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Have you looked at today's Letter to the Editor section? They printed one letter from a reader in agreement with Malkiel, followed by 6 dissenters. You might be shocked to learned that 5 of the 6 were money managers. The 6th was apparently a law professor who railed about how the market would collap...

A number of posters (including myself) invest in Vanguard's value index funds and have expressed concern over Vanguard's decision to switch index providers to CRSP. Before Vanguard made the switch I took a screenshot of their small- and mid-value portfolio characteristics from their institutional we...

Really? Here's what Yahoo Finance shows: snip I presume these are without distributions and without the advisor drag on DFA. The chart you've displayed from Yahoo Finance shows the difference in share prices, not the total return. The total return for DFSVX over the past twenty years is much higher...

AOL-Time Warner turned out to be the largest value destroying merger in history. Amazon reached its peak then, as a stock, I think without checking. It's now something like 10 times the size as a business, but not as a market capitalization. The majority of tech stocks tanked (Lucent and Cisco are ...

Logging onto a site generates a cookie on your computer, and in the case of financial institutions, the cookie is usually a "session" cookie, meaning that it is destroyed when the browser is closed. Closing a tab generally won't close a session, but exiting the browser altogether will. Whe...

I believe that they both have a high turnover so that increases your tax bill Turnover can matter because higher turnover often leads to higher capital gains. Wellington, however, has not distributed any capital gains for the past four years, and shareholders have only been taxed on bond interest a...

Thanks for all the posts and careful analysis you've done over the years. Although you haven't posted as much over the past year or so, I got quite a bit out of the regular (and civil) debates you used to have with SmallHi and others back when I first joined the board.

"What you're seeing is a recognition that our way of doing business and our way of investing is making more sense to more people," Mr. McNabb said. No, what you're seeing is people chasing performance. Some of the market indexes have outperformed active managers lately, so people are shif...

I finished reading the book yesterday and posted an Amazon review this morning. I thought it was well written and surprisingly candid. Many investment how-to books are a little too "dry" for my tastes, and present the perfect scenario that you should follow based on a bunch of research stu...

I agree with Nisiprius. The only reason to buy small value is if you believe in the small and value premium, and if you're considering buying small growth as an option, you clearly don't. Look at your portfolio as a whole and decide what you want to do with it, which includes the types of asset clas...

I like the irony of the advertising headline inserted halfway down the article: "15 top stock picks from star investors"

When you met Dr. Swensen, did you raise these same points, pound the table, insist you are correct, and that Dr. Swensen has clearly been doing something wrong over the last 25 years? Clearly your responses are based on more fact, intelligence, and results, than David Swensen knows or has achieved....

pauliec84 wrote:To my knowledge Bridgeway Omni Small Cap Value fund (BOSVX), which is NOT available to retail investors.

Not only isn't it available to retail investors, but I believe only members of the Buckingham family can access it, since they essentially co-created it with Bridgeway.

SSSS wrote:Has anyone really been far even as decided to use even go want to do look more like?

Either your cat is walking on your keyboard and posting messages to this board, or you're having a stroke.

Want to give it another shot and rephrase?

Regarding the high expense ratio: Bridgeway has been fairly successful in generating a lot of income from security lending for this particular fund (more so than Vanguard's small company funds). I checked last year's semi-annual report, and they brought in $741 million through security lending, whic...

I like some of the comments to the article. Sounds like many of the WSJ readers are expert stock pickers and aren't too fond of mutual funds. "Mutual funds are a Ponzi scheme ... Buy shares of major corporations that pay dividends" "Always buy under market value" (whatever that m...

I give Gus Sauter and the Vanguard people credit for telling investors to stay the course. They know from experience that many investors panic and sell near the bottom and later buy again after the market has risen. Other firms and brokerages may also tell investors to stay in the market but then a...

Of course, he wants you to stay the course. They get paid for assets under management. Since Vanguard has plenty of bond and money market mutual funds, shifting money to "safer" investments shouldn't affect their AUM all that much, at least short-term. Of course, if people panicked and so...

