Search found 12518 matches

by larryswedroe
Sat Aug 29, 2015 7:11 am
Forum: Investing - Theory, News & General
Topic: part two on the crisis, part 3 on Monday
Replies: 20
Views: 2241

Re: part two on the crisis, part 3 on Monday

UHCOP
No whenever you have new cash you should REBALANCE, so buy the losers to get back closer to your target
Larry
by larryswedroe
Fri Aug 28, 2015 9:01 am
Forum: Investing - Theory, News & General
Topic: part 1 of my webinar on the current crisis and how to think about it
Replies: 9
Views: 1720

Re: part 1 of my webinar on the current crisis and how to think about it

thinking about writing a fourth piece--what lessons did you learn from this dip? And did you take the right or wrong lesson?
Larry
by larryswedroe
Fri Aug 28, 2015 9:00 am
Forum: Investing - Theory, News & General
Topic: part two on the crisis, part 3 on Monday
Replies: 20
Views: 2241

Re: part two on the crisis, part 3 on Monday

One should not "buy" on dips because you don't know if the dip is only the beginning of much bigger dip. One should buy to rebalance, or sell to rebalance and maintain your plan. Period. If you buy just because market has gone down then you could exceed your ability, willingness and need t...
by larryswedroe
Tue Aug 25, 2015 5:13 pm
Forum: Investing - Theory, News & General
Topic: Why China Matters to the World Economy
Replies: 10
Views: 1493

Re: Why China Matters to the World Economy

What matters isn't the size of GNP but how much it TRADES with rest of world. Consider if CHINA was half of world GNP but didn't trade at all with rest of world what happened in China would have very little impact on other economies. And China IMPORTS from the developed world (with exception of comm...
by larryswedroe
Fri Aug 21, 2015 7:51 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

yesterdaysnews, and was up yesterday, but that's just a couple of days. There have been years when both stocks and QSPIX both down, the correlation isn't negative 1 so should expect that to on occasion happen.


Larry
by larryswedroe
Fri Aug 21, 2015 5:10 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Longinvest Equity risk premium is simply the historical return of stocks, annual average, minus the annual average return on t-bills (for US). We do know that stocks are more risky than bonds in your example, that's the evidence in any conventional sense of the word. Now we don't know which will pro...
by larryswedroe
Fri Aug 21, 2015 4:37 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

longinvest RE definition of bet. That is precisely why I put a " " around the term. You can call it what you want but that's just semantics. You are betting on something, you are just calling it an investment. And I would not disagree of course. But the investment is based on a bet that th...
by larryswedroe
Fri Aug 21, 2015 3:39 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

longinvest fWIW you are confusing many issues, not reading clearly what I have said. First, by investing in stocks you are making a "bet" that they will outperform, otherwise you'd be very foolish to take the much greater risks of stocks. There must be an EX-ANTE risk premium to compensate...
by larryswedroe
Fri Aug 21, 2015 12:26 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Longinvest Just simple question. The evidence on the equity premium is persistent and pervasive. And you are betting on it continuing. Are you predicting the future? If rational, and I assume you are, you are predicting a premium as the mean (expected) but with a very wide dispersion of potential ou...
by larryswedroe
Fri Aug 21, 2015 12:08 pm
Forum: Investing - Theory, News & General
Topic: For those interested-my interview with Charles Jaffe-re Incredible Shrinking Alpha
Replies: 1
Views: 286

For those interested-my interview with Charles Jaffe-re Incredible Shrinking Alpha

You can find the link to the August 12 interview I did with Charles Jaffe on my new book The Incredible Shrinking Alpha here http://www.moneylifeshow.com/highlights.asp

Hope you find it of interest
Larry
by larryswedroe
Fri Aug 21, 2015 11:05 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Maynard I knew you knew it was being cute, just bringing that to the attention of others. Here's another interesting point most investors miss, with typical balanced portfolios the VAST majority of the risks are in stocks, which is behind the idea of risk parity strategies (which I'm not particularl...
by larryswedroe
Fri Aug 21, 2015 10:35 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Few things First we all have to "predict" the future to some degree. But IMO it isn't about luck as Simons is quoted as saying. It's about putting the odds of success on your side by using the evidence we have. This is no different with the equity risk premium. I'm confident Simon doesn't ...
by larryswedroe
Fri Aug 21, 2015 9:17 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Let's assume that value was based on data mining by Fama and French. Now you run the same test using the same metric in the pre sample period and you get the same basic finding. Now you run the same test in the post sample and get the same basic finding. Now you run the same test in say 30 different...
by larryswedroe
Thu Aug 20, 2015 4:56 pm
Forum: Investing - Theory, News & General
Topic: Pascal's Wager and prudent investment decisions
Replies: 29
Views: 3258

