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Margin of Error

I'm thinking maybe a young(under 30) investor's probability of success has at most 1 significant figure and I'll wait for other bogleheads to tear this apart. 1. Stock returns could be a non-stationary random process. If so, any historical performance data of stock returns is useless for predicting ...
by lostInFinance
Wed Dec 18, 2013 12:25 am
 
Forum: Investing - Theory, News & General
Topic: Margin of Error
Replies: 32
Views: 1753

Re: Auto Lawsuit Statistics [Purchasing umbrella insurance]

I'm guessing the chance of you getting kidnapped/ransomed is not all that dissimilar from actually needing the whole $5 million from an umbrella policy for a lawsuit when you were not drunk/malicious. Paying a ransom is unethical. The government should make it illegal for anyone to pay a ransom, or...
by lostInFinance
Mon Dec 16, 2013 8:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: Auto Lawsuit Statistics [Purchasing umbrella insurance]
Replies: 50
Views: 3510

Re: Venezuela report Dec 15 2013

There's a lot of discussion on this board from a vocal minority on how to protect yourself from high to hyperinflation, so it's very interesting to see the perspective of someone who's living through it as "ground truth". 1. If you're a citizen of Venezuela and have dollars, what is the pe...
by lostInFinance
Sun Dec 15, 2013 11:25 pm
 
Forum: Personal Consumer Issues
Topic: Venezuela report Dec 15 2013
Replies: 37
Views: 2583

Re: Low Income 29yr old

When you suggest saving 10k/year is that including the 403(b) contributions? The reason I ask is because when all is said and done I think after everything is taken out of of my paycheck, taxes, SS, insurance, transit, 403b. I'm taking home like 21k. I also have roughly 9-10k of fixed expenses(rent...
by lostInFinance
Sun Dec 15, 2013 7:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: Low Income 29yr old
Replies: 27
Views: 2271

Re: Auto Lawsuit Statistics [Purchasing umbrella insurance]

BolderBoy wrote: Also, if your net worth is $1 mil do you think a company is going to simply underwrite you for a $5 mil umbrella, willy-nilly?


I'm sure insurance companies will be happy to sell you as much coverage as you are willing to buy, provided you pay the premiums on time.
by lostInFinance
Sun Dec 15, 2013 5:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Auto Lawsuit Statistics [Purchasing umbrella insurance]
Replies: 50
Views: 3510

Re: Any bogleheads work "for the dark side"?

There was me thinking you were asking if I worked for the National Security Agency (Fort Meade MD?) or General Communications Headquarters Group (GCHQ in Cheltenham). No I don't work for the darkside. But I am sure they are reading my email. I assume you're being sarcastic, but it's ridiculous how ...
by lostInFinance
Sun Dec 15, 2013 5:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Any bogleheads work "for the dark side"?
Replies: 36
Views: 4188

Re: Auto Lawsuit Statistics

This will probably help: http://www.forbes.com/sites/ashleaebeling/2012/03/05/the-1-fear-being-sued-but-shun-umbrella-insurance/ The article says that 13% of personal liability claims exceed a million or more. That's probably 13% of those that go to court. Does that include lawsuits against corpora...
by lostInFinance
Sun Dec 15, 2013 2:28 pm
 
Forum: Personal Finance (Not Investing)
Topic: Auto Lawsuit Statistics [Purchasing umbrella insurance]
Replies: 50
Views: 3510

Re: Have Index Funds Become Too Popular?

If everyone used index funds, then the markets would become wildly inefficient, and the ONE person who decided to pick stocks would do incredibly well. Like there would be an announcement that a company was going bankrupt. But the stock price wouldn't budge, since index funds can't selectively sell...
by lostInFinance
Sun Dec 15, 2013 2:07 pm
 
Forum: Investing - Theory, News & General
Topic: Have Index Funds Become Too Popular?
Replies: 35
Views: 3787

Re: Despite the headline defaults, munis doing okay

manwithnoname Just to repeat --changing cola's to reduce payments is DEFAULTING on promises, no different than say lowering the interest rate they promised to pay on a loan Larry Where is the default on a promise? Colas are enacted by the legislature as a valid law. It is an axiom of judicial inter...
by lostInFinance
Fri Dec 13, 2013 10:34 pm
 
Forum: Investing - Theory, News & General
Topic: Despite the headline defaults, munis doing okay
Replies: 85
Views: 6715

Re: Despite the headline defaults, munis doing okay

manwithnoname wrote:If ANPL is such an accurate metric what state pension default has ANPL predicted?


