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Re: WWWD (what would warren do)

There are interviews where he has said that TSM "is good enough". People make too much out of this, its not like there's major differences between them, or like anyone could tell you what any future difference between TSM or SP500 would be. FWIW, in the Intelligent Investor Ben Graham had ...
by JoMoney
Tue Mar 03, 2015 3:06 am
 
Forum: Investing - Theory, News & General
Topic: WWWD (what would warren do)
Replies: 18
Views: 1247

Re: Dividends and Market Slides

There is a distinction between "high dividend" and "dividend growth" stocks. Neither is a good representation of how value or growth styles are generally depicted, but high div would tend to be more value style and div growth more growth-y. Come up with a list of really high div ...
by JoMoney
Sun Mar 01, 2015 11:07 am
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 51
Views: 2633

Re: 10 Interesting facts about the S&P500

The S&P was a total market index adding members until it out grew 500, and the committee then decided to stop expanding the number of members. My unresearched guess is 10% residual, 50 companies. Wasn't the initial index, started early in the 20th century? Somewhat like the Dow, it was the pric...
by JoMoney
Tue Feb 24, 2015 5:55 pm
 
Forum: Investing - Theory, News & General
Topic: 10 Interesting facts about the S&P500
Replies: 28
Views: 3549

Re: Full Faith and Credit

I'm not sure what direction you're going with this, but the difference I see is that it's not written into law or something that congress appropriates money for. So some government entities are able to go around creating liabilities, under what is interpreted as a backing of the government, but cong...
by JoMoney
Tue Feb 24, 2015 3:16 pm
 
Forum: Investing - Theory, News & General
Topic: Full Faith and Credit
Replies: 37
Views: 2373

Re: 10 Interesting facts about the S&P500

I don't know much about the S&P500 other than it's cap weighted meaning that it's overweight the most expensive stocks and underweight the cheapest ones. :) I don't think cap weighted means what you think it means. If you're going to say that it's "overweight" or "underweight&quo...
by JoMoney
Tue Feb 24, 2015 6:59 am
 
Forum: Investing - Theory, News & General
Topic: 10 Interesting facts about the S&P500
Replies: 28
Views: 3549

Re: Risk--Again. The common stepping stone

The why would be that while those characteristics are accurate the implications are not clear without a lot of additional information. This is particularly the case if one wants to put some sort of quantitative margins around the issue. As to different risks, that is a very valid point. However, it...
by JoMoney
Mon Feb 23, 2015 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3236

Re: John Bogle on International Investing

JoMoney, from prior posts I see you favor the S&P 500. I would think the Vanguard FTSE Europe (VGK) would be a good extension of that. In fact it's like the European S&P 500. 516 large and mid cap of Europe's best companies. Just look at the top 25 holdings. I would think this would be a gr...
by JoMoney
Mon Feb 23, 2015 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Risk--Again. The common stepping stone

The crux of a lot of disputes comes about with the idea that some people insist they can quantify all the risk, and that people are going to weigh different risks the same way. Why does the difference between stocks/bonds have to be presented as anything more than the idea that bonds are promises to...
by JoMoney
Mon Feb 23, 2015 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3236

Re: John Bogle on International Investing

...FWIW, Bogle does recommend a 20% international allocation. He repeatedly has said that he doesn't do it, he doesn't recommend it, he doesn't think it's necessary for U.S. investors, but if you feel so compelled he would suggest limiting it to no more than 20%. Oddly enough, he's suggested that i...
by JoMoney
Mon Feb 23, 2015 2:54 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: John Bogle on International Investing

“people feel comfortable with risk they are taking in their home country, but as they leave their home country they start to be less sure about where are the risks” ….”that creates … the distinction between risk and uncertainty, that uncertainty outside the US may be pushing investors to tilt less ...
by JoMoney
Mon Feb 23, 2015 6:24 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Risk--Again. The common stepping stone

...In other words, these additional risks are in the eye of the beholder ... I think there's something to this, my preference would be that "risk" was defined as losing "value" instead of money, although money is typically used to measure value, different people can value things...
by JoMoney
Sun Feb 22, 2015 3:41 pm
 
