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Re: Unbridled Consumerism?

If spend freely means spending without thought or limits there are no categories. All spending comes with some thought as to if we can afford it and would we rather spend it on something else. Are we relatively more free in some areas than others? Sure. Food and travel come to mind. Very early on ou...
by Rodc
Sat May 25, 2013 6:06 pm
 
Forum: Personal Consumer Issues
Topic: Unbridled Consumerism?
Replies: 23
Views: 1666

Re: can i buy my sportscar?

It always kind of creeps me out when people talk about needing permission to do something in a marriage... Seems like there is either mutual agreement on something...or not. That's it. Permission just sounds like a power or control issue. Back to your on topic programming, BFG Big purchases should ...
by Rodc
Sat May 25, 2013 5:51 pm
 
Forum: Personal Consumer Issues
Topic: can i buy my sportscar?
Replies: 119
Views: 5990

Re: C'mon international rise!

The market can stay irrational longer than you can stay solvent. (or more to the point here, it can stay irrational longer than many a market timing can hold on to a down position). I'm just sticking with a fixed allocation until my circumstances change enough for my desired allocation to change (ne...
by Rodc
Sat May 25, 2013 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: C'mon international rise!
Replies: 25
Views: 1677

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

I think if we could just agree that this model is good only to make simple back of the envelop estimates we'd find common ground more easy to come by. It is not so that the model is "wrong", so much as an estimate derived from the model being based on back of the envelop assumptions is not...
by Rodc
Sat May 25, 2013 10:02 am
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: Poll: Umbrella Insurance

Triggered by having a teenager about to start driving. It was her age, not mine that was the issue.
by Rodc
Fri May 24, 2013 5:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Umbrella Insurance
Replies: 44
Views: 1493

Re: How much does water weigh? [Swimming pool]

dm200 wrote:
HongKonger wrote:A pint of water weighs a pound and a quarter.


In the US, a pint weighs about a pound. In the UK (using the previous non-metric), a pint is about a pound and a quarter.


In what system is 16 oz not 16 oz? Who would make such a system? :happy
by Rodc
Fri May 24, 2013 4:53 pm
 
Forum: Personal Consumer Issues
Topic: How much does water weigh? [Swimming pool]
Replies: 37
Views: 2524

Re: Global markets in turmoil

.... The long run track of securities prices looks fractal .... What does not look fractal? With enough terms, I can use a Fourier transform to model anything. Anything. Enough terms. Except the Heaviside step function (see Gibbs phenomenon). Depends on what definition of convergence you use. :) Po...
by Rodc
Fri May 24, 2013 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Global markets in turmoil
Replies: 19
Views: 1864

Re: can i buy my sportscar?

You may buy the car.

Or you may buy a Rolex.

You may not buy both.
by Rodc
Fri May 24, 2013 4:34 pm
 
Forum: Personal Consumer Issues
Topic: can i buy my sportscar?
Replies: 119
Views: 5990

Re: Why Can't I Bring Myself to Buy Me a Nice Watch?

I like the idea of letting your wife in on your dirty little secret. If she buys you one that is great. If not, go ahead. I once wanted a particular woodworking tool I did not need and while a whole lot cheaper than a Rolex (but a lot!) at the time we were really far from a 7 figure portfolio (still...
by Rodc
Fri May 24, 2013 4:20 pm
 
Forum: Personal Consumer Issues
Topic: Why Can't I Bring Myself to Buy Me a Nice Watch?
Replies: 171
Views: 9106

Re: Is This Correct About International Equities

Following this logic, then the only sensible thing would be to have 100% or your equity allocation invested in a true world index fund. Anything else would be half measures. I'm not saying 100% in a true world index fund is wrong, only pointing this out to show the logical conclusion. Thus Jack Bog...
by Rodc
Fri May 24, 2013 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Is This Correct About International Equities
Replies: 31
Views: 1766

