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Re: Charley Ellis Guesting on Bob Brinker today

I'll have to take up for Bob here. He correctly called the tech collapse of 2000 6 months before it happened. Those who followed his market timing advice (to move 60% of your equity holdings into bonds or cash) are not crying because they broke with Boglehead orthodoxy and market timed. Having made ...
by garlandwhizzer
Sun Mar 01, 2015 8:47 pm
 
Forum: Investing - Theory, News & General
Topic: Charley Ellis Guesting on Bob Brinker today
Replies: 8
Views: 595

Re: Dividends and Market Slides

Stocks that pay good dividends tend to be value stocks, large cap stocks, and to operate in mature seasoned markets not rapidly growing ones. Their cash flows in general tend to be more reliable but to grow more slowly than their opposite: smaller cap growth stocks in rapidly expanding and rapidly c...
by garlandwhizzer
Sun Mar 01, 2015 8:12 pm
 
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 47
Views: 2077

Re: What is the BH consensus on international bonds?

y Noobvestor » Sun Mar 01, 2015 2:42 am Total International Bond has a current yield of less than 1% and a duration of over 7 years. I can see no good reason to hold it over CDs or other bonds. Surprised there is even discussion around this. I know I'm normally the international advocate, but in th...
by garlandwhizzer
Sun Mar 01, 2015 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: What is the BH consensus on international bonds?
Replies: 50
Views: 3283

Re: Likely impact on equities of interest rate increase

When yields rise above 5% - 6%, that critical inflection point, there is always inflation present. Inflation acts as a discount on future stock earnings as well as on future bond returns. There are two important questions. First, what is the real bond interest rate (yield minus inflation) and the re...
by garlandwhizzer
Sun Mar 01, 2015 12:55 pm
 
Forum: Investing - Theory, News & General
Topic: Likely impact on equities of interest rate increase
Replies: 7
Views: 605

Re: You and Your Dumb Money

"Dumb money" reflects sentiment more than fundamentals. When sentiment swings in either direction to extreme levels, it has a negative correlation with future returns. Excessive optimism precedes crashes, excessive pessimism precedes secular bull markets. Most sentiment indicators now show...
by garlandwhizzer
Sun Mar 01, 2015 12:21 pm
 
Forum: Investing - Theory, News & General
Topic: You and Your Dumb Money
Replies: 14
Views: 2037

Re: Past, present, and future of Berkshire - Annual letter

It is interesting that in earlier years Berkshire massively outperformed the S&P 500 but since 2009 it has underperformed that benchmark. This may be merely a pause in Warren's outperformance or it may be the effect of asset bloat. No matter how great you are as a stock picker if the volume of m...
by garlandwhizzer
Sat Feb 28, 2015 11:33 am
 
Forum: Investing - Theory, News & General
Topic: Past, present, and future of Berkshire - Annual letter
Replies: 29
Views: 2228

Re: i am retired and want to live in Hawaii

I am retired and I live in Hawaii. I can tell you that with the 4K/month income you will have a hard time of it here. I live on the Big Island which is supposedly the "cheap" place to live, but if you choose a nice part of it like Kona where I live the median house price is greater than 50...
by garlandwhizzer
Fri Feb 27, 2015 12:27 pm
 
Forum: Personal Consumer Issues
Topic: i am retired and want to live in Hawaii
Replies: 61
Views: 9130

Re: Aging Populations and Stock/Bond Market Returns

Simplegift, I think your point is excellent that we should expect lower equity returns in developed markets going forward relative to the past 50 - 80 years due largely to demographic trends. What to do about it is another question entirely. There are no easy choices out there now to produce histori...
by garlandwhizzer
Fri Feb 27, 2015 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: Aging Populations and Stock/Bond Market Returns
Replies: 31
Views: 3194

Re: Aging Populations and Stock/Bond Market Returns

Fascinating post, Simplegift, as usual from you. The US appears to be a standout among developed nations, the only one projected to have with an increasing work force. That work force however is growing very slowly relative to EMs. Another interesting chart would show the population that is beyond w...
by garlandwhizzer
Thu Feb 26, 2015 8:36 pm
 
Forum: Investing - Theory, News & General
Topic: Aging Populations and Stock/Bond Market Returns
Replies: 31
Views: 3194

Re: International increase in Target Retirement & LifeStrate

As for international bonds I don't see the need for them for US investors. The main purpose of bonds it seems to me is to provide stability against the volatility of equity. I believe that high quality US bonds fulfill that purpose quite well, better than currency hedged international bonds. Euro bo...
by garlandwhizzer
Thu Feb 26, 2015 7:55 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 119
Views: 7776

