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Re: Hedge fund loses 99.8% of all funds, $100m down to $200k

We'll have to see if he can duplicate this performance before we can determine whether it is luck or skill.
by bpp
Wed Jan 21, 2015 6:55 pm
 
Forum: Investing - Theory, News & General
Topic: Hedge fund loses 99.8% of all funds, $100m down to $200k.
Replies: 59
Views: 6656

Re: What will happen to international stocks if a Euro break

Presently, international developed market index funds have about 61% in Europe, and total international has about 45%. With the warning shot fired by the Swiss, can the breakup of the Euro be far behind? What is likely to happen to European stocks if (when) this happens, and is it maybe a good idea...
by bpp
Wed Jan 21, 2015 5:18 pm
 
Forum: Investing - Theory, News & General
Topic: What will happen to international stocks if a Euro breakup?
Replies: 23
Views: 1578

Re: Adjusted Livesoft Income (ALI)

So you want all (potentially) spendable income? So any legally-mandated spending (social security or health insurance, e.g.) should be excluded? For investment income, should pre- or post-tax income be considered? Actually, in general, should it be pre- or post-tax?
by bpp
Tue Jan 20, 2015 7:14 pm
 
Forum: Personal Finance (Not Investing)
Topic: Adjusted Livesoft Income (ALI)
Replies: 31
Views: 3029

Re: Adjusted Livesoft Income (ALI)

This seems a very US-centric list. Instead of basing it on specific Form 1040 entries, how about stating in general terms what kinds of income and compensation should be included?
by bpp
Tue Jan 20, 2015 5:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Adjusted Livesoft Income (ALI)
Replies: 31
Views: 3029

Re: Australian superannuation help

You can transfer to Vanguard Oz to get better expense ratios..... maybe high growth or alike. Vanguard Australia doesn't offer Superannuation accounts, but you can buy Vanguard Australia funds through Plum (and possibly others?). But those will be PFICs, right? Please read about and understand the ...
by bpp
Mon Jan 19, 2015 5:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Australian superannuation help
Replies: 8
Views: 605

Re: Australian superannuation help

Just to be on the overly safe side, but you guys living in the US with Australian superannuation accounts, are you aware of PFIC, FBAR and FATCA rules? The wiki page on Taxation as a US person living abroad has some info on those issues that may be applicable to your cases (even if the title might s...
by bpp
Mon Jan 19, 2015 5:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Australian superannuation help
Replies: 8
Views: 605

Re: What is the international portion of your portfolio and

The international portion of my portfolio consists of BND (Vanguard US total bond), EMLC (emerging markets local currency bond index), the non-Japanese bonds in IGOV (developed ex-US government bond index) and the non-Japanese stocks in VT (Vanguard Total World Stock Index). Stocks and bonds are bot...
by bpp
Sun Jan 18, 2015 12:47 am
 
Forum: Investing - Theory, News & General
Topic: What is the international portion of your portfolio and why?
Replies: 131
Views: 9664

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

As with Japan, if people think prices are going to be lower next year, they will not spend this year. I hate to sound too persistent on this, but, are there any studies that show a reason for believing that this is the thought process that goes through Japanese consumers' minds? This is not true fo...
by bpp
Tue Jan 13, 2015 5:14 pm
 
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6159

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

As with Japan, if people think prices are going to be lower next year, they will not spend this year. I hate to sound too persistent on this, but, are there any studies that show a reason for believing that this is the thought process that goes through Japanese consumers' minds? This is not true fo...
by bpp
Tue Jan 13, 2015 9:45 am
 
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6159

Re: cat water fountain

You can also try ice ... I have a cat that loves cold water. If I put an ice cube in a tray, he will pounce on it and lick half way down. Seems to work for him! My cat's the same. Loves ice water. She's a rescue cat with health issues, including oral inflammation, so I thought the ice helped ease t...
by bpp
Tue Jan 13, 2015 9:40 am
 
Forum: Personal Consumer Issues
Topic: cat water fountain
Replies: 75
Views: 4658

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

There must be some behavioral economics studies published on the subject of how consumers respond to inflationary/deflationary expectations, no?
Anybody have any good links?
by bpp
Mon Jan 12, 2015 10:39 pm
 
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6159

Re: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit

Personally, I've never bought into the argument that deflation causes people to delay purchases. I agree with you. I have been a consumer in Japan during the deflation here. We have also had inflation starting a year or two ago, by force. My personal reaction to incipient inflation has been to pull...
by bpp
Mon Jan 12, 2015 6:01 pm
 
Forum: Investing - Theory, News & General
Topic: Why Is "Deflation" A Bad Thing??? How To Prepare/Profit?
Replies: 87
Views: 6159

Re: What will be the biggest investment surprises of 2015?

