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Re: Small cap value premium

Rick Ferri wrote: My view: factor investing in small-value stocks has produced over-sized returns post millennium. Some of this excess return was a correction for undervaluation during the tech bubble. Some may be too many cooks chasing the same factors. Either way, I don't see the next 15 years pro...
by garlandwhizzer
Fri Nov 21, 2014 12:46 pm
 
Forum: Investing - Theory, News & General
Topic: Small cap value premium
Replies: 59
Views: 3677

Re: An alternative to alternative investments [QSPIX]

Funds that attempt to capture non-beta premiums like this one rely on two things for either long term outperformance or some enhancement in risk/reward tradeoff relative to beta. First that the future of financial markets will be, if not a replay of the past, at least very similar to it. Backtesting...
by garlandwhizzer
Thu Nov 20, 2014 1:55 pm
 
Forum: Investing - Theory, News & General
Topic: An alternative to alternative investments [QSPIX]
Replies: 67
Views: 4009

Re: Additional Betas: Defining and implementing

Excellent straightforward presentation, telling it like it is at least in my opinion. Thanks, Rick.

Garland Whizzer
by garlandwhizzer
Tue Nov 18, 2014 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Additional Betas: Defining and implementing
Replies: 6
Views: 605

Re: Explaining muni bond spreads

In the friendly Rick versus Larry debate on muni bond funds, although I have great respect for both, I side with Rick on this one. I have greater trust in Vanguard and the way it operates, than any other financial firm bar none. Perhaps it's just that, having been burned by supposedly brilliant acti...
by garlandwhizzer
Mon Nov 17, 2014 12:05 pm
 
Forum: Investing - Theory, News & General
Topic: Explaining muni bond spreads
Replies: 40
Views: 3399

Re: New Tony Robbins Book on Financial Freedom

The Ray Dalio All-Seasons Portfolio leverages up on bonds to offset equity risk. On backtesting even as far back as the 1970s it has reduced risk and volatility but still managed to provide consistent positive returns. The risk of leveraging bonds during the later stages of the bond bear market infl...
by garlandwhizzer
Sat Nov 15, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: New Tony Robbins Book on Financial Freedom
Replies: 56
Views: 9903

Re: Why do HY Savings and CD rates dominate short-term bonds

dbr wrote:
My personal opinion is that the long term investor holding both stocks and bonds can invest in any reasonable choice of a low cost intermediate term bond fund and spend their time better thinking about other things unless they just enjoy the past time of posting here.


1+

Garland Whizzer
by garlandwhizzer
Fri Nov 14, 2014 11:22 am
 
Forum: Investing - Theory, News & General
Topic: Why do HY Savings and CD rates dominate short-term bonds?
Replies: 26
Views: 3018

Re: International Stock Diversification — A New Look

Great post, Simplegift, thanks. I was surprised at this data and it made me reconsider international diversification. It seems that internationalization of large cap corporations in terms of revenue generation is more pervasive than I had realized. But the difficult question: is this actionable info...
by garlandwhizzer
Wed Nov 12, 2014 1:56 pm
 
Forum: Investing - Theory, News & General
Topic: International Stock Diversification — A New Look
Replies: 51
Views: 5189

Re: Dividend yield from 60/40 stocks/bond

A 60/40 portfolio's dividend yield is about 2% now. Inflation runs now at 1.7% as measured by the last CPI, so your real return from dividends is 0.3%. However your 2% is fully taxable in non-tax advantaged accounts. So if your 2% yield gets taxed in total (both federal and state) at greater than a ...
by garlandwhizzer
Wed Nov 12, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Dividend yield from 60/40 stocks/bond
Replies: 16
Views: 1513

Re: Do actively managed funds outperform in recessions?

Thanks, Larry, for a great post. What is amazing is that despite mountains of evidence active management continues to have more more assets under management than does passive, although the gap is narrowing at an increasing pace. This speaks to the power of marketing, advertising, and the insights of...
by garlandwhizzer
Mon Nov 10, 2014 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Do actively managed funds outperform in recessions?
Replies: 7
Views: 984

Re: Poll: What is your Bond Allocation %?

hiddensee wrote: I suggest this data shows that Boggleheads only act like Boggleheads to an approximation. If the immediate post-crash allocation, which may most closesly represent real risk tolerance, was close to Age then the Age philosophy may be a good one. I suggest that one rule doesn't apply ...
by garlandwhizzer
Sun Nov 09, 2014 12:31 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: What is your Bond Allocation %?
Replies: 93
Views: 12081

