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Re: Joel Greenblatt's "magic formula"

If the Magic Formula works, it ought to work in a mutual fund. Formula Investing launched four funds in 2011 that did just that. Formula Investing U.S. Value Select (FNSAX) Formula Investing International Value Select (FNAAX) Formula Investing U.S. Value 1000 (FVVAX) Formula Investing International ...
by nisiprius
Mon Jul 21, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: Joel Greenblatt's "magic formula"
Replies: 22
Views: 4753

Re: With all these recent posts regarding tilts, should I?

Exercise:

1) Re-read Bogleheads® investment philosophy.

2) Summarize briefly what it says about tilting, both what it says about the pros and what it says about the cons.
by nisiprius
Mon Jul 21, 2014 7:03 pm
 
Forum: Investing - Theory, News & General
Topic: With all these recent posts regarding tilts, should I?
Replies: 13
Views: 643

Re: not all value metrics are equal

I wish I knew how to tell the difference between "the literature" and "literature." There's a paper on "Why Most Published Research Findings Are False," but is it part of the literature?
by nisiprius
Mon Jul 21, 2014 1:52 pm
 
Forum: Investing - Theory, News & General
Topic: not all value metrics are equal
Replies: 17
Views: 669

Re: What to do in a market correction

Nothing. :happy Which prompts the following question. If my plan is "during a market correction, I will do nothing," how should I prepare to ensure that I actually follow that plan? We know that it is common for people not to follow their plan during a market correction. Author and profes...
by nisiprius
Mon Jul 21, 2014 1:44 pm
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 25
Views: 2198

Re: My quarterly update on 2014's sure things

Beautiful, I love these. It is a real problem having the discipline not to act on what "everyone" is saying. In this forum, Jan 6, 2014 Given that interest rates can only go up, does it make sense to lessen the impact on our bond stake by shifting a portion of those intermediate bonds to a...
by nisiprius
Mon Jul 21, 2014 11:09 am
 
Forum: Investing - Theory, News & General
Topic: My quarterly update on 2014's sure things
Replies: 6
Views: 1964

Re: Vanguard Client Dispute Resolution Dept.

A letter to the CEO should be less than a page long, and the first sentence should say exactly what you want--the thing that would make you happy. I've had very good luck writing to CEOs-- when the thing I wanted was a small refund. (For example, when I felt that Walt Disney World's "MemoryMake...
by nisiprius
Mon Jul 21, 2014 9:35 am
 
Forum: Investing - Theory, News & General
Topic: Vanguard Client Dispute Resolution Dept.
Replies: 10
Views