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Re: Michael Lewis puts his money into Vanguard index funds

Have you read Flash Boys? If so, it seems odd to me that Lewis actually believes index funds aren't themselves subject to the same "dark pools." The best defense an individual investor has against the front running described in Flash Boys is to trade as little as possible. Because index f...
by market timer
Mon Mar 23, 2015 11:58 am
 
Forum: Investing - Theory, News & General
Topic: Michael Lewis puts his money into Vanguard index funds
Replies: 12
Views: 3127

Re: Grad School - Max out Roth IRA or use for tuition?

Given the high interest rate and currently high equity valuations, I'd recommend option d. You'll be able to convert your 403b to a Roth while in school, and likely pay very little if any taxes on the conversion.
by market timer
Mon Mar 23, 2015 3:42 am
 
Forum: Investing - Help with Personal Investments
Topic: Grad School - Max out Roth IRA or use for tuition?
Replies: 10
Views: 936

Re: [New Member Observations- Covered Calls, Financial Advis

Here is a paper showing actual returns for various options strategies over the period 1985-2001: http://escholarship.org/uc/item/0499w44p#page-30 Table 3 (page 30 of the PDF) provides a detailed summary of returns. A covered call strategy that sells 45-day calls 5% out-of-the-money slightly outperfo...
by market timer
Sun Mar 22, 2015 7:54 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15695

Re: [New Member Observations- Covered Calls, Financial Advis

If you get me the dates that you used as the start of each "quarter", I will be happy to run the numbers for you. I can get implied volatility for one month options and VIX options in the future, and it is generally reasonably similar to 3 month ones. From that and black-scholes, we can g...
by market timer
Sun Mar 22, 2015 7:42 pm
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15695

Re: What Age Did You First Ponder Financial Independence?

I've never liked the idea of working, especially for someone else. At age 15, I bought my first mutual funds and ran some scenarios in Excel projecting my net worth out several decades. Back then (pre-internet), I would actually call the mutual fund companies at 6pm to get closing prices and update ...
by market timer
Sat Mar 21, 2015 11:59 pm
 
Forum: Personal Finance (Not Investing)
Topic: What Age Did You First Ponder Financial Independence?
Replies: 74
Views: 6793

Re: Should I use margin to buy a balanced fund?

I was thinking about how to implement this strategy using futures and what the minimum size would need to be. For a 40/60 portfolio, I was thinking it would be roughly 2x e-mini S&P 500, 1x 30-year treasury, 1x 10-year treasury, and 1x in 5-year treasury. Maybe instead of holding cash in the ac...
by market timer
Sat Mar 21, 2015 11:07 am
 
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 637
Views: 87409

Re: Math majors needed in here for loan interest rates thoug

Math major here. Agree with the suggestion to sell taxable holdings to buy the car. Sell all your bonds, then enough stocks to cover the purchase. That said, I think cars are overrated and have never bought one.
by market timer
Sat Mar 21, 2015 3:19 am
 
Forum: Personal Finance (Not Investing)
Topic: Math majors needed in here for loan interest rates thoughts
Replies: 36
Views: 2104

Re: [New Member Observations- Covered Calls, Financial Advis

Count me among those who view this as a thinly veiled sales pitch. I like how the story has changed whenever confronted with facts: I have an outlook reminder to sell every three months @ +8% then re-allocate the proceeds into more ETF's. This is not active trading. I place 4 trades a year. Then, wh...
by market timer
Sat Mar 21, 2015 2:45 am
 
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 221
Views: 15695

Re: Step callable long term CD for fixed income- pros & cons

I would not recommend buying this product. Because this is a callable CD, you have to keep in mind that you only receive the rates advertised if they are below-market at the time the CD is callable. The first call date is April 2018. So, really, what you are buying is a 3-year CD that pays 3%. That'...
by market timer
Sat Mar 21, 2015 2:17 am
 