Pascal's Wager and prudent investment decisions

http://mutualfunds.com/news/2015/08/20/pascals-wager-and-the-making-of-prudent-decisions/ Thought you would find this of interest. When I was very young a very smart person taught me the story of Pascal's Wager and it has served me well over my long career in running trading rooms, advising many of...
by larryswedroe
Mon Aug 17, 2015 10:12 pm
Forum: Investing - Theory, News & General
Topic: The Risk Quandary
Replies: 29
Views: 2461

Re: The Risk Quandary

For better or worse, risk is a very complex issue and can have nothing to do with the risk of a loss. For example, you can invest 100% of your money in Tbills and have 0 risk of nominal loss and possibly 0 chance of achieving your financial goals. So you have to think about risk in multi faceted way...
by larryswedroe
Sun Aug 16, 2015 6:29 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

First, it should NOT be compared to an equity fund since it has about half the expected volatility, and no correlation with equities, nor should it be compared to a bond fund (say high quality intermediate) as it has no correlation to bonds but about 2x the volatility of that type fund. Second, if y...
by larryswedroe
Sun Aug 16, 2015 2:19 pm
Forum: Investing - Theory, News & General
Topic: The Risk Quandary
Replies: 29
Views: 2461

Re: The Risk Quandary

Paul, volatility has always been just ONE measure of risk, not THE measure.
by larryswedroe
Sun Aug 16, 2015 10:14 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Exactly, based on the historical premiums and the leverage applied the expected return is equity like with about half the volatility of equity. The return is expected to be more than bond like with about 2x volatility of a high quality bond fund. But of course that is no guarantee, any more than one...
by larryswedroe
Sat Aug 15, 2015 7:32 am
Forum: Investing - Theory, News & General
Topic: commodities and long-short strategies
Replies: 7
Views: 747

Re: commodities and long-short strategies

Nisprius
should include if you run a mechanical systematic approach but also don't change your AA. Trend following is systematic but not passive because it changes equity to bond allocations, So I need to add that to my passive definition. Will try to keep that in mind
larry
by larryswedroe
Sat Aug 15, 2015 7:26 am
Forum: Investing - Theory, News & General
Topic: the 12 commandments of gold bugs
Replies: 62
Views: 4254

the 12 commandments of gold bugs

I thought this was fabulous from Barry Ritholtz http://www.etf.com/sections/index-investor-corner/swedroe-12-gold-bug-commandments
had to share
Best wishes
Larry
by larryswedroe
Fri Aug 14, 2015 12:35 pm
Forum: Investing - Theory, News & General
Topic: commodities and long-short strategies
Replies: 7
Views: 747

Re: commodities and long-short strategies

Tamales Here's my definition of active. Individual stock selection and or market timing (going in and out) that cannot be replicated as judgments are used. Passive is a systematic/rules based approach which is replicable and based on evidence supporting the strategy that is persistent and pervasive....
by larryswedroe
Fri Aug 14, 2015 10:23 am
Forum: Investing - Theory, News & General
Topic: commodities and long-short strategies
Replies: 7
Views: 747

Re: commodities and long-short strategies

Andy, hedge funds aren't dirty word, if they actually hedge something and the strategies are based on peer reviewed academic research showing persistent and pervasive premiums with logical risk and or behavioral explanations (and limits to arbitrage and costs preventing corrections of mispricings). ...
by larryswedroe
Fri Aug 14, 2015 7:54 am
Forum: Investing - Theory, News & General
Topic: commodities and long-short strategies
Replies: 7
Views: 747

commodities and long-short strategies

http://www.etf.com/sections/index-investor-corner/swedroe-virtues-longshort-strategy?nopaging=1
New paper findings consistent with prior research, hope you find it of interest
Larry
by larryswedroe
Thu Aug 13, 2015 5:19 pm
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

