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The trick is not to find a manager who outperformed the market in the past, that is easy. The trick is to find a manager who will consistently outperform the market in the future. That's hard.

Yes, it's hard, but I know how to do it. Just flip a coin. Works as well as any other method.
by Joe S
Wed Mar 19, 2008 9:57 pm
 
Forum: Investing - Theory, News & General
Topic: Mutual Fund manager breaks 15 year winning streak...
Replies: 12
Views: 2492

1987? An honest assessment would have at least hinted that the S&P is down since the 2000/2001 peak, and it's sure not looking good to go back up there any time soon. Well, at least he shows the chart - probably hopes his words will distract you. Note: 10 year annualized total return is 3.99%, T...
by Joe S
Wed Mar 19, 2008 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: BRENNAN ARTICLE ON VG WEBSITE
Replies: 10
Views: 2332

Some of the comments here seem kind of angry and mean spirited. I don't get it. This is a woman who is maybe of below average judgment and intelligence who has made some bad decisions and is suffering. Why are you mocking her and attacking her? Amen. First, our entire economy is based on convincing...
by Joe S
Wed Mar 19, 2008 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: CNNMoney: Brief stories of folks hit by hard economic times
Replies: 55
Views: 10191

Supposedly tripped on a pothole, opted to save his MacBook Air rather than his face.
Either that or Volcker slugged him.
by Joe S
Wed Mar 19, 2008 7:08 pm
 
Forum: Investing - Theory, News & General
Topic: Paul Volcker interview
Replies: 6
Views: 1430

Paul Volcker interview

Go to charlierose.com for March 18 interview.
by Joe S
Wed Mar 19, 2008 6:34 pm
 
Forum: Investing - Theory, News & General
Topic: Paul Volcker interview
Replies: 6
Views: 1430

Just curious. If your withdrawal rate is only 2%, why have you determined you need 45% in stocks? Do you plan to leave lots of money, are you very young, do you expect/fear that rate will escalate, do you have no other income?
by Joe S
Wed Mar 19, 2008 6:30 pm
 
Forum: Investing - Theory, News & General
Topic: Rebalancing When Retired: A Psychological Trick
Replies: 19
Views: 3229

This is way over my head, and probably over the heads of 99.5% of our population Not really. It's not all that complicated. The problem is that it is not discussed. The average citizen can tell you all about Paul McCartney's divorce settlement and the latest sex scandal, but they haven't a clue abo...
by Joe S
Wed Mar 19, 2008 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Double standard
Replies: 33
Views: 5300

My two cents: Given the high expenses, I would invest only up to the point your employer ceases to match your contribution, then go to an IRA or a taxable account. Then lobby your employer to get real.
by Joe S
Wed Mar 19, 2008 4:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Review on 401k choices at my firm...
Replies: 6
Views: 1712

There is always the trade-off between convenience and efficiency. My admittedly unscientific take is that Total Bond is fine especially for a very long-term investor, Intermediate Term is probably even better (per Swedroe) but the availability of TIPS makes it possible to easily buy some extra prote...
by Joe S
Wed Mar 19, 2008 4:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: Set-it-and-forget-it bond allocation
Replies: 9
Views: 1810

Somebody can check the numbers, but basically I think they have had a 6 or 8 year or so run compared to domestic equities, so it's not surprising. In the previous similar period, they underperformed relative to the US.
by Joe S
Wed Mar 19, 2008 3:45 pm
 
Forum: Investing - Theory, News & General
Topic: What is wrong with international markets?
Replies: 8
Views: 2029

I don't like "bailouts" or if you will, unprecedented emergency financial assistance from the federal government, for anybody. You know darn well it's ultimately going to put tax money at risk. The only question is whether it's worth it. Similarly, I agree, why should somebody who paid too...
by Joe S
Wed Mar 19, 2008 3:23 pm
 
Forum: Investing - Theory, News & General
Topic: Double standard
Replies: 33
Views: 5300

When you say you've "lost money" on funds, that probably means you sold when they went down. An advantage of individual bonds is you aren't likely to sell before they mature, but with a fund, you may be tempted to sell when they go down. I find eliminating the hassle of reinvesting the bon...
by Joe S
Wed Mar 19, 2008 2:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: How to effectively/practically invest in munis? Book rec?
Replies: 13
Views: 2750

We have these big investment bankers, driven by ivory-tower economists armed with their history-based mathematical models, running the financial markets. They've usurped the banks and risk-averse real-world bankers, and after their faulty models failed, now have to be bailed out by the Fed. If the F...
by Joe S
Wed Mar 19, 2008 2:27 pm
 
