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Re: Due diligence on RAFI Pure Small Value

I have a question. Many factor investors on this board believe that, other than DFA funds, PXSV is perhaps the best way to get small value factor exposure. According to Morningstar charts, PXSV has been around for almost 10 years and during that time it has underperformed VB, Vanguard's cap weighted...
by garlandwhizzer
Tue Sep 30, 2014 10:08 am
 
Forum: Investing - Theory, News & General
Topic: Due diligence on RAFI Pure Small Value
Replies: 184
Views: 15498

Re: Bill Gross moving from PIMCO to Janus, Monday

Doc wrote: But if you are behemoth like PIMCO are your costs really higher than that index fund? I don't know enough of the details, Doc, to say definitively but my intuition says that PIMCO has a higher cost structure than Vanguard. In stocks it's simple. An index can be run by a computer without p...
by garlandwhizzer
Mon Sep 29, 2014 7:06 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8044

Re: The volatility of premiums

Interesting post, Larry. Thanks. Risk and uncertainty are concepts that we must always keep in mind when it comes to investing. Both come in many flavors and there is no risk free solution in investing that I'm aware of. Do we focus on reducing risk in preparation for a black swan event or do we loa...
by garlandwhizzer
Mon Sep 29, 2014 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: The volatility of premiums
Replies: 17
Views: 1046

Re: Bill Gross moving from PIMCO to Janus, Monday

valuethinker wrote: I had not noticed Berkshire Hathaway 'underperforming'? Or did you mean simply relative to its own past? Berkshire Hathaway has been outperformed by the S&P 500 over the last 5 years or at least that was the case at the beginning of 2014. Source: http://www.bloomberg.com/news...
by garlandwhizzer
Mon Sep 29, 2014 1:19 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8044

Re: Will Investment Returns Ever Revert to "Normal"?

Great post, interesting. The future is unpredictable but it's quite a stretch when doing financial planning now to project past returns into the near and intermediate term future. Past returns from 1927 - 2013 are 9.5%/yr. for US large cap stocks and 4.9% for 10year Treasuries. Source of these figur...
by garlandwhizzer
Sat Sep 27, 2014 10:46 pm
 
Forum: Investing - Theory, News & General
Topic: Will Investment Returns Ever Revert to "Normal"?
Replies: 56
Views: 4191

Re: Bill Gross moving from PIMCO to Janus, Monday

Irregardless of current problems which are numerous for Bill Gross, when you've had a very long and very successful (until recently) career like Bill Gross you can do what you want to do and when you want to do it. I do know that Pimco's stock went way down on the news and Janus's went way up which ...
by garlandwhizzer
Sat Sep 27, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross moving from PIMCO to Janus, Monday
Replies: 106
Views: 8044

Re: a look at technical indicators

Great post, Larry, and also some great humor in it. I have had through the years a number of friends who managed their investment decisions solely with technical analysis. Six months after a market event they could always precisely define the technical pattern that was operating. They are a diverse ...
by garlandwhizzer
Fri Sep 26, 2014 12:18 pm
 
Forum: Investing - Theory, News & General
Topic: a look at technical indicators
Replies: 16
Views: 1269

Re: History of U.S. Inflation — Appearances Can Be Deceiving

Simplegift wrote: It's clear that when inflation has been moderate and stable, and not fluctuating from year to year, equities have performed well (chart below). It makes me wonder if the significant moderation in price fluctuations since 1980 hasn't contributed to the general rise in CAPE (PE10) va...
by garlandwhizzer
Thu Sep 25, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: History of U.S. Inflation — Appearances Can Be Deceiving
Replies: 16
Views: 2323

Re: Even institutions are performance chasers, and the impac

The Vanguard article Larry cites demonstrates that performance chasing doesn't work when rolling 3 year returns are used to make buy and sell decisions. However momentum investing is all about performance chasing but it bases its buy-sell strategy on 12 month or less time frames for performance chas...
by garlandwhizzer
Tue Sep 23, 2014 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: Even institutions are performance chasers, and the impact
Replies: 7
Views: 752

Re: Could one theoretically be 100% stocks your whole life?