Re: International increase in Target Retirement & LifeStrate

I agree with nedsaid that at least part of the reason for this shift is relative valuations particularly in US versus INTL equity markets. The US has been in an exuberant 5+ year bull market and US stocks are generously priced on a fundamental basis relative to DM and especially EM. The increased ri...
by garlandwhizzer
Thu Feb 26, 2015 1:04 pm
 
Forum: Investing - Theory, News & General
Topic: International increase in Target Retirement & LifeStrategy
Replies: 119
Views: 7776

Re: Dual Momentum Investing

RunningRad, thank you for this very interesting post. I find the strategy interesting and expect that it will dampen overall portfolio volatility and possibly increase return at least in market cycles like we've just been through. In essence it is is a fixed formula for large tactical asset allocati...
by garlandwhizzer
Thu Feb 19, 2015 9:03 pm
 
Forum: Investing - Theory, News & General
Topic: Dual Momentum Investing
Replies: 55
Views: 4221

Re: Dual Momentum Investing

The chart posted by ginmqi makes a compelling case for Dual Momentum Investing. Interestingly, it underperformed initially in the later stages of the great bull market that ended in 2000 but more than made up for it in the bear market of 2000 - 2003. It got out of stocks early in that collapse and g...
by garlandwhizzer
Thu Feb 19, 2015 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: Dual Momentum Investing
Replies: 55
Views: 4221

Re: A case for long term government bonds

Mr. Shlling's crystal ball is now and has been for some time cloudy. During the current bull market of 2009 - present, he has been a consistent perma-bear even as the S&P with dividends re-invested has increased by 300%+. I personally don't believe that now's the time to load up on 30 year Treas...
by garlandwhizzer
Thu Feb 19, 2015 1:00 pm
 
Forum: Investing - Theory, News & General
Topic: A case for long term government bonds
Replies: 40
Views: 3089

Re: Why Active Management Fell Off a Cliff

Minus the exploitable accidents of large numbers of mom and pop investors, there’s simply less alpha to go around. The low hanging fruit has left and gone to Valley Forge, PA. In the absence of so many unskilled players, the field has become much more brutal, much more difficult to best. The Wizard...
by garlandwhizzer
Wed Feb 18, 2015 12:03 pm
 
Forum: Investing - Theory, News & General
Topic: Why Active Management Fell Off a Cliff
Replies: 6
Views: 1522

Re: 5.6% stable value fund - what allocation?

There is no way that any firm can preserve your principal and guarantee you for a lifetime of that high rate of return in this low yield environment and at the same time preserve your principal and give you access to it. There is risk, a lot of it, hidden somewhere in it. Reliably high dividends (th...
by garlandwhizzer
Sat Feb 14, 2015 5:44 pm
 
Forum: Investing - Theory, News & General
Topic: 5.6% stable value fund - what allocation?
Replies: 29
Views: 2525

Re: VSS- International Small Cap

Sometimes (like the last 5 years) DM outperformeds EM. And sometimes like the several years before that EM outperforms DM. If your strategy is to skate to where the puck was recently, switching out of VSS and into a DM small cap fund would be appropriate. Buying past performance is not however a rel...
by garlandwhizzer
Sat Feb 14, 2015 5:20 pm
 
Forum: Investing - Theory, News & General
Topic: VSS- International Small Cap
Replies: 13
Views: 1285

Re: Future Stock Returns in an Aging World?

Thanks, Simplegift, for this great and thought provoking post. I tend to agree with its conclusions, that both economic growth and stock returns are likely to decrease in the next 10 - 50 years relative to the their robust rates in the past century. Having said that, it is clear that the future is b...
by garlandwhizzer
Sat Feb 14, 2015 12:30 pm
 
Forum: Investing - Theory, News & General
Topic: Future Stock Returns in an Aging World?
Replies: 24
Views: 2294

Re: buy gold in euro terms

Johno wrote: But it is true mechanically that a USD investor (with no pre-existing stock of EUR cash) has to do two trades to carry out Gartman's idea. Those are: -sell EUR for USD *forward* (or via futures contracts) to a date by which you think the trade will pan out or from which you intend to r...
by garlandwhizzer
Fri Feb 13, 2015 5:40 pm
 
Forum: Investing - Theory, News & General
Topic: buy gold in euro terms
Replies: 27
Views: 1331

Re: buy gold in euro terms

Dennis Gartman's call to buy gold is based on 2 market timing moves, neither of which is certain to succeed. The first is the buy of gold at present in Euro terms when the Euro is depreciating and gold is appreciating more in Euro terms than in dollar terms. That sounds good on the surface. The prob...
by garlandwhizzer
Fri Feb 13, 2015 12:29 pm
 