Forum: Investing - Theory, News & General
Topic: Why not nationalize Bear Stearns?
Replies: 24
Views: 4085

I don't understand why 20% of equity investment in international is considered "balanced". If diversification is key, then why ignore the bulk of the world's stock markets? I would be at least 33% international, and within that looking at a little overweighted exposure to emerging market i...
by Joe S
Wed Mar 19, 2008 12:53 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is my tolerance for risk higher, or am I market timing?
Replies: 11
Views: 2366

Fidelity has an inventory of primary and secondary FDIC-insured CDs. Just go their site, click Research to Fixed Income to Bonds. (Haven't check their offerings lately, and not sure of commissions - probably 0 for new issues, $8 for secondary?)
by Joe S
Wed Mar 19, 2008 12:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Where is a good place to buy CDs for a (roth) IRA?
Replies: 6
Views: 1436

I don't think anybody should be 100% in any investment class over which he has no real personal control, unless maybe you are super-rich, in which case you can just buy Treasuries at 2%. Remember diversification. Beyond pure theory, you also have to consider psychology: There are very few people ind...
by Joe S
Wed Mar 19, 2008 12:17 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it bad that my 401k is down 12.8% YTD?
Replies: 17
Views: 3951

"Strong run up to this point?" The Schultheis comments reflect the perspective of someone who has to show short-term "performance", i.e., an "investment manager". The primary purpose of inflation bonds is insurance against inflation, which is especially important to fix...
by Joe S
Wed Mar 19, 2008 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Schultheis (Coffeehouse Investor) on Risk of TIPS
Replies: 24
Views: 5352

I didn't intend it to be political, and certainly didn't mean it to be partisan. Nor do I believe it "highly improper" to question whether we have been blind to better more direct ways of achieving the goal of stabilizing the crisis, but I'll let the monitors judge that. Meanwhile, thanks ...
by Joe S
Tue Mar 18, 2008 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: Double standard
Replies: 33
Views: 5300

Oops - my bad, I think. Amazing, the time-scale makes the Depression look like a small benign dip. Which it is, in the long span of history. Unfortunately, I don't expect to be investing for 135 years. The market has been very very good to us recently - we have been very very lucky. Got a non-logori...
by Joe S
Tue Mar 18, 2008 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: Ways to Stay Calm in Bad Markets
Replies: 27
Views: 5841

My advice: Don't quit your job, you'll be fine if you handle the boredom, uncle takes care of its own like no other employer in the world.
by Joe S
Tue Mar 18, 2008 11:07 am
 
Forum: Investing - Help with Personal Investments
Topic: AA advice for USG employee
Replies: 8
Views: 1593

If you believe the pollyannas here, it's WONDERFUL news. Seriously, if you're asking is that normal, well it's about where the Vanguard Total Stock Market Fund is. The big question is whether that is coincidence or not. The fact that you are even asking this question means you should be investigatin...
by Joe S
Tue Mar 18, 2008 11:05 am
 
Forum: Investing - Help with Personal Investments
Topic: Is it bad that my 401k is down 12.8% YTD?
Replies: 17
Views: 3951

Look at all the financial nonsense spewed on the media. How many of those people are being sued? What about the medical advice on the internet? Somehow, I don't think there is a judge or jury dumb enough to think anybody who takes free advice from an anonymous source on the internet without corrobor...
by Joe S
Tue Mar 18, 2008 10:50 am
 
Forum: Investing - Theory, News & General
Topic: What is legal when discussing personal finance?
Replies: 23
Views: 4187

1. Defer SS (if you can't, you shouldn't be retiring). 2. Have at least 60% of your money in conservative fixed income (if you can't live on that, you shouldn't be retiring). 3. Be skeptical of 4% withdrawal rates (if you need that much, you shouldn't be retiring). 4. The overarching principal: Leav...
by Joe S
Tue Mar 18, 2008 10:40 am
 
Forum: Investing - Theory, News & General
Topic: New Retiree - Plan B - Maybe
Replies: 6
Views: 1636

Remember to look only at charts that shows reinvested dividends. There are some Dow charts out there that look differently because they are price only.