Re: Didn't save enough for retirement, what would you do ove

I think most would have fallen out of first getting better educated. But things are coming along (less than 10 years to retirement) so no major mistakes. But the number one thing I would do differently is set up an automatic system of increasing savings rate from the beginning. Say, take 1/3 of ever...
by Rodc
Fri May 24, 2013 7:59 am
 
Forum: Personal Finance (Not Investing)
Topic: Didn't save enough for retirement, what would you do over?
Replies: 30
Views: 3109

Re: Is This Correct About International Equities

From the Wiki : http://www.bogleheads.org/w/images/1/11/US-International.png This graph is a great illustration of the fact that if you look at things that are nearly identical under a microscope they look very different. This is also an illustration that basically comes right out of a wonderful li...
by Rodc
Fri May 24, 2013 7:48 am
 
Forum: Investing - Theory, News & General
Topic: Is This Correct About International Equities
Replies: 31
Views: 1766

Re: 63yo moved 401k to 100% cash, how/when to restore AA?

A target retirement fund maybe best so he does not see the various subfunds moving around, just the bottom line which in a bond heavy balanced fund should be fairly stable.
by Rodc
Thu May 23, 2013 7:58 pm
 
Forum: Investing - Theory, News & General
Topic: 63yo moved 401k to 100% cash, how/when to restore AA?
Replies: 32
Views: 2970

Re: Do you adjust your AA based on valuations?

Good! Hard to tell sometimes on the internet.
by Rodc
Thu May 23, 2013 6:40 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Do you adjust your AA based on valuations?

Isn't rebalancing "market timing?" Everyone has their own definition, but 'market timing' is generally accepted to be an action based upon one's prediction of the future movement of markets. Rebalancing, in most cases, does not qualify - it's a mathematically predetermined action that doe...
by Rodc
Thu May 23, 2013 4:59 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Do you adjust your AA based on valuations?

As to why wouldn't rebalance on valuations, you certainly could. But again the amounts being moved are generally so small that it just does not matter. It doesn't have to be small. My stock exposure ranged from < 10% in 2000 (PE10 45) to almost 70% in 2009 (PE10 as low as 12). Now 59% at pE10 24. Y...
by Rodc
Thu May 23, 2013 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Straying from 'Staying the Course'

Define staying the course. I have made some adjustments over the years. In the beginning I had no clue and a 401K with almost no choices, all low cost "index" type investments so hard to go wrong. I knew stocks were expected to be higher return than bonds with higher risk. Being young I th...
by Rodc
Thu May 23, 2013 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: Straying from 'Staying the Course'
Replies: 16
Views: 1835

Re: Do you adjust your AA based on valuations?

Isn't rebalancing "market timing?" Everyone has their own definition, but 'market timing' is generally accepted to be an action based upon one's prediction of the future movement of markets. Rebalancing, in most cases, does not qualify - it's a mathematically predetermined action that doe...
by Rodc
Thu May 23, 2013 1:09 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Global markets in turmoil

.... The long run track of securities prices looks fractal .... What does not look fractal? With enough terms, I can use a Fourier transform to model anything. Anything. Enough terms. Lots of things are not fractal. The key characteristic of a fractal is not that it is unpredictable, but that it is...
by Rodc
Thu May 23, 2013 1:05 pm
 
Forum: Investing - Theory, News & General
Topic: Global markets in turmoil
Replies: 19
Views: 1864

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

Andrew Smithers is pretty hot on q, and as I recall his books (Valuing Wall Street and the other one) seemed to have a lot of predictive power. He also shows how it maps onto Shillers PE10. However you are right neither will call turning points-- things like 2000 just seem to happen. So it has lots...
by Rodc
Thu May 23, 2013 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

Also you have to make an assumption about dividend growth Well, to be more precise, if you insist on building a model, regardless of the quality of its predictions, you have to make assumptions. As lazyday says, this is the problem with all these models. One is forced to not only make assumptions, ...
by Rodc
Thu May 23, 2013 10:52 am
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: How much does water weigh?

