: 7
Views: 800

Re: Bond ETF Thoughts

The liquidity of bonds is a bit of a growing concern. While someone buying a bond should expect some safety with respect to receiving the interest and return of principal as promised, if instead the buyer was expecting to find someone else to sell it to rather than let it mature and collect the coup...
by JoMoney
Mon Jun 29, 2015 4:34 am
Forum: Investing - Theory, News & General
Topic: Puerto Rico Governor Says Island’s Debts Are ‘Not Payable’
Replies: 37
Views: 3044

Re: Puerto Rico Governor Says Island’s Debts Are ‘Not Payable’

In view of some other thread wondering if states can declare bankruptcy, I was interested to read in the Times article a remark that Puerto Rico can't declare bankruptcy "because it's a commonwealth." Why is a commonwealth special? Does this mean U.S. states that are commonwealths, like M...
by JoMoney
Mon Jun 29, 2015 4:26 am
Forum: Investing - Theory, News & General
Topic: dow futures down 200+ points
Replies: 84
Views: 8958

Re: dow futures down 200+ points

Stocks had gotten a bit ahead of themselves which can happen in a bull market. And all it takes is for investors to get spooked, or a Black Swan, to bring stocks back to earth. ... --We need at least a 5-6% correction to return to "fair value ", defined by the historical "yield sprea...
by JoMoney
Sun Jun 28, 2015 3:27 pm
Forum: Investing - Theory, News & General
Topic: The Other Side, part 2
Replies: 41
Views: 5631

Re: The Other Side, part 2

...Japanese retirees in the 1930s-1940s would have wanted their bond allocation in TIPS (if only they were available). Don't forget that prior to the 1930's, having a ' Gold Clause ' as part of a bond to hedge against paper currency inflation was a regular occurrence... but that didn't work out so ...
by JoMoney
Fri Jun 26, 2015 10:22 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

From 1991-2014, a hypothetical global fund with a load of 1 on beta and 1 on SMB would have beat a total market fund by 55 basis points on an annualized basis. Over the 24 year period 1/1/1991 - 12/31/2014, a hypothetical investor who held a global portfolio would have lost 49 basis points annualiz...
by JoMoney
Fri Jun 26, 2015 9:10 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

I have always planned on tilting when my balance is big enough so that it actually matters. What I don't fully understand is to why tilt if one is not 100% equities. For example if someone is 10% bonds does it make sense to tilt before they reduce bonds to zero? Tilting and decreasing bonds both in...
by JoMoney
Fri Jun 26, 2015 2:31 am
Forum: Investing - Theory, News & General
Topic: A tool to backtest hypothetical portfolios
Replies: 3
Views: 641

Re: A tool to backtest hypothetical portfolios

There are problems backtesting hypothetical portfolios. Some of the data out there regarding "growth" and "value" doesn't actually represent anything you can actually duplicate (i.e. the Fama French data does not represent any actual index or fund, and it may include stocks no ac...
by JoMoney
Thu Jun 25, 2015 3:36 pm
Forum: Investing - Theory, News & General
Topic: Shiller P/E 10 hits 25
Replies: 331
Views: 26263

Re: Shiller P/E 10 hits 25

...At the moment I frankly think real estate, stocks and bonds are all overvalued. It's due to a combination of government involvement and an overall decline in return on capital investment projects . ... I think that last part might be key as well. Yes price/expected return is high, but prices are...
by JoMoney
Thu Jun 25, 2015 4:14 am
Forum: Investing - Theory, News & General
Topic: Historical data for PE/5
Replies: 3
Views: 507

Re: Historical data for PE/5

The CAPE ratio or PE10 was popularized by Yale Prof. Robert Shiller. Updated data is available on his website in a excel file http://www.econ.yale.edu/~shiller/data.htm On the data tab of the spreadsheet is a column with the month by month PE10, it should be a pretty simple task to change the formul...
by JoMoney
Wed Jun 24, 2015 4:25 pm
Forum: Investing - Theory, News & General
Topic: Graham's "margin of safety" for US stocks (6-29-15)
Replies: 24
Views: 4247