Nice, except you ignored inflation.
by Joe S
Tue Mar 18, 2008 10:34 am
 
Forum: Investing - Theory, News & General
Topic: Ways to Stay Calm in Bad Markets
Replies: 27
Views: 5841

Double standard

Don't get me wrong, I believe the Fed's actions were warranted though possibly a bit panicky. (As that Cramer character says, the Feds were "pantsed".) But let me get this straight: The government and the Fed guarantee an overnight bank buyout of BS for pennies on the dollar, and they are ...
by Joe S
Tue Mar 18, 2008 10:27 am
 
Forum: Investing - Theory, News & General
Topic: Double standard
Replies: 33
Views: 5300

This is a trick question, since I see why you are wondering: The current muni fund yields look very good compared to the prime fund after taxes, and are substantially more than the treasury fund, which is unusual - I really can't explain it except as residual fallout from insurers' issues. I wouldn'...
by Joe S
Mon Mar 17, 2008 11:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is the Tax-Exempt Money Market as safe as Prime Money Market
Replies: 1
Views: 828

401Ks are sometimes better protected against creditors. IRA protections, including divorce situations, vary in a few states. God only knows what the 401K beneficiary rules may be, since they even vary by employer, though the IRA rules are uniform. Then there are the offshore self-directed IRAs used ...
by Joe S
Mon Mar 17, 2008 2:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it advised to rollover a 401K when leaving a company?
Replies: 10
Views: 1865

I've been in a 401K since they have a good stable value fund not available in a regular mutual fund family.
by Joe S
Mon Mar 17, 2008 1:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is it advised to rollover a 401K when leaving a company?
Replies: 10
Views: 1865

I don't know you, so I can't answer for you, and even if I did, I still might not know. Ask yourself, if offered the chance to buy a tax-free no-risk 10 year bond at 4.65%, how much would I like to invest today? That's the same as paying some or all of it off, assuming no tax breaks from the mortgag...
by Joe S
Mon Mar 17, 2008 1:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: Should I pay off my mortgage?
Replies: 20
Views: 4272

You have a good point. As to government being a bad manager: Compared to what - BS? A valid reason: It's decisions would too often be politically rather than economically driven. (That's why the Fed is independent - to try to minimize the politics). Not the usual baloney, e.g., it's anti-capitalism,...
by Joe S
Mon Mar 17, 2008 12:39 pm
 
Forum: Investing - Theory, News & General
Topic: Why not nationalize Bear Stearns?
Replies: 24
Views: 4085

Optimists? Pessimists? Silly language. How about realists? Despite all the historical "scientific" studies and simulations, no one knows what will happen to the long-term economy as a whole, because we are, as is sometimes the case, in uncharted waters. Though maybe you'd like to ask those...
by Joe S
Mon Mar 17, 2008 12:04 pm
 
Forum: Investing - Theory, News & General
Topic: The benefits of a bear market
Replies: 72
Views: 21995

Corrections are good. Bear markets, hmmm. It all depends on the time frame.
You mean like the Great Depression? Or the 1970s?
Yeah, those were the days.
by Joe S
Mon Mar 17, 2008 10:12 am
 
Forum: Investing - Theory, News & General
Topic: The benefits of a bear market
Replies: 72
Views: 21995

The advisor says they have "too much money". Like Greenspan, who once said the US had "too big of a surplus", I'm sure he knows some great ways to solve that problem. This is the problem with many commissioned advisors. Some of their advice is OK, then when specific recommendatio...
by Joe S
Mon Mar 17, 2008 10:10 am
 
Forum: Investing - Theory, News & General
Topic: Tough problem: What to do with a $1.7-million nest egg?
Replies: 7
Views: 2254

Understand, the comment wasn't aimed at Paulson.
by Joe S
Mon Mar 17, 2008 9:44 am
 
Forum: Investing - Theory, News & General
Topic: Maybe I just don't get it.
Replies: 42
Views: 6188

The practice of citing only the Dow on the news is an indication that they don't know and don't care. And they think the public is totally ignorant, too, so give the suckers what they want, which in a way is even scarier.
by Joe S
Mon Mar 17, 2008 9:42 am
 
Forum: Investing - Theory, News & General
Topic: Do you think they don't care or don't know better?
Replies: 12
Views: 2334

Why the panic and the bailout? Because it's probably worse than anybody will tell us, and the Fed had little recourse. I am comforted by the fact that the Secretary of the Treasury "worked this weekend" to "solve the problem", i.e., make a phone call to support the Fed's action.
by Joe S
Mon Mar 17, 2008 9:18 am
 
Forum: Investing - Theory, News & General
Topic: Maybe I just don't get it.
Replies: 42
Views: 6188

Just wait a little while - it's going to get cheaper.
by Joe S
Sat Mar 15, 2008 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: Hey bottom-fishers, what looks cheap?
Replies: 22
Views: 4672

The FDIC website was helpful to me once and rated the banks as outstanding, adequate, etc., though as I recall it took some navigating. If it's FDIC insured I wouldn't lose any sleep unless you're over the limit or are concerned about instant liquidity - if the bank fails, your money gets tied up an...
by Joe S
Sat Mar 15, 2008 12:20 am
 
