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Re: An alternative to alternative investments [QSPIX]

Re turnover: Those securities that failed one screen but passed another and therefore were not traded would not show up in the turnover figures nor would they contribute to the tax inefficiency. Any high turnover strategy works better if tax advantaged, but could be good in taxable if it worked well...
by afan
Thu Nov 27, 2014 10:05 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

Larry, I suggest when you calm down you take another look at what I said. Right now you seem too upset to read it clearly. I hope whatever is bothering you resolves itself. Note that, among many other distortions, I did not say that I had no opinion about investing for market exposure. If you read m...
by afan
Thu Nov 27, 2014 9:51 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

Again, passion, but apparent agreement. I said, and you repeatedly agree, that one cannot use the record of long/short funds to predict the performance of this fund. WE AGREE ON THIS, RIGHT? I said, and you repeatedly agree, that if the fund can change strategy over time, then one could not use the ...
by afan
Wed Nov 26, 2014 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

Larry, This is very interesting. Your tone suggests that you disagree, but then you restate what I have already said. I am having trouble finding the disagreement implied by "you are off base" Your first point seems to restate exactly what I said. One cannot use the real world performance ...
by afan
Wed Nov 26, 2014 2:58 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

My comments about the expense ratio were based just on the math. The real question is whether one should want such a fund at all. I agree that one is unlikely to find someone offering a long only portfolio like this for 10 basis points. My point was that one can get a long only portfolio for 10 basi...
by afan
Wed Nov 26, 2014 9:39 am
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

Here you have $,1000 of long exposure and $1,000 of short giving you a loading of 1 on the factor for the 1.5% expense This, of course, presumes one would be willing to pay 1.5%, or some figure above zero, in expense ratio for the short component of the portfolio. The history of long/short funds is...
by afan
Tue Nov 25, 2014 6:55 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: An alternative to alternative investments [QSPIX]

So have we resolved whether the fund is actively managed? Larry says "no". Alex says "yes" and quotes the prospectus that not only states plainly that it is actively managed (which might settle the issue), but then proceeds to describe an active approach. Larry, in what sense do ...
by afan
Tue Nov 25, 2014 4:01 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 205
Views: 20504

Re: a look at the size premium and BtM

Interesting results, but I have to question whether the t stats mean anything at all. The t stat would make sense for pre specified comparisons, based on theory. They mean considerably less, perhaps nothing, when applied to data that has already be analyzed for a size effect, over the same periods o...
by afan
Tue Nov 25, 2014 3:36 pm
 
Forum: Investing - Theory, News & General
Topic: a look at the size premium and BtM
Replies: 5
Views: 729

Re: How do you "un-fund" a revocable trust?

What was the point of emptying out the trust? Even if your assets are below the estate tax exclusion amount right now, remember that this figure can change anytime Congress and the White House agree to alter it. Are you going to put money in and take it out of the trust each time that happens? If yo...
by afan
Sat Nov 22, 2014 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: How do you "un-fund" a revocable trust?
Replies: 10
Views: 1266

Re: Family Trust? Strategies for inheritance?

The estate tax exclusion amount is set by law, currently indexed to inflation, but could be changed anytime Congress and the White House can next agree. Unless you expect to pass away in the next couple of years, the current figure is essentially meaningless. It could go down. If you live for a numb...
by afan
Sat Nov 22, 2014 9:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family Trust? Strategies for inheritance?
Replies: 6
Views: 1083

Re: Financial research on reasons For stock performance wron

I think the situation is worse than that. This paper concerns data mining for new tweaks on asset pricing. They point out that this usually involves selective reporting of only positive results after trolling through hundreds or thousands of alternatives. An even bigger problem is repeating analysis...
by afan
Sat Nov 08, 2014 9:56 am
 
Forum: Investing - Theory, News & General
Topic: Financial research on reasons For stock performance wrong
Replies: 1
Views: 388