Vanguard will create a Total World Bond Index Fund, unhedged.

(I wish.)
by bpp
Sun Jan 11, 2015 9:41 pm
 
Forum: Investing - Theory, News & General
Topic: What will be the biggest investment surprises of 2015?
Replies: 76
Views: 7450

Re: Busting the "myth" of the small cap / size premium ?

But I am puzzled. Why would someone favor small stocks for putative absolute but not risk adjusted returns? This seems an inefficient approach as opposed to just increasing allocation to risky assets to get the desired variance. Small-cap stocks also tend to be more "local" stocks, so off...
by bpp
Thu Jan 08, 2015 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Busting the "myth" of the small cap / size premium ?
Replies: 14
Views: 1742

Re: Busting the "myth" of the small cap / size premium ?

This article is claiming that small stocks do not hold a significant advantage in risk adjusted returns . That may be true. They do show an advantage in absolute returns, which is why I hold them. [Deleting what I wrote earlier] Looks like they are claiming that even the absolute return premium for...
by bpp
Wed Jan 07, 2015 6:08 pm
 
Forum: Investing - Theory, News & General
Topic: Busting the "myth" of the small cap / size premium ?
Replies: 14
Views: 1742

Re: Why a Boglehead doesn't invest in individual companies?

Multiple cost bases can be avoided by always directing new money to new companies, so there is only one cost basis per company. If you invest monthly, which is common, then your total number of stocks could get very high over an investing lifetime. (if you start at 22 and retire at 67, you could ha...
by bpp
Tue Jan 06, 2015 7:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

that doesn't take into account the downsides of this strategy: 1) Increased administrative overhead, especially later on as you end up with multiple cost basis 2) More complicated tax returns, which either means more work for yourself or more pay for your accountant 3) Fairly complicated portfolio ...
by bpp
Tue Jan 06, 2015 6:12 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

Do you have data or references regarding the skewness of returns of small cap stocks, by any chance? Don't have a link to skewness for really small caps off the top of my head, but Appendix B of Ikenberry, Shockley and Womack has skewness by decile within the S&P500. Average yearly skewness goe...
by bpp
Tue Jan 06, 2015 5:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

Your graph does not capture the saved fees vs. index fund products, so the higher expected returns of the individual stock buy-and-hold strategy discussed in this thread are not fully represented in the graph. I assume any tax management benefits are not included in your graph either. That is true,...
by bpp
Tue Jan 06, 2015 3:32 am
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

New money going into an index fund when the market is rising may never be harvested, while you are certain to have some losers in a purchase of new individual stocks, even in a rising market. This is really the key point for tax loss harvesting. With an index fund, you can only harvest when the mar...
by bpp
Mon Jan 05, 2015 11:15 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

On the subject of factor exposure, I only track capitalization, but here are cumulative tracking errors for my individual stocks versus relevant indices: Blue line = (Large caps) - (Nikkei 225 index) Red line = (Small caps) - (Tokyo Stock Exchange Section 2 index) Yellow line = (Large+Small caps) - ...
by bpp
Mon Jan 05, 2015 11:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

New money going into an index fund when the market is rising may never be harvested, while you are certain to have some losers in a purchase of new individual stocks, even in a rising market. This is really the key point for tax loss harvesting. With an index fund, you can only harvest when the mar...
by bpp
Mon Jan 05, 2015 10:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

So at least 0.4% in expense ratio savings, and 0.3% in tax savings. Seems worth it to me. That's getting large enough to be significant. I have to ask though, why so many Japanese stocks, doesn't that leave you fairly undiversified? As comeinvest notes, Japanese stocks are domestic stocks for me, s...
by bpp
Mon Jan 05, 2015 6:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

Real-world numbers: I have 100+ individual Japanese stocks. Commissions under 1%, but say effective ER of about 0.1% for average holding time of 20 years. (1% buy + 1% sell / 20 years). The only US-domiciled index fund available here (and it only became available a few months ago) covering the Japan...
by bpp
Mon Jan 05, 2015 6:16 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Purchasing foreign currency for vacations (present/futur

Buying FX is like buying very short term bonds denominated in the host country. Does your current asset allocation have short term bonds in: - GB, - EU, - JP. If not, then you are making the decision to allow for such allocation now. This is a good point. Hedge by buying some IGOV? But it doesn't s...
by bpp
Sun Jan 04, 2015 7:13 am
 
Forum: Personal Consumer Issues
Topic: Purchasing foreign currency for vacations (present/future)
Replies: 21
Views: 1780

Re: Why a Boglehead doesn't invest in individual companies?