At times like now, after 5 years of a robust bull market, 100% stock allocation posts appear rather frequently on this forum. In contrast, at times like the depths of the 2008-9 bear market, "age in bonds" or even greater bond allocation posts were quite popular. Investor enthusiasm for an...
by garlandwhizzer
Tue Sep 23, 2014 2:32 pm
 
Forum: Investing - Theory, News & General
Topic: Could one theoretically be 100% stocks your whole life?
Replies: 43
Views: 2741

Re: Risk and the Trinity Study

I think tadamsmar and ObliviousInvestor make very good points and I put my money where my mouth is with a 75/25 stock/bond allocation even though I am 67 and have been retired for 17 years. Having said that, there are problems with any analysis no matter how sound when it is based on past historical...
by garlandwhizzer
Tue Sep 23, 2014 2:11 pm
 
Forum: Investing - Theory, News & General
Topic: Risk and the Trinity Study
Replies: 33
Views: 1760

Re: Immediate payable annuity is a bad investment?

I believe this article presents the economic shortcomings of immediate annuities briefly and quite well. I have never (and hopefully will never) buy one, but they do have some appeal to extremely risk averse investors who fear financial markets, providing some degree of income certainty for a high p...
by garlandwhizzer
Thu Sep 18, 2014 7:16 pm
 
Forum: Investing - Theory, News & General
Topic: Immediate payable annuity is a bad investment?
Replies: 45
Views: 2636

Re: MD/MBA Investing Opportunities

It is sufficiently difficult and time consuming to be a successful doctor that I don't think adding another huge challenge onto your plate will be wise. Same thing can be said for a professional investment manager, another difficult time consuming occupation if you do it well. As a practicing doctor...
by garlandwhizzer
Sat Sep 06, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: MD/MBA Investing Opportunities
Replies: 23
Views: 2485

Re: Finding Smart Beta in the Factor Zoo

Robert T wrote: I think if you try to add too many (factors) you may simply end up with a market portfolio. This thought has also occurred to me as factors have proliferated. The older I get the better TSM looks. Ben Graham recalls that when he started there were plenty of stocks that were selling f...
by garlandwhizzer
Fri Sep 05, 2014 10:53 pm
 
Forum: Investing - Theory, News & General
Topic: Finding Smart Beta in the Factor Zoo
Replies: 34
Views: 2124

Re: Why is REIT only sector fund recommended in slice & dice

berntson » Wed Sep 03, 2014 12:05 pm Alex Frakt wrote: This is pure rationalization to me. No sector's investable assets are all publicly traded. Logically, if you should overweight REITs because they are underrepresented in the public markets compared to their share of the national economy, then y...
by garlandwhizzer
Wed Sep 03, 2014 1:54 pm
 
Forum: Investing - Theory, News & General
Topic: Why is REIT only sector fund recommended in slice & dice?
Replies: 113
Views: 7888

Re: A Low-Return Future? Are We Prepared?

Arguing about what the exact percentage of market returns will be for the next 1, 2, or 3 decades is a lot like arguing over how many angels can dance on the head of a pin. It is entirely reasonable to expect lower than historically average market returns going forward and to make that assumption pa...
by garlandwhizzer
Wed Sep 03, 2014 1:22 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 189
Views: 12274

Re: Why invest in bonds?

Robert T wrote: Tolerable loss. If you can tolerate a 50 percent loss (a halving of your assets) at any one time without baling (selling out), then 100% equities may be okay for a long-term investor. If you can't tolerate this loss and sell out the market bottom, you would likely have better long-te...
by garlandwhizzer
Mon Sep 01, 2014 1:51 pm
 
Forum: Investing - Theory, News & General
Topic: Why invest in bonds?
Replies: 103
Views: 6308

Re: A Low-Return Future? Are We Prepared?

Simplegift wrote: Bottom line: Any investor who expects and plans for future stock market returns (and bond returns!) like were seen in the last half of the twentieth-century is in for a rude shock and disappointment. We can reasonably predict those returns certainly won't be repeated. Better to mak...
by garlandwhizzer
Fri Aug 29, 2014 12:40 pm
 
Forum: Investing - Theory, News & General
Topic: A Low-Return Future? Are We Prepared?
Replies: 189
Views: 12274

Bond Bubble?