Re: your advisor should act like a good doctor

Back to the topic of out of sample testing: If someone writes a paper in 1993 about small and value, then the entire market history up to that point is in sample. One might consider only results back to 1963 in the paper, but the idea of looking at small and value was hardly novel in '93. People loo...
by afan
Sat Nov 01, 2014 9:10 pm
 
Forum: Investing - Theory, News & General
Topic: your advisor should act like a good doctor
Replies: 48
Views: 4019

Re: your advisor should act like a good doctor

The problem with many financial studies is not lack of a priori hypotheses but lack of out of sample data. In medicine and in finance the hypotheses are formulated based on prior knowledge. They are influenced by then-current theories about the disease or markets. In medicine one replicates studies ...
by afan
Wed Oct 29, 2014 7:26 pm
 
Forum: Investing - Theory, News & General
Topic: your advisor should act like a good doctor
Replies: 48
Views: 4019

Re: I am surely doing something wrong (FireCalc question)

To the OP, I think you are using Firecalc wrong, so it is hard to tell whether the results make sense. You should input the amount you plan to spend, not the amount you need on top of SS. Then enter your expected SS income, and the year(s) when it starts. When you call $122k your "take home&quo...
by afan
Sat Oct 04, 2014 9:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: I am surely doing something wrong (FireCalc question)
Replies: 45
Views: 4444

Re: DIY Index Fund

It would be possible to save the ER, but the effective cost of TSM is lower due to securities lending and more efficient trading. That would be hard to beat without an army of professionals running your portfolio. Some huge investors, pension funds, endowments, run their own index funding in house o...
by afan
Sat Sep 06, 2014 5:43 pm
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2591

Re: How is tilting any different that active value investing

Be careful about equating risk adjusted return with Sharpe ratio. Doing so ignores skewness, which is clearly priced.
by afan
Sat Sep 06, 2014 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2664

Re: How is tilting any different that active value investing

Tilting is an approach to active management. Active managers reject the market as a whole and instead try to identify groups of stocks that will outperform and buy only those. These groups can be single stocks, small groups or large groups. It is arbitrary to claim that actively selecting large grou...
by afan
Sat Sep 06, 2014 9:33 am
 
Forum: Investing - Theory, News & General
Topic: How is tilting any different that active value investing
Replies: 55
Views: 2664

Re: "There is no such thing as a truly passive portfolio"

Eugene Fama, who popularized the EMH, did not seem to understand that, at the macro level, the current snapshot of global financial assets is an ex-post view of how inefficient markets are currently allocated. You gotta love this. Lecturing Eugene Fama about what he does not "understand" ...
by afan
Thu Sep 04, 2014 6:32 pm
 
Forum: Investing - Theory, News & General
Topic: "There is no such thing as a truly passive portfolio"
Replies: 58
Views: 2299

Re: USAA home insurance vs chubb/pure/firemans.

In two different states, I have not been forced to buy full replacement cost coverage. I have wanted it, and was told that, particularly for our current older house, it would be more expensive. Nothing like the difference you found, but significant. If you really would not replace your home with ori...
by afan
Sat Aug 23, 2014 3:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: USAA home insurance vs chubb/pure/firemans.
Replies: 13
Views: 1532

Re: Power of Attorney

An articl in today's NYTimes makes the same points about getting POAs recognized, giving financial institutions their own forms, revocable trust usually better...
by afan
Sat Aug 23, 2014 3:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: Power of Attorney
Replies: 32
Views: 2731

Re: Power of Attorney

Assuming the parent is not incapacitated now, that is, can sign a POA, it is FAR better to get POAs registered with every entity with which they do business. Banks, brokerage firms, retirement accounts, anything. Then you eliminate the guessing game about whether they will accept the general durable...
by afan
Sat Aug 23, 2014 12:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Power of Attorney
Replies: 32
Views: 2731