The yearly compensation is relatively small, but becomes quite significant over a number of years or an individual's investment life. I think the word "miniscule" would be more appropriate. Basically you're talking about saving a fraction of a percent in management fees, plus some very mi...
by bpp
Sun Jan 04, 2015 6:40 am
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: "The 15-Stock Diversification Myth"

and the outperformance will become larger when increasing the number of stocks, which arguably carries almost no administrative effort with today's technology. The bolded part is simply wrong. The more of the index stocks you have, the closer your performance is to that of the index. Put it this wa...
by bpp
Tue Dec 30, 2014 8:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: "The 15-Stock Diversification Myth"

I would be glad to see any statistics similar to the one displayed in Bernstein's article, with a longer time frame and numbers that can be easily achieved with an individual stock strategy. There are some studies reviewed on the Wiki page on Passively managing individual stocks , a couple of which...
by bpp
Tue Dec 23, 2014 11:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Why a Boglehead doesn't invest in individual companies?

Is there any real reason to invest in individual companies? There can be: Passively managing individual stocks Wanting to take more risk is not a good one, though, since one is mostly going to get exposure to diversifiable (and therefore uncompensated) risk by using individual stocks, unless one ho...
by bpp
Wed Dec 17, 2014 11:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why a Boglehead doesn't invest in individual companies?
Replies: 142
Views: 15615

Re: Retirement Location [US, Australia, or Elsewhere]

Some people here recommend having some home bias, for currency reasons. If you adopt this, you have two potential homes in retirement at this point, US and Australia. In your shoes, I might split 1/3 US, 1/3 Australia, 1/3 elsewhere for stocks, and either the same split for bonds, or else 1/2 US, 1/...
by bpp
Tue Dec 16, 2014 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: Retirement Location [US, Australia, or Elsewhere]
Replies: 4
Views: 952

Re: Does your work define you?

Dictionary.com: Define means to explain or identify the nature or essential qualities of... Bogleheads, Lately I've been feeling like my work defines me. I'm not sure if this is good or bad. I have hobbies, things I love to do outside of work, but I just feel like work defines me. It's where I have...
by bpp
Mon Dec 15, 2014 7:03 pm
 
Forum: Personal Consumer Issues
Topic: Does your work define you?
Replies: 30
Views: 2789

Re: You folks think the big one is coming?

jginseattle wrote:
Michael_Fisher1 wrote:
jginseattle wrote:Here in Seattle "the big one" means someting entirely different.



ooo tell me please :)



Earthquake!


The stock market is much like earthquakes, in that The Big One has already come, and will come again.
The big question is when.
by bpp
Fri Dec 12, 2014 10:43 pm
 
Forum: Investing - Theory, News & General
Topic: You folks think [a market crash] is coming?
Replies: 64
Views: 5776

Re: Different Experience With TSA Pre-Check

My preferred entry points to Europe are Frankfurt, Paris (just because I prefer Air France), and Amsterdam (for connections to Africa on KLM / Delta. I avoid Heathrow at any cost. I agree that Heathrow sucks in general, but I hear the same from Brits. Still, no worse than most US airports. Except C...
by bpp
Fri Dec 12, 2014 10:24 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2933

Re: Different Experience With TSA Pre-Check

The abuses that Europeans endure at their airports just amaze me. Interesting. I have always found European airports much more traveler-friendly than American ones. It may be that where you are defined as a "foreigner" matters. L. I am a US citizen resident of Japan. So am a foreigner in ...
by bpp
Fri Dec 12, 2014 10:10 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2933

Re: Different Experience With TSA Pre-Check

Leeraar wrote:The abuses that Europeans endure at their airports just amaze me.


Interesting. I have always found European airports much more traveler-friendly than American ones.
by bpp
Fri Dec 12, 2014 10:01 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2933

Re: Different Experience With TSA Pre-Check

I'm not about to pay for Global Entry ($100 non-refundable application fee regardless of acceptance? Heck with that, I'm signed up for the Japanese version for free -- just call me a Boglehead cheapskate.) But last time I visited the US via Chicago, they had kiosks in the peons lane that seemed to b...
by bpp
Fri Dec 12, 2014 9:35 pm
 
Forum: Personal Consumer Issues
Topic: Different Experience With TSA Pre-Check
Replies: 35
Views: 2933

Re: foreign passive investment companies

In that case, some suggested reading: Passively managing individual stocks
by bpp
Thu Dec 11, 2014 7:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 944

Re: [Investing in Japan - Help selecting broker, NISA accoun

(1) Is Matsui Securities the only online broker that offers zero transaction fee indefinitely? I heard zero transaction fee offers from other brokers such as SBI Securities, will expire this year 2014. Hopefully someone else who is more up to date on the latest brokerage deals can help you here. (2...
by bpp
Wed Dec 10, 2014 1:47 pm
 