Re: Graham's "margin of safety" for US stocks (6-24-15)

... Take away? The US market requires either a price correction, or interest rates need to come down, to restore Graham's "margin of safety." The 'correction' could also occur by increased earnings. http://online.wsj.com/mdc/public/page/2_3021-peyield.html S&P 500 Prior year earnings ...
by JoMoney
Wed Jun 24, 2015 4:07 pm
Forum: Investing - Theory, News & General
Topic: Shiller P/E 10 hits 25
Replies: 331
Views: 26263

Re: Shiller P/E 10 hits 25

Switching from Total U.S. Stock to International at the start of this thread would have been a decision that cost 14.2% if measured today. Over time, you would expect these good luck and bad luck decisions to average out, and it may be that the disparity between these two cancels out over some futur...
by JoMoney
Wed Jun 24, 2015 6:26 am
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

... the CAGR for the total return of the ten CRSP deciles, from 1926-2009, shows a pattern of higher returns for smaller-cap stocks. The pattern in the numbers is real and statistically significant. So, the anomaly spotted by others--"smaller stocks have higher returns" yes "the S&am...
by JoMoney
Wed Jun 24, 2015 4:47 am
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

Did small-caps outperform the total market since 1926? Yes. Did they if you remove the single period 1975-1983? No. If they did have higher return, did they have higher risk-adjusted return? Probably not ... I have read this "fact" a thousand times ... and yet .. according to Jack Bogle ....
by JoMoney
Tue Jun 23, 2015 4:17 pm
Forum: Investing - Theory, News & General
Topic: What was the 2008 crash like in real time?
Replies: 217
Views: 19475

Re: What was the 2008 crash like in real time?

The things I remember most was Cramer's crying rant to the fed to ease up on interest rates at the end of 2007 https://www.youtube.com/watch?v=SWksEJQEYVU And it made me notice the fact that the yield curve had significantly flattened... (but for the most part ignored it) I remember in late 2008-200...
by JoMoney
Tue Jun 23, 2015 4:00 pm
Forum: Investing - Theory, News & General
Topic: Why do Bogleheads/BiggerPocketers think there is only one way?
Replies: 123
Views: 13397

Re: Why do Bogleheads/BiggerPocketers think there is only one way?

In my lifetime, I have never heard of a person getting wiped out by #1 or #2. But I know plenty of cases where people have been completely wiped out by #3 or #4. #3 is just dumb, I think we can all agree on that. #1 fails to deliver enough returns to retire on and shouldn't be considered "inve...
by JoMoney
Tue Jun 23, 2015 3:41 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Total Stock Market Index Fund (VTSAX)
Replies: 16
Views: 4328

Re: Vanguard Total Stock Market Index Fund (VTSAX)

The advantage of owning the Total Stock Market is that it assures you will get the average performance of the market, which is something Merriman and others who would suggest performance chasing schemes can't. Holding some other portfolio will perform differently, maybe better, maybe worse. The whol...
by JoMoney
Tue Jun 23, 2015 3:21 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

...How much should we weight small caps in our portfolio? It depends on the expected risk premium, small cap relative valuation to our other investment options and how much tracking error one can tolerate... If you use a small-cap index fund, you shouldn't have to to tolerate any tracking error . I...
by JoMoney
Tue Jun 23, 2015 6:21 am
Forum: Investing - Theory, News & General
Topic: Small Cap Index - What % of equities?
Replies: 74
Views: 6671

Re: Small Cap Index - What % of equities?

I doubt there is any kind of consensus, the 'general take' would obviously be to hold the market weightings because that is what the aggregate market is doing as a whole. John Bogle has suggested that there's no compelling reason to tilt to small-caps (Telltale chart), but he does advocate for holdi...
by JoMoney
Tue Jun 23, 2015 4:49 am
Forum: Investing - Theory, News & General
Topic: Wealthfront suggests Dollar Cost Averaging and its opposite?
Replies: 12
Views: 1941

Re: Wealthfront suggests Dollar Cost Averaging and its opposite?