Re: Paper on Market Timing

The authors of the paper either work for or are principals of Pension Partners which I presume to be a financial management firm located in NYC. I presume that Pension Partners is not a university or academic institution but rather a for profit investment firm. I'm guessing that Pension Partners off...
by garlandwhizzer
Sat Nov 08, 2014 12:40 pm
 
Forum: Investing - Theory, News & General
Topic: Paper on Market Timing
Replies: 3
Views: 892

Re: Junk bond fund NAVs

Eric76 wrote: But as another poster stated, VWEHX initially had a NAV of $10.00 when it was launched. So even though there are obviously ups and downs (such as the move up since '08) the long term movement is lower, even if well managed. I believe It's the same with all high yield bond funds. PRHYX ...
by garlandwhizzer
Fri Nov 07, 2014 9:40 pm
 
Forum: Investing - Theory, News & General
Topic: Junk bond fund NAVs
Replies: 86
Views: 5110

Re: iBonds at zero % fixed

I lived in the SF Bay area for 15+ years and in Santa Barbara for another 9 years, so I'm very familiar with what hoops777 is talking about. He is not exaggerating and is presenting a real situation in my opinion. Inflation as measured by CPI has not kept up with living expense inflation in coastal ...
by garlandwhizzer
Fri Nov 07, 2014 12:53 pm
 
Forum: Investing - Theory, News & General
Topic: iBonds at zero % fixed
Replies: 84
Views: 8870

Re: Junk bond fund NAVs

Eric76 wrote: As a result, Isn't it inevitable that junk bond funds will all, at some point in the future, go to 0? Does this necessitate reverse splits to maintain the fund? Or is my entire premise off base? Your premise is completely off base. Vanguard's High Yield Bond Fund's NAV for example was ...
by garlandwhizzer
Fri Nov 07, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Junk bond fund NAVs
Replies: 86
Views: 5110

Re: Oil and or Metals?

If you're only investing 1% of your assets in gold, PME, oil, commodities, etc., it is hard to imagine how that is going to significantly alter your overall portfolio's performance. These types of sector bets can help a portfolio in an inflationary economy (which we don't have now) but in order to m...
by garlandwhizzer
Wed Nov 05, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: Oil and or Metals?
Replies: 19
Views: 1165

Re: What's worrying Vanguard's CEO

Correction: McNabb does indicate that the 5% - 5.5% is nominal, not real, and his optimistic prediction on inflation for the next 10 years (hope he's right) is 2% which is more than a full percentage point below its long term historical average. So his real returns for a balanced portfolio are proje...
by garlandwhizzer
Mon Nov 03, 2014 5:10 pm
 
Forum: Investing - Theory, News & General
Topic: What's worrying Vanguard's CEO
Replies: 14
Views: 2765

What's worrying Vanguard's CEO

From an article on Marketwatch. His future predictions for returns of a balanced portfolio over the next 10 years are 5% - 5.5% if you use long bonds, not short or intermediate term in your portfolio. He doesn't say if that's real or nominal but I suspect it's nominal. These numbers aren't as grim a...
by garlandwhizzer
Mon Nov 03, 2014 5:01 pm
 
Forum: Investing - Theory, News & General
Topic: What's worrying Vanguard's CEO
Replies: 14
Views: 2765

Re: The Euro-Boglehead way of Bonds

Johno wrote: If everyone expects a certain future to happen, why isn't it already reflected in the market price? That is, why hasn't the dollar already strengthened to the predicted level?: The Euro exchange rate on May 6, 2014 was $1.39. Today it is $1.25. In less than 6 months that represents a 10...
by garlandwhizzer
Mon Nov 03, 2014 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: The Euro-Boglehead way of Bonds
Replies: 24
Views: 2257

Re: Dividends: reinvest or into money market?

Leeraar wrote:
In a tax-advantaged account, you should re-invest dividends. You can then rebalance or take withdrawals from the account as needed.

For taxable investments, sweep dividends to a cash account.Then, use them to rebalance or keep the distributions for yourself.

L.