A pint is a pound the world around.
by Rodc
Thu May 23, 2013 8:19 am
 
Forum: Personal Consumer Issues
Topic: How much does water weigh? [Swimming pool]
Replies: 37
Views: 2524

Re: Runners Knee...new shoes, orthodics, what?

Thanks for all the replies! :) First off, I should note that running is only supplemental to my exercise routine. I've been working with primarily bodyweight circuits of different types and really enjoying those. In addition to these I also walk (power walk) 5-6 days a week and try to go for a ligh...
by Rodc
Thu May 23, 2013 8:16 am
 
Forum: Personal Consumer Issues
Topic: Runners Knee...new shoes, orthodics, what?
Replies: 47
Views: 1520

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

As I have a PhD in math and have a successful multi-decade career, so you are correct that I have a basic working knowledge of what a first derivative is. :) However that completely misses the point it seems to me. If the dividend yield doubled, back to historic levels of 6% say, then the price woul...
by Rodc
Thu May 23, 2013 7:26 am
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: How much does water weigh?

Ged wrote:Note: These answers apply to the surface of the Earth only. Otherwise YMMV.


Yes, and you may have to include relativistic effects as well

(or not...)
by Rodc
Wed May 22, 2013 8:40 pm
 
Forum: Personal Consumer Issues
Topic: How much does water weigh? [Swimming pool]
Replies: 37
Views: 2524

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

I am fixing the first 2 factors for analysis, with a view to explaining the impact of the last factor,


The problem is that you have simply assumed away other real-world answers as to why yield can change. In the real world those factors are rarely fixed. Which was my point.
by Rodc
Wed May 22, 2013 6:52 pm
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: Property tax increase protest - other forms of evidence?

Here appraisals are supposed to be full value with error bars no more than +/-10%. I doubt anyone can assess/appraise your house to better than +/- 10% because in part it depends on who you can entice to buy your home. It is not like going to a store and reading off the price. Sell this month get on...
by Rodc
Wed May 22, 2013 5:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Property tax increase protest - other forms of evidence?
Replies: 21
Views: 685

Re: glide path vs. fixed asset allocation [POLL]

It is also worth noting that not only can ability to survive risk be low when young but it also can go up with age. It might be harder to get back money lost if you are older, but if you have enough because you have been successful you might be able to do just fine even if you lose a bunch. I think ...
by Rodc
Wed May 22, 2013 5:29 pm
 
Forum: Investing - Theory, News & General
Topic: glide path vs. fixed asset allocation [POLL]
Replies: 35
Views: 1275

Re: glide path vs. fixed asset allocation [POLL]

Here is something I did a few years ago. Historically it really has not mattered in the end. See graph number 3. http://home.comcast.net/~rodec/finance/papers/AgeInBonds.pdf Now it might psychologically matter. If an investment goes from $1000 to $10,000 in a fairly steady progress you feel great. I...
by Rodc
Wed May 22, 2013 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: glide path vs. fixed asset allocation [POLL]
Replies: 35
Views: 1275

Re: College costs, anyone else spit coffee on their monitor?

I'm planning for the instance where my kid has a legitimate interest in a particular subject (I didn't have such interest as a teenager) and there is an institution recognized as a leader in that discipline Could happen, but really at the undergrad level it is very rare that going in a kid is so sp...
by Rodc
Fri May 17, 2013 8:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: College costs, anyone else spit coffee on their monitor?
Replies: 87
Views: 4839

Re: Help! Car won't start this morning!

Good luck getting over 3 years out of a battery, seems the general consensus is they are not made like they use to be. You can go to a local chain automotive parts store and they can check your battery and alternator. I don't ever pretend to be an automotive expert, but am very impressed by the kno...
by Rodc
Thu May 16, 2013 4:57 pm
 
Forum: Personal Consumer Issues
Topic: Help! Car won't start this morning!
Replies: 36
Views: 3415

Re: College costs, anyone else spit coffee on their monitor?

