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Re: What evidence would prove the Boglehead mentality wrong?

There is nothing in the "Boglehead mentality" that assumes markets always go up. A few quotes from this thread: “Regardless of whether companies can increase profits or not, as long as companies are making profits, it makes sense to own a total stock market index fund.” “The concept of a ...
by bpp
Wed Sep 17, 2014 10:13 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 60
Views: 3399

Re: What evidence would prove the Boglehead mentality wrong?

There is nothing in the "Boglehead mentality" that assumes markets always go up.
by bpp
Wed Sep 17, 2014 9:33 am
 
Forum: Investing - Theory, News & General
Topic: What evidence would prove the Boglehead mentality wrong?
Replies: 60
Views: 3399

Re: Randomly-weighted stock portfolios beat the index

However, since the equal-weighted portfolio is rebalanced yearly... In other words, he's discovered evidence of mean reversion among individual stocks for this time period. That might be what he has found, but unfortunately, the apples-to-oranges nature of the comparison deters me from drawing any ...
by bpp
Tue Sep 16, 2014 11:00 pm
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1892

Re: Randomly-weighted stock portfolios beat the index

Looking at the returns of the different portfolios, something odd: Portfolio Monthly Monthly Sharpe Weights Return SD Ratio --------- ----- ------ -------- Cap. 0.50% 5.06% 0.0593 Random 0.58% 5.51% 0.068 Permuted 0.57% 5.5% 0.067 Equal 0.66% 5.49% 0.0825 Note that the Equal-weight and Permuted-weig...
by bpp
Tue Sep 16, 2014 10:08 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1892

Re: Randomly-weighted stock portfolios beat the index

Ok, I've read it more thoroughly. The author has rediscovered two already-known effects: --The small-cap effect (which he calls the "stock mix effect") --The reduction in effective number of stocks due to cap-weighting (which he calls the "diversification effect") One thing he co...
by bpp
Mon Sep 15, 2014 8:59 pm
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1892

Re: Randomly-weighted stock portfolios beat the index

We compare the risk-adjusted performance of the market index with the performance of a large number of random buy-and-hold portfolios. The weights in each of these portfolios are randomly drawn at the beginning of the period, and from that time onwards the portfolio is held passively. Namely, each ...
by bpp
Mon Sep 15, 2014 9:32 am
 
Forum: Investing - Theory, News & General
Topic: Randomly-weighted stock portfolios beat the index
Replies: 28
Views: 1892

Re: Share your Hot-Rod Portfolio

Let's Get Small:

50% VB (Vanguard Small-Cap ETF)
50% VSS (Vanguard FTSE All World ex-US Small-Cap ETF)
by bpp
Sun Sep 14, 2014 7:54 am
 
Forum: Investing - Theory, News & General
Topic: Share your Hot-Rod Portfolio
Replies: 52
Views: 3462

Re: Share your Hot-Rod Portfolio

Groovy Global:

100% VT (Vanguard Total World Stock ETF)
by bpp
Fri Sep 12, 2014 10:32 pm
 
Forum: Investing - Theory, News & General
Topic: Share your Hot-Rod Portfolio
Replies: 52
Views: 3462

Re: Nikkei index 20+ years later.

rai wrote:So I was curious if some of you could sum up the lesson learned from the Nikkei index?


Diversify.

Image

www.bogleheads.org/forum/viewtopic.php? ... &start=100
by bpp
Fri Sep 12, 2014 10:15 am
 
Forum: Investing - Theory, News & General
Topic: Nikkei index 20+ years later.
Replies: 4
Views: 821

Re: A 'really good book' you did NOT enjoy

I actually liked Ulysses. But I agree with everyone on Dahlgren, which I tried a couple times and could never finish. Reading the Wikipedia entry on it, I see now what the author was trying to do. Interesting approach in an intellectual way, perhaps, but the story itself bored the heck out of me. Ma...
by bpp
Thu Sep 11, 2014 7:15 am
 
Forum: Personal Consumer Issues
Topic: A 'really good book' you did NOT enjoy
Replies: 211
Views: 10025

Re: Help Selecting Insurance [Japan]