Forum: Investing - Theory, News & General
Topic: buy gold in euro terms
Replies: 27
Views: 1331

Re: Passive Investing Makes Even More Sense In Inefficient M

Very interesting post, nisi, thanks. Perhaps this explains why indexing seems also to work well in areas like EM which are supposed to be inefficient markets. True investment skill is extremely rare in practice, and often, even when present, is either transient (ask Bill Miller and Bill Gross) or pu...
by garlandwhizzer
Wed Feb 11, 2015 1:37 pm
 
Forum: Investing - Theory, News & General
Topic: Passive Investing Makes Even More Sense In Inefficient Mkts
Replies: 8
Views: 1144

Re: The Future of Global Interest Rates — Trending Lower?

Another great post, Todd. I'd like to offer another point to consider in explaining why bond yields get lower as median age increases. As we get older our portfolios tend more and more to slant toward fixed income for safety and yield. Also older average populations tend to be in more affluent (non-...
by garlandwhizzer
Wed Feb 11, 2015 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1657

Re: Credit Suisse Yearbook 2015

Thanks to statman and Todd for this post. I always enjoy Credit Suisse Yearbooks and learn something from them.

Garland Whizzer
by garlandwhizzer
Wed Feb 11, 2015 1:01 pm
 
Forum: Investing - Theory, News & General
Topic: Credit Suisse Yearbook 2015
Replies: 3
Views: 579

Re: Primecap

I posted recently the question "Are there skilled investors?" and mentioned Primecap as an example of skill. Their record speaks for itself. Interestingly they do not load up on factors as such and instead concentrate on producing alpha which they do fairly reliably. Their portfolio has lo...
by garlandwhizzer
Wed Feb 11, 2015 12:13 pm
 
Forum: Investing - Theory, News & General
Topic: Primecap: The Best Stock Pickers You've Never Seen
Replies: 32
Views: 2590

Re: No "Value Premium" in real mutual funds

Good post and good comments. The small value premium is robust in the literature but tends to be less impressive with real life funds especially in recent years. Choosing a heavily tilted SV portfolio is not a slam dunk to achieve outperformance. You pay your money and take your chances. TSM is in m...
by garlandwhizzer
Mon Feb 09, 2015 4:15 pm
 
Forum: Investing - Theory, News & General
Topic: No "Value Premium" in real mutual funds
Replies: 32
Views: 3026

Re: Is Risk Real?

Yes, risk is real. One of the great and perplexing problems with it is that rarely do we perceive where the real risk is beforehand. We certainly perceive it afterwards. After the tech bubble collapsed in 2000, many saw it as an obvious and inevitable event in retrospect. Almost no one saw it coming...
by garlandwhizzer
Mon Feb 09, 2015 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Is Risk Real?
Replies: 74
Views: 3821

Re: Your Future According to Yale Star Robert J. Shiller

One of the problems in my opinion is that technology is creating a widening chasm between the educated-elite-tech savvy and the less educated non-elite masses who used to find high paying jobs in manufacturing. Facebook is a 208.4 billion dollar market cap business and it hires a grand total of 7,18...
by garlandwhizzer
Sun Feb 08, 2015 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10154

Re: WSJ - Simple, Bedrock Rules on Personal Finance

Great article. Simple, brief, to the point, and accurate.

Garland Whizzer
by garlandwhizzer
Sun Feb 08, 2015 12:12 pm
 
Forum: Investing - Theory, News & General
Topic: WSJ - Simple, Bedrock Rules on Personal Finance
Replies: 11
Views: 2135

Re: When 60/40 just isn't appropriate

I would like to suggest considering another point of view instead of 30/70, although I do think that Rick's logic is sound for many if not most retirees. First of all, the graphs look great and convincing for how successful this conservative portfolio is on backtesting. It's important to recall that...
by garlandwhizzer
Sat Feb 07, 2015 7:49 pm
 
Forum: Investing - Theory, News & General
Topic: When 60/40 just isn't appropriate
Replies: 127
Views: 13054

Re: Dave Ramsey says you shouldn't own bonds?

When stock prices collapse (2000-3, 2008-9) as they inevitably do from time to time, it is a great emotional comfort to have significant assets parked in high quality bonds. Having no bonds is in a sense like sailing a ship without an anchor. It's fine until the hurricane arrives. Very few investors...
by garlandwhizzer
Sat Feb 07, 2015 12:09 pm
 
Forum: Investing - Theory, News & General
Topic: Dave Ramsey says you shouldn't own bonds?
Replies: 64
Views: 8804

Re: Vanguard Total Bond - Not reccomended by Swedroe??