The price you pay when you buy (and price when sold) will determine the results of your investment. If you want the results of your investment to be determined completely on the results of those two decisions, then that's what it will be... which could work out really well or really bad depending on...
by JoMoney
Tue Jun 23, 2015 4:26 am
Forum: Investing - Theory, News & General
Topic: Why do Bogleheads/BiggerPocketers think there is only one way?
Replies: 123
Views: 13397

Re: Why do Bogleheads/BiggerPocketers think there is only one way?

..I won't do any leveraging... You list a "Carrying Costs: 10k (hard money loan for the purchase, insurance, utilities)" which is at least some leveraging . You don't take any kind of mortgage or loan to buy the property? How long does a rehab take? How long is the $350k of expenses you l...
by JoMoney
Tue Jun 23, 2015 4:16 am
Forum: Investing - Theory, News & General
Topic: The Other Side, part 2
Replies: 41
Views: 5631

Re: The Other Side, part 2

You should be able to look at a chart, and tell if the returns would have helped or hurt by "rebalancing" or DCA. Choppy waves that go up and down and mean-revert look good for rebalancing/DCA. Streaks of upward momentum with few (or relatively small) dips are best for 'buy and hold'/Lump ...
by JoMoney
Mon Jun 22, 2015 3:46 pm
Forum: Investing - Help with Personal Investments
Topic: Japan. The rotten apple that spoils the whole index?
Replies: 13
Views: 2572

Re: Japan. The rotten apple that spoils the whole index?

Not sure why you would want to own 'everything' except Japan. I think if you wanted to pick along those lines you could do a lot more pruning. But regardless, if you split your international into a "Pacific" and "Europe" fund, their are ETF's like "iShares MSCI Pacific ex Ja...
by JoMoney
Mon Jun 22, 2015 7:18 am
Forum: Investing - Theory, News & General
Topic: An out-of-sample look at the four best-performing funds 1972-2012
Replies: 24
Views: 4255

Re: An out-of-sample look at the four best-performing funds 1972-2012

... One of the few places where his ideas seem definite is that, direct quote: The past performance of actively managed mutual funds is not encouraging... most investors would be better off in capitalization-weighted or fundamentally-weighted index funds. The phrasing is particular interesting in h...
by JoMoney
Mon Jun 22, 2015 5:17 am
Forum: Investing - Theory, News & General
Topic: Younger and better educated invest in International...
Replies: 7
Views: 2132

Re: Younger and better educated invest in International...

...So why would Vanguard, a trusted firm, get involved with this push for high allocations to international. 1. They believe it is a valid idea - lots of support for this 2. They aren't about to let their competitive advantage or customer base be at risk - they raised equity TD allocations when oth...
by JoMoney
Mon Jun 22, 2015 4:27 am
Forum: Investing - Theory, News & General
Topic: The Other Side (proposed series)
Replies: 35
Views: 4436

Re: The Other Side (proposed series)

I don't know what it looked like from a Japanese investors perspective, but you can find the "MSCI Japan NR USD" data here: Morningstar Link This is the "Net Return" index, so it's from the perspective of a U.S. investor that would have had foreign income taxes withheld, and it's...
by JoMoney
Mon Jun 22, 2015 3:54 am
Forum: Investing - Theory, News & General
Topic: The Other Side (proposed series)
Replies: 35
Views: 4436

Re: The Other Side (proposed series)

If you added inflation, I would assume that no matter what holding one had, their purchasing power has decreased over the years by substantial amounts. This may have been devastating to anyone who retired in 1990 I look forward to your dollar cost averaging graph in the future. Actually, there has ...
by JoMoney
Sun Jun 21, 2015 4:11 pm
Forum: Investing - Theory, News & General
Topic: Why do Bogleheads/BiggerPocketers think there is only one way?
Replies: 123
Views: 13397

Re: Why do Bogleheads/BiggerPocketers think there is only one way?