1+

Garland Whizzer
by garlandwhizzer
Sat Nov 01, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends: reinvest or into money market?
Replies: 6
Views: 1154

Re: A Challenge for Bogleheads - the market has changed

ogd wrote: In the market, there are mutual funds attempting to do precisely this. We're talking professional fund managers, with PhD's on staff and supercomputers and nanosecondly news feeds. They are called tactical allocation funds. How do they fare in practice? Miserably: http://www.cbsnews.com/n...
by garlandwhizzer
Fri Oct 31, 2014 12:45 pm
 
Forum: Investing - Theory, News & General
Topic: A Challenge for Bogleheads - the market has changed
Replies: 53
Views: 6754

Re: Coffee House - REIT or Commodity

backpacker wrote: William Bernstein suggests owning a precious metal producers fund in his latest book. To quote Bernstein directly: "If, and only if, you've had a disciplined long-term allocation to PME, it might not be a bad idea to now up your policy allocation to this asset class, which, It...
by garlandwhizzer
Fri Oct 31, 2014 11:46 am
 
Forum: Investing - Theory, News & General
Topic: Coffee House - REIT or Commodity
Replies: 9
Views: 1131

Re: Do stocks have an intrinsic fundamental value?

I believe that the EMH generally sets an accurate price for assets. Largely due to emotional factors it is not always totally accurate. Whenever investor sentiment swings severely in one direction or the other, pricing error creeps into the market. Prices were too high for big cap tech in 1999, too ...
by garlandwhizzer
Sun Oct 26, 2014 6:07 pm
 
Forum: Investing - Theory, News & General
Topic: Do stocks have an intrinsic fundamental value?
Replies: 31
Views: 2129

Re: "Jack Bogle on Warren Buffett, Bill Gross and How to Inv

I never get tired of listening to Jack Bogle. He is and always has been a giant surrounded by numerous noisy self-serving dwarfs in the investing business.

Garland Whizzer
by garlandwhizzer
Fri Oct 24, 2014 12:41 pm
 
Forum: Investing - Theory, News & General
Topic: "Jack Bogle on Warren Buffett, Bill Gross and How to Invest"
Replies: 17
Views: 3070

Re: "How to Win the Loser's Game -- Part 9"

Superb video! Thanks, Taylor.

Garland Whizzer
by garlandwhizzer
Wed Oct 22, 2014 12:22 pm
 
Forum: Investing - Theory, News & General
Topic: "How to Win the Loser's Game -- Part 9"
Replies: 6
Views: 1547

Re: Forbes Article On Active vs Passive Investing

It is not difficult to look at past market history and derive in retrospect a formula that would have worked better than buy and hold indexing over a cherry picked time interval. It's a very simple exercise: buy low, sell high during this particular period and don't include fees, trading costs, or t...
by garlandwhizzer
Wed Oct 22, 2014 12:08 pm
 
Forum: Investing - Theory, News & General
Topic: Forbes Article On Active vs Passive Investing
Replies: 35
Views: 3967

Re: Stocks as long term investments

riptide wrote: Nedsaid always has excellent advice and words of wisdom for us that are younger, listen to him. Agreed, and that goes for those of us who are older too. My experience is much like nedsaids, starting out 25+ years ago with a portfolio dominated by individual stocks with a few actively ...
by garlandwhizzer
Tue Oct 21, 2014 1:11 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks as long term investments
Replies: 57
Views: 4902

Re: Leon Cooperman giving the same advice as Warren

Jeff Albertson wrote:
The real puzzle, why would anyone watch CNBC?


It's okay to watch it, but it's very important to keep the mute button pressed.

Garland Whizzer
by garlandwhizzer
Tue Oct 21, 2014 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Leon Cooperman giving the same advice as Warren
Replies: 47
Views: 3330

Re: The Euro-Boglehead way of Bonds

ogd wrote: Presently I would also consider US Treasuries, despite the currency risk problem, because they work very well alongside equities. 1+ US Treasuries are in my opinion a screaming, pound-the-table buy relative to any Euro zone sovereign bonds at present. German ten year bonds are yielding 1....
by garlandwhizzer
Mon Oct 20, 2014 12:38 pm
 
Forum: Investing - Theory, News & General
Topic: The Euro-Boglehead way of Bonds
Replies: 24
Views: 2257

Re: How does one hedge against deflation?

If deflation is limited to one country (Japan 1990 - now) the obvious way to beat it is to diversify internationally. If deflation is global as in the Great Depression, there are few places to hide (Treasuries, and T-bills, the latter yielding nothing but nothing theoretically zero return gets more ...
by garlandwhizzer
Sun Oct 19, 2014 12:36 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 52
Views: 4087

Re: Headed for a 300+ point loss today?