Taylor wrote:

In my opinion, ANY low-cost, good quality short- or intermediate-term bond fund will provide safety and income in a portfolio.

When experts have different opinions, it is often because it does not make a foreseeable difference.


1+

Garland Whizzer
by garlandwhizzer
Sat Feb 07, 2015 11:53 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Total Bond - Not reccomended by Swedroe??
Replies: 23
Views: 3763

Re: GNMA....Sell or hold

In response to my post, garlandwhizzer wrote: ...Treasuries at current yields are very much subject interest rate risk if and when inflation takes off. At that point the communal love affair with Treasuries might turn a little sour... Nisi asked, Why would GNMA's be any different? Good question. GNM...
by garlandwhizzer
Fri Feb 06, 2015 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: GNMA....Sell or hold
Replies: 46
Views: 5120

Re: GNMA....Sell or hold

Like nedsaid, I get a little tired of people beating up on GNMAs. The bond market is in my opinion generally a very efficient pricing mechanism between risk and yield. GNMAs are on the efficient frontier of that spectrum, a bit riskier than Treasuries but with higher yields. They fit in between inve...
by garlandwhizzer
Fri Feb 06, 2015 12:07 pm
 
Forum: Investing - Theory, News & General
Topic: GNMA....Sell or hold
Replies: 46
Views: 5120

Re: Value Premium & Interest Rates

Derek has it right. Value generally does better than growth in a rising inflationary environment. Put in a different, more to the point way, growth is more adversely affected by inflation than value. When you buy growth you pay more for every dollar of present earnings because you're paying up front...
by garlandwhizzer
Fri Feb 06, 2015 11:41 am
 
Forum: Investing - Theory, News & General
Topic: Value Premium & Interest Rates
Replies: 2
Views: 286

Re: Bogle: The stock market seems to be ignoring the big ris

Great interview. Bogle is amazing. Wish we had more like him. Never get tired of listening to him. He tells it like he sees it and he has sufficient wisdom and experience to see it like it really is.

Garland Whizzer
by garlandwhizzer
Thu Feb 05, 2015 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Bogle: The stock market seems to be ignoring the big risks
Replies: 13
Views: 2220

Re: Bill Gross warns about bonds. Are you worried?

nobsinvestor wrote: Do you believe the total return for investment-grade intermediate-term bond/bond funds will at least keep pace with inflation over say at least the YTM period (say 5-8 years)? Yes, I do believe they will at least keep pace with inflation. As inflation increases (if and when is s...
by garlandwhizzer
Thu Feb 05, 2015 12:15 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross warns about bonds. Are you worried?
Replies: 38
Views: 5124

Re: Bill Gross warns about bonds. Are you worried?

The return on bonds is closely related to its yield if held to maturity. Current yields are at or very close to all time lows. What has been inflating bond returns for the last 22 years is ever decreasing interest rates and inflation which means ever increasing principal value of existing bonds. Int...
by garlandwhizzer
Tue Feb 03, 2015 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Bill Gross warns about bonds. Are you worried?
Replies: 38
Views: 5124

Re: Shiller: "Become a smart beta person"

Fine to buy Greek bonds if you're a risk taker but it should certainly be counted as equity in your asset allocation. While returns might be excellent going forward (or the opposite) Greek bonds have at least as much risk as US equities. In most portfolios, bonds are for security, a port in the equi...
by garlandwhizzer
Mon Feb 02, 2015 1:27 pm
 
Forum: Investing - Theory, News & General
Topic: Shiller: "Become a smart beta person"
Replies: 20
Views: 2571

Re: Are there skilled investors and managers?

Jo Money wrote: Currently VPMCX has a median market-cap of $72.1-billion which might make it appear comparable to an S&P500 index which has a median market-cap of $77.2-billion... but if you look at the "Portfolio Characteristics" back in 2005 you'd see it significantly smaller (middl...
by garlandwhizzer
Sun Feb 01, 2015 12:43 pm
 
Forum: Investing - Theory, News & General
Topic: Are there skilled investors and managers?
Replies: 25
Views: 1433

Are there skilled investors and managers?