Forum: Investing - Help with Personal Investments
Topic: [Investing in Japan - Help selecting broker, NISA account]
Replies: 4
Views: 629

Re: foreign passive investment companies

Thanks again for the help. Would it be able to use the foreign tax credit against the gains? Yes, but the problem is with mark-to-market treatment, only the US would see a gain. Norway will not recognize a gain unless he actually sells (I assume -- but I know nothing about Norwegian taxation), so t...
by bpp
Mon Dec 08, 2014 7:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 944

Re: foreign passive investment companies

I have experience with PFICs, and all I can say is that if he intends to keep his US citizenship, I would highly recommend staying away from them. Either find a way to invest in US-based ETFs from where he is (if possible), or stick to individual stocks and bonds. Can give more gory details if neede...
by bpp
Sun Dec 07, 2014 10:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: foreign passive investment companies
Replies: 10
Views: 944

Re: Hypothetical - Mutual Funds Don't Exist

I would buy individual stocks at random (literally picked using a random number generator), investing about $1000 per security through interactive brokerage. I would expect to get close to market returns. You'd end up with a pretty heavy small-cap tilt that way, so you'll get something approximatin...
by bpp
Fri Dec 05, 2014 8:51 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 2008

Re: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)

Hi bruby, First, we should be clear that your currency exposure depends on the underlying investments, not which currency you bought the fund with. Whether you buy a world stock fund in the US or Japan, for example, your currency exposure is the same. What you should consider though is US and Japane...
by bpp
Fri Dec 05, 2014 3:02 am
 
Forum: Investing - Theory, News & General
Topic: [Japan] SBI Exe-I Funds: Funds that invest in ETFs (?)
Replies: 14
Views: 1554

Re: Hypothetical - Mutual Funds Don't Exist

mbk734 wrote:Also, are there any benefits of not investing in mutual funds besides the obvious 0% expense ratio of holding stocks.


Tax management is probably the big one.
Have you seen the wiki page on Passively managing individual stocks?
by bpp
Thu Dec 04, 2014 11:01 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 2008

Re: Hypothetical - Mutual Funds Don't Exist

If bond, REIT, and equity index/active funds didn't exist (gasp!), how would you invest your money and what rules would you follow? This is pretty much the situation I am in with respect to Japanese stocks. There are of course many funds here in Japan covering the local stock market, but they are n...
by bpp
Thu Dec 04, 2014 10:17 pm
 
Forum: Investing - Theory, News & General
Topic: Hypothetical - Mutual Funds Don't Exist
Replies: 26
Views: 2008

Re: Stanley Kubrick's 2001 a space odyssey

There do seem to be some echoes of The Day the Earth Stood Still. .. I don't quite see the "echoes." Going by sensibilities alone, I don't sense any similarities between "Earth" and "2001." Most of my growing-up years were in the '50s, when I first saw "Earth,&quo...
by bpp
Thu Dec 04, 2014 6:08 pm
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 4493

Re: Stanley Kubrick's 2001 a space odyssey

Renata Adler's review in the New York Times when it opened is spot on: The whole sensibility is intellectual fifties child... And as an intellectual fifties child, I liked that. There do seem to be some echoes of The Day the Earth Stood Still, and of course The Sentinel was published in the 1950s.....
by bpp
Thu Dec 04, 2014 11:54 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 4493

Re: Stanley Kubrick's 2001 a space odyssey

oldzey wrote:The ending is even groovier with Pink Floyd: https://www.youtube.com/watch?v=i2uuRG9l1JA

Enjoy! :beer


Excellent!
by bpp
Thu Dec 04, 2014 10:13 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 4493

Re: Stanley Kubrick's 2001 a space odyssey

I happened to catch 2001 recently, after not having seen it for, I don't know, at least 30 years probably. I was really impressed at how well it held up, and how enjoyable it was. I think I appreciate now more than I did when younger the slow pacing and quietness of much of the movie. Especially in ...
by bpp
Thu Dec 04, 2014 7:54 am
 
Forum: Personal Consumer Issues
Topic: Stanley Kubrick's 2001 a space odyssey
Replies: 64
Views: 4493

Re: Live in Japan with no plans of coming home. Should I do

sdpfoj239 is right that you should also consider the Japanese tax ramifications of a US-based account. Some threads that may be worth perusing on Japanese tax issues are here: Filing Japanese tax returns (確定申告) ETF / Mutual Fund in Japan Japan - domestic and cross-border loss harvesting The latter t...
by bpp
Tue Dec 02, 2014 11:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Live in Japan with no plans of coming home. Should I do IRA
Replies: 6
Views: 1156
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