Here's the link to a piece suggesting a worldwide bond bubble < www.marketwatch.com/story/beware-the-enormous-bubble-in-bonds-2014-08-29 > Many have been calling for bonds to suffer for years and yet it hasn't happened. Is this just another cry that the sky is falling or is there something more to i...
by garlandwhizzer
Fri Aug 29, 2014 12:20 pm
 
Forum: Investing - Theory, News & General
Topic: Bond Bubble?
Replies: 10
Views: 919

Re: Economic Forecasts

The graph shows estimates of medicare expenses going forward. It does not show total health care costs for the elderly. Total health care costs continue to rise faster than either inflation or GDP growth. The difference in cost and medicare payments comes out of the pockets of the elderly and I susp...
by garlandwhizzer
Thu Aug 28, 2014 1:09 pm
 
Forum: Investing - Theory, News & General
Topic: Economic Forecasts
Replies: 5
Views: 662

Re: Emerging markets 1900-2013

Very interesting post, Robert T. The real question is will the future be a repeat of the past, rhyme with it, or be something entirely different? That in my mind at least is unknown at present. There is now a conjunction of factors in essentially all DMs that have never before existed in history. Fi...
by garlandwhizzer
Wed Aug 27, 2014 1:54 pm
 
Forum: Investing - Theory, News & General
Topic: Emerging markets 1900-2013
Replies: 54
Views: 5398

Re: first of three part series on hedge funds

Good post, thanks Larry. Perhaps investors and pension funds are waking up.

Garland Whizzer
by garlandwhizzer
Mon Aug 25, 2014 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: first of three part series on hedge funds
Replies: 2
Views: 347

Re: Good interview with John Bogle

Jaxfann wrote: To go from 80/20 to 25/75 in one move was a huge change and very different to the philosophy continually expounded on this board by very intelligent members. I am surprised that at his age at the time he was so exposed to equities also. Clearly given extraordinary circumstances Bogle ...
by garlandwhizzer
Thu Aug 21, 2014 11:04 pm
 
Forum: Investing - Theory, News & General
Topic: Good interview with John Bogle
Replies: 34
Views: 3788

Re: Brad Delong commenting on Shiller's NYTimes piece

Interesting. Thanks for the post.

Garland Whizzer
by garlandwhizzer
Thu Aug 21, 2014 10:46 pm
 
Forum: Investing - Theory, News & General
Topic: Brad Delong commenting on Shiller's NYTimes piece
Replies: 4
Views: 1008

Re: Good interview with John Bogle

I never tire of listening to John Bogle. He makes it all sound so simple, reducing all the complexity of investing into simple elegant common sense. Investing history has shown time and again that his approach is rock solid. What a contrast to Wall Street "geniuses" peddling complex snake ...
by garlandwhizzer
Thu Aug 21, 2014 1:43 pm
 
Forum: Investing - Theory, News & General
Topic: Good interview with John Bogle
Replies: 34
Views: 3788

Qu

Larry wrote when the spreads on HY are high, it's the same time that the ERP and size and value premiums are high Larry Good point, Larry. However in the crash of 2008-9, the Vanguard Small Cap Value fund lost 56% of its value compared to 29% in the Vanguard High Yield Corporate fund. The most impor...
by garlandwhizzer
Wed Aug 20, 2014 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: High Yield Bonds - Uncorrelated to Stocks and Bonds?
Replies: 73
Views: 4992

Re: Indexing in EM, and Templeton's Mobius

Great post, Larry. Thanks. The simple arithmetic of indexing once again defeats costly genius.

Garland Whizzer
by garlandwhizzer
Tue Aug 19, 2014 2:13 pm
 
Forum: Investing - Theory, News & General
Topic: Indexing in EM, and Templeton's Mobius
Replies: 10
Views: 1004

Re: Long term bond tilting?

I always appreciate Robert T's thorough and insightful analysis. His bond post is a great example of this.

Garland Whizzer
by garlandwhizzer
Tue Aug 19, 2014 2:02 pm
 
Forum: Investing - Theory, News & General
Topic: Long term bond tilting?
Replies: 14
Views: 1275

Re: Morningstar data vs Factsheets

Doc wrote in response to my post: garlandwhizzer wrote: Vanguard's numbers are in my opinion more solidly grounded in current reality. The question is what you are going to do with the numbers. If you are looking at the numbers with respect to some academic study then the past year actual may be the...
by garlandwhizzer
Sun Aug 17, 2014 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: Morningstar data vs Factsheets
Replies: 5
Views: 667

Re: Shiller on Lofty Market Elevations

I believe that the problem with high valuations by PE 10 or any other measure is not limited to stocks, but also includes bonds and real estate. There is a great deal of money in the world looking for opportunity, creating huge demand which has far exceeded the supply of attractive investment opport...
by garlandwhizzer
Sun Aug 17, 2014 3:15 pm
 
Forum: Investing - Theory, News & General
Topic: Shiller on Lofty Market Elevations
Replies: 55
Views: 5128

Re: Going 60+% international? (US resident)