Re: The Worst Investment You Can Make: Buying a Home

Unless you can find a charitable landlord who leases houses out of the goodness of his/her heart, you will be paying for taxes, insurance, maintenance, mortgage, and all other expenses of the home. For renting to be better than buying (for the renter) owning an house and renting it to someone has to...
by afan
Fri Aug 22, 2014 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: The Worst Investment You Can Make: Buying a Home
Replies: 135
Views: 16966

Re: Financial Advisor Compensation

Two ways not mentioned already: ⋅ Securities lending ⋅ Through the money market account where all the cash in your account sits I think they can only lend your securities if you let them, or have a margin account? Although they pay next to nothing on a money market account, they...
by afan
Fri Aug 22, 2014 1:59 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Advisor Compensation
Replies: 36
Views: 3166

Re: Financial Advisor Compensation

I think it is a principle of retail that you establish and keep personal contact with customers. I have accounts at discount brokers, trade rarely and always online. They are definitely not making money on transactions, since I so rarely trade, and usually pay no commission when I do. Spreads are ty...
by afan
Fri Aug 22, 2014 1:54 pm
 
Forum: Investing - Theory, News & General
Topic: Financial Advisor Compensation
Replies: 36
Views: 3166

Re: John Hussman, smart guy, should you listen to his foreca

You read Hussman because he is a smart guy, writes well and has interesting ideas. That's it. It would be foolish to expect Hussman, or anyone else, to predict the moves of the market for you. He cannot forecast the market (no one can). He cannot time the market (no one can). He cannot be expected t...
by afan
Fri Aug 22, 2014 1:38 pm
 
Forum: Investing - Theory, News & General
Topic: John Hussman, smart guy, should you listen to his forecasts
Replies: 76
Views: 8580

Re: change from trustee/successor trustee to CO-trustees

Clearly you need the help of an attorney expert in estates and trusts. Usually a trust will include some provisions for appointing another trustee, since one could not assume whoever was initially named would be available forever. If there are such terms, you just need to follow them. If there are n...
by afan
Sun Aug 17, 2014 7:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: change from trustee/successor trustee to CO-trustees
Replies: 9
Views: 934

Re: WSJ: Is Your Portfolio Too Diversified?

nisiprius wrote: yes, there are--ETFs that invest in hedge funds.


I want an ETF that invests in hedge funds that invest in ETF's that invest in hedge funds. That way, I get the best of the best of the best of the best. I'll be rich by Friday.
by afan
Sun Aug 17, 2014 4:31 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ: Is Your Portfolio Too Diversified?
Replies: 23
Views: 3549

Re: Endowments: Paying for complexity or performance?

It makes sense in principle to invest more widely than just public securities. Given enough size, which the giant endowments certainly have, branching out to less liquid investments should permit one to capture risk premiums besides those in stocks and bonds. The returns should be less than perfectl...
by afan
Sun Aug 10, 2014 5:13 pm
 
Forum: Investing - Theory, News & General
Topic: Endowments: Paying for complexity or performance?
Replies: 14
Views: 1115

Re: When is a 3.75% load worth it?

Much less interesting, this particular fund: You are paying someone to speculate on market moves on your behalf. This may work out well in the future, or poorly. In general, it will work out poorly, but you could get lucky. There are many, many investment advisors eager for your business. Some run m...
by afan
Wed Aug 06, 2014 7:50 am
 
Forum: Investing - Theory, News & General
Topic: When is a 3.75% load worth it?
Replies: 79
Views: 5682

Re: When is a 3.75% load worth it?

Funny answer "front end loads are ALWAYS worth it if you are collecting them, rather than paying them" Serious answer "One can always look back and find funds- low cost, high cost; loaded, no-load- that did better that S&P 500 for some period of time. This is meaningless" The...
by afan
Wed Aug 06, 2014 7:40 am
 
Forum: Investing - Theory, News & General
Topic: When is a 3.75% load worth it?
Replies: 79
Views: 5682

Re: Stop Passing Up This Great Deal - In Money Magazine

The big problem with any comparison of traditional vs Roth IRA's, bigger the younger someone may be, lies in the assumptions that neither tax rates nor tax laws will change between the time of contribution and the date of death. This may be reasonable with a one-year life expectancy, but then the di...
by afan
Wed Aug 06, 2014 7:29 am
 
Forum: Investing - Theory, News & General
Topic: Stop Passing Up This Great Deal - In Money Magazine
Replies: 80
Views: 11812

Re: International investing. A good call by our mentor.