I don't know about ANPL predictions, but from the point of view of state retirees, the states that have stopped providing their retirees with COLAS are in partial default on their pensions.
by lostInFinance
Fri Dec 13, 2013 4:56 pm
 
Forum: Investing - Theory, News & General
Topic: Despite the headline defaults, munis doing okay
Replies: 85
Views: 6715

Re: Family member renting 2nd house. Ok to ignore on tax ret

I see you are using Turbotax. Here's an answer to essentially the same question on the Turbotax website: https://ttlc.intuit.com/questions/1221834-my-mom-is-living-in-my-second-home-and-pays-the-mortgage-though-the-house-is-still-owned-by-me-is-she-considered-a-renter You're welcome! Unfortunately ...
by lostInFinance
Fri Dec 13, 2013 4:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: A levered 50/50 portfolio is better than a 90/10 one?

The right conclusion to draw from this is not that miracles are possible, and not that you can win against a casino, but that infinite lines of credit don't exist. If you're considered too big to fail and can borrow from the Fed and the Fed can print money, is that considered very close to an infin...
by lostInFinance
Thu Dec 12, 2013 11:25 pm
 
Forum: Investing - Theory, News & General
Topic: A levered 50/50 portfolio is better than a 90/10 one?
Replies: 43
Views: 4416

Re: Despite the headline defaults, munis doing okay

But then you are living in Florida or Texas, when you at least initially wanted to live in CA. As my own company has discovered, we can pay a lot less in the Midwest for top tier talent that already lives there, but we cannot convince people to move there from Silicon Valley even by vastly overpayi...
by lostInFinance
Thu Dec 12, 2013 10:24 pm
 
Forum: Investing - Theory, News & General
Topic: Despite the headline defaults, munis doing okay
Replies: 85
Views: 6715

Re: Umbrella coverage for lawsuits

I work as one of the lawyers that is hired when someone is sued and has an umbrella policy. It is smart to make sure you obtain broad and deep coverage. If you are sued for something that is covered under the policy, then the insurer will hire a defense attorney for you. You are required to coopera...
by lostInFinance
Thu Dec 12, 2013 9:46 pm
 
Forum: Personal Finance (Not Investing)
Topic: Umbrella coverage for lawsuits
Replies: 34
Views: 3281

Re: Umbrella coverage for lawsuits

I work as one of the lawyers that is hired when someone is sued and has an umbrella policy. It is smart to make sure you obtain broad and deep coverage. If you are sued for something that is covered under the policy, then the insurer will hire a defense attorney for you. You are required to coopera...
by lostInFinance
Thu Dec 12, 2013 7:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: Umbrella coverage for lawsuits
Replies: 34
Views: 3281

Re: Protective puts

Here is a sort of Boglehead-ish argument against puts. Collectively, investors earn market returns minus ordinary fess. If investors sell each other puts, then some will make money and others lose money, but the total earnings of investors will be the same. So investors will earn the same market re...
by lostInFinance
Tue Dec 10, 2013 11:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Protective puts
Replies: 21
Views: 1914

Re: Buying my own company's stock

Are you an accredited investor? Companies can give their employee's equity or stock options as part of their compensation, but I don't understand how it's legal for the company to sell you shares if you're not an accredited investor and the company is private, unless it's a 504 offering. I would tre...
by lostInFinance
Tue Dec 10, 2013 9:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Buying my own company's stock
Replies: 5
Views: 865

Re: Derivatives to hedge inflation? (swap, futures, etc)

I think this mutual fund follows the strategy you're talking about. https://www.jpmorganfunds.com/cm/Satellite?UserFriendlyURL=fundoverview&pagename=jpmfVanityWrapper&cusip=48121A589 One of the objections some people make with TIPS is counter-party risk. What's the counter-party risk with a ...
by lostInFinance
Tue Dec 10, 2013 8:57 pm
 
Forum: Investing - Theory, News & General
Topic: Derivatives to hedge inflation? (swap, futures, etc)
Replies: 9
Views: 869

Re: Family member renting 2nd house. Ok to ignore on tax ret

Mom? $650/month? Sure sounds like family cost sharing to me. I would ignore this on my tax return, but I am kind of a "wild man" when it comes to this stuff. I don't collect and remit sales tax when I sell junk at yard sales or on Craigslist, and I keep forgetting to file a "use tax&...
by lostInFinance
Tue Dec 10, 2013 8:15 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: safety hedges - TIPS, Permanent Portfolio, 529s, Roths

