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Re: California affordable care act rates for 2014 released

Those who can afford the higher rates will not get subsidies. They will lose the option of buying catastrophic insurance. If they have any sort of assets to protect, I doubt they would have chosen the catastrophic plan in the first place anyway. It seems like you don’t understand the true purpose o...
by kmok
Sat Jun 01, 2013 10:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: California affordable care act rates for 2014 released
Replies: 143
Views: 12384

Re: California affordable care act rates for 2014 released

Those who can afford the higher rates will not get subsidies. They will lose the option of buying catastrophic insurance. If they have any sort of assets to protect, I doubt they would have chosen the catastrophic plan in the first place anyway. It seems like you don’t understand the true purpose o...
by kmok
Sat Jun 01, 2013 3:18 am
 
Forum: Personal Finance (Not Investing)
Topic: California affordable care act rates for 2014 released
Replies: 143
Views: 12384

Re: Snickers helps US eat healthier

This is call inflation. They are just smart is justifying the price increased.
by kmok
Thu May 30, 2013 11:08 pm
 
Forum: Personal Consumer Issues
Topic: Snickers helps US eat healthier
Replies: 4
Views: 881

Re: Poll: Is The Value Premium A Risk Story Or Behavioral

So why are the risks associated specifically with Small and Value stocks so much more worthwhile than other sorts of market risks? No one is saying small and value risk premium is more worthwhile than the risk premium of stocks vs bonds, or junk bonds vs high grade corporate bonds, or corporate bon...
by kmok
Thu May 30, 2013 1:02 am
 
Forum: Investing - Theory, News & General
Topic: Poll: Is The Value Premium A Risk Story Or Behavioral
Replies: 24
Views: 1190

Re: Poll: Is The Value Premium A Risk Story Or Behavioral

Could someone quickly explain why Value and Small stocks are expected to have a risk premium? The historical data indicates that they may, and I've read the Fama-French paper on the 3-factor topic, tilting, etc. But I don't get intuitively why they should have a premium if the Market is Efficient a...
by kmok
Wed May 29, 2013 11:33 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Is The Value Premium A Risk Story Or Behavioral
Replies: 24
Views: 1190

Re: Reconciling history of nominal GDP vs. S&P 500 return

I would think one of the factor is international expansion. There should be a lot higher foreign revenue as a % of total revenue nowadays then 85 years ago, which is partially offset by an increase of US revenue from foreign companies.
by kmok
Wed May 29, 2013 10:24 pm
 
Forum: Investing - Theory, News & General
Topic: Reconciling history of nominal GDP vs. S&P 500 return
Replies: 10
Views: 862

Re: Poll: Is The Value Premium A Risk Story Or Behavioral

letsgobobby wrote:but what does 'risk' mean?

Risk means uncertainty of returns
by kmok
Wed May 29, 2013 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Is The Value Premium A Risk Story Or Behavioral
Replies: 24
Views: 1190

Re: Poll: Is The Value Premium A Risk Story Or Behavioral

For the record or for purposes of this poll, would someone care to define what is meant by 'behavioral' or 'risk' in this context? So that we are all operating on the same assumptions. :wink: Risk means the portion of the value premium that is supported by higher risk. That value stock offer higher...
by kmok
Wed May 29, 2013 5:23 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: Is The Value Premium A Risk Story Or Behavioral
Replies: 24
Views: 1190

Re: NPV for Bogleheads

1. Yes, I would think so. 2. I would use the expected return based on my asset allocation, and account for the fact that my asset allocation be more conservative going forward. I would add that it is important to consider the probability of wanting to pay off the mortgage early some point in the fut...
by kmok
Wed May 29, 2013 5:14 pm
 
Forum: Investing - Theory, News & General
Topic: [Net Present Value] NPV for Bogleheads
Replies: 80
Views: 3919

Re: California affordable care act rates for 2014 released

It is impossible to be impressed with Obamacare yet. Obamacare has programs such as Transitional Reinsurance Program and Risk Corridors that provide incentive for insurance companies to offer low premiums. These two programs are not long term answers and only last till 2016. We will know whether Ob...
by kmok
Wed May 29, 2013 12:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: California affordable care act rates for 2014 released
Replies: 143
Views: 12384

Re: California affordable care act rates for 2014 released

It is impossible to be impressed with Obamacare yet. Obamacare has programs such as Transitional Reinsurance Program and Risk Corridors that provide incentive for insurance companies to offer low premiums. These two programs are not long term answers and only last till 2016. We will know whether Oba...
by kmok
Wed May 29, 2013 11:00 am
 
Forum: Personal Finance (Not Investing)
Topic: California affordable care act rates for 2014 released
Replies: 143
Views: 12384

