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Re: Any Bogelheads get involved in private equity?

If you could be a general partner. You almost can by buying publicly traded alternative asset management companies. You can own shares of KKR & CO L.P, which is the GP in KKR's private equity funds. GPs might have liability exposure that LPs do not. And the carried interest rules aren't some ma...
by dmcmahon
Wed Jul 09, 2014 1:35 pm
 
Forum: Investing - Theory, News & General
Topic: Any Bogleheads get involved in private equity?
Replies: 31
Views: 3298

Re: Any Bogelheads get involved in private equity?

Watch out for headaches at tax time. They may not be worth the trouble if the investment is a small fraction of your net worth.
by dmcmahon
Fri Jul 04, 2014 9:51 am
 
Forum: Investing - Theory, News & General
Topic: Any Bogleheads get involved in private equity?
Replies: 31
Views: 3298

Re: The Risk of Short-term Bond Funds

As far as missing the returns from intermediate term bonds...big deal! The returns I missed are not enough to get excited about. Amen. The paltry returns don't seem adequate for the risk undertaken - you could wait years at these rates to recover from an 8% drop, should one occur. But congrats to t...
by dmcmahon
Thu Jul 03, 2014 2:34 pm
 
Forum: Investing - Theory, News & General
Topic: The Risk of Short-term Bond Funds
Replies: 152
Views: 10123

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

I must be missing something re. the "extra" 28% argument. Why can't you put the cash you would have paid in tax into regular taxable investments and then when the time is right use it to pay the tax on a conversion to Roth either in service or after retirement? Especially for the older wor...
by dmcmahon
Tue Jul 01, 2014 5:21 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ article on ROTH 401K's vs Traditional
Replies: 48
Views: 4414

Re: The IPO is dying - Marc Andreessen

Well there are regulatory hassles that many such companies view as an unnecessary headache and expense when they're small.
by dmcmahon
Mon Jun 30, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: The IPO is dying - Marc Andreessen
Replies: 16
Views: 1391

Re: to Muni, or not to Muni - that is the question

ps56k wrote:...but now pushing up into 28% bracket.
However, our Effective Tax Rate has remained right around 10%


IMO the effective rate is a red herring - for incremental "what-if" decisions like this the marginal rate is what matters.
by dmcmahon
Sun Jun 22, 2014 10:41 am
 
Forum: Investing - Theory, News & General
Topic: to Muni, or not to Muni - that is the question
Replies: 10
Views: 1500

Re: Bogleheads 2014 Hedge fund contest

Yes can we please get the AAPL split into the data? Added to my disastrous TSLA short, it's embarrassing!
by dmcmahon
Wed Jun 11, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: Nasdaq 100 - Why not ?

They're both kind of silly indexes since the common theme of both is stocks that trade on a particular exchange. Why does that matter? Not a good way to build an index or invest. +1 If you want to make a sector bet on tech, why would you use a basket of stocks, some of which are non tech companies ...
by dmcmahon
Wed Jun 11, 2014 1:14 am
 
Forum: Investing - Theory, News & General
Topic: Nasdaq 100 - Why not ?
Replies: 9
Views: 499

Re: What happened if you had used CAPE to time the market?

Look at the unreaptable bull market in bonds on that graph. Now imagine the bond line for the next 20 years as a flat line, and then consider what effect that'll have on the timing results.
by dmcmahon
Wed Jun 11, 2014 12:04 am
 
Forum: Investing - Theory, News & General
Topic: What happened if you had used CAPE to time the market?
Replies: 20
Views: 1721

Re: The 2 comma paradox

This happened to me during the 2008 crash. The bigger you are, the harder you fall. In my case, the large size of my portfolio meant that I was absorbing losses that would take years of after tax earnings to replace. Worse than that was the thought that I had less years of such work earnings to repl...
by dmcmahon
Mon Jun 09, 2014 5:45 pm
 
Forum: Personal Finance (Not Investing)
Topic: The 2 comma paradox
Replies: 155
Views: 14196