I agree with the Vanguard article on international asset allocation. Namely, if you wish to add international (Bogle for example doesn't so clearly not everyone must do this), the upper limit should be market cap exposure which currently is less than 60% international. Equity valuations at present p...
by garlandwhizzer
Sat Aug 16, 2014 7:47 pm
 
Forum: Investing - Theory, News & General
Topic: Going 60+% international? (US resident)
Replies: 83
Views: 6032

Re: Morningstar data vs Factsheets

Morningstar gives projected earnings and book value estimates for next year. Vanguard gives earnings and book value of the past year. One year of difference can take into account estimates of earnings and book value growth or decline for the next year. I need to insert here that future earnings esti...
by garlandwhizzer
Sat Aug 16, 2014 7:27 pm
 
Forum: Investing - Theory, News & General
Topic: Morningstar data vs Factsheets
Replies: 5
Views: 667

Re: BI: High Yield six-sigma event

I used to hold some HYB but no longer. Interest spreads between HYB and Treasuries or Investment Grade Corporates have narrowed and the quality of most HYB funds has declined in recent years in my opinion. At times in the past the yield spread over safer bonds offered a sufficiently attractive risk/...
by garlandwhizzer
Thu Aug 14, 2014 11:16 pm
 
Forum: Investing - Theory, News & General
Topic: BI: High Yield six-sigma event
Replies: 24
Views: 2078

Re: good short very Bogleheadish interview with Cliff Asness

Good interview. Cliff Asness is very knowledgeable in my opinion and always worth listening to. Bogle is one of his two heros, not what you might expect from one whose products compete with cap weighted indexes.

Garland Whizzer
by garlandwhizzer
Thu Aug 14, 2014 10:45 pm
 
Forum: Investing - Theory, News & General
Topic: good short very Bogleheadish interview with Cliff Asness
Replies: 2
Views: 751

Re: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & B

I don't know of any knowledgeable financial analyst who thinks US bond returns will be at historical norms going forward. On the other hand, the same can be said for US stocks. We're in a world of low expected returns from all investment assets in my opinion. Stocks are harder to predict in terms of...
by garlandwhizzer
Thu Aug 07, 2014 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: GOLDMAN: A 'Dramatic Divergence' Is Coming To Stocks & Bonds
Replies: 13
Views: 1475

Re: AARP: The Great Pension Sell-Off

This article just touches on a small but visible part of a huge iceberg. I believe that the future holds for us as a nation serious economic challenges when it comes to funding retirement, medical care cost, and long term care for our retiring workers. I hope I'm wrong on this one but it seems to me...
by garlandwhizzer
Tue Aug 05, 2014 2:35 pm
 
Forum: Investing - Theory, News & General
Topic: AARP: The Great Pension Sell-Off
Replies: 30
Views: 3635

Re: It seems Warren Buffett believes in DCA

CaptainSegfault wrote: So, my cat walked on my keyboard and sold all my stocks. Should I DCA the resulting lump sum back to my target AA or should I just fix it? Why is my answer any different than the answer for someone who just received a lump sum, all else equal? Money is fungible -- my situation...
by garlandwhizzer
Mon Aug 04, 2014 11:07 pm
 
Forum: Investing - Theory, News & General
Topic: It seems Warren Buffett believes in DCA
Replies: 44
Views: 4019

Re: Vanguard Unethical?

There is a certain irony to a lawyer calling out Vanguard for being unethical.

Garland Whizzer
by garlandwhizzer
Mon Aug 04, 2014 1:19 pm
 
Forum: Personal Finance (Not Investing)
Topic: Vanguard sued for charging too little
Replies: 187
Views: 21565

Re: global diversification works in long term

Tigermoose wrote in response to my post: garlandwhizzer wrote: These are good points, Tigermoose, but I believe the market knows about them and current prices reflect that information. By many fundamental measures, PE, PB, PDIV, etc., both DM stocks and EM stocks are undervalued relative to their US...
by garlandwhizzer
Mon Aug 04, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: global diversification works in long term
Replies: 21
Views: 1949

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

I agree with JoMoney that the US is in a favorable economic position for equity investing relative to the rest of the world. Certainly historically those who remained strictly in the US on equities have done very well. International equity exposure adds a diversification benefit to a US equity portf...
by garlandwhizzer
Sat Aug 02, 2014 11:59 pm
 
Forum: Investing - Theory, News & General
Topic: International investing. A good call by our mentor.
Replies: 145
Views: 12564

Re: It seems Warren Buffett believes in DCA

Leeraar wrote: DCA is when you have all the money available, but choose to divide it into small periodic investments. I thought dollar cost averaging was investing an equal amount of dollars at regular intervals (monthly works well because that's often when paychecks come out) from cash into investm...
by garlandwhizzer
Sat Aug 02, 2014 1:42 pm
 
Forum: Investing - Theory, News & General
Topic: It seems Warren Buffett believes in DCA
Replies: 44
Views: 4019

Re: how do I find out PE10 of foreign stock markets?

