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by market timer
Mon May 25, 2015 9:08 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 844
Views: 117932

Re: What Movie Have You Recently Watched?

Hawaiishrimp wrote:Can someone recommend a movie with lots of office politics and guys talking in suits? :wink:

The Insider (1999) is very good. For an off-beat comedy, I really liked the The Informant! (2009), but it has mixed reviews.
by market timer
Fri May 22, 2015 11:28 pm
Forum: Investing - Help with Personal Investments
Topic: Fund Roth IRA or pay student loans?
Replies: 13
Views: 958

Re: Fund Roth IRA or pay student loans?

However, the accrued amount is a relatively small part of the loan balance unless the loan has been in negative amortization for a very long time. Once you cover the accrued interest on the smallest loan, you earn 6.8% on the remaining accrued amount, so the benefit from paying it off in full (whic...
by market timer
Fri May 22, 2015 10:45 am
Forum: Investing - Help with Personal Investments
Topic: Fund Roth IRA or pay student loans?
Replies: 13
Views: 958

Re: Fund Roth IRA or pay student loans?

With federal student loans, one important but overlooked feature is that interest accrues without compounding. In other words, during the negative amortization phase of your loan (where your payment does not cover interest), you are effectively accruing a 0% interest loan (the accrued interest is li...
by market timer
Fri May 22, 2015 1:50 am
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1427
Views: 502011

Re: A different approach to asset allocation

I'm curious why you decided to set a relatively low equity exposure, even as an early retiree? It is hard for me to get excited about owning equities at today's valuations. Instead, I'm using my capital for various trading strategies that have done well the past several years, and am looking to buy...
by market timer
Thu May 21, 2015 9:31 pm
Forum: Personal Finance (Not Investing)
Topic: Career Advice: Follow "Passion" or Follow the Money?
Replies: 73
Views: 4147

Re: Career Advice: Follow "Passion" or Follow the Money?

Definitely go ahead and do the informational interview with a management consultant. Ask your friend how things are going. Learn all you can about alternative careers. You should also check out some finance jobs, where physics PhDs are more common. My guess is you'll find that your PhD in physics is...
by market timer
Thu May 21, 2015 7:26 pm
Forum: Investing - Help with Personal Investments
Topic: Fund Roth IRA or pay student loans?
Replies: 13
Views: 958

Re: Fund Roth IRA or pay student loans?

How soon could you refinance these loans with a private lender? Do you need to start your $200K job first, or is a residency sufficient?

Do you qualify for an interest-free period on any of your subsidized loans due to partial financial hardship during residency?
by market timer
Thu May 21, 2015 7:00 pm
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1427
Views: 502011

Re: A different approach to asset allocation

Several times you expressed the desire to financially leverage your human capital. Presumably, this would involve some sort of lump-sum payment up front in exchange for X% of your future income. Looking back, and given your somewhat rapid rise in net worth, would this likely have been a wise financ...
by market timer
Thu May 21, 2015 6:46 pm
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1427
Views: 502011

Re: A different approach to asset allocation

Does anyone know of a mutual fund or perhaps managed ETF that implements this sort of leveraged strategy? Or a Registered Investment Advisor who can implement this on behalf of clients at a reasonable cost?? There are various 2x and 3x leveraged ETFs that reset their leverage on a daily basis, e.g....
by market timer
Tue May 19, 2015 11:01 pm
Forum: Personal Finance (Not Investing)
Topic: much ado about coasting (through life)
Replies: 153
Views: 17892

Re: much ado about coasting (through life)

Yesterdaysnews wrote:Reading Buddhist philosophy has helped me a lot and I highly recommend it.

Any particular recommendations? I enjoyed my Buddhist class in college, but could never really get into the primary sources on my own.
by market timer
Tue May 19, 2015 12:10 am
Forum: Investing - Theory, News & General
Topic: Investing in long bonds if close to buying an SPIA ?
Replies: 5
Views: 513

Re: Investing in long bonds if close to buying an SPIA ?