Re: Poll: Luxury and Happiness

I buy things that might be considered luxury items when I get (or think I get) a better value for money. So in me you have the apparent contradiction of a guy walking out of the grocery store with a bag full of store brand and sale items and throwing it into the back of a Lexus. In no particular ord...
by dmcmahon
Mon Jun 09, 2014 5:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Poll: Luxury and Happiness
Replies: 141
Views: 8037

Re: Schwab: interesting failure that can cost clients $

Schwab's system doesn't seem to be capable of doing specific lot identification via their UI. This isn't true. I'm not sure about mutual funds since I don't own any, but it's easy to do specific lot identification when selling shares of stocks or ETFs. On the "trade" panel where you enter...
by dmcmahon
Fri Jun 06, 2014 5:57 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab: interesting failure that can cost clients $
Replies: 19
Views: 3201

Re: Schwab: interesting failure that can cost clients $

Schwab's system doesn't seem to be capable of doing specific lot identification via their UI. I've managed to work around this by changing the default method as needed and I always check it and/or reset it a few days before an anticipated trade. Usually I can find one of the settings that will resul...
by dmcmahon
Tue Jun 03, 2014 7:33 pm
 
Forum: Investing - Theory, News & General
Topic: Schwab: interesting failure that can cost clients $
Replies: 19
Views: 3201

Re: How diversified is the Larry Portfolio

Seems like the LP assumption that the factors will persist. If they don't, or change significantly, couldn't this adversely impact the math behind it?
by dmcmahon
Tue May 27, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: How diversified is the Larry Portfolio
Replies: 40
Views: 3316

Re: Lawyer recommends trust

I have a trust but it's not to exert control over the money after I'm gone - it's to make sure my heirs get almost immediate control of the assets without waiting for probate, as well as to avoid very significant probate costs (which are by California law a percentage of the assets).
by dmcmahon
Mon May 12, 2014 12:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Lawyer recommends trust
Replies: 81
Views: 5183

Re: Bogleheads 2014 Hedge fund contest

Please close my AMZN short today, thanks.
by dmcmahon
Wed May 07, 2014 11:47 am
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: Is it okay to keep all your assets with one fund company

Nisprius I am not aware of a single case of bad behavior of the kind like fraud where investors in publicly held mutual funds lost money. No Madoffs. Now with index funds you also avoid the risk of bad manager behavior (taking bad risks) Larry Thanks Larry. Your article did not mention custodian ri...
by dmcmahon
Wed May 07, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 5923

Re: heartbleed - widespread internet security problem

Maybe it's time VG offered two-factor auth? And every other bank/broker site...
by dmcmahon
Thu Apr 10, 2014 12:48 am
 
Forum: Personal Consumer Issues
Topic: heartbleed - widespread internet security problem
Replies: 175
Views: 22183

Microbusiness and TurboTax

A family member runs a business as a sideline, and makes a small amount of income ($100s / year) from it. Think selling items on ebay although this is not exactly what she's doing. Problem is, she has expenses that exceed the amount she makes in tax year 2013. Now, as far as I can tell, if she repor...
by dmcmahon
Tue Apr 08, 2014 5:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Microbusiness and TurboTax
Replies: 1
Views: 120

Re: What is your 2013 Federal Effective Tax Rate?

Only way to determine effective tax rate is total tax paid divided by total income from all sources including w-2 income before tax deferred retirement contributions and health insurance premiums plus non taxable income not reported on 1040, e.g., roth IRA distributions and muni bonds. If working i...
by dmcmahon
Sat Mar 15, 2014 4:29 pm
 
Forum: Personal Finance (Not Investing)
Topic: What is your 2013 Federal Effective Tax Rate?
Replies: 73
Views: 5005

Re: What If Long-Term Thinking Really Catches On?

Facebook could never have had an IPO, because nobody would have been able to buy it, since it wasn't in any index. :) Au contraire, it's rapid inclusion in many indexes forces passive indexers who wouldn't normally buy a stock at rich valuations to own it. What if the VC community could fob off alm...
by dmcmahon
Wed Mar 12, 2014 1:09 am
 
Forum: Investing - Theory, News & General
Topic: What If Long-Term Thinking Really Catches On?
Replies: 21
Views: 2072

Re: Tax deduction larger than AGI. What to do?