The correlation is not 100%, but it is high and rising. There is probably some diversification benefit, but not as much as there used to be. Might the correlations go back down? Possible, but there are good arguments that the international markets are more like one world market than they ever have b...
by afan
Sat Aug 02, 2014 4:29 pm
 
Forum: Investing - Theory, News & General
Topic: International investing. A good call by our mentor.
Replies: 145
Views: 13072

Re: Kiplinger: Why You Should Avoid Most Bond Index Funds

If you believe that the lower volatility means that investment grade bonds are even more efficiently priced than stocks, then this becomes easy. Buy a low cost investment grade bond fund. The prices of the bonds will be as good a prediction of interest rate and default risk you van get. As long as t...
by afan
Sat Jul 12, 2014 4:44 pm
 
Forum: Investing - Theory, News & General
Topic: Kiplinger: Why You Should Avoid Most Bond Index Funds
Replies: 32
Views: 6909

Re: Delaying SS while working past age 70

bobcat,

The Shoven papers are exactly on point. I will read them tonight.

Thank you so much.

afan
by afan
Sat Jul 05, 2014 8:46 am
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Delaying SS while working past age 70

Thanks everyone for all the replies. Working my way through them. The discount rate is simply a rate for discounting future cash flows. It depends on the likelihood of receiving the cash flows, but not at all on how they are invested. This simply is not true. From my textbook "Finance" by ...
by afan
Sat Jul 05, 2014 8:35 am
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Delaying SS while working past age 70

I found a calculator from AARP of which the finance buff seemed to approve. It said to have the lower income spouse claim at 66, higher income claim spousal benefits at 66 and own benefits at 70. But it discussed only total value of lifetime SS benefits, without considering time value of money or pr...
by afan
Fri Jul 04, 2014 6:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Delaying SS while working past age 70

Just tried males. The longer lives of women might make getting the cash flows of the later years more likely. But we did run it without discounting for the chance of death before getting a payment. Delaying was still a bad idea. It does not seem that the higher likelihood of living longer would resc...
by afan
Fri Jul 04, 2014 6:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Delaying SS while working past age 70

You didn't mention taxes on SS. These will be large if you continue to work until age 70 and to be fair you can only invest the after tax portion of the payments. Sounded like you invested the whole thing? Also, did you look at the common strategy that lower earner collects at 66 and higher earner ...
by afan
Fri Jul 04, 2014 6:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Combining finances - gift tax?

Well, you might end up caring about the lifetime exclusion. From a tax point of view, wating until you are married, or splitting the gifts into 14k each year, would preserve your full exclusion. If you are relatively young, your estate tax return will not be filed for decades, and that will be the o...
by afan
Fri Jul 04, 2014 4:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: Combining finances - gift tax?
Replies: 15
Views: 762

Delaying SS while working past age 70

I have been on BH for quite a while now, but I have not been reading the Social Security threads. It is far enough off for me that I assume the rules will change before I have to deal with it. But a friend and I got into a discussion of his decision and my search has not found a thread addressing it...
by afan
Fri Jul 04, 2014 4:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Delaying SS while working past age 70
Replies: 135
Views: 10482

Re: Worth it to eliminate counterparty risk with Treasuries?