While we're on the subject of low expenses, I was surprised to see how cheap some of Vanguard's admiral shares are these days. In many cases, they are even less expensive than their comparable ETFs. Mid-cap value is only 10 basis points, while the total stock market is only 7. Those are numbers you ...

This is another example of competition for DFA, along with RAFI funds, Bridgeway funds, M*, Vanguard, traditional value index funds such as S&P and Russell, and a growing variety of factor-based value stock offerings that are on the market or on the way. I'm not convinced that RAFI is a viable ...

I still haven't figured out why an ETF wouldn't be appropriate for what they do. Since they are passively managed, they shouldn't need to trade for the fund itself much, reducing concerns about front-running the ETF. I've seen a few requests for DFA to create ETF versions of its funds--mostly from ...

Bill isn't the only one who's confused. I'm not even sure what this article is trying to say. We're taught that Morningstar performance ratings are at best useless and at worst destructive because they encourage people to rely too heavily on past performance and churn their portfolios, hopping from ...

I personally wouldn't invest in PowerShares because I think they're too expensive and I don't have a great deal of confidence (respect?) for them as a company. As for Schwab's funds, ftobin is correct that their RAFI funds are being subsidized, but I believe that Schwab capped the expense ratios whe...

I'm jumping into this thread a little late, but since the RAFI portfolio seems to be the current winner, I thought I'd share some disturbing results I saw when I reviewed Schwab's October 2011 annual report for their RAFI index funds. While their domestic funds' tracking error wasn't too egregious, ...

You might find this post from Kenster in late 2010 to be of interest. He was responding to a thread discussing the "current" funds to be in, and he noticed that many of the names he'd seen over the years were conspicuously absent in the "new" list. Here are the missing funds, man...

Vanguard originally filed a utility patent (6,879,964) in March 2001 for VIPERs, but then filed an amended patent (7,337,138) March 28, 2005. Utility patents are good for 20 years from the filing date, so they either expire March 2021 or March 2025. I'm not sure if amended patents reset the lifespan...

Soon Debbie will show up in a New York Times article about 40-somethings who cannot retire early. Her husband will have left her, her kids will be getting free school lunches, she will have zero saved for retirement (lost it all in the crash....), she won't have a job (never had a legitimate one an...

This, again is combining a real risk factor (equity risk) with a couple of historical patterns as if they were on the same terms. So we're all on the same page, is it your view that all equity is equal and it makes no difference what segments of the market you get it from? I think most people would...

Lbill wrote:Vanguard does offer BRSVX, but it might not be like BOSVX. For example, it looks like it has about 10% in REIT holdings.

BRSVX is Bridgeway's actively managed small value fund. Their passive small value fund (BOSVX), is not, to the best of my knowledge, available to retail investors.

So as Enron dropped, it became a better value? Sometimes things fall for a reason. I see your point, but that logic doesn't hold up with diversified mutual funds. If all holdings in a fund drop for a good reason and should be sold, it wasn't an investment you should have purchased in the first plac...

First to add to what was said earlier--at one point if my memory serves Fairholme held just TWO stocks. I don't think that's correct. Before starting Fairholme he worked at Smith Barney for a couple of years managing a portfolio for a handful of wealthy clients. During this time, in 1994, he owned ...

Taylor, your statement is a little misleading. Morningstar currently ranks Fairholme in the bottom 1% of LV funds for <i>over the past four months</i>. At the end of 2010, just a few months ago, it fell within the top 1% of funds for the year. If Fairholme had an extraordinary run and then crashed a...

I'm not sure the results show that American Funds have added no value, either--it looks like more of a stalemate. As Amarone mentioned, they beat both Vanguard and DFA in two out of four categories. As for emerging markets, New World isn't a "pure" emerging markets fund, and invests in com...

b) they have bad experiences with retail money as it flees in bear markets and that becomes a BIG problem when trading very small stocks. I'd like to comment on this. I'm now sure how other fund companies fare, but hot money and performance chasing is a huge problem at Bridgeway. I don't own any of...