Andy, yes in the original study over the specific time period the HISTORICAL return was high, but I don't know any paper that FORECASTED high returns. In fact in my debate/discussions with Rick on the issue I made very clear always that one should assume on individual commodities a zero real return ...
by larryswedroe
Thu Aug 13, 2015 5:15 pm
Forum: Investing - Theory, News & General
Topic: More Individual Municipal Bond Shenanigans [Edward Jones SEC overcharge settlement]
Replies: 27
Views: 2031

Re: More Individual Municipal Bond Shenanigans

You can't beat them for their diversification. It overwhelms any tax benefit from state specific individual bonds. I would agree with the quote if you are talking about lower quality bonds. The kind of quality we buy (AAA/AA and only GO and essential services) have almost no history of credit losse...
by larryswedroe
Thu Aug 13, 2015 7:51 am
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

grayfox
I read these explanations of why CCFs should have high expected return just like stocks,

I've never read a paper that predicts high expected returns from commodities.
larry
by larryswedroe
Thu Aug 13, 2015 7:49 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

One of this funds assumptions that all risks are worth taking No this isn't the assumption at all. All of the risks the fund takes are based on research showing that the factors they are investing in are both persistent and pervasive across time, regions, and asset classes. And they are little to n...
by larryswedroe
Wed Aug 12, 2015 1:41 pm
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

Tiger
Not a fan, equities not really inflation hedge, the higher returns are risk premium, not inflation hedge, and in fact equities and inflation bit negatively correlated. And owning commodity producers IMO doesn't make sense to me as they correlate more with stocks than with commodities!
Larry
by larryswedroe
Wed Aug 12, 2015 1:39 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Lackey
Note it makes no sense to use the other fund as you get 1/2 vol but pay more than half the expenses, better to just put in half the amount in QSPIX than invest in other fund.
Larry
by larryswedroe
Wed Aug 12, 2015 1:36 pm
Forum: Investing - Theory, News & General
Topic: How did Barron's number one ranked fund family perform?
Replies: 10
Views: 1695

Re: How did Barron's number one ranked fund family perform?

scott
Did Barron’s Number-One Ranked Fund Family Add Value for Its Investors?
http://www.apviewpoint.com/viewpoint-home

and here is the site to do the regression analysis
https://www.portfoliovisualizer.com/factor-analysis

Best wishes
Larry
by larryswedroe
Wed Aug 12, 2015 10:27 am
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

Andy two things, yes certainly my personal strategy is more active, just as bit active on bond side, extending maturities a bit when curve steep and shortening when flat. That's following the research. Same thing with CCF--that's what research shows. And using that research in part of QSPIX Second, ...
by larryswedroe
Wed Aug 12, 2015 8:48 am
Forum: Investing - Theory, News & General
Topic: How did Barron's number one ranked fund family perform?
Replies: 10
Views: 1695

Re: How did Barron's number one ranked fund family perform?

Yes Taylor, I note that the returns are pretax and the active strategies of fund managers is likely their highest costs. With that said there are many investors, such as pension plans and endowments that may not face tax issues. Note I'm tracking the results and will be eventually reporting on the d...
by larryswedroe
Wed Aug 12, 2015 8:41 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 612
Views: 67294

Re: QSPIX - thoughts on interesting fund

Andrew couple things, first LCTM failed not because of failure of "models" or theory but because of hubris of the managers who were simply making bets and used such high leverage that being wrong even once would have led to failure. Wasn't failure of financial theory. QSPIX isn't a black b...
by larryswedroe
Wed Aug 12, 2015 8:37 am
Forum: Investing - Theory, News & General
Topic: updated study of the original facts and fantasies about commodities
Replies: 4
Views: 596

updated study of the original facts and fantasies about commodities

http://www.etf.com/sections/index-investor-corner/swedroe-commodities-can-hedge-inflation Ten years later Hope you find it helpful Larry [inserted for context - admin alex] The following table, adapted from the study [“Facts and Fantasies about Commodity Futures Ten Years Later,” authors Geetesh Bh...
by larryswedroe
Tue Aug 11, 2015 7:11 pm
Forum: Investing - Theory, News & General
Topic: How did Barron's number one ranked fund family perform?
Replies: 10
Views: 1695