Forum: Investing - Theory, News & General
Topic: Step callable long term CD for fixed income- pros & cons?
Replies: 17
Views: 929

Re: 401k Max-out Strategy

There were a couple things that made it easy for me to reach the exact limit for maxing out the 401K and get the full match: 1. It was impossible to contribute more than the limit. Therefore, if your 401K contribution is restricted to a whole number percentage of your paycheck, you could just round ...
by market timer
Wed Feb 25, 2015 12:13 am
 
Forum: Investing - Help with Personal Investments
Topic: 401k Max-out Strategy
Replies: 16
Views: 1911

Re: REITs

I was also surprised by today's move in REITs, given the rally in both stocks and bonds. The only news I saw was a secondary offering of $1.3-1.5bn in equity by Health Care REIT (HCN) this morning. The selloff seemed concentrated in health care REITs, and hedging may have weighed on other types of R...
by market timer
Tue Feb 24, 2015 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: REITs [Why did Vanguard's REIT lose 2% today?]
Replies: 33
Views: 3452

Re: What Movie Have You Recently Watched?

The Return (2003), Russian film about a father returning home to his wife and two sons after a 12-year absence.
by market timer
Tue Feb 24, 2015 5:49 am
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 655
Views: 86449

Re: A different approach to asset allocation

kenyan wrote:Did you ever write a book on your experiences?

I don't expect to publish anything based on this experience. A few pages of excerpts from this thread were included in Lifecycle Investing by Ayres and Nalebuff. That is all I have in print.
by market timer
Mon Feb 23, 2015 8:20 pm
 
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1422
Views: 497013

Re: A different approach to asset allocation

Excellent thread. Thank you for posting. Glad you enjoy it. I just noticed it's been two years since I posted an update. Equity exposure: $200K Net worth: $700K, up $910K since Q4 2008 Since 2005, my goal has been to trade for a living. As a grad student at the time, I read about people like Soros ...
by market timer
Mon Feb 23, 2015 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1422
Views: 497013

Re: Saving home movies: what medium/format?

I created a gmail account for my son and send all our home videos and pictures to his email. Easy to search and with convenient time stamps. Do you edit and organize them ("Our Canada Vacation") or do you just send him loose collections of clips--video "snapshots?" The email get...
by market timer
Mon Feb 23, 2015 10:31 am
 
Forum: Personal Consumer Issues
Topic: Saving home movies: what medium/format?
Replies: 9
Views: 524

Re: Saving home movies: what medium/format?

I created a gmail account for my son and send all our home videos and pictures to his email. Easy to search and with convenient time stamps.
by market timer
Mon Feb 23, 2015 7:19 am
 
Forum: Personal Consumer Issues
Topic: Saving home movies: what medium/format?
Replies: 9
Views: 524

Re: Prom budget for teenage girl?

Isn't this the entire point of high school McJobs?
by market timer
Sat Feb 21, 2015 7:59 am
 
Forum: Personal Consumer Issues
Topic: Prom budget for teenage girl?
Replies: 82
Views: 4918

Re: self-directed IRA loan for mortgage to a family member

I don't know of a way around the IRA rule, but would it be feasible for your dad to take out the mortgage in his name?
by market timer
Fri Feb 20, 2015 12:11 am
 
Forum: Personal Finance (Not Investing)
Topic: self-directed IRA loan for mortgage to a family member
Replies: 10
Views: 572

Re: What Movie Have You Recently Watched?

Just saw Birdman. This would be my choice for Best Picture. I'll probably see it in the theater again next week.
by market timer
Thu Feb 19, 2015 9:10 am
 
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 655
Views: 86449

Re: What Book Are You Currently Reading? Part VI

Lucky Jim by Kingsley Amis. Comic novel about a young Medieval history professor in post WW2 Britain.
by market timer
Wed Feb 18, 2015 2:15 am
 
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 579
Views: 79990

Re: Bond investors...is there a crash on the horizon..!!