Thanks, cjking, for the post. Very interesting. The valuation disparities are quite striking. We all know there's a tradeoff between risk and reward but safer equity (US) seems very expensive relative to riskier equity (Russia, etc.,) on a valuation basis. This is why forward projections by multiple...
by garlandwhizzer
Sat Aug 02, 2014 1:16 pm
 
Forum: Investing - Theory, News & General
Topic: how do I find out PE10 of foreign stock markets?
Replies: 78
Views: 13280

Re: Arnott's/RAFI 10 year 'expected' returns

Lower than historic returns from all US assets: stocks, bonds, REIT, and other hard assets are widely expected by a number of respected market analysts. Earlier this year after reading Rational Expectations by Bill B, I shifted some of my equity exposure from US to international and now hold 60% US,...
by garlandwhizzer
Fri Aug 01, 2014 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: Arnott's/RAFI 10 year 'expected' returns
Replies: 78
Views: 4852

Re: It seems Warren Buffett believes in DCA

I think DCA is a great way to invest while you're young in the accumulation phase and have a job. Every month you pay yourself first off, buying a given amount of stock in a broadly based index fund like TSM. You're busy at that point in your life and don't perhaps have time to do your market timing...
by garlandwhizzer
Fri Aug 01, 2014 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: It seems Warren Buffett believes in DCA
Replies: 44
Views: 4019

Re: Are utility stocks no longer safe?

Utility stocks have done well as have REITS in this historic low interest rate environment as investors desperately sought yield. Small and mid cap index funds have relatively large allocations to them which is part of the reason for their outperformance in recent years. For example, the Vanguard Sm...
by garlandwhizzer
Fri Aug 01, 2014 2:36 pm
 
Forum: Investing - Theory, News & General
Topic: Are utility stocks no longer safe?
Replies: 22
Views: 2121

Re: It seems Warren Buffett believes in DCA

DCA is designed to control risk better than lump sum. It is useful if you want to get into the market, and current valuations are high or generous like they are today, and you are tired of sitting in cash or T bills getting no return. If valuations are compelling or better than average like they ten...
by garlandwhizzer
Fri Aug 01, 2014 1:59 pm
 
Forum: Investing - Theory, News & General
Topic: It seems Warren Buffett believes in DCA
Replies: 44
Views: 4019

Re: global diversification works in long term

Tigermoose wrote: What tends to worry me these days about international equities -- especially in Japan and Europe -- is that their demographics are horrible. The U. S. has the "echo-boom" generation that will be very productive and numerous, and so we should see some continued wealth crea...
by garlandwhizzer
Wed Jul 30, 2014 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: global diversification works in long term
Replies: 21
Views: 1949

Re: Why should stocks go up over the long term?

Stock market prices grow in relation to corporate profits. Sentiment swings distort this profit growth--higher prices for a dollar of earnings sometimes, lower prices other times--but eventually markets always come back to earnings which tend to grow over time. What makes earnings grow? Population g...
by garlandwhizzer
Mon Jul 28, 2014 6:17 pm
 
Forum: Investing - Theory, News & General
Topic: Why should stocks go up over the long term?
Replies: 34
Views: 2915

Re: Larry: 20 Dollar Bills and Factor Persistence

Thanks to nedsaid and Robert T for their insightful analysis in response to my questions.

Garland Whizzer
by garlandwhizzer
Mon Jul 28, 2014 1:02 pm
 
Forum: Investing - Theory, News & General
Topic: Larry: 20 Dollar Bills and Factor Persistence
Replies: 113
Views: 10049

Re: my quarterly hedge fund update

I believe that three things may help to explain the paradox. First is cache. Investing in a hedge funds is mostly restricted to a small class, the very rich. It has cocktail party cache to say you're in so-and-so's hedge fund rather than boring plain vanilla Vanguard index funds. Recall that getting...
by garlandwhizzer
Mon Jul 28, 2014 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: my quarterly hedge fund update
Replies: 11
Views: 1621
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