Hi twoyen, What kind of insurance to get is a bit of a tough question, but if your wife is your dependent and you have a baby on the way, then I would say term life is a must, as you have already decided. Most of the other types of insurance that are sold at the workplace, etc., seem to be too limit...
by bpp
Thu Sep 11, 2014 12:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Help Selecting Insurance [Japan]
Replies: 2
Views: 314

Re: Investing in Japan with a NISA

HI Green Grass, I have a few questions I'd like to ask about investing: 1. Looking at previous threads involving similar circumstances to my own, it seems that the best way forward is to open a NISA (similar to an IRA) account, and invest up to a million yen per year through that. I've been looking ...
by bpp
Tue Sep 09, 2014 12:15 am
 
Forum: Investing - Help with Personal Investments
Topic: Investing in Japan with a NISA
Replies: 13
Views: 655

Re: How do you keep your electricity bill low?

But I also did something very unBogleheadish. I bought enough dividend paying electric utility stock to pay my electric bill and enough oil stock to pay my fuel oil bill. I like this! I've often thought about buying enough ATT stock to have the dividends pay off my phone bill. You've actually done ...
by bpp
Mon Sep 08, 2014 7:09 pm
 
Forum: Personal Consumer Issues
Topic: How do you keep your electricity bill low?
Replies: 123
Views: 9116

Re: DIY Index Fund

I fail to understand this question and the perceived benefits. It's clearly impossible to effectively replicate any broad based index on your own without investing millions of dollars. Just take 60 seconds to determine how many shares of each stock you'd need to purchase to replicate the s&p an...
by bpp
Sat Sep 06, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2264

Re: Motif Investing - own the S&P500 for less

You are still missing the skewness of returns. Since a large part of index gains comes from a small number of stocks, the majority of samples will underperform the complete index. Two things will reduce this effect. First, your sample of the index is small, so when you randomly hit one of these sma...
by bpp
Thu Sep 04, 2014 12:46 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: How do you keep your electricity bill low?

cherijoh wrote:
bpp wrote:I'm still trying to get our bill lower. May be time to replace the fridge...


Actually pulling out the fridge and vacuuming the coils may help. :wink:


Hey, that's a good idea! Thanks.
by bpp
Wed Sep 03, 2014 7:59 pm
 
Forum: Personal Consumer Issues
Topic: How do you keep your electricity bill low?
Replies: 123
Views: 9116

Re: How do you keep your electricity bill low?

There are the obvious things: LED lights (and turn them off when not in a room), master power switch to shut off electronics when not in use (so they don't suck power in standby mode). Valuethinker will be along shortly to tell you to replace the fridge. :) If AC is a big component, what kind of AC ...
by bpp
Wed Sep 03, 2014 6:46 pm
 
Forum: Personal Consumer Issues
Topic: How do you keep your electricity bill low?
Replies: 123
Views: 9116

Re: DIY Index Fund

On the subject of tracking error, and mindful of livesoft's exhortation: If someone wants to do this, more power to them. But let's have an honest ongoing report about it. :) ...I post here the tracking error for my collection of Japanese stocks against their benchmark indices. The blue line is the ...
by bpp
Wed Sep 03, 2014 4:52 am
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2264

Re: What Movie Have You [Recently] Watched?

a Japanese animation " Grave of the Fireflys " . Haven't seen it, but knowing what it's about, it must be fairly depressing? It is. It is also one of the best animated films ever made. 97% on Rotten Tomatoes. If you are willing to let a film evoke these sorts of feelings I would highly re...
by bpp
Tue Sep 02, 2014 9:17 am
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 84
Views: 3632

Re: DIY Index Fund

Anyone who tries to do this for themselves in a taxable account will be overwhelmed by the accounting and tax-reporting issues. That's why it's so much cheaper to have Vanguard do it for you. It's easier to have Vanguard do it, but not necessarily cheaper, after-tax. To get the tax benefits does re...
by bpp
Tue Sep 02, 2014 9:01 am
 
Forum: Investing - Theory, News & General
Topic: DIY Index Fund
Replies: 25
Views: 2264

Re: What Movie Have You [Recently] Watched?

joe8d wrote:a Japanese animation " Grave of the Fireflys " .