Re: California affordable care act rates for 2014 released

Using rates from the lowest cost company is a bit disingenuous when some of these networks only have a few hundred doctors (compared to national PPO's with hundreds of thousands of providers)...I don't know anyone that would want to buy a health insurance policy with so few providers. Okay, you pre...
by kmok
Wed May 29, 2013 10:37 am
 
Forum: Personal Finance (Not Investing)
Topic: California affordable care act rates for 2014 released
Replies: 143
Views: 12384

Re: Is This Correct About International Equities

A japanese in the late 80s might also see no points of investing overseas. That didn't end very well. Can the same "Loss Decades" happen in the US stock market? Absolutely. You are less diversified if you only invest in US stocks in the equity portion of your portfolio, though I definitely...
by kmok
Wed May 22, 2013 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: Is This Correct About International Equities
Replies: 31
Views: 2020

Re: Compound Interest

Don't look at it in number of shares; Look at it in dollar terms. You can only benefit from compounding if you take money out less than the gains. Since companies normally don't distribute all of the gains through dividends, you can still compound if you don't reinvest your dividends, though the com...
by kmok
Sat May 18, 2013 3:29 am
 
Forum: Investing - Theory, News & General
Topic: Compound Interest
Replies: 24
Views: 2167

Re: The trickiest question?

What I am questioning is the idea that when (or before) you reach some "number" you should be very conservative. My own opinion is that you should take a moderate amount of risk to get there, and continue that style after you get there. Why lock yourself in to the minimum, when the upside...
by kmok
Sat May 18, 2013 1:34 am
 
Forum: Investing - Theory, News & General
Topic: The trickiest question?
Replies: 34
Views: 3362

Re: Roth... to convert or not to convert?

The general concept is if the marginal tax rate is the same right now and gong forward, it would be beneficial to convert, provided you have money outside of retirement accounts to pay taxes , as conversion means you can put more value in retirement accounts. This is actually NOT a prerequisite for...
by kmok
Thu May 16, 2013 9:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth... to convert or not to convert?
Replies: 36
Views: 1793

Re: Roth... to convert or not to convert?

The general concept is if the marginal tax rate is the same right now and gong forward, it would be beneficial to convert, provided you have money outside of retirement accounts to pay taxes, as conversion means you can put more value in retirement accounts. Thanks for the reply, So if I'm understa...
by kmok
Thu May 16, 2013 8:05 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth... to convert or not to convert?
Replies: 36
Views: 1793

Re: Roth... to convert or not to convert?

The general concept is if the marginal tax rate is the same right now and gong forward, it would be beneficial to convert, provided you have money outside of retirement accounts to pay taxes, as conversion means you can put more value in retirement accounts.
by kmok
Thu May 16, 2013 7:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth... to convert or not to convert?
Replies: 36
Views: 1793

Re: Retirement distribution

First off all, you might want to rename the thread to retirement contribution. On your question, the general contribution order is (1) contribute to 401k till you get the maximum employer match (2) contribute to ira or roth ira (3) max your 401k contribution (4) invest via taxable account. Note that...
by kmok
Thu May 16, 2013 4:17 pm
 
Forum: Personal Finance (Not Investing)
Topic: Retirement contribution
Replies: 5
Views: 938

Re: Tax-Efficient Asset Location

I wonder how this comparison could be made fair? I'm not sure how rebalancing could be incorporated - I think this problem exceeds my knowledge of Excel, haha. Rebalancing should not impact the comparison, it is just unrealistic. To make the comparison fair, you can make it $1k in Roth and $1,176 (...
by kmok
Wed May 15, 2013 7:17 pm
 
Forum: Investing - Theory, News & General
Topic: Tax-Efficient Asset Location
Replies: 8
Views: 848

Re: Tax-Efficient Asset Location

The reason why investor B is doing better is because these two investors has different asset allocation. Investor B has more than 50% invested in stocks to begin as 1k in roth is more than 1k in taxable accounts. Similarly, investor A has more than 50% invested in bonds. Thus, it is not a fair compa...
by kmok
Wed May 15, 2013 3:43 pm
 
Forum: Investing - Theory, News & General
Topic: Tax-Efficient Asset Location
Replies: 8
Views: 848

Re: Black Scholes Option Question

The longer duration of the option, the greater the value of the option since you will have more time for appreciation in value. Also, for the $38.65 option, you say the intrinsic value is $37.13 which is very close to the option value, but it is also important to know what is the current stock price...
by kmok
Tue May 14, 2013 9:10 pm
 
Forum: Investing - Help with Personal Investments
Topic: Black Scholes Option Question
Replies: 8
Views: 622

Re: SF BayArea - Buy Home or not

Do you have a strong preference (other than financial aspect) to want to buy rather than rent? If you don't, then I would suggest you to should consider buying a house in a few years when you have save enough for down payment without using your retirement accounts. If you have a strong preference to...
by kmok
Mon May 13, 2013 2:13 pm
 
Forum: Personal Finance (Not Investing)
Topic: SF BayArea - Buy Home or not
Replies: 45
Views: 2550

Re: Home Ownership Costs

The Wizard wrote:As time goes on, the spread between renting and buying gets bigger, since you've locked in your mortgage payment.