Vanguard Extended Duration Treasury ETF (EDV) is down over 11% in the past 2.5 weeks. We are already over half-way to a bear market in long term Treasuries.
by market timer
Tue Feb 17, 2015 12:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond investors...is there a crash on the horizon..!!
Replies: 43
Views: 3196

Re: Expecting a big inheritance - Should it change my life?

Have you asked your aunt if she has any particular way she'd like you to use the money?

As someone planning to leave something behind, I think I'd feel a bit peeved if I saw a beneficiary spending more in anticipation of my death. If I wanted to encourage such behavior, I'd give cash gifts.
by market timer
Mon Feb 16, 2015 4:33 am
 
Forum: Personal Finance (Not Investing)
Topic: Expecting a big inheritance - Should it change my life?
Replies: 124
Views: 8223

Re: Graduating law student portfolio and loan questions

Otherwise, you will likely find yourself chained to the Biglaw job for 5+ years just to pay the student loans. If you end up sticking around Biglaw for 3+ years, it's much better to have done so by choice rather than by some need imposed by oppressive student loans. It is no fun feeling like an ind...
by market timer
Sun Feb 15, 2015 10:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: Graduating law student portfolio and loan questions
Replies: 32
Views: 2701

Re: Recommend a movie for a lonely Boglehead on Valentine's

Check out Wong Kar-wai's trilogy:
Days of Being Wild
In the Mood for Love
2046
by market timer
Sat Feb 14, 2015 11:54 pm
 
Forum: Personal Consumer Issues
Topic: Recommend a movie for a lonely Boglehead on Valentine's day
Replies: 87
Views: 4700

Re: Graduating law student portfolio and loan questions

The main thing you give up by refinancing your loans is the potential for loan forgiveness. While your current salary is too high for you to take advantage of IBR/PAYE, there is a chance you could decide to switch to the public sector after a few years in biglaw. If this is a realistic scenario, it ...
by market timer
Sat Feb 14, 2015 11:23 pm
 
Forum: Investing - Help with Personal Investments
Topic: Graduating law student portfolio and loan questions
Replies: 32
Views: 2701

Re: Future Stock Returns in an Aging World?

Todd, I like these series you put together. I missed the one you link to in the OP, showing the relationship between global GDP growth and stock returns. I think estimating causality is tricky in these situations. Higher stock prices allow investors and businesses to borrow more for consumption and...
by market timer
Sat Feb 14, 2015 12:36 pm
 
Forum: Investing - Theory, News & General
Topic: Future Stock Returns in an Aging World?
Replies: 25
Views: 2806

Re: rank order fixed income options

The ranking order depends heavily on your tax situation. Ignoring taxes, I'd rank them as follows: 1. EE bonds 2. CDs 3. The rest Stable value could be anywhere on this list depending on the rate you're getting. Lately, I have been buying some REITs instead of long term bonds. I think equity REITs a...
by market timer
Sat Feb 14, 2015 3:05 am
 
Forum: Investing - Theory, News & General
Topic: rank order fixed income options
Replies: 14
Views: 1104

Re: Future Stock Returns in an Aging World?

Todd, I like these series you put together. I missed the one you link to in the OP, showing the relationship between global GDP growth and stock returns. I think estimating causality is tricky in these situations. Higher stock prices allow investors and businesses to borrow more for consumption and ...
by market timer
Fri Feb 13, 2015 11:05 pm
 
Forum: Investing - Theory, News & General
Topic: Future Stock Returns in an Aging World?
Replies: 25
Views: 2806

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

Nisi is saying there is only 1 e in suffrage.
by market timer
Fri Feb 13, 2015 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10461

Re: If you could start over at age 30...