Forum: Investing - Theory, News & General
Topic: Risk--Again. The common stepping stone
Replies: 57
Views: 3236

Re: Worst case scenario

Do these charts include dividends reinvested? I think the S/P NAV dropped by >50% in the last recession but if you count duvidends I thought it was more like 35-40%? Anyone know? Thx Yes, the charts are Morningstar.com "total return" growth charts that include dividends. They are also rep...
by JoMoney
Sun Feb 22, 2015 3:12 pm
 
Forum: Investing - Theory, News & General
Topic: Worst case scenario
Replies: 16
Views: 1802

Re: Worst case scenario

From the perspective of whom? http://www.bloomberg.com/bw/articles/2014-08-18/russia-seized-citizens-pension-funds-dot-could-that-happen-in-the-u-dot-s-dot If your home country was seizing assets and shutting down capital markets as in some sort of communist revolution that could certainly take thin...
by JoMoney
Sun Feb 22, 2015 12:50 am
 
Forum: Investing - Theory, News & General
Topic: Worst case scenario
Replies: 16
Views: 1802

Re: Most trading strategies are not tested rigorously enough

The thinking probably goes along the lines that if you find some methodology to divide the universe of these financial products in half, the sum of them all together will be the universe of all financial products. One half or the other will ex-post appear to be superior, the problem will be distingu...
by JoMoney
Sat Feb 21, 2015 10:49 pm
 
Forum: Investing - Theory, News & General
Topic: Most trading strategies are not tested rigorously enough
Replies: 1
Views: 292

Re: John Bogle on International Investing

... And why should one portfolio necessarily be more or less efficient than another - when the combination of every one of our portfolios make up an "efficient" market portfolio? ... Well, I can certainly agree that someone's belief in the "efficient market" might weigh heavily ...
by JoMoney
Sat Feb 21, 2015 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: The Distribution of Individual Stock Returns, 1983-2006

Even at 5% of a portfolio a single stock isn't making much of an impact. By the time you get a dozen or so stocks in a portfolio almost all of the idiosyncratic factors unique to that company hardly play a role. Well, is that really true? If 25% of the companies are the ones making the real returns...
by JoMoney
Sat Feb 21, 2015 8:32 pm
 
Forum: Investing - Theory, News & General
Topic: The Distribution of Individual Stock Returns, 1983-2006
Replies: 20
Views: 1783

Re: The Distribution of Individual Stock Returns, 1983-2006

...And then, when you think cap-weighting, there is this tiny bitty detail called Apple Inc. Well, there is only one like that. And it plays quite a significant role in a (US) large-cap index fund. Is there a significant risk for US-only investors to miss a couple of non-US companies like that (and...
by JoMoney
Sat Feb 21, 2015 7:45 pm
 
Forum: Investing - Theory, News & General
Topic: The Distribution of Individual Stock Returns, 1983-2006
Replies: 20
Views: 1783

Re: The Distribution of Individual Stock Returns, 1983-2006

Interesting bit of research. Thanks for posting. This caught my eye: Notice that the average annualized return for all stocks is negative 1.06%. This is remarkable for a period when stocks in general did so well. I think I will pass on the equal-weighted index funds. There's some other papers out t...
by JoMoney
Sat Feb 21, 2015 6:45 pm
 
Forum: Investing - Theory, News & General
Topic: The Distribution of Individual Stock Returns, 1983-2006
Replies: 20
Views: 1783

Re: John Bogle on International Investing

. “ people feel comfortable with risk they are taking in their home country, but as they leave their home country they start to be less sure about where are the risks” ….”that creates … the distinction between risk and uncertainty, that uncertainty outside the US may be pushing investors to tilt le...
by JoMoney
Sat Feb 21, 2015 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: John Bogle on International Investing

http://www.cnbc.com/id/102369672 "My overall view is if you stick to the U.S. , ... first of all, I don't think your listeners understood this, I got a lot of vituperation for what I've been saying for the last 25 years, all condensed to about two days, about saying... you don't need to do int...
by JoMoney
Sat Feb 21, 2015 6:17 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Full Faith and Credit

I have a question about the concept of "Full Faith and Credit." Sorry if it is too simplistic. But how exactly does this work? How can a government absolutely ensure they can pay you back? Do they structure themselves in a way where this is a guarantee? What happens if they can't? Have th...
by JoMoney
Fri Feb 20, 2015 11:03 pm
 
Forum: Investing - Theory, News & General
Topic: Full Faith and Credit
Replies: 37
Views: 2373

Re: What is Risk?