The only investment that I can see no one has mentioned yet is foreign sovereign bonds. I think most people get enough foreign currency exposure if they just hold their stocks at global market cap, but if you want more "currency diversification" then that's where I would look. It comes dow...
by lostInFinance
Mon Dec 09, 2013 1:07 am
 
Forum: Investing - Theory, News & General
Topic: safety hedges - TIPS, Permanent Portfolio, 529s, Roths
Replies: 10
Views: 970

Re: Family member renting 2nd house. Ok to ignore on tax ret

Mom is not a renter and she is not paying rent. She is contributing to the family's household expenses associated with owning a second home. I think the tax law as explained in Pub 527 handles all of these situations exactly right. Families are permitted to take care of each other. This is an incre...
by lostInFinance
Sun Dec 08, 2013 10:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: Physician Malpractice tail insurance-which would you cho

Such is the world we live in. The good news is that umbrella policies are so amazingly affordable. Which implies that in this world claims are amazingly rare. LOL. Yes! Until it happens to you. And then no matter how rare they might be it doesn't matter: you're the only one that matters. And it did...
by lostInFinance
Sun Dec 08, 2013 8:49 pm
 
Forum: Personal Finance (Not Investing)
Topic: Physician Malpractice tail insurance-which would you choose?
Replies: 39
Views: 2170

Re: Family member renting 2nd house. Ok to ignore on tax ret

Mom is not a renter and she is not paying rent. She is contributing to the family's household expenses associated with owning a second home. I think the tax law as explained in Pub 527 handles all of these situations exactly right. Families are permitted to take care of each other. This is an incre...
by lostInFinance
Sun Dec 08, 2013 8:41 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: Family member renting 2nd house. Ok to ignore on tax ret

End result the same. Property is used 365 days of the year for personal use, therefore it is used less than 15 days per year as a rental, therefore the income is not reportable. The property is used 365 days of the year for personal use, but it does not follow that the home is not rented during the...
by lostInFinance
Sat Dec 07, 2013 11:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: Family member renting 2nd house. Ok to ignore on tax ret

I'm pretty sure Retread is correct, and people telling you this is a rental property and that you owe taxes or are committing tax fraud are completely off-base. To whit: http://www.forbes.com/sites/anthonynitti/2013/01/18/tax-lesson-of-the-day-no-good-can-come-from-letting-your-in-laws-mooch-off-of...
by lostInFinance
Sat Dec 07, 2013 10:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: safety hedges - TIPS, Permanent Portfolio, 529s, Roths

One way to hedge against "black swan" events on paper is to buy way out of the money puts on a stock market index etf, which can be had for fairly cheap. The question is if the US stock market ever dropped 80%, would the sellers of the put still be solvent? What's the counter-party risk wi...
by lostInFinance
Sat Dec 07, 2013 9:45 pm
 
Forum: Investing - Theory, News & General
Topic: safety hedges - TIPS, Permanent Portfolio, 529s, Roths
Replies: 10
Views: 970

Re: Family member renting 2nd house. Ok to ignore on tax ret

I'm learning there are a lot of grey areas with our tax code. Just so I understand, if I let her live in the condo with no rent (market value $1,250/month) and she pays the HOA ($250/month), I'm essentially gifting her $1,000 per month, which would be totally fine from a tax standpoint (under $13k)...
by lostInFinance
Sat Dec 07, 2013 7:55 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family member renting 2nd house. Ok to ignore on tax return?
Replies: 197
Views: 13102

Re: Physician Malpractice tail insurance-which would you cho

LostInFinance, Location might be key here, and I can only speak about something that I am familiar with in my own area. The reason why malpractice premiums are much higher than umbrella premiums is because a doctor is more likely to be sued for large amounts at work than at home. Even if you never ...
by lostInFinance
Sat Dec 07, 2013 6:02 pm
 
Forum: Personal Finance (Not Investing)
Topic: Physician Malpractice tail insurance-which would you choose?
Replies: 39
Views: 2170

Re: safety hedges - TIPS, Permanent Portfolio, 529s, Roths

If 90%+ of your retirement investments are in tax advantaged accounts, then I think the most conservative option would be 100% TIPS and once you're 70 think about buying a SPIA, LTC insurance, or some other product that insures for longevity.
by lostInFinance
Sat Dec 07, 2013 5:32 pm
 
Forum: Investing - Theory, News & General
Topic: safety hedges - TIPS, Permanent Portfolio, 529s, Roths
Replies: 10
Views: 970

Re: Time Diversification actually DOES reduce stock risk

The argument against time diversification can be traced back to Paul Samuelson's paper "Risk and Uncertainty: A fallacy of large numbers." In the paper, Samuelson gives the example of betting $100 on a coin toss at 2:1 odds. Suppose you refuse to take the bet since, for you, the pain of l...
by lostInFinance
Sat Dec 07, 2013 12:22 pm
 