It would make more sense to use long-term TIPS rather than conventional bonds for this strategy, as the TIPS ensure that your portfolio will keep up with inflation. If inflation is high between now and the date you buy the annuity, you will have a larger annuity to compensate for the larger living ...
by market timer
Mon May 18, 2015 9:10 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 844
Views: 117932

Re: What Movie Have You Recently Watched?

madbrain wrote:Max Max : fury road. I thought it was terribly boring. I must be in the minority obviously since this movie gets 98% on rotten tomatoes. But my husband felt the same way I did. I had never seen any other Mad Max movie before so didn't know what to expect.

I felt the same.
by market timer
Mon May 18, 2015 8:13 am
Forum: Investing - Help with Personal Investments
Topic: Time to reach 1M and 2M milestones
Replies: 63
Views: 9307

Re: Time to reach 1M and 2M milestones

The older I get, the more I come around to this way of thinking. However, I think I'd be crippled with anxiety using a 4% withdrawal rate starting at, say, 37. The possibility of working part-time not withstanding. Have you actually done this? Or are you still working? I left my job to become a sta...
by market timer
Sun May 17, 2015 10:30 pm
Forum: Investing - Help with Personal Investments
Topic: Time to reach 1M and 2M milestones
Replies: 63
Views: 9307

Re: Time to reach 1M and 2M milestones

Getting to the first million means you can live on your own terms, you are not tethered to a job. With a 4% withdrawal rate, you should be able to support a reasonable middle class life on $40K/year (maybe not in SF/NYC, but true in most of the world). Beyond that point, there are diminishing return...
by market timer
Thu May 14, 2015 1:19 am
Forum: Personal Finance (Not Investing)
Topic: Student Loan Repayment ? - How would you pay it back?
Replies: 14
Views: 1377

Re: Student Loan Repayment ? - How would you pay it back?

For example: Cost of borrowing $1000 @18% over 2 years = $201.59 Cost of borrowing $1000 @ 3% over 20 years = $332.37 In other words, if you have $1000 to pay down a loan, of these two, you should pay down the 3% loan. I see where you are coming from, but this comparison is really apples-to-oranges...
by market timer
Wed May 13, 2015 9:57 pm
Forum: Personal Finance (Not Investing)
Topic: Student Loan Repayment ? - How would you pay it back?
Replies: 14
Views: 1377

Re: Student Loan Repayment ? - How would you pay it back?

If I were in your situation, I'd pay off Loan #2 ASAP. Assuming you have stable employment prospects and high income, I'd go ahead and use the emergency fund to pay off this loan, then rebuild the emergency fund with future savings. For the remaining loans, I'd request an extended repayment plan (25...
by market timer
Mon May 11, 2015 10:02 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 744
Views: 105139

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

According to Portfolio Visualizer, it's about 14.54% drawdown of the notional portfolio during 1973-4, or 3.18% after adjusting for monthly contributions. I don't have daily or monthly data to know if there are larger intra-year drops. Yes, the 1x portfolio is down 14.54% over those two years. Howe...
by market timer
Mon May 11, 2015 9:06 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 744
Views: 105139

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

Looks like 2013 would have resulted in a 40+% drawdown at 7x leverage.

1973-4 would be a good stress test for this portfolio.
by market timer
Mon May 11, 2015 7:09 pm
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 744
Views: 105139

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

Rob, are you planning to make any adjustments in response to the changing correlation between bonds and stocks? It seems to me that the negative correlation that persisted over the past 7 years is breaking down now as we approach the beginning of a Fed hiking cycle. I notice that your new portfolio ...
by market timer
Sat May 09, 2015 1:23 am
Forum: Personal Finance (Not Investing)
Topic: much ado about coasting (through life)
Replies: 153
Views: 17892

Re: much ado about coasting (through life)

"We act as though comfort and luxury were the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about."
-Charles Kingsley (or Albert Einstein?)
by market timer
Thu May 07, 2015 2:56 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off student loans by selling house
Replies: 43
Views: 2580

Re: Paying off student loans by selling house

My house is everything I need from a home. But I don't think it fits what we both want from a home. And I think that at this stage in our lives, making a salary today that's three times what it was when I purchased this house, I can afford to buy a nicer place and still live below my means. This se...
by market timer
Thu May 07, 2015 8:16 am
Forum: Personal Finance (Not Investing)
Topic: Paying off student loans by selling house
Replies: 43
Views: 2580

Re: Paying off student loans by selling house

timboktoo wrote:This is a big part of why I feel the need to take responsibility for her student loans, because I don't think she ever will.