Re: How did Barron's number one ranked fund family perform?

greatoutdoors Here are funds I looked at, used 10 years instead of my normal 15 as would not have had many funds. U.S. Large-Cap Blend Waddell & Reed Advisors Dividend Opportunities DFA US Large Company Vanguard 500 Index U.S. Large-Cap Growth Waddell & Reed Advisor Accumulative Waddell &...
by larryswedroe
Tue Aug 11, 2015 5:06 pm
Forum: Investing - Theory, News & General
Topic: How did Barron's number one ranked fund family perform?
Replies: 10
Views: 1695

Re: How did Barron's number one ranked fund family perform?

sorry scotty that's why I put the summary there.
by larryswedroe
Tue Aug 11, 2015 12:16 pm
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

Scot, can simply google the terms and find the definitions. Always a balance in writing blogs between covering so much that lose the knowledgeable reader and going so high you lose all the rest. I try to find the right balance Note if want to read more on commodities there is a chapter in my alterna...
by larryswedroe
Tue Aug 11, 2015 10:25 am
Forum: Investing - Theory, News & General
Topic: How did Barron's number one ranked fund family perform?
Replies: 10
Views: 1695

How did Barron's number one ranked fund family perform?

I used Barrons 2014 year end ranking. The number one fund family was Waddell and Reed http://www.apviewpoint.com/index.php?option=com_kunena&func=view&catid=94&id=8786&Itemid=0 Unfortunately the site isn't available to everyone So here's a snapshot of the findings In both of the asse...
by larryswedroe
Tue Aug 11, 2015 7:53 am
Forum: Investing - Theory, News & General
Topic: a look at impact of financialization of commodities
Replies: 20
Views: 1742

Re: a look at impact of financialization of commodities

Andy I'll just add that --and repeat--that it has always been known that commodities only hedge SOME equity risks, they hedge supply not demand shocks, but they do hedge bond risks pretty well with a pretty high negative correlation. You seem to have missed/ignored that part---that if adding CCF add...
by larryswedroe
Mon Aug 10, 2015 8:03 pm
Forum: Investing - Theory, News & General
Topic: It's never the house's money
Replies: 5
Views: 1190

Re: It's never the house's money

Pizzasteve510 IMO you are confusing strategy with outcome. It almost certainly was correct ex-ante to sell those shares and diversify your risk. Never make mistake of judging a strategy by the outcome without considering what alternative universe might have showed up. Only fools do that as Nicholas ...
by larryswedroe
Mon Aug 10, 2015 6:41 pm
Forum: Investing - Theory, News & General
Topic: It's never the house's money
Replies: 5
Views: 1190

It's never the house's money

thought this would be of interest as one of most common errors I see

http://mutualfunds.com/news/2015/08/11/ ... 6d30b983ff

Larry
by larryswedroe
Mon Aug 10, 2015 8:11 am
Forum: Investing - Theory, News & General
Topic: CDs vs. treasury bonds
Replies: 99
Views: 6940

Re: CDs vs. treasury bonds

rrppve Yes Treasuries performed better due to the liquidity premium that went into Treasuries in the flight to safety/liquidity--and big institutional/sovereign players who buy Treasuries cannot buy CDs. Of course this means buying CDs becomes that much better as spreads widen. And we have yet to se...
by larryswedroe
Sun Aug 09, 2015 4:00 pm
Forum: Investing - Theory, News & General
Topic: CDs vs. treasury bonds
Replies: 99
Views: 6940

Re: CDs vs. treasury bonds

Just so people know secondary market CDs trade in secondary market just like bonds, at premiums and discounts based on value.
Just that they don't have the same liquidity, meaning the same tight bid-offer spreads that Treasuries have. But they are certainly marketable.
Larry
by larryswedroe
Sun Aug 09, 2015 8:44 am
Forum: Investing - Theory, News & General
Topic: CDs vs. treasury bonds
Replies: 99
Views: 6940

Re: CDs vs. treasury bonds

Except for inside 401k plans where CDs not an option we almost never buy Treasuries or funds that buy them, except for small amounts for liquidity. Without question for individual investors CDs are almost always a superior choice. Not only eliminate the mutual fund fees that one occurs if not buying...

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