I'm surprised you didn't get hammered with AMT. By any chance did you accelerate income into 2012 to avoid 2013 tax increases, after which your income for 2013 fell off a cliff whilst a big retroactive prop 30 tax bill hit you in calendar 2013?
by dmcmahon
Fri Mar 07, 2014 1:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Tax deduction larger than AGI. What to do?
Replies: 7
Views: 657

Re: Schwarzman Loves Dividends!

leesbro Yes all that is true. But so does buybacks and paying down debt--they have same positive impact of reducing agency risk And if dividends actually made a company safer, for reasons you cite--would you not think that was in the price? You pay a price for safety. But it turns out that stocks t...
by dmcmahon
Fri Mar 07, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: Schwarzman Loves Dividends!
Replies: 34
Views: 2385

Re: Tax Exempt Bonds - Risks Involved

If I really wanted to bump up the safety of bonds in that portfolio, I'd switch from TBM to just Treasuries in taxable. This is what I've done. Limits on tax-deferred contributions over my working lifetime have left me with a high proportion of my savings in taxable, so inevitably some bonds need t...
by dmcmahon
Thu Mar 06, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: Tax Exempt Bonds - Risks Involved
Replies: 76
Views: 4220

Re: Investing in real estate

My quick reaction is that it would be too large a proportion of you assets at this point. Houses are illiquid investments. A single family house won't have the cap rate of a multi-family structure. Finally, you'll have to think of it as more of a side business (requiring your time and energy) than a...
by dmcmahon
Tue Mar 04, 2014 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in real estate
Replies: 23
Views: 1357

Re: Filing paper stubs with by-mail tax return - why?

I have never mailed in torn off stubs from my paycheck. For quite a while my "paycheck" has been an electronic deposit into my checking account. There is no check, there is no stub, there is nothing to tear off. I don't think your question is really about tearing stubs off paychecks. Can ...
by dmcmahon
Sun Feb 23, 2014 1:08 pm
 
Forum: Personal Finance (Not Investing)
Topic: Filing paper stubs with by-mail tax return - why?
Replies: 4
Views: 546

Filing paper stubs with by-mail tax return - why?

Does anyone know why, out of the bazillion tax-related documents we get, the IRS and state require you to send in tear-off stubs from your W2? And why this also includes pension payments from the OPM?
by dmcmahon
Sun Feb 23, 2014 12:07 pm
 
Forum: Personal Finance (Not Investing)
Topic: Filing paper stubs with by-mail tax return - why?
Replies: 4
Views: 546

Re: To MBA or not MBA?

Adding to the other posts, one question I have is whether you'd get the full benefit of the degree without classroom interaction with professors and students? And the related question, how would prospective employers view the on-line version of a degree even from a prestigious school?
by dmcmahon
Thu Feb 20, 2014 10:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: To MBA or not MBA?
Replies: 57
Views: 4907

Re: ACA investment income surtax - where is it reported?

Ah, thanks, that explains why I couldn't find the form!
by dmcmahon
Tue Feb 18, 2014 12:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: ACA investment income surtax - where is it reported?
Replies: 11
Views: 605

ACA investment income surtax - where is it reported?

I do my taxes using TurboTax, and I'm trying to see whether and how it's accounted for the 3.8% ACA surtax this year, which (I think) I'm subject to. But I can't see where that would be calculated, even flipping to forms mode. Anyone know where to look for it? Is there, for instance, some IRS form t...
by dmcmahon
Tue Feb 18, 2014 11:33 am
 
Forum: Personal Finance (Not Investing)
Topic: ACA investment income surtax - where is it reported?
Replies: 11
Views: 605

Re: If tax rates have gone way up for you -

I've discovered another way dividends bite you in California. Cali taxes them as ordinary income, so they have the effect of amplifying your AMT.
by dmcmahon
Tue Feb 18, 2014 2:24 am
 