Forum: Investing - Theory, News & General
Topic: Time Diversification actually DOES reduce stock risk
Replies: 70
Views: 8985

Leaps [Long-term Equity AnticiPation Securities]

So portfolio A is 100% in the S&P 500. Portfolio B is 60% cash/CDs/short term bonds and 40% deep in the money LEAPS on an S&P 500 ETF. How do these two portfolios compare in the long run?
by lostInFinance
Sat Dec 07, 2013 2:14 am
 
Forum: Investing - Theory, News & General
Topic: Leaps [Long-term Equity AnticiPation Securities]
Replies: 5
Views: 488

Re: Physician Malpractice tail insurance-which would you cho

Perhaps non-physicians don't get that. I'm in nowhere near the most expensive malpractice specialty, but an umbrella for $1 Million is like $200 a year. A $1 Million malpractice policy for my specialty in my area is $16-18K per year. That's not a direct comparison because you typically have home ow...
by lostInFinance
Fri Dec 06, 2013 9:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Physician Malpractice tail insurance-which would you choose?
Replies: 39
Views: 2170

Re: Physician Malpractice tail insurance-which would you cho

If that were true then every doc would carry the minimum coverage regardless of his net worth because the lawyers will settle for minimum amount instead of a greater amount awarded by a jury. There's some circular reasoning here. First, doctor A, I'll buy as much coverage as doctor B has. Later on,...
by lostInFinance
Fri Dec 06, 2013 6:01 pm
 
Forum: Personal Finance (Not Investing)
Topic: Physician Malpractice tail insurance-which would you choose?
Replies: 39
Views: 2170

Re: Physician Malpractice tail insurance-which would you cho

I've heard that argument too. I'd sure love to have as much malpractice coverage as I have umbrella coverage, but I guess I would have to keep it secret, which would probably be difficult to do. I would guess that you should have at least as much as malpractice coverage as umbrella coverage. While ...
by lostInFinance
Fri Dec 06, 2013 5:57 pm
 
Forum: Personal Finance (Not Investing)
Topic: Physician Malpractice tail insurance-which would you choose?
Replies: 39
Views: 2170

Re: LT equity returns

Hi Nisi, Since I keep getting dragged into this, let me say what I believe the most important LT historical return data are. I look primarily at the Triumph of the Optimists data (the Dimson, Marsh, & Staunton data) from 1900 to the latest available year, which currently is 2012. This covers re...
by lostInFinance
Fri Dec 06, 2013 5:36 pm
 
Forum: Investing - Theory, News & General
Topic: Endpoint sensitivity on "historic" data
Replies: 30
Views: 1240

Re: Bogleheads, why is this taboo? [Use Leverage in a Portfo

It is interesting those that bring up MarketTimer as an example of how leverage fails. As I read his system, he was saying you can recover from a leverage failure based on future income. Since he now claims a net worth of 500K at age 33 and just 5 years ago had a net worth of negative 200k, it woul...
by lostInFinance
Thu Dec 05, 2013 6:43 pm
 
Forum: Investing - Theory, News & General
Topic: Bogleheads, why is this taboo? [Use Leverage in a Portfolio]
Replies: 189
Views: 15790

Re: should my nephew apply to a top-tier university?

The debate was a long time ago, this is what I dredged up in a quick google search now: http://www.slate.com/articles/news_and_politics/the_highbrow/2005/01/dont_let_larry_summers_off_the_hook_yet.html you read that, and take your own view. http://harvardmagazine.com/2005/05/at-odds-html http://www...
by lostInFinance
Wed Dec 04, 2013 8:30 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: Tactical Flashlight for long walks at night vs. pepper s

Don't bother with a pocket knife or pepper spray.
Either
0) Worry less
1) Stop walking at night
2) Get other people to walk with you. Criminals tend to avoid groups.
3) Get a vicious dog
4) Get a gun

A pocket knife or pepper spray is security theater and a flash light is a joke.
by lostInFinance
Tue Dec 03, 2013 11:21 pm
 
Forum: Personal Consumer Issues
Topic: Tactical Flashlight for long walks at night vs. pepper spray
Replies: 85
Views: 5248

Re: should my nephew apply to a top-tier university?

What was galling was that Summers repeated a stereotype, and the whole point of the conference had been to consider women in academic science, and why the stereotype was incorrect. The point of the conference as I understand it was to consider why there were far fewer tenured women academics in mat...
by lostInFinance
Tue Dec 03, 2013 7:44 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: should my nephew apply to a top-tier university?