I just put two kids through college... University of Kansas... about $15k a year including room and board... $60k total for each of their degrees... And that's with sorority fees... Could be done for less. There should be a simple college admission test. "Are you willing to pay $200k for your ...
by Rodc
Thu May 16, 2013 4:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: College costs, anyone else spit coffee on their monitor?
Replies: 87
Views: 4839

Re: Do you adjust your AA based on valuations?

basically thrown your hands up and concluded "I give up, we don't know anything, just put 50% in stocks and 50% bonds." But I think you overstate the amount of uncertainty. It's not a complete opaque box about which nothing is known. I'm sorry you feel this way. It is not uncommon. Some p...
by Rodc
Thu May 16, 2013 4:40 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: How Would Mr. Bogle Calculate Expected REIT Returns?

If the dividend yield doubled, back to historic levels of 6% say, then the price would drop to 50. Doesn't this suppose re does not get more profitable? If yield is down because rents are down (either per square foot when down or vacancy went up), and rents go back up, you could get a doubling of y...
by Rodc
Thu May 16, 2013 12:51 pm
 
Forum: Investing - Theory, News & General
Topic: How Would Mr. Bogle Calculate Expected REIT Returns?
Replies: 76
Views: 5266

Re: rebalancing

I understand that, I should have mentioned my fund is Wellesley, which just maintains 36% stock in most cases. So, since I rebalance my portfolio as you suggest and a balanced fund does the same for you, for better or for worse, it is all the same thing (more or less). In a specific balanced fund t...
by Rodc
Thu May 16, 2013 12:40 pm
 
Forum: Investing - Theory, News & General
Topic: rebalancing
Replies: 6
Views: 289

Re: Do you adjust your AA based on valuations?

I confess that seems a little like the tail wagging the dog to me. Any estimates of stock returns and risk going forward are so likely to be hugely wrong for one thing that this approach seems more wishful thinking than actual sound planning. One thing you are missing is that, while there is great ...
by Rodc
Thu May 16, 2013 11:30 am
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Do you adjust your AA based on valuations?

One should focus on what is under your control. Set some more or less reasonable asset allocation between stocks and bonds (split those up if you wish into subasset classes) based on a broad long term view of the market, if long term prospects look poor save more than otherwise or lower expectation...
by Rodc
Thu May 16, 2013 11:13 am
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Help! Car won't start this morning!

Jeff,

Appreciate your insights.
by Rodc
Wed May 15, 2013 8:44 pm
 
Forum: Personal Consumer Issues
Topic: Help! Car won't start this morning!
Replies: 36
Views: 3415

Re: Help! Car won't start this morning!

Good luck getting over 3 years out of a battery, seems the general consensus is they are not made like they use to be. You can go to a local chain automotive parts store and they can check your battery and alternator. I don't ever pretend to be an automotive expert, but am very impressed by the kno...
by Rodc
Wed May 15, 2013 8:42 pm
 
Forum: Personal Consumer Issues
Topic: Help! Car won't start this morning!
Replies: 36
Views: 3415

Re: REITS: a portfolio look

I try to use use economics to rule theories in ... and data to rule things out.


:thumbsup
by Rodc
Wed May 15, 2013 8:38 pm
 
Forum: Investing - Theory, News & General
Topic: REITS: a portfolio look
Replies: 28
Views: 2687

Re: REITS: a portfolio look

The graph is entirely misleading. The differences on the x-axis are totally meaningless. The range is all of 0.4%! Way below the level of noise. For all intents and purposes the SD of these portfolios is identical, they are all equal. The range on the y-axis is even more meaningless; it looks to be...
by Rodc
Wed May 15, 2013 5:49 pm
 
Forum: Investing - Theory, News & General
Topic: REITS: a portfolio look
Replies: 28
Views: 2687

Re: The new profitability factor, US and int'l evidence

1) Still waiting for us to hear your brilliant insights explaining why the work on profitability is rubbish. The economic explanations which will also provide us the insights into why such investors as Graham and Dodd and others like Buffett also preached rubbish--because this is basically the stra...
by Rodc
Wed May 15, 2013 10:45 am
 
Forum: Investing - Theory, News & General
Topic: The new profitability factor, US and int'l evidence
Replies: 167
Views: 7399

Re: 100% equities, anyone?