Does its relative lack of holdings (86) bother you? I'd presume you'd not consider this a sufficient number of stocks for you to use it as your personal U.S. allocation. Larry uses their new BOSVX fund that is not available to retail investors. He used the ticker for their actively managed fund (BR...

Does the CFO have an incentive to push this assumption as high as possible? The higher the expected rate of return, the less money the company has to contribute to meet its future obligations. If the actual return is lower and they find themselves short, well, upper management will have probably mo...

IMHO, very disappointing that Vanguard took this approach versus adding a passive/index EM value fund. Keep in mind that they wouldn't add a value fund without adding a growth counterpart (Vanguard doesn't buy into value premium, and if anything, many of their directors seem to prefer growth judgin...

Of course, you are only dealing with Vanguard here because they hold the patent on the ETF+Mutual Fund shenanigans . huh?...what do you mean? Vanguard was the first company to create ETFs that were just a different class of an existing open-ended mutual fund. They applied for and were granted a pat...

That is one reason we prefer the fund families of DFA and Bridgeway---more constant exposure to the asset class we want exposure to. Larry, are you just referring to the Ultra-Small Market fund (BRSIX) when you mentioned Bridgeway, or are there other funds you like? Everything aside from BRSIX and ...

Think about VBR for a minute. Since it's cap weighted it gives the highest weighting to the most expensive small cap value stocks. So basically it overweights the growiest small cap value stocks. I never understood this logic. Take two companies: "A" has $1 million in annual earnings, whi...

But the reality is the typical employer has gone from contributing maybe 10-12% of payroll to a DB pension plan to contributing maybe 3% of your pay to a 401K (provided that you are putting in 6% of pay). I agree that pension plans are not feasible unless job security is very high, and you can spen...

ETFs and Vanguard ETFs are two different things. There's debate over whether the dual-class structure helps or hurts tax efficiency. Also, the ETF class accounts for 80% of the total assets, so it's unlikely the mutual fund portion can have that adverse of an effect. In a recent interview, Vanguard...

You don't know what it is at this moment? > Both funds are characterized by 3 factors, right? You can't compare the aggregate of the 3 for DFA vs the aggregate of the 3 for Vanguard _at this moment_? You can determine what the loading factors were during a certain period of time in the past, but yo...

Pete, Before we decide that Core funds are useless because they are identical to the Total Stock Market, let's compare TSM against small value during the same time period. http://i56.tinypic.com/8wib9u.jpg The Core funds behaved similarly to TSM because small and value behaved similarly. When the tw...

When an individual writes a book about a strategy that promises extraordinary returns, you can tell that the strategy isn't effective at generating reliable and consistent profits. But....selling a book to naive investors is an excellent strategy that produces reliable and consistent profits. The B...

I read the paper ddb linked to, and didn't find it to have much substance. For one thing, he never really clarified what he meant by "asset allocation". Does he mean the domestic stock market in aggregate versus bonds or cash? Stocks by style or market cap? Domestic versus international? I...

I respect Mr. Bogle's opinion but don't really see how it is more expense to invest in foreign markets from a cost stand point. The problem isn't with the expense ratios of the funds. International stocks generally have higher trading costs than domestic companies, with emerging markets being the w...

I'd rather they offered an international value index fund instead, but considering that iShares EFV has only attracted a little over a billion in assets, I'm guessing Vanguard may not feel there's enough interest. I'm curious to see what the upcoming Russell value ETFs look like. This ETF is good ne...

Small and value stocks have expected but not guaranteed risk premiums, so it's not exactly a sure thing. The majority of investors have no idea what they are doing, even though many probably think they do. How many of them would believe that investing in distressed companies with uncertain futures c...

On average, people would have to be rewarded for the possibility of their stock tanking. As a whole, the class did better, due to risk of the individual components, that one could not diversify away. Now, however, that risk can be diversified away by indexing. I disagree. Investing in many stocks (...