I believe that there are in fact skilled managers who can consistently beat the market. They are exceptionally rare, however, and those who show consistent success tend eventually to return to beta or less due to asset bloat from performance chasing investors. Warren Buffett is a classic example and...
by garlandwhizzer
Sat Jan 31, 2015 4:57 pm
 
Forum: Investing - Theory, News & General
Topic: Are there skilled investors and managers?
Replies: 25
Views: 1433

Re: "Planet Money" is shorting SPY

Shorting a security is based on the concept that you know better where the price of a stock or etf is going than either the market (which has mis-priced it in the first place) or the guy who is on the other side of the transaction (who is betting against your short) does. The strategy works consiste...
by garlandwhizzer
Sat Jan 31, 2015 12:44 pm
 
Forum: Investing - Theory, News & General
Topic: "Planet Money" is shorting SPY
Replies: 26
Views: 3090

Re: Forecasting REIT dividends

nedsaid wrote: Holy Cow!! REITs must really be overvalued if they are selling off their component properties. If not a sell signal, certainly an indication one shouldn't be piling into these things. Gosh, if the Real Estate Investment Trusts don't believe in real estate, that is like saying the Pop...
by garlandwhizzer
Fri Jan 30, 2015 11:42 am
 
Forum: Investing - Theory, News & General
Topic: Forecasting REIT dividends
Replies: 13
Views: 1332

Re: Any other investors with 70/30 portfolio?

I'm 68 and I'm 75/25 which admittedly is high on the equity side for someone my age. Fortunately my portfolio is large enough that I can afford to take lots of risk and I am willing to do so. That is in fact partly how the portfolio got so large in the first place. I've been at this for 27 years, lo...
by garlandwhizzer
Fri Jan 30, 2015 11:03 am
 
Forum: Investing - Theory, News & General
Topic: Any other investors with 70/30 portfolio?
Replies: 40
Views: 3370

Re: "Retiring in a Low-Return Environment"

The difficulties of actively predicting anything for the next 30 years are immense. Too much time, too many variables, too many unforeseen things happening. I think the message is basically right, lower returns expected for both stocks and bonds over the next decade or so, but I do not accept that a...
by garlandwhizzer
Thu Jan 29, 2015 9:25 pm
 
Forum: Investing - Theory, News & General
Topic: "Retiring in a Low-Return Environment"
Replies: 71
Views: 7327

Re: Forecasting REIT dividends

To start out with you need to understand the REIT index fund's yield. The following is an explanation from Vanguard. The current unadjusted effective yield is 3.41% as of 12/31/2014, which is based on the full amount of REIT distributions (dividend income, as well as return of capital and capital ga...
by garlandwhizzer
Thu Jan 29, 2015 9:10 pm
 
Forum: Investing - Theory, News & General
Topic: Forecasting REIT dividends
Replies: 13
Views: 1332

Re: The missing value premium- a 10 year global lookback

Derek Tinnan wrote: What's a more likely explanation, the fact that inflation has been declining (2.13 past 10 years, 1.69 past 5 years, 1.33 past 3 years, 0.76 past year, -1.48 past 6 months...) or the market finally arbed HmL away? I submit that no one knows the answer to this question with a high...
by garlandwhizzer
Thu Jan 29, 2015 8:49 pm
 
Forum: Investing - Theory, News & General
Topic: The missing value premium- a 10 year global lookback
Replies: 57
Views: 3311

Re: Earnings growth estimates vanguard

Forward PEs and forward growth rates are guesses, nothing more. Vanguard sticks with facts. Morningstar estimates forward growth rates and forward PEs for mutual funds and etfs under their portfolio tab for what it's worth. If you follow their estimates over time you'll find that they are often laug...
by garlandwhizzer
Thu Jan 29, 2015 1:19 pm
 
Forum: Investing - Theory, News & General
Topic: Earnings growth estimates vanguard
Replies: 1
Views: 222

Re: Backtesting Presentation

Interesting.

Garland Whizzer
by garlandwhizzer
Wed Jan 28, 2015 1:29 pm
 
Forum: Investing - Theory, News & General
Topic: Backtesting Presentation
Replies: 1
Views: 240

Re: Mr. Bogle on CNBC today--International and Bonds

Taylor Larimore wrote: No one knows which funds will outperform in the future. One of our contributors listed 150 different portfolios recommended by different investment experts. There is more than one road to Dublin. Stay-the-course. 1+ Rather than arguing over how many angels can dance on the hea...
by garlandwhizzer
Wed Jan 28, 2015 1:05 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Bogle on CNBC today--International and Bonds
Replies: 50
Views: 6412

Re: Question on investing/ personal finance newsletters....

I think Bob Brinker is as good as anyone. He's not always right--made a bad call to get back into tech too early in 2000-1--but he was right about the tech bubble in 1999, predicting a collapse well before it happened, and also about when to get back into the market both in 2003 and in 2009. He is m...
by garlandwhizzer
Tue Jan 27, 2015 11:21 am
 
Forum: Investing - Theory, News & General
Topic: Question on investing/ personal finance newsletters....
Replies: 7
Views: 603
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