It seems like you implied that buying is better on a long run. That is not necessay true if you consider opportunty cost.
by kmok
Fri May 03, 2013 6:42 pm
 
Forum: Personal Finance (Not Investing)
Topic: Home Ownership Costs
Replies: 12
Views: 1042

Re: I need help with CAP rates

Cap rate is the ratio of the operating income divided by the cost. So therr are two variables, cost, net operating income, and cap rate. If you have a reasonable cap rate for your property, you can calculate the proprrty value. If you use the appraiser's value you can calculate the cap rate to see i...
by kmok
Fri May 03, 2013 3:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: I need help with CAP rates
Replies: 11
Views: 893

Re: Taxes and ESPP

You cannot choose. Long term gain first offset long term losses; Short term gain offset short term losses. Then the net long term gain/loss offset net short term gain/loss.
by kmok
Fri May 03, 2013 12:40 am
 
Forum: Personal Finance (Not Investing)
Topic: Taxes and ESPP
Replies: 1
Views: 229

Re: Choosing Roth IRA vs TIRA - Are my Calculations Correct?

If you are going to max your contributions, a roth IRA allows you to contribute more, since 5,500 after tax is more than 5,500 pre tax. Thus, Roth allows you to contribute more on a tax shelter accout which otherwise would be at a taxable account.
by kmok
Thu May 02, 2013 7:51 pm
 
Forum: Investing - Help with Personal Investments
Topic: Choosing Roth IRA vs TIRA - Are my Calculations Correct?
Replies: 5
Views: 390

Re: Question re: Apple's upcoming debt offering

Since the debt is being used for share buybacks instead of expansion, there is a net loss to shareholders. Less future net income is offset by less shares outstanding due to share buybacks. Stockholders who hold the same number of shares will own more % of the company resulting from the shares buyb...
by kmok
Wed May 01, 2013 5:55 pm
 
Forum: Investing - Theory, News & General
Topic: Question re: Apple's upcoming debt offering
Replies: 16
Views: 1586

Re: Contemplating buying rental property - what to consider?

Here are a few points to consider: It seems like your $1,940 per year in profit is based on 100% occupancy. You should consider something lower, such as 90%, or 80%, just in case there are some vacancies. The $1,940 is also before any utilities. Make sure that is included in the numbers. You will ge...
by kmok
Tue Apr 30, 2013 1:24 am
 
Forum: Investing - Help with Personal Investments
Topic: Contemplating buying rental property - what to consider?
Replies: 38
Views: 2082

Re: Is this an adequate model for inflation?

This is a unique way of factoring inflation, to say the least. I am not sure you need to make it this complicated. I don't quite understand where are you putting your slush fund, and what action are you actually taken on the $95k 'withdraw'. Can you just do an analysis with real numbers instead of n...
by kmok
Mon Apr 29, 2013 9:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Is this an adequate model for inflation?
Replies: 7
Views: 910

Re: Anybody watch Zeitgeist documentary?

1. True
2. If the biggest buyers of treasury securities become the biggest sellers, there can be problems, but hyperinflation would still be unlikely.
3. True
by kmok
Mon Apr 29, 2013 2:30 pm
 
Forum: Investing - Theory, News & General
Topic: Anybody watch Zeitgeist documentary?
Replies: 3
Views: 641

Re: Interest Rates and Property Values

I am not sure 25% drop is accurate. It is more like 12% as described by billyt. Obviously there are a lot of other factors that comes into play. Any models, no matter how complicated, has a lot of limitations.
by kmok
Fri Apr 26, 2013 2:12 pm
 
Forum: Investing - Theory, News & General
Topic: Interest Rates and Property Values
Replies: 16
Views: 1443

Re: GDP

Given my low economic education compare to others. )))Please help me to understand how the Smarty's predicted 3%+???? I even expected lower GDP past quarter given higher payroll-taxes, higher gas prices and so on. Are they [smarty's] flying in the sky's?:twisted: It might be counter-intuitive, but ...
by kmok
Fri Apr 26, 2013 11:33 am
 
Forum: Investing - Help with Personal Investments
Topic: GDP
Replies: 10
Views: 489

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