Haven't seen it, but knowing what it's about, it must be fairly depressing?
by bpp
Mon Sep 01, 2014 10:03 am
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 84
Views: 3632

Re: Motif Investing - own the S&P500 for less

Actually, the real secret is that there is no point in slavishly trying to track any index. The fact is that if one has enough separate holdings, it really doesn't matter too much what exactly those holdings are, or in what weights. One will end up tracking the overall market regardless. (Modulo, s...
by bpp
Wed Aug 27, 2014 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: Motif Investing - own the S&P500 for less

Actually, the real secret is that there is no point in slavishly trying to track any index. The fact is that if one has enough separate holdings, it really doesn't matter too much what exactly those holdings are, or in what weights. One will end up tracking the overall market regardless. (Modulo, s...
by bpp
Wed Aug 27, 2014 10:24 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: Motif Investing - own the S&P500 for less

Re-investing dividends adds to the money-cost -- you can't assume that the dividends are re-invested into the same stock, if you're trying to match the index. Taking time to compare your holdings to the Index after each dividend payout or a split also time-costly. Why pick arbitrarily pick the S&am...
by bpp
Wed Aug 27, 2014 10:00 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: Motif Investing - own the S&P500 for less

I do something like this with Japanese stocks, though not through Motif. Original motivation was to avoid PFIC issues, so was not actively pursuing TLH opportunities previously, but am now starting to exploit TLH opportunities at least to the extent of rendering dividends tax-free. Given Japanese in...
by bpp
Wed Aug 27, 2014 8:53 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: Motif Investing - own the S&P500 for less

Have you seen the wiki page on Passively Managing Individual Stocks ? The main advantage for you would probably be better tax-loss harvesting opportunities, as you say. Hard to quantify, but in the couple-few tens of basis points range perhaps, depending on how aggressive you are about it, and if yo...
by bpp
Wed Aug 27, 2014 4:29 am
 
Forum: Investing - Theory, News & General
Topic: Motif Investing - own the S&P500 for less
Replies: 91
Views: 5285

Re: Do you diversify into international bond?

Sooooo, questions - 1) Do you hold international bonds? Yes. If so, hedged or not and which particular instrument? Unhedged. 1/3 each of: BND (US Total Bond) EMLC (Emerging Markets) IGOV (Developed Markets ex-US) Note: IGOV is only 77% foreign (non-Japan), so 23% of it counts towards my domestic (J...
by bpp
Wed Aug 20, 2014 6:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Do you diversify into international bond?
Replies: 33
Views: 2253

Re: Help with 401k Options [Japan]

Wow, you're right, looks like the Daiwa funds reinvest all dividends internally. No distributions in the past decade. Which means they are already perfectly tax-efficient, so no need to hold them in a 401k. The Topix fund must be internally reinvesting almost, but not quite, all of its dividends, si...
by bpp
Wed Aug 20, 2014 8:59 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with 401k Options [Japan]
Replies: 4
Views: 352

Re: Help with 401k Options [Japan]

If it is only going to be 3-4% of your portfolio, I suppose it doesn't matter too much what you do. But, as for whether to put bonds or stocks in there, I would put the one with higher dividends in there, on the idea that that is the only place you can get tax-free dividend compounding over the long...
by bpp
Wed Aug 20, 2014 6:21 am
 
Forum: Investing - Help with Personal Investments
Topic: Help with 401k Options [Japan]
Replies: 4
Views: 352

Re: Pension floor drops from 4% to 2.5% -- Time to bail?

As a bond, it still looks like a reasonably good deal to me. If you bailed, what would you replace it with?
by bpp
Mon Aug 11, 2014 7:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Pension floor drops from 4% to 2.5% -- Time to bail?
Replies: 17
Views: 2762

Re: So where's that inflation many forecasted?

I'm actually seeing plenty of inflation, for the first time in 20 years.
(Not seeing the pay rises that are supposed to accompany it yet, though.)

Gasoline at 164 yen/liter.
Food being packaged in smaller and smaller packages, for the same price.
Etc.