Love the cartoon, autonomy. No matter how many times I see it, I still laugh. Unfortunately it is a good representation of stock trading reality.

Garland Whizzer
by garlandwhizzer
Fri Oct 17, 2014 11:30 am
 
Forum: Investing - Theory, News & General
Topic: Headed for a 300+ point loss today?
Replies: 461
Views: 34328

Re: Investing in Japan with Yen Hedged to USD or EUR

I am not an expert on this question, but I do strongly believe some basic principals about investing. First, the more complex and less diversified an investment strategy is, the less likely it is to achieve long term risk adjusted success. This strategy involves concentrated bets in Japan equity and...
by garlandwhizzer
Thu Oct 16, 2014 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in Japan with Yen Hedged to USD or EUR
Replies: 5
Views: 313

Re: Dealing with Volatility

Excellent insight and advice, Rick. Thanks.

Garland Whizzer
by garlandwhizzer
Thu Oct 16, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: Dealing with Volatility
Replies: 14
Views: 1133

Re: why you might not want to buy what's popular

I'm with you, Larry, on not overweighting REITS and high dividend stocks for the same fundamental reasons. Having said that I'm still waiting to be paid off for my insight this year when both REITS and High Dividend Index have outperformed. I'm a fundamental valuation guy so I'll keep on avoiding ov...
by garlandwhizzer
Thu Oct 16, 2014 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: why you might not want to buy what's popular
Replies: 8
Views: 1193

Re: Why does the stock market beat inflation?

protagonist wrote: This is similar to the common feeling in Rome during the time of Marcus Aurelius following the century of Pax Romana and unprecedented growth of prosperity and security (not dissimilar to our current era). I wouldn't have wanted to base my investment strategy on Monte Carlo simula...
by garlandwhizzer
Wed Oct 15, 2014 4:24 pm
 
Forum: Investing - Theory, News & General
Topic: Why does the stock market beat inflation?
Replies: 62
Views: 3152

Re: U.S. stocks in freefall

kenyan wrote:
I don't disagree with most of your post, but what about 2011? Peak-to-trough was -19% in TSM, -17.5% S&P 500.


You're right. That one slipped my aging mind. Thanks for the correction.

Garland Whizzer
by garlandwhizzer
Wed Oct 15, 2014 3:30 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 941
Views: 158244

Re: Why does the stock market beat inflation?

Stock prices ultimately come back to corporate earnings. Earnings tend to rise over time because populations increase (more people to sell goods and services to, more people to produce those goods and services) and because over time worker productivity increases due to technological innovation. Infl...
by garlandwhizzer
Wed Oct 15, 2014 12:54 pm
 
Forum: Investing - Theory, News & General
Topic: Why does the stock market beat inflation?
Replies: 62
Views: 3152

Re: U.S. stocks in freefall

The last 5 years has been up to now a consistent uninterrupted bull market which historically is overdue for a correction and has been for some time. US small cap stocks are already in correction territory (>10% drop from highs). US large cap stocks still haven't hit correction territory although th...
by garlandwhizzer
Wed Oct 15, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 941
Views: 158244

Re: Historical returns or current valuations to forecast fut

My personal investing experience has been solid over 25 years except for two areas: margin buying and leverage. I have learned the hard way that for me at least these two can be poison. Both leverage and margin buying have a cost structure that must be overcome to achieve improved results. But their...
by garlandwhizzer
Mon Oct 13, 2014 5:27 pm
 
Forum: Investing - Theory, News & General
Topic: Historical returns or current valuations to forecast future
Replies: 8
Views: 837

Re: Historical returns or current valuations to forecast fut

Bellavsky wrote: I think I can get 3% real, tax-free, on leveraged closed-end muncipal bond funds, currently trading at discounts of about 10%, with less risk than the stock market. Leveraged closed-end muni bond funds selling at 10% discount with a 3% real, tax free return and lower risk than the m...
by garlandwhizzer
Mon Oct 13, 2014 12:18 pm
 
Forum: Investing - Theory, News & General
Topic: Historical returns or current valuations to forecast future
Replies: 8
Views: 837

Re: Who should regularly contribute to taxable investments?