There are a variety of opinions, styles, and strategies on this board. I have no idea how anyone believes that there is some consensus with the investment approaches people on this board use. We wouldn't have nearly as many arguments if there was such a consensus.
by JoMoney
Sun Jun 21, 2015 3:51 pm
Forum: Investing - Theory, News & General
Topic: Are Grantham and Hussman Correct About Valuations? [US stock market, Larry article]
Replies: 18
Views: 1964

Re: Are Grantham and Hussman Correct About Valuations? [US stock market, Larry article]

...for those who say valuations don't matter, nobody knows nothing about the future, and forecasting is useless... There may be distinguishing differences between "valuation" and "forecasting". I don't necessarily see anything wrong with someone saying some particular valuation ...
by JoMoney
Sun Jun 21, 2015 4:02 am
Forum: Investing - Theory, News & General
Topic: The 'Monday Effect'?
Replies: 50
Views: 7418

Re: The 'Monday Effect'?

David Jay wrote:...Almost every real coin flip result has a string of more than 4 in a row.

Ah yes! The powers of momentum at work... so pervasive it's found even in random coin flips :D
by JoMoney
Sat Jun 20, 2015 3:37 pm
Forum: Investing - Theory, News & General
Topic: "The Rule of 20" equity valuation methodology
Replies: 3
Views: 1003

Re: "The Rule of 20" equity valuation methodology

In the second edition of Stocks For The Long Run Jeremy Siegel points out that long-run P/E has averaged 19 minus inflation (I don't have my copy of the newer edition handy to see if he mentions it in the new book). Peter Lynch suggested the "Rule of 20" saying that the market equilibrium ...
by JoMoney
Fri Jun 19, 2015 10:58 pm
Forum: Investing - Theory, News & General
Topic: Warning Signs
Replies: 242
Views: 25814

Re: Warning Signs

...And so, as with all brilliant ideas, once someone figures them out, they are quickly arbitraged out of the market and expected return reverts back to the mean. Warren Buffett describes a similar concept for the “natural progression” to how good new ideas go wrong: The “three I’s.” First come the...
by JoMoney
Fri Jun 19, 2015 10:07 pm
Forum: Investing - Theory, News & General
Topic: Warning Signs
Replies: 242
Views: 25814

Re: Warning Signs

... What you're saying is that you've found a formula to beat the market over the long-term. Go ahead and start your hedge fund and make a billion dollars with your idea. Seriously. If it works, people will pay you billions to implement it for them. He's would be late to the game, Robert Shiller ha...
by JoMoney
Fri Jun 19, 2015 7:17 pm
Forum: Investing - Theory, News & General
Topic: An out-of-sample look at the four best-performing funds 1972-2012
Replies: 24
Views: 4255

Re: An out-of-sample look at the four best-performing funds 1972-2012

It's not a profound analysis, it just seemed to me that it would be fun to do a quick reality check. There are six other funds in his table, and perhaps someone can check out the other six. The others are: T. Rowe Price Small Cap Fidelity Contrafund Davis NY Venture A Invesco Comstock A Fidelity Ad...
by JoMoney
Fri Jun 19, 2015 6:45 pm
Forum: Investing - Theory, News & General
Topic: Not Buying a Home Could Cost You
Replies: 36
Views: 7591

Re: Not Buying a Home Could Cost You

I thought I read that over the long term home ownership just about kept up with inflation. ... That's pretty much true for real estate (the land) in aggregate, however some places tend to become more in demand than others giving them a higher growth rate (at the expense of places with slower growth...
by JoMoney
Fri Jun 19, 2015 6:32 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Ticker Symbols on 401k Northern Trust Funds
Replies: 7
Views: 534

Re: Help with Ticker Symbols on 401k Northern Trust Funds

JoMoney: Thanks for the clarification. In that case, I guess the question still stands: are there comparable mutual funds/etfs with known ticker symbols that I can use as inputs to the morningstar x-ray or the portfolio visualizer to play around with my allocations? mhc: what funds specifically wou...
by JoMoney
Fri Jun 19, 2015 4:39 pm
Forum: Investing - Help with Personal Investments
Topic: Help with Ticker Symbols on 401k Northern Trust Funds
Replies: 7
Views: 534