I also don't ignore the risk of a 100% equity portfolio, and if you read and understood my post, it would be quite clear that if my portfolio value went down 50%, it would not affect my retirement income one bit. Sure my portfolio was down about 45% in 2008, but by 2011, it was back above where it ...
by Rodc
Wed May 15, 2013 9:23 am
 
Forum: Investing - Theory, News & General
Topic: 100% equities, anyone?
Replies: 138
Views: 7681

Re: Help! Car won't start this morning!

I've gotten really good service out of Interstate batteries http://en.wikipedia.org/wiki/Interstate_Batteries : Interstate Battery System of America, Inc., a.k.a. Interstate Batteries, is a privately owned company that markets automotive batteries manufactured by Johnson Controls through independen...
by Rodc
Wed May 15, 2013 9:08 am
 
Forum: Personal Consumer Issues
Topic: Help! Car won't start this morning!
Replies: 36
Views: 3415

Re: Do you adjust your AA based on valuations?

IMO, there is no "over-valued or "undervalued". Stocks have some expected future earnings and dividends, and the price you pay will determine the return you can expect from that future cash-flow. The higher the price, the lower the expected return. I suppose one could say that the ma...
by Rodc
Wed May 15, 2013 6:57 am
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Move back w/parents or sign 1 year lease

In your shoes I personally would not have moved home. I love my parents and we got along fine. But I would not have moved home unless the situation was truly dire. I would have found a school I could afford and a place I could afford. In fact that is exactly what I did. As it turns out my almost 26 ...
by Rodc
Tue May 14, 2013 8:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Move back w/parents or sign 1 year lease
Replies: 42
Views: 2216

Re: Why don't people use the Permanent Portfolio?

90 years of data gives all of three 30-year data points. Rolling periods may give more numbers, good for making pretty scatter plots, but all of them are just remixes of three honestly independent data points (at best, as the the second is dependent on the particular history that led to point one, ...
by Rodc
Tue May 14, 2013 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: Why don't people use the Permanent Portfolio?
Replies: 151
Views: 8265

Re: Do you adjust your AA based on valuations?

The trouble that I have, and I expect others may as well, is that bold moves are psychologically hard to make. If my IPS states that I must adjust 3% out of stocks for each 1pt move in P/E10 above 23 (or add 3% for each move below 11), I can stomach those smaller changes. The challenge is that 3% i...
by Rodc
Tue May 14, 2013 2:49 pm
 
Forum: Investing - Theory, News & General
Topic: Do you adjust your AA based on valuations?
Replies: 93
Views: 4119

Re: Hussman: Now is one of the worst times in history to inv

Then everything took a dump and people lost their shirts. The good news about the 2001 tech crash, just as with the 2008-2009 financial collapse, is that those that stayed in the broad market, even rebalanced, ended up regaining not only their shirt, but a pair of pants and maybe some shoes as well...
by Rodc
Tue May 14, 2013 2:31 pm
 
Forum: Investing - Theory, News & General
Topic: Hussman: Now is one of the worst times in history to invest
Replies: 51
Views: 6366

Re: Why don't people use the Permanent Portfolio?

90 years of data gives all of three 30-year data points. Rolling periods may give more numbers, good for making pretty scatter plots, but all of them are just remixes of three honestly independent data points (at best, as the the second is dependent on the particular history that led to point one, ...
by Rodc
Tue May 14, 2013 2:23 pm
 
Forum: Investing - Theory, News & General
Topic: Why don't people use the Permanent Portfolio?
Replies: 151
Views: 8265
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