Anyone is really rolling the dice when they are betting on refinancing down the road. No one lost their home because of a decrease in value with a fixed rate mortgage. I might be wrong, and it might be picking nits, but didn't some banks demand additional principal to make up for the loss in nomina...
by JoMoney
Fri Feb 20, 2015 8:47 pm
 
Forum: Investing - Theory, News & General
Topic: What is Risk?
Replies: 27
Views: 1342

Re: What is Risk?

I'm curious how all these different interpretations of risk relate to expected return. Everyone knows you can't have high expected returns without high risk but what interpretation of risk does this assume? To what extent is this common sense true when applied to different interpretations of risk? ...
by JoMoney
Fri Feb 20, 2015 7:13 pm
 
Forum: Investing - Theory, News & General
Topic: What is Risk?
Replies: 27
Views: 1342

Re: What is Risk?

Risk is the possibility of something bad happening, in particular an investment losing value . One of the many problems with volatility being a measure of risk is that the upside is weighted the same as the downside. The upside isn't a risk, there is no concern that my investments earn too much, the...
by JoMoney
Fri Feb 20, 2015 7:01 pm
 
Forum: Investing - Theory, News & General
Topic: What is Risk?
Replies: 27
Views: 1342

Re: Vanguard merged Mutual fund + brokerage - anyone have ye

I've finally been fully converted... my IRA accounts were converted awhile back, I was looking forward to the cleaner look of having my brokerage account and mutual fund account merged. After it was done, and I found out that I would no longer be able to direct-deposit into my mutual fund or brokera...
by JoMoney
Fri Feb 20, 2015 6:38 pm
 
Forum: Investing - Theory, News & General
Topic: Vanguard merged Mutual fund + brokerage - anyone have yet?
Replies: 34
Views: 6035

Re: Full Faith and Credit

....Have they ever been in a position where the full faith and credit clause has failed? Yes... There was a time that it was popular to have bonds backed with a ' gold clause ', essentially as insurance against inflation. By the 1930's the U.S. had rolled a significant amount of debt into Libery Bo...
by JoMoney
Fri Feb 20, 2015 6:21 pm
 
Forum: Investing - Theory, News & General
Topic: Full Faith and Credit
Replies: 37
Views: 2373

Re: Risk/Return Spectrum

... I guess it also depends on the definition of "recent." Over the last ten years the S&P 500 and VWO have been neck and neck. Will be interesting to see how things shake out from here. ... It's not just a recent thing, for the 20+ years of Vanguard's Emerging Market funds existence ...
by JoMoney
Fri Feb 20, 2015 4:10 pm
 
Forum: Investing - Theory, News & General
Topic: Risk/Return Spectrum
Replies: 19
Views: 1064

Re: John Bogle on International Investing

The media and this board give Bogle guff for it every time he discusses his view on international. When Bogle changed his view a bit on the things like the "Total Bond" fund, he has been willing to talk about it, despite the criticisms from the peanut gallery. Trying to argue that Buffett ...
by JoMoney
Fri Feb 20, 2015 3:31 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Does Inflation eliminate the Safety of Bonds?

... cash isn't safe , it's more vulnerable to loss, theft, disasters, counterfeiting :twisted: I know of someone who had an elderly family member withdraw a large sum of money into cash out of fear during the midst of the 2008-2009 crisis, they passed away shortly thereafter and nobody knew what was...
by JoMoney
Fri Feb 20, 2015 7:24 am
 
Forum: Investing - Theory, News & General
Topic: Does Inflation eliminate the Safety of Bonds?
Replies: 42
Views: 3322