Forum: Investing - Theory, News & General
Topic: If tax rates have gone way up for you -
Replies: 17
Views: 1772

Re: If tax rates have gone way up for you -

watty; thanks for the math, and I was wondering if I was worrying about it too much. Since I don't have much tax advantaged space but want to tilt to small value, perhaps I just need to accept the added tax. I do not reinvest my dividends but if you want a value tilt the issue still remains. The id...
by dmcmahon
Sun Feb 16, 2014 10:42 pm
 
Forum: Investing - Theory, News & General
Topic: If tax rates have gone way up for you -
Replies: 17
Views: 1772

Re: Will the Super Bowl Theory Hold Up This Time?

ofcmetz wrote:NFC definitely, the market will be up today. :D My condolences to Payton Manning and the death of the AFC.


I dunno, that wasn't a game so much as a train wreck, and that's what we've got today in the markets... :twisted:
by dmcmahon
Mon Feb 03, 2014 12:03 pm
 
Forum: Investing - Theory, News & General
Topic: Will the Super Bowl Theory Hold Up This Time?
Replies: 19
Views: 2970

Re: Bought in, and then they start tumbling

Hi, I seem to have a bad timing when it comes to making contributions to my portfolio. I only contribute quarterly. Last time I did so in bonds, it was just before bonds started to fall. Recently when I did so in stocks, it was just before the recent plunge. Although I know I am holding for the lon...
by dmcmahon
Mon Jan 27, 2014 5:39 pm
 
Forum: Investing - Theory, News & General
Topic: Bought in, and then they start tumbling
Replies: 51
Views: 6568

Re: Bogleheads 2014 Hedge fund contest

Looks like my choices are the kiss of death again with AAPL getting clobbered today and TSLA up for the year so far.
by dmcmahon
Mon Jan 27, 2014 5:38 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: New 10year TIP January 2014

Well, when I click to place the order, I get a "Trade Message" that says, "the cusip entered has a short period of time before maturity and the quantity entered would result in a negative yield for this cusip. Please select Back from your browser's toolbar to use a different CUSIP or...
by dmcmahon
Sat Jan 18, 2014 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: New 10year TIP January 2014
Replies: 20
Views: 1673

Re: technology's impact

Every time I have to call a plumber or washing machine repair man or take my car to the shop or clean my bathrooms I'm reminded that work as we know it isn't going to disappear any time soon.
by dmcmahon
Sat Jan 18, 2014 6:17 pm
 
Forum: Investing - Theory, News & General
Topic: technology's impact
Replies: 18
Views: 975

Re: total stock vs sp500 and extended market?

jwillis77373 wrote:Wow Nisiprius.

That history lesson was worth its weight in gold.

I had been asking those questions myself for quite some time.

+1
by dmcmahon
Sat Jan 11, 2014 1:02 am
 
Forum: Investing - Theory, News & General
Topic: total stock vs sp500 and extended market?
Replies: 19
Views: 2138

Re: when you reach"your number"

In theory I'm already there. Problem is I see a lot of uncertainties w.r.t. inflation, prospective returns on financial assets, the health care system, and social security. So it's more of a smear than a specific point. I do like my job and my company. Hi Ho, Hi Ho, it's off to work I go.
by dmcmahon
Thu Jan 09, 2014 1:37 pm
 
Forum: Investing - Theory, News & General
Topic: when you reach"your number"
Replies: 84
Views: 9061

Re: Net Worth Survey, 2014 Edition

And you have to use an appropriate discount rate. I'm suspicious of the SS PV numbers, they look awful low. Since it's as secure as the us gov and it's inflation protected, IMO the yield on 30-year TIPS should be used to discount the flows (i.e. the PV is the value of TIPS bonds you'd have to own i...
by dmcmahon
Mon Jan 06, 2014 8:26 pm
 
Forum: Investing - Theory, News & General
Topic: Net Worth Survey, 2014 Edition
Replies: 149
Views: 21634