Re: Help with Ticker Symbols on 401k Northern Trust Funds

My workplace 401k also offers some Northern Trust Collective Investment Trusts. If they're the same as what is offered to you, these are not "Mutual Funds", if you read the disclosure documentation it should state: "The investment option is a collective investment trust. " CIT's ...
by JoMoney
Thu Jun 18, 2015 2:32 am
Forum: Personal Consumer Issues
Topic: Coffee - just starting out
Replies: 43
Views: 5310

Re: Coffee - just starting out

... Why is espresso used instead of regular coffee in drinks like this? Is it because espresso contains more caffeine than an equal volume from a drip machine? If so, then is this done to make masking the flavor of the coffee easier for people like me, or does espresso itself taste better? ... The ...
by JoMoney
Wed Jun 17, 2015 3:47 pm
Forum: Investing - Theory, News & General
Topic: What important Key Performance Indicators should I evaluate in Morningstar
Replies: 33
Views: 2739

Re: What important Key Performance Indicators should I evaluate in Morningstar

Does anyone know if there is an online course available on this subject (the KPIs mentioned in Morningstar)? such as Price/Sales Price/Cash Flow Dividend Yield Long-Term Earnings Historical Earnings Sales Growth Cash-Flow Growth Book-Value Growth etc. There are lots of courses, books, and videos ou...
by JoMoney
Wed Jun 17, 2015 2:29 am
Forum: Investing - Theory, News & General
Topic: Cost difference
Replies: 27
Views: 2158

Re: Cost difference

#Cruncher wrote:...if I say that 2 + 2 is 3.99, it would be appropriate to criticize me...

Maybe we could come up with some defense for it https://en.wikipedia.org/wiki/0.999...
by JoMoney
Wed Jun 17, 2015 2:17 am
Forum: Investing - Theory, News & General
Topic: Warning Signs
Replies: 242
Views: 25814

Re: Warning Signs

.. But on the other hand, if you do the exact opposite of what the market does (buy the sectors no one wants, the regions everyone's afraid of, the most beaten down securities) historically you'd have always done much better... That's baloney. If you're always buying the beaten down securities, soo...
by JoMoney
Tue Jun 16, 2015 3:25 pm
Forum: Investing - Theory, News & General
Topic: Siegel's letter to the editor on Shiller's CAPE data problem
Replies: 14
Views: 2659

Re: Siegel's letter to the editor on Shiller's CAPE data problem

Jeremy Siegel has a couple issues with the CAPE, this paper highlights some of the other issues http://www.advisorperspectives.com/newsletters14/pdfs/CAPE_Crusaders.pdf Something the above paper's author comments though: " ...price divided by any scaling variable — that is, any variable that ma...
by JoMoney
Tue Jun 16, 2015 2:53 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri looking to internationalize his portfolio
Replies: 377
Views: 60968

Re: Rick Ferri looking to internationalize his portfolio

...As of 05/31, both International stock and International bond allocations have been increased by 0.5%. Maybe the migration will take several months or even years. https://institutional.vanguard.com/VGApp/iip/site/institutional/researchcommentary/article/NewsInstinfo022615QA The transition to the ...
by JoMoney
Tue Jun 16, 2015 4:45 am
Forum: Investing - Theory, News & General
Topic: $2.55 Billion in gains -- $40 million in returns to investors
Replies: 7
Views: 2146

Re: $2.55 Billion in gains -- $40 million in returns to investors

Searching the article title "Eating Up Pension Profits" will find various related articles
http://www.nytimes.com/2015/04/09/nyreg ... gains.html
by JoMoney
Tue Jun 16, 2015 12:50 am
Forum: Investing - Theory, News & General
Topic: Mid caps: black sheep?
Replies: 21
Views: 2208

Re: Mid caps: black sheep?

...I believe that in most indices, the "large cap index" includes the "mid cap index". ... Right, the Russell Mid-Cap Index is a subset of the Russell 1000, and is essentially everything below the Top 200 Mega-Caps, but above the Russell 2000 small-caps. Back to the statement I ...

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