Give it time. I'm sure you will see it too.
by bpp
Mon Aug 11, 2014 11:07 am
 
Forum: Investing - Theory, News & General
Topic: So where's that inflation many forecasted?
Replies: 43
Views: 2679

Re: Poll: What's the name of Argentina's stock market?

...But is the name really important?... Well, not only am I getting beaten up pretty bad, but people aren't falling for the "distractors..." I would defend the meaningfulness of "general knowledge" as a quick sample of whether you know the important things. It might have been mo...
by bpp
Sat Aug 09, 2014 8:33 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: What's the name of Argentina's stock market?
Replies: 37
Views: 2450

Re: Poll: What's the name of Argentina's stock market?

sscritic wrote:
Professor Emeritus wrote:Heck if you want a good question ask who owns the New York Stock Exchange!

Or whether the real name is now NYSE.


And on which US exchange do US-domiciled ETFs now trade?
Hint: it's not AMEX anymore. But it does begin with an "A."
by bpp
Sat Aug 09, 2014 9:52 am
 
Forum: Investing - Theory, News & General
Topic: Poll: What's the name of Argentina's stock market?
Replies: 37
Views: 2450

Re: How do you address your inlaws and being addressed?

It must be cultural. In my Chinese soap operas, as soon as you are engaged, you call your future in-laws Mom and Dad or the equivalent. I married into a similar culture, except it started after the marriage, not before. Similar in Japan. It was made clear to me from that start that my in-laws were ...
by bpp
Sat Aug 09, 2014 9:42 am
 
Forum: Personal Consumer Issues
Topic: How do you address your inlaws and being addressed?
Replies: 84
Views: 4755

Re: How do you address your inlaws and being addressed?

It must be cultural. In my Chinese soap operas, as soon as you are engaged, you call your future in-laws Mom and Dad or the equivalent. I married into a similar culture, except it started after the marriage, not before. Similar in Japan. It was made clear to me from the start that my in-laws were t...
by bpp
Sat Aug 09, 2014 9:09 am
 
Forum: Personal Consumer Issues
Topic: How do you address your inlaws and being addressed?
Replies: 84
Views: 4755

Re: Poll: What's the name of Argentina's stock market?

My point (which may get undercut if an overwhelming number of people give the correct answer!) is that really we need to have some humility about our understanding of international finance. I like to think I have humility (though that may really be another form of arrogance), which is why I let oth...
by bpp
Sat Aug 09, 2014 8:38 am
 
Forum: Investing - Theory, News & General
Topic: Poll: What's the name of Argentina's stock market?
Replies: 37
Views: 2450

Re: Boglehead-style Investing for a Yen-based Income Earner

Thanks BPP. I just did a search on the life insurance scheme as well and as you said, it seems like it is a terrible investment idea. Link for anyone interested: http://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/ I continue to become disgusted by the tactics of financial advisers - is it...
by bpp
Tue Aug 05, 2014 8:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead-style Investing for a Yen-based Income Earner
Replies: 12
Views: 1234

Re: Boglehead-style Investing for a Yen-based Income Earner

Thank you all for the very helpful advice. A couple more questions: 1. It looks like as a US citizen / Japan permanent resident I am taxed on global income in both Japan and the US and it looks like I can only get foreign tax credits on income earned (through salary and wages). Does this mean that ...
by bpp
Tue Aug 05, 2014 9:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead-style Investing for a Yen-based Income Earner
Replies: 12
Views: 1234

Re: Boglehead-style Investing for a Yen-based Income Earner

I wrote: You will not be able to buy any US-based ETFs that cover just Japan through a Japanese broker, though. And I have just discovered, that is no longer true! It looks like Nomura has been expanding their US-based ETF offerings lately, and I see that one fund they now offer is the iShares MSCI ...
by bpp
Tue Aug 05, 2014 6:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead-style Investing for a Yen-based Income Earner
Replies: 12
Views: 1234

Re: Are utility stocks no longer safe?