Re: A case for long term government bonds

The market value would fluctuate quite a bit, it would not continue to be 4% of the change in value, but the dollar amount paid out should be quite consistent, a long-term bond fund would see its income payments change very slowly. A short term bond fund would have a more stable market value, but th...
by JoMoney
Thu Feb 19, 2015 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: A case for long term government bonds
Replies: 40
Views: 3104

Re: A case for long term government bonds

No idea on the specifics of where to get details on the returns for rolling a 30 year zero, but a $10,000 investment in VWESX (Vanguard's Long-Term Corporate bond fund) would have grown to $223,507.01 from 1981-Present whereas the S&P grew from $135.76 to $2,099.68, which would equate to $10,000...
by JoMoney
Thu Feb 19, 2015 6:25 am
 
Forum: Investing - Theory, News & General
Topic: A case for long term government bonds
Replies: 40
Views: 3104

Re: John Bogle on International Investing

...One of the oddities of diversification, though, is that you can often decrease risk by adding riskier investments. Even if A is safer than B, it doesn't follow that a portfolio of only A is safer than a portfolio of A and B. I only think this is true under the assumptions of Modern Portfolio The...
by JoMoney
Thu Feb 19, 2015 5:22 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Composition of world equity markets 1899 v 2014

Is there a correlation between size of a market, and the returns of a market, other than the ones that go to 0 ?
by JoMoney
Thu Feb 19, 2015 4:08 am
 
Forum: Investing - Theory, News & General
Topic: Composition of world equity markets 1899 v 2014
Replies: 6
Views: 592

Re: John Bogle on International Investing

Here's an old Dr.Bernstein article from 1998, http://www.efficientfrontier.com/ef/499/death.htm He criticizes an article written by Roger Lowenstein who was also dismissive of the need for international investing. I'm basicly in the same boat with Dr.Bernstein where he says: " There is in fact ...
by JoMoney
Wed Feb 18, 2015 3:46 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Why Active Management Fell Off a Cliff

...the “Paradox of Skill” theory that Michael Mauboussin has written at length about – wherein it is only relative skill, not absolute skill, that matters. https://www.scribd.com/doc/160301289/Warren-Buffett-Katharine-Graham-Letter ...in no case were the superior records I have observed based upon ...
by JoMoney
Wed Feb 18, 2015 4:37 am
 
Forum: Investing - Theory, News & General
Topic: Why Active Management Fell Off a Cliff
Replies: 6
Views: 1522

Re: John Bogle on International Investing

...Historically, adding a certain amount of non-US stocks has reduced portfolio volatility. ... One could also say that "historically" going all US stocks, or possibly even all non-U.S. stocks, and several weightings in between, has "reduced portfolio volatility" - but these are...
by JoMoney
Wed Feb 18, 2015 2:24 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: John Bogle on International Investing

...Total International follows a cap-weighted index - why bother to warn about small and mid cap stocks? Seems like someone at Vanguard is just slapping various risk labels onto funds without really thinking them through. The "Median Market Cap" for the Total International fund is $24.1 b...
by JoMoney
Tue Feb 17, 2015 3:38 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: John Bogle on International Investing

...Here's my fundamental issue: all of the logic being applied toward US-only investing is selectively applied - it isn't used when picking stocks versus bonds, or this sector versus another, it is only employed to selectively and retroactively justify emotional decision-making. At least that's how...
by JoMoney
Tue Feb 17, 2015 6:19 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Bond investors...is there a crash on the horizon..!!

I don't think long-term bonds are adequately "rewarding" for the risks of inflation which I think looms large. I could be wrong. I think there is very little risk that a high quality bond will make good on the promised interest and return of principal. If interest rates go up, people who w...
by JoMoney
Mon Feb 16, 2015 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond investors...is there a crash on the horizon..!!
Replies: 43
Views: 3096

Re: Are International Stocks Classified by HQ location?