Re: Net Worth Survey, 2014 Edition

Calculating PV of pension is also part of the data quality problem. To calculate the PV of pension you have to make an assumption on life expectancy, retirement age/years of service, income at retirement, and inflation. And you have to use an appropriate discount rate. I'm suspicious of the SS PV n...
by dmcmahon
Sun Jan 05, 2014 7:50 pm
 
Forum: Investing - Theory, News & General
Topic: Net Worth Survey, 2014 Edition
Replies: 149
Views: 21634

Re: Bond Rising Rate Effect - Definitive Study

The synopsis would be: It would seem the % of the rate change to beginning yield is directly proportional to the level of damage to the bond funds. This all gets compounded by inflation... Yes this makes intuitive sense and is the reason I've pulled in the maturities of my bond holdings. At low cou...
by dmcmahon
Sat Jan 04, 2014 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Rising Rate Effect - Definitive Study
Replies: 28
Views: 1903

Re: Have any of you dollar cost averaged in over 5 years

Well...Um...I did. And I'm glad. I started legging into my AA in 2007, and I was glad I didn't go all in at market highs. 5 years seemed about right - legging in over a few months didn't seem likely to protect me from the kind of effect I was worried about, and as it turns out,it wouldn't have. Yes ...
by dmcmahon
Sat Jan 04, 2014 2:12 am
 
Forum: Personal Finance (Not Investing)
Topic: Have any of you dollar cost averaged in over 5 years
Replies: 38
Views: 2373

Re: Is there a theoretical limit to the size of the stock ma

Note that a great amount of business and other economic activity is privately owned and not capitalized in the market. There's room to expand the absolute size of the market by capitalizing more business. For example, large partnerships could go public, as Goldman did many years ago. Or a public bus...
by dmcmahon
Fri Jan 03, 2014 9:47 pm
 
Forum: Investing - Theory, News & General
Topic: Is there a theoretical limit to the size of the stock market
Replies: 13
Views: 1174

Re: Investing in Physical as well as Financial Health

Amen. The hardest thing has been realizing that I have to dial back some of the activities as I get older. I stopped running in favor of low impact gym machines after my younger sister, a long time runner, needed a knee replacement. And now it looks like I'm going to have to curtail weight lifting a...
by dmcmahon
Wed Jan 01, 2014 5:37 pm
 
Forum: Personal Consumer Issues
Topic: Investing in Physical as well as Financial Health
Replies: 39
Views: 2701

Re: Bogleheads 2014 Hedge fund contest

blorman wrote:I just can't resist all this TSLA bait:)

My Lower Intestine & Co

Long:
TSLA - Tesla Motors Inc
DDD - 3D Systems Corporation

Short:
AAPL - Apple Inc
TWTR - Twitter Inc


Twitter isn't in the R3K, is it?
by dmcmahon
Sun Dec 29, 2013 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: Bogleheads 2014 Hedge fund contest

Fund name: Quantitative Teasing

Long: AAPL and WDAY
Short: AMZN and TSLA

(Alas Twitter isn't in the R3000.)
by dmcmahon
Sat Dec 28, 2013 10:05 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: Bogleheads 2014 Hedge fund contest

After last year's humiliating performance we're quietly closing our funds and hoping no one remembers our failures when we hang out our new shingle. Anyone know of a searchable on line Russell 3000 database?
by dmcmahon
Fri Dec 27, 2013 6:23 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads 2014 Hedge fund contest
Replies: 152
Views: 11951

Re: What you wish you had known entering your late 20's

I'd tell myself "find a wife before it's too late".
by dmcmahon
Thu Dec 26, 2013 8:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: What you wish you had known entering your late 20's
Replies: 100
Views: 9677

Re: Any tips for avoiding large tax bill?

Pay the Cali tax in 2013 so you can deduct it. Pull forward anything deductible from next year, for example pay your full years property tax instead of paying it for 6 months and then paying the next 6 months in early 2014. Consider pulling forward any charitable contributions you'd be making anyway...
by dmcmahon
Thu Dec 26, 2013 5:50 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any tips for avoiding large tax bill?
Replies: 4
Views: 664
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