Seems to me the issue should not be so much whether utilities show interest-rate sensitivity, but whether they show individual-stock risk.
Which they obviously do.
That is why the illusion of safety with them is just that.
by bpp
Sun Aug 03, 2014 9:20 am
 
Forum: Investing - Theory, News & General
Topic: Are utility stocks no longer safe?
Replies: 22
Views: 2120

Re: Boglehead-style Investing for a Yen-based Income Earner

Thank you both for the very detailed and helpful replies! I am clearly going to need to do more research. One quick question: do you see any significant issue if I just decide to invest completely in USD? Wherever you buy Vanguard funds/ETFs, you will need to buy them with dollars. (At Nomura, they...
by bpp
Sun Aug 03, 2014 2:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Boglehead-style Investing for a Yen-based Income Earner
Replies: 12
Views: 1234

Re: Are utility stocks no longer safe?

I have some Tokyo Electric stock that I'm planning to tax-loss harvest soon. It's worth about 1/10 of what I bought it for. Also have some Kansai Electric that is worth about 1/3 of what I bought it for. Not quite a juicy enough loss to harvest yet. Widows and orphans stocks? More like widow-maker ...
by bpp
Fri Aug 01, 2014 8:51 am
 
Forum: Investing - Theory, News & General
Topic: Are utility stocks no longer safe?
Replies: 22
Views: 2120

Re: Are utility stocks no longer safe?

I have some Tokyo Electric stock that I'm planning to tax-loss harvest soon. It's worth about 1/10 of what I bought it for. Also have some Kansai Electric that is worth about 1/3 of what I bought it for. Not quite a juicy enough loss to harvest yet. Widows and orphans stocks? More like widow-maker s...
by bpp
Fri Aug 01, 2014 7:11 am
 
Forum: Investing - Theory, News & General
Topic: Are utility stocks no longer safe?
Replies: 22
Views: 2120

Re: Do any boggleheads invest in individual companies?

However I don't agree it's 'fruitless to talk about diversification' to people who believe the CAPM isn't necessarily exactly the world and believe they can achieve better (or more suitable to them) risk/return with individual stocks where they *do* read the financials and study the companies. Thes...
by bpp
Thu Jul 31, 2014 4:20 am
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5819

Re: Do any boggleheads invest in individual companies?

However I don't agree it's 'fruitless to talk about diversification' to people who believe the CAPM isn't necessarily exactly the world and believe they can achieve better (or more suitable to them) risk/return with individual stocks where they *do* read the financials and study the companies. Thes...
by bpp
Wed Jul 30, 2014 8:09 pm
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5819

Re: Do any boggleheads invest in individual companies?

Here is an idea: I toss $25,000 into my local gas company, the dividend will pay my gas bill, I now have liability matching :wink: Hey you never know it may just work out. Until the gas company gets into a difficult situation, and is forced to raise prices and cut their dividend. Think Tokyo Electr...
by bpp
Wed Jul 30, 2014 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5819

Re: Owning individual stocks to harvest tax losses

I started buying individual Japanese stocks to avoid PFIC issues on my US taxes, which pretty much automatically makes it worthwhile independent of any other considerations. Lately I've started doing loss harvesting to save on my Japanese taxes. Losses in Japan can only be carried forward for 3 year...
by bpp
Tue Jul 29, 2014 8:44 pm
 
Forum: Investing - Theory, News & General
Topic: Owning individual stocks to harvest tax losses
Replies: 17
Views: 1140

Re: Do any boggleheads invest in individual companies?

However back to the general case, IMO those who would make a statement like 'you should have 50-100 individual stocks if you do it 30 *might* be OK' (50-100 is ridiculously too many from a practical POV, even 30 might be stretching it in that respect) are assuming the single stock investor is tryin...
by bpp
Tue Jul 29, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5819

Re: Do any boggleheads invest in individual companies?

I still want to know the bad about holding the individual blue chip companies if you are re-investing and holding strong through the drop in the market. After all, Graham says this is the time to buy more shares. So , is is really bad if you are going to hold the companies and re-invest for many ye...
by bpp
Tue Jul 29, 2014 5:02 am
 
Forum: Investing - Theory, News & General
Topic: Do any boggleheads invest in individual companies?
Replies: 95
Views: 5819
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