Lastly, I can't help but feel like this may be a bad time to be getting into stocks (the market can't keep surging like this for much longer right?), so is there some way to hedge against a future bear market? Or should I just keep dumping money into VTI? I agree with you that now is not the best t...
by market timer
Fri Feb 13, 2015 1:15 am
 
Forum: Investing - Help with Personal Investments
Topic: age 30... [portfolio advice requested]
Replies: 22
Views: 2668

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

<>I do believe central banks can choose inflation rates. As a Neo-Fisherian<> A bit off-topic so I'll just link to a post "let’s blow the neo-Fisherite model right out of the water" http://www.themoneyillusion.com/?p=26671 As it's off-topic, I'll just post this recent article, showing how...
by market timer
Thu Feb 12, 2015 11:58 am
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

Re: Mr. Money Mustache: Hero or Foolish?

DW has a very stable career and we have a paid off condo, so the risks of this decision were quite low. It seems like you're a SAHD then, not retired. Just saying. Sure, I wouldn't argue with that characterization. However, I do support my family from my investments, and if I run out of money, I'll...
by market timer
Thu Feb 12, 2015 11:39 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71352

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

I think the problem with your model is that Central Banks don't choose inflation rates? In other words, this is a real story, not a nominal one? There are real economy forces out there which mean an inflation of the money supply doesn't lead to an increase in lending, economic activity and inflatio...
by market timer
Thu Feb 12, 2015 5:34 am
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

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

Your point is well taken that inflation is a big part of the observed difference in nominal rates between emerging and developed countries today. Thanks for clarifying this. But I'd also argue that the very same demographic trends that are creating slow growth and low real interest rates in the adv...
by market timer
Thu Feb 12, 2015 2:50 am
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

Re: Mr. Money Mustache: Hero or Foolish?

DW=dear wife
by market timer
Thu Feb 12, 2015 1:37 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71352

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

It would be interesting to compare earlier time periods to see if there's still a rough correlation between median age of population and interest rates. Agreed, and I do think you highlight an interesting relationship between yields and demographics. I just don't believe the relationship is as clea...
by market timer
Wed Feb 11, 2015 11:15 pm
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

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

2. Differences in nominal interest rates across countries are largely a function of expected inflation. The argument would be stronger if you used real rates, as this reflects demand for capital (you might want to argue demographics explain inflation, but that's a different story). While not all of...
by market timer
Wed Feb 11, 2015 11:09 pm
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

Re: Mr. Money Mustache: Hero or Foolish?

I was making over $200K and retired at 34 last year to spend time with my infant son. DW and I spend a similar amount as MMM, and have similar net worth as he did when he retired. Having a paid off house is key. Like MMM, I'm also seriously considering home schooling my son. I disliked the structur...
by market timer
Wed Feb 11, 2015 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71352

Re: Mr. Money Mustache: Hero or Foolish?

Boglehead MMM fans, please post here if you dropped your high-income job for making a small amount of money with lots of free time in the prime of your life. I'd like to hear from you. Bogleheads on average seem to make higher than normal salaries...this whole phenomena is intriguing to me. I was m...
by market timer
Wed Feb 11, 2015 9:31 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 452
Views: 71352

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

It is a nice chart with a good story to go with it. I have a few criticisms: 1. Why these 25 countries? I believe you have dropped some outliers. 2. Differences in nominal interest rates across countries are largely a function of expected inflation. The argument would be stronger if you used real ra...
by market timer
Wed Feb 11, 2015 5:44 am
 
Forum: Investing - Theory, News & General
Topic: The Future of Global Interest Rates — Trending Lower?
Replies: 19
Views: 1732

Re: An LMP/RP approach based on VPW (and derivatives)

One important implication from this drawdown framework is that your standard of living is independent of bond volalility, for a portfolio of bonds that behaves like an annuity. In other words, bonds are much less risky than they might appear under a standard deviation lens. However, if bonds and sto...
by market timer
Tue Feb 10, 2015 12:45 am
 
Forum: Investing - Theory, News & General
Topic: An LMP/RP approach based on VPW (and derivatives)
Replies: 9
Views: 715