If your monthly income well exceeds your expenses and your ability to stash investment dollars away in tax deferred spaces, regular monthly investments into a taxable personal account is a great idea. If you're doing this I suggest TSM as the vehicle of choice because: 1. It is very tax efficient (l...
by garlandwhizzer
Mon Oct 13, 2014 11:40 am
 
Forum: Investing - Theory, News & General
Topic: Who should regularly contribute to taxable investments?
Replies: 34
Views: 3770

Re: How to win the loser's game #6

Nothing new but I loved it. I believe that viewing videos like this should be part of a person's educational experience. We now graduate legions of people from high schools, colleges, graduate and professional schools, etc., who know absolutely nothing about how markets work or the basics of investi...
by garlandwhizzer
Sun Oct 12, 2014 9:34 pm
 
Forum: Investing - Theory, News & General
Topic: How to win the loser's game #6
Replies: 2
Views: 988

The Rise and Fall of Performance Investing

A great new paper by Charles Ellis. Telling the truth simply and clearly about the superiority of index investing. There was a time long ago (50 years) when active management, if done very well, could produce returns that beat the market on a fairly consistent basis, largely because of market ineffi...
by garlandwhizzer
Sun Oct 12, 2014 12:37 pm
 
Forum: Investing - Theory, News & General
Topic: The Rise and Fall of Performance Investing
Replies: 5
Views: 592

Re: is anything 'cheap' out there?

Simplegift wrote: by Simplegift » Fri Oct 10, 2014 2:33 pm Unless investors want to seek out cheaper, exceptionally risky assets (Russian equities, oil service stocks, etc.), today's high asset values all across the board point to lower expected portfolio returns for at least the next decade — and p...
by garlandwhizzer
Fri Oct 10, 2014 4:13 pm
 
Forum: Investing - Theory, News & General
Topic: is anything 'cheap' out there?
Replies: 54
Views: 5686

Re: A close look at factors in real world,

That is a fascinating and thoroughly researched paper, jaab, thanks for the post. Much food for thought.

Garland Whizzer
by garlandwhizzer
Wed Oct 08, 2014 4:55 pm
 
Forum: Investing - Theory, News & General
Topic: A close look at factors in real world,
Replies: 18
Views: 2614

Re: Will Interm-Term Inv Grade Bonds Keep With Inflation?

dbr wrote: The two amount to perhaps 3% between TIPS and Investment grade that is explained by not understanding what TIPS yield means and what the extra risk is doing to help investment grade. TIPS may have more risk in duration. Believe it or not, dbr, I do understand the difference between a real...
by garlandwhizzer
Wed Oct 08, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: Will Interm-Term Inv Grade Bonds Keep With Inflation?
Replies: 13
Views: 1391

Re: Monthly or annual returns for csrp indices

Thanks, jaab, for that data web site. Very comprehensive.

Garland Whizzer
by garlandwhizzer
Wed Oct 08, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Monthly or annual returns for csrp indices
Replies: 9
Views: 674

Re: A close look at factors in real world,

Excellent post, Larry, thanks. Very interesting about the failure of hedge funds and institutions to significantly dilute the premiums up to now. The more thorny question it seems to me is not do premiums persist in long only portfolios after reasonable estimates of trading costs but how successful ...
by garlandwhizzer
Wed Oct 08, 2014 12:07 pm
 
Forum: Investing - Theory, News & General
Topic: A close look at factors in real world,
Replies: 18
Views: 2614

Re: Will Interm-Term Inv Grade Bonds Keep With Inflation?

Steadfast wrote: If you are concerned about your bonds keeping pace with inflation, allocate an appropriate portion of them to TIPS in addition to nominal bonds. I have this concern and so I allocate 33% of bonds to TIPS in my IRA. Good point, Steadfast. The only problem is that at present Vanguard'...
by garlandwhizzer
Tue Oct 07, 2014 8:06 pm
 
Forum: Investing - Theory, News & General
Topic: Will Interm-Term Inv Grade Bonds Keep With Inflation?
Replies: 13
Views: 1391

Re: today's WSJ page 1...interesting

There are a few experts who have trading formulas that consistently beat the market. Obviously they must keep it secret so as not to overgraze the alpha while they continue to reap the benefits. Not many can do this, only a very few names come to mind. Bernard Madoff, "Sir" Alan Stanford.....
by garlandwhizzer
Tue Oct 07, 2014 12:47 pm
 
Forum: Investing - Theory, News & General
Topic: today's WSJ page 1...interesting
Replies: 22
Views: 3300
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