Well, if you are buying a Vanguard FUND, as opposed to buying Treasuries in a Vanguard brokerage account, then Vanguard is a counterparty. If you buy a fund, you do not own Treasuries, you own shares of the fund. I thought the post was about holding Treasuries rather than a Treasury bond fund. You w...
by afan
Sun Jun 29, 2014 7:24 pm
 
Forum: Investing - Theory, News & General
Topic: Worth it to eliminate counterparty risk with Treasuries?
Replies: 17
Views: 1087

Re: Home Appraisal Comps

Given the errors in appraising a house, I suspect the value of the sorts of negotiations discussed here are lost in the noise. The appraised value is an estimate, with limited accuracy. You would love for it to be within 10% of the sale price. You hardly expect it to be within 1-2%. If someone were ...
by afan
Sun Jun 29, 2014 6:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Home Appraisal Comps
Replies: 12
Views: 858

Re: Paid off home as LTC Insurance?

I have dealt with relatives getting care at home and in a facility. The at home care never worked very well. The patient got to the point of needing round the clock supervision and assistance. That meant hiring enough people to provide that (the spouse was in better shape, but quite incapable of pro...
by afan
Sun Jun 29, 2014 6:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Paid off home as LTC Insurance?
Replies: 38
Views: 2164

Re: A challenge to "risk free" pre-payment of Mortgages

I will just note that in a nonrecourse state you sign a contract to EITHER pay the mortgage OR give the house back. As long as you honor your side of the contract by doing one of these things, I don't see an ethical issue. But as the crash illustrated, housing prices can go down dramatically. There ...
by afan
Sat Jun 28, 2014 9:02 pm
 
Forum: Investing - Theory, News & General
Topic: A challenge to "risk free" pre-payment of Mortgages
Replies: 17
Views: 1059

Re: WSJ article on ROTH 401K's vs Traditional

As it is impossible to predict future tax law changes I always find the best financial planning tool to assume that current tax laws will continue indefinitely. Given the frequency with with the laws change, that seems a strange assumption. From Forbes 2013, OK, it is Forbes and they hate taxes, bu...
by afan
Sat Jun 28, 2014 8:45 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4724

Re: "Being Done" Saving: White Coat Investor blog post

Ungoliant, You are right that I don't have a lot of other things I intend to do for the rest of my life. Maybe read more classical Greek literature, maybe learn classical Greek, I would like to learn music theory, and there is always always more math. But all of those can be pursued nights and weeke...
by afan
Sat Jun 28, 2014 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: "Being Done" Saving: White Coat Investor blog post
Replies: 47
Views: 8099

Re: "Being Done" Saving: White Coat Investor blog post

Just reading this is a bit depressing. I don't want to work till 70 and I will not have millions and millions to draw from either. So I guess I'm screwed. I don't look at is as depressing. Just the human condition. The vast majority of the humans who ever lived had to work from the point they were ...
by afan
Sat Jun 28, 2014 8:22 pm
 
Forum: Investing - Theory, News & General
Topic: "Being Done" Saving: White Coat Investor blog post
Replies: 47
Views: 8099

Re: Weird theory about how to indefinitely delay tax

Well, you are assuming that the "investment" in the property is to be "enjoyed" and never sold. Under that assumption the appreciation in value is irrelevant. You are also assuming that the value of the financial investment lies only in its ability to be spent. Why cannot one per...
by afan
Fri Jun 27, 2014 10:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: Weird theory about how to indefinitely delay tax
Replies: 9
Views: 1242

Re: NY Times: Not enough younger investment advisors

For the vast majority of investors, there is nothing useful for an investment advisor to do. For tax advice, go to a tax expert, such as an accountant. For trust services, you need a trustee to make disbursements, perhaps pay bills, and so forth. But the trustee should hold the same low cost, low tu...
by afan
Fri Jun 27, 2014 10:30 pm
 
Forum: Investing - Theory, News & General
Topic: NY Times: Not enough younger investment advisors
Replies: 72
Views: 7978

Re: WSJ article on ROTH 401K's vs Traditional

For a Roth to pay off at all, the tax treatment of withdrawals must not change between now and the end of retirement. For someone still working this might 30 years- if the employee is 70 and lives to 100. This might be 80 years if the employee is 20 and lives to 100. So you pay the tax upfront and a...
by afan
Fri Jun 27, 2014 10:15 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4724
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