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

In recent news, employment saw a healthy jump not long ago when unemployment benefits ran out. Incentives matter. In recent news people still mistake correlation for causation... You might be interested in this recent article, if you haven't seen it yet: http://www.nber.org/papers/w20884 "The ...
by market timer
Tue Feb 10, 2015 12:34 am
 
Forum: Investing - Theory, News & General
Topic: Your Future According to Yale Star Robert J. Shiller
Replies: 86
Views: 10461

Re: buy gold in euro terms

jdilla1107 wrote:I assure you that you are incorrect. Can you provide an example with numbers please? The two plans above are identical except for crossing the EUR USD spread.

I agree with jdilla and Leeraar. Plan B is just crossing spreads with those trades, not maintaining a currency position.
by market timer
Mon Feb 09, 2015 9:59 pm
 
Forum: Investing - Theory, News & General
Topic: buy gold in euro terms
Replies: 27
Views: 1373

Re: buy gold in euro terms

This means to speculate that the ratio of Gold/Euro will increase, which is simply the number of Euros it takes to buy an ounce of gold (currently 1098). That ratio can increase in one of two ways: gold up (vs dollar) or Euro down (vs dollar). So, the way to put on the trade, as a USD-based investor...
by market timer
Mon Feb 09, 2015 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: buy gold in euro terms
Replies: 27
Views: 1373

Re: Loans vs. Investing

Is this thinking correct? Any other things that I am forgetting to take into account? Comments or opinions? What you are likely not accounting for is in the future, after you have started maxing out your Roth IRA, you will be forced to invest the remainder of your savings in a taxable brokerage acc...
by market timer
Mon Feb 09, 2015 9:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: Loans vs. Investing
Replies: 17
Views: 1818

Re: Moving to Thailand. Assets in USD

Martello Shores wrote:I thought you had to be a Thai citizen, or born there, to buy property in Thailand?

You can easily buy a condo if not a citizen. Owning land is more complicated.
by market timer
Mon Feb 09, 2015 9:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Moving to Thailand. Assets in USD
Replies: 12
Views: 1506

Re: Moving to Thailand. Assets in USD

Is buying a house a good currency hedge? or that just as risky How you perceive risk depends on your reference frame. I think a natural frame of reference is your future cost of living. Shelter is a major component of your cost of living. Rather than think of home ownership as a currency hedge, I w...
by market timer
Mon Feb 09, 2015 5:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Moving to Thailand. Assets in USD
Replies: 12
Views: 1506

Re: Moving to Thailand. Assets in USD

There are many advantages to keeping your wealth in the US. This doesn't necessarily mean you are exposed to the dollar, unless you keep your wealth mostly in cash (dollars) and bonds. If you hold a globally diversified portfolio of stocks and commodities, it doesn't mean you are long USD just becau...
by market timer
Mon Feb 09, 2015 12:44 am
 
Forum: Investing - Help with Personal Investments
Topic: Moving to Thailand. Assets in USD
Replies: 12
Views: 1506

Re: Student Loan Interest

On second thought why would a borrower want to enter into an arrangement where the balance would increase ? and why would a reputable loan agency offer a ridiculous option like this ? I know I said your explanation was good but I guess I'm still not understanding how this makes any sense ???? You m...
by market timer
Sun Feb 08, 2015 10:39 am
 
Forum: Personal Finance (Not Investing)
Topic: Student Loan Interest
Replies: 23
Views: 1994

Re: Determining your "number" when you want to leave nothing

Do you have any interest in earning a small amount of part-time income during early retirement? I think it is very risky to rely completely on financial assets and lose all attachment to the labor market--you might also find it boring after a while. Instead, I recommend saving up a sizable nest egg,...
by market timer
Sun Feb 08, 2015 1:54 am
 
Forum: Investing - Theory, News & General
Topic: Determining your "number" when you want to leave nothing
Replies: 21
Views: 2113
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