It wasn't just *one remark* and the scope of that final remark, at a conference of scientists dedicated to challenging that very preconception that he reiterated, was spectacularly badly placed. It was the proverbial straw that broke the camel's back --even his supporters backed away. I think it's ...
by lostInFinance
Tue Dec 03, 2013 1:16 am
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: Fund placement from the Bogleheads' Guide to Investing.

Lady Geek: In our Bogleheads' Guide to Investing (page 141) we provide Tables showing the after-tax returns when we place stocks in taxable accounts and bonds in tax-deferred accounts vs. the opposite fund placement: We can demonstrate the importance of fund placement with a simple illustration (Ta...
by lostInFinance
Mon Dec 02, 2013 10:21 pm
 
Forum: Investing - Theory, News & General
Topic: Delete Wiki [Article] on Tax-Efficient Asset Location
Replies: 285
Views: 17466

Re: Success Stories of Bogleheads

To answer your question on advice: I would stress stick to indexing with super low cost funds, but also understand that a majority of investing lies beyond our borders. It may be heresy on this board, but I think many bogleheads over-emphasize the importance of low cost funds. The worst 20-year per...
by lostInFinance
Mon Dec 02, 2013 9:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Success Stories of Bogleheads
Replies: 62
Views: 6556

Re: Status...Independent Contractor or Company Employee?

1. Does the company furnish you with office space? 2. Are required to work a fixed set of hours? 3. Does the company provide all the equipment that you need for your job? 4. Do you consult for more than one company? If the answer to the first three is yes and the last is no, then you're probably an ...
by lostInFinance
Mon Dec 02, 2013 1:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Status...Independent Contractor or Company Employee?
Replies: 17
Views: 1119

Re: REIT Magazine - Sam Zell Interview

REITS basically: 1) have income and value derived from rent of land-, and ownership of land,which basically does not go away (barring Atlantis), versus ownership of a business entity, that will at some point cease to exist, and business profits, from selling widgets or washing cars/finance whatever...
by lostInFinance
Sun Dec 01, 2013 10:01 pm
 
Forum: Investing - Theory, News & General
Topic: REIT Magazine - Sam Zell Interview
Replies: 34
Views: 2798

Re: should my nephew apply to a top-tier university?

Rodc wrote:
Those saying that he can get just as good an education at the local community college...


Did anyone say that or did you just make that up?


The Krueger study that you brought up does seem to indicate that you could go to almost any college and have the same earning potential.
by lostInFinance
Sun Dec 01, 2013 9:37 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: Master Limited Partnerships grow in importance: action??

I think people undervalue the Investment Company Act of 1940 and the protection, transparency, and liquidity of mutual funds. Not to mention the Securities Act of 1933 and the Securities Exchange Act of 1934. I believe everyone should read Reminiscences of a Stock Operator (it's still in print or h...
by lostInFinance
Sun Dec 01, 2013 9:27 pm
 
Forum: Personal Finance (Not Investing)
Topic: Master Limited Partnerships grow in importance: action??
Replies: 21
Views: 2047

Re: should my nephew apply to a top-tier university?

And the fact that I hire many engineers and scientists from BS to PhD and we only hire the very top students from the best to the very solid schools. You really can't tell the folks from MIT from the top state schools if you stick to the very top of the class at both. Down the road in their careers...
by lostInFinance
Wed Nov 27, 2013 9:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: should my nephew apply to a top-tier university?

That is easy enough. The harder issues are what is the trade off is you have to bite into retirement savings? How big a bite is ok, that is how much risk to retirement is ok? Or if you could pay for one really bright kid but can't also pay private for your less stellar kids? I suspect this is the r...
by lostInFinance
Wed Nov 27, 2013 6:48 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: should my nephew apply to a top-tier university?

Tycoon wrote:How would one measure "unobservable" student ability?


Krueger represents it as the average SAT score of the schools that a student applies to.
by lostInFinance
Tue Nov 26, 2013 10:12 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005

Re: should my nephew apply to a top-tier university?

That seems like an odd way to read the research. I think the point is more that if you are smart enough (hi enough SATs for example) to reasonably apply... I don't think the point is that if you can only get an 300 on your math SATs you can boost your career odds by applying to Harvard... Have you ...
by lostInFinance
Tue Nov 26, 2013 9:56 pm
 
Forum: Personal Finance (Not Investing)
Topic: should my nephew apply to a top-tier university?
Replies: 274
Views: 12005
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