Forum: Investing - Theory, News & General
Topic: Watching your cash
Replies: 5
Views: 1815

Yes, turn off your TVs and buy long-term bonds. Great idea.
by Joe S
Sat Mar 15, 2008 12:11 am
 
Forum: Investing - Theory, News & General
Topic: What is the deal with the dollar
Replies: 67
Views: 9799

I think he's right, we've been living in an enormous bubble fueled by out-of-control public and private debt, and the Fed can't do much about it. This is reminiscent of the 70s in many ways, and most of the differences, may make it even worse. Unless we're very lucky, it's going to take a lot longer...
by Joe S
Fri Mar 14, 2008 11:53 pm
 
Forum: Investing - Theory, News & General
Topic: Nat. Bureau of Economic Research: " Severe Recession Co
Replies: 5
Views: 1590

The power of compounding is on your side: Early years probably won't change your cost basis much. If you know what you paid for the original shares, you can estimate the unknown distributions based on the annualized return to date and the known distributions, which is readily available for most funds.
by Joe S
Fri Mar 14, 2008 11:10 pm
 
Forum: Investing - Theory, News & General
Topic: Cost basis for old mutual fund
Replies: 14
Views: 4186

Except for the basic index funds, Vanguard has much lower expenses for domestic and international stock funds. Vanguard has cheaper bond funds across the board. Fidelity has more funds (too many for me). Fidelity has a better/cheaper brokerage, and you can buy most of the non-Admiral Vanguard funds ...
by Joe S
Fri Mar 14, 2008 3:01 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stay at Fidelity vs Move to Vanguard??
Replies: 66
Views: 18834

Puerto Rico/VI individual bonds
Or a NY mutual fund or ETF.
But I also think the USSC has a pending decision that could change exemptions - a long shot but possible.
by Joe S
Fri Mar 14, 2008 2:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Muni Fund Tax Question
Replies: 13
Views: 2287

OK, moneyman, "progressiveness" is one good way of framing their statement/excuse, but I'm not sure I'm totally buying it. The short-term loss of tax revenue may be closer to the truth.
by Joe S
Fri Mar 14, 2008 2:15 pm
 
Forum: Investing - Theory, News & General
Topic: 1.2% I Bonds Looking Good Again
Replies: 117
Views: 23302

With all due respect Victoria, that sounds like a lot of bureaucratic doubletalk. I think what they said is: "The purpose of the savings bonds program is to provide individuals with a way to save or invest relatively small amounts of money in non-marketable Treasury securities. Individuals with...
by Joe S
Fri Mar 14, 2008 1:52 pm
 
Forum: Investing - Theory, News & General
Topic: 1.2% I Bonds Looking Good Again
Replies: 117
Views: 23302

I don't buy it.
[political comment removed by Mod Mel]
by Joe S
Fri Mar 14, 2008 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle and the Cause of our current woes
Replies: 5
Views: 1711

Unless something extremely unexpected happens between now and then, I'd be very surprised if they don't lower the I bond rate. When Treasury imposed the $5K limits they took away one of the best deals available to small investors/savers, and I don't see them doing us any favors any time soon. Why th...
by Joe S
Fri Mar 14, 2008 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: 1.2% I Bonds Looking Good Again
Replies: 117
Views: 23302

Not an expert, but guess lots of people think inflation and a recession won't mix.
I do know that for most small investors/savers the choice between 5 year treasuries at 2.3% and FDIC-insured CDs at 4% is a no-brainer. Apparently the market is so risk-averse only the super-safest will do.
by Joe S
Fri Mar 14, 2008 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: Why are TIPS (real) yields so HIGH???!!!
Replies: 8
Views: 1688

"Constricted not rattled", as Tom Dooley said when they tightened the noose.
I don't know your situation, but the fact that you think $300K is big money makes me think you may be going in over your head. Or are you just angling for a loan here?
by Joe S
Fri Mar 14, 2008 12:32 pm
 
Forum: Investing - Theory, News & General
Topic: Hey did 3/11 bull run save market timers bacon?
Replies: 44
Views: 5453

I think they should raise the taxes on them to reflect the true costs incurred to repair damage to personal health and the environment, maintain a big part of our military to defend oil in the middle east, and provide federal subsidies to oil interests. Aside from the intangible, i.e., more accurate...
by Joe S
Fri Mar 14, 2008 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: How to predict the short-term direction of gas prices
Replies: 33
Views: 3687
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