It's an interesting question, if you're investing in an index fund you need to read the criteria for that specific index provider. There are lots of differences between them. I think the exchange they trade on is usually a big part of it, but how the stock is registered on the exchange and with the ...
by JoMoney
Mon Feb 16, 2015 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: Are International Stocks Classified by HQ location?
Replies: 5
Views: 462

Re: Dual Momentum Investing

I think following momentum and contrarian mean-reversion styles are more "speculating" than investing. When someone does trading it generally will follow a pattern that's similar to one style or the other, but I don't think either has an inherent advantage, the nature of when and how they ...
by JoMoney
Mon Feb 16, 2015 3:24 pm
 
Forum: Investing - Theory, News & General
Topic: Dual Momentum Investing
Replies: 55
Views: 4258

Re: John Bogle on International Investing

...if you're going to pick markets, why not sectors or stocks? I would expect the kind of reasoning you're using for US-centric investing to apply to other things just as well - why not pick healthcare stocks because of the aging population and the fact they have done well as a sector now for decad...
by JoMoney
Mon Feb 16, 2015 6:07 am
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: What is a Value Premium?

http://en.wikipedia.org/wiki/Value_premium The Efficient Market Hypothesis asserts that " one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis ". Studies were done that purport value stocks outperformed the market. In order to be consistent w...
by JoMoney
Mon Feb 16, 2015 5:12 am
 
Forum: Investing - Theory, News & General
Topic: What is a Value Premium?
Replies: 5
Views: 439

Re: Corruption pays (when investing internationally)

Is it really a correlation with "corruption" that pays? Or is it just a fluke that happenstance would have it that "Emerging Markets" outperformed developed markets over that specific period dependent time frame? There probably is a correlation between "corruption" and ...
by JoMoney
Sat Feb 14, 2015 6:10 pm
 
Forum: Investing - Theory, News & General
Topic: Corruption pays (when investing internationally)
Replies: 10
Views: 1282

Re: John Bogle on International Investing

Generally, currency risk is something that's pretty low on my list of risks with International. It's something that moves up and down so it has a standard deviation and numbers that people can play with and give discussions something more substantial to talk about... But is there anyone out there th...
by JoMoney
Sat Feb 14, 2015 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: John Bogle on International Investing
Replies: 184
Views: 14876

Re: Buffett/Hedge Fund Bet - Protege Partners' Excuses!

Poor guys, I guess they'll have to cry themselves to sleep with the millions of dollars they charge the investors regardless if their funds perform or not. I'm sure they got more than a million dollars worth of publicity out of the bet even if they lose. If they win, I'm sure that kind of publicity ...
by JoMoney
Sat Feb 14, 2015 4:05 am
 
Forum: Investing - Theory, News & General
Topic: Buffett/Hedge Fund Bet - Protege Partners' Excuses!
Replies: 34
Views: 2516

Re: No "Value Premium" in real mutual funds

...At the point markets lost confidence to the extreme, the market valuation of GE Commercial Paper was zero. Was this an efficient price? Warren Buffett didn't think so and he provided GE with the liquidity it needed. Markets acted like GE didn't generate the cash flows to meet its debt obligation...
by JoMoney
Fri Feb 13, 2015 9:58 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3027

Re: Hypothetical chance of bond or stock index going to zero

Well, suppose the current trend for companies to go private continues, to the point where only new companies issue publically traded stock and S&P quits issuing the index. Private companies might still want to issue bonds, though. This is not such a far fetched scenario; in 1998 the Wilshire 50...
by JoMoney
Fri Feb 13, 2015 7:35 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical chance of bond or stock index going to zero
Replies: 8
Views: 780

Re: Hypothetical chance of bond or stock index going to zero

In some ways of looking at it, they both go to zero every Friday afternoon in the U.S. While I could theoretically go to my neighbors house on Saturday evening and draw up a contract and sell him my rights for whatever he was willing to give me for my shares, I have a feeling I wouldn't like the off...
by JoMoney
Fri Feb 13, 2015 7:04 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical chance of bond or stock index going to zero
Replies: 8
Views: 780

Re: [Poll] Is MKT on the multi-factor efficient frontier?

I'm going to vote yes, although I don't necessarily have a strong belief in the "Efficient Market Hypothesis". There's an issue with the " Joint Hypothesis Problem " Rather than try to develop another philosophy/hypothesis that claims something other than the idea that the market...
by JoMoney
Fri Feb 13, 2015 6:26 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] Is MKT on the multi-factor efficient frontier?
Replies: 6
Views: 458
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