What makes you say this? Do you have any reason to think she won't pay her loans?
by market timer
Sat May 02, 2015 12:08 pm
Forum: Personal Finance (Not Investing)
Topic: Too late for career change/worth it?
Replies: 44
Views: 5851

Re: Too late for career change/worth it?

Are you planning on taking classes part-time while keeping your current job? I think that would be a great idea. I'm not sure it's a good idea to quit your job and go to school at this stage.
by market timer
Sat May 02, 2015 9:43 am
Forum: Investing - Help with Personal Investments
Topic: How to invest 15 years of living expenses
Replies: 13
Views: 1576

Re: How to invest 15 years of living expenses

I'd use a liability matching portfolio, roughly: 5 years in a high-yield savings account or CDs: $375K 5 years in intermediate corporate bonds: $375K 5 years in long duration assets: Rental condo ($325K), Long term corporates ($50K) After each year, replenish the short term cash account back to five...
by market timer
Sat May 02, 2015 9:08 am
Forum: Personal Consumer Issues
Topic: 2 Days in Bangkok
Replies: 17
Views: 1195

Re: 2 Days in Bangkok

Plenty of good suggestions here. I'd suggest that you be mindful of transportation times. It is not uncommon to spend 30 minutes in a cab to drive 100 meters during congested times. Whenever possible, use the Sky Train or subway (MRT). The main temples are must-see, and I highly recommend hiring a t...
by market timer
Mon Apr 27, 2015 9:55 am
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 97
Views: 6112

Re: 140% Stocks (or why the Kelly criterion is cool)

To clarify, I ran 250 games of 2000 flips each. Though 6% consistently has the best avg log return over 250 games, by a few %, that bettor comes in first the fewest times. 250 is arbitrary as the number of runs where log return and total % of heads converge to barely moving between runs of 250, tho...
by market timer
Mon Apr 27, 2015 8:22 am
Forum: Investing - Help with Personal Investments
Topic: Investing on Margin
Replies: 74
Views: 4959

Re: Investing on Margin

It looks like $50,000 growing at 7% per year would be $748,722.89 after 40 years. The interest owed on the margin balance over that time period would be $50,000 * .0163 * 40 = $32,600.00. So do you gain an extra $748,722.89 - $32,600.00 = $716,122.89 by leaving the extra $50,000 in the account? The...
by market timer
Mon Apr 27, 2015 8:14 am
Forum: Investing - Help with Personal Investments
Topic: Investing on Margin
Replies: 74
Views: 4959

Re: Investing on Margin

Another advantage of futures is that they can be used in an IRA, while margin is not allowed.
by market timer
Sun Apr 26, 2015 1:41 pm
Forum: Investing - Theory, News & General
Topic: 140% Stocks (or why the Kelly criterion is cool)
Replies: 97
Views: 6112

Re: 140% Stocks (or why the Kelly criterion is cool)

In fact, readers of both this post and the 200% leveraged crazy investor post might conclude that what was done wrong by the 200% leveraged guy was simply a mistake between being long 140% and 200%, while in fact, the mistake was fundamental. If you want to leverage, you should leveraged the HIGHER...
by market timer
Sat Apr 25, 2015 10:58 am
Forum: Investing - Help with Personal Investments
Topic: Investing on Margin
Replies: 74
Views: 4959

Re: Investing on Margin

Assuming that one of the 30s is bonds, the answer is zero. Margin is effectively a short term negative bond asset. Bond yields tend to be lower than margin interest. With futures, you can effectively borrow at the short term risk free rate, which is typically lower than bond yields for intermediate...
by market timer
Sat Apr 25, 2015 10:15 am
Forum: Investing - Theory, News & General
Topic: I-Bonds/TIPs:When interest rate rises, inflation is lowered?
Replies: 5
Views: 874

Re: I-Bonds/TIPs:When interest rate rises, inflation is lowe

Historically, higher interest rates are correlated with higher inflation. That inflation declines in response to higher rates is not as clear cut as Investopedia suggests. In fact, prices tend to rise in response to a rate hike (called the price puzzle in monetary economics). Some economists argue t...
by market timer
Wed Apr 22, 2015 11:54 pm
Forum: Investing - Help with Personal Investments
Topic: Giving Vanguard VTSMX as a Wedding Gift
Replies: 34
Views: 2924

Re: Giving Vanguard VTSMX as a Wedding Gift

I would save it for the baby shower.
by market timer
Tue Apr 21, 2015 1:43 pm
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 844
Views: 117932

Re: What Movie Have You Recently Watched?

I thought Birdman was a really special film and one of the few recent instances where the Academy picked the correct Best Picture.
by market timer
Thu Apr 16, 2015 6:17 pm
Forum: Investing - Theory, News & General
Topic: I and EE Bonds - What will the new rate be?
Replies: 18
Views: 2257

Re: I and EE Bonds - What will the new rate be?

Treasury rates have declined over the past six months, so I doubt savings bonds rates will rise.

My guess:
EE bonds: 0.1%
I bonds: 0%
by market timer
Fri Apr 10, 2015 10:09 am
Forum: Investing - Help with Personal Investments
Topic: New guy with another student loan/investing situation
Replies: 11
Views: 542

Re: New guy with another student loan/investing situation

From the details you've provided, I'd be inclined to pay off the loans ASAP using the inheritance. Your interest rate is high at 6.8%. It is really unclear whether you will benefit much from forgiveness, as you are just starting your career, might get married to someone earning a decent income, etc...
by market timer
Fri Apr 10, 2015 9:46 am
Forum: Investing - Help with Personal Investments
Topic: New guy with another student loan/investing situation
Replies: 11
Views: 542

Re: New guy with another student loan/investing situation

From the details you've provided, I'd be inclined to pay off the loans ASAP using the inheritance. Your interest rate is high at 6.8%. It is really unclear whether you will benefit much from forgiveness, as you are just starting your career, might get married to someone earning a decent income, etc....
by market timer
Fri Apr 10, 2015 5:57 am
Forum: Investing - Help with Personal Investments
Topic: What are you up YTD?
Replies: 328
Views: 41256

Re: What are you up YTD?

+7% so far in 2015

Variable asset allocation. Currently:

20% EM equities
30% long term Treasuries
10% oil
15% precious metals
25% REITs
by market timer
Tue Apr 07, 2015 7:46 pm
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 724
Views: 105284

Re: What Book Are You Currently Reading? Part VI

Started reading David Mitchell's Number9dream on my trip to see the cherry blossoms in Tokyo.
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: 3259

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 3:42 am
Forum: Investing - Help with Personal Investments
Topic: Grad School - Max out Roth IRA or use for tuition?
Replies: 10
Views: 1020

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
Sun Mar 22, 2015 7:54 pm
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 227
Views: 18522

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 7:42 pm
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 227
Views: 18522

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
Sat Mar 21, 2015 11:59 pm
Forum: Personal Finance (Not Investing)
Topic: What Age Did You First Ponder Financial Independence?
Replies: 74
Views: 7590

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 11:07 am
Forum: Investing - Theory, News & General
Topic: Should I use margin to buy a balanced fund?
Replies: 744
Views: 105139

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 3:19 am
Forum: Personal Finance (Not Investing)
Topic: Math majors needed in here for loan interest rates thoughts
Replies: 36
Views: 2346

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 2:45 am
Forum: Investing - Theory, News & General
Topic: [New Member Observations- Covered Calls, Financial Advisors]
Replies: 227
Views: 18522

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 2:17 am
Forum: Investing - Theory, News & General
Topic: Step callable long term CD for fixed income- pros & cons?
Replies: 17
Views: 1062

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
Wed Feb 25, 2015 12:13 am
Forum: Investing - Help with Personal Investments
Topic: 401k Max-out Strategy
Replies: 16
Views: 2022

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
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: 3693

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 5:49 am
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 844
Views: 117932

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
Mon Feb 23, 2015 8:20 pm
Forum: Investing - Theory, News & General
Topic: A different approach to asset allocation
Replies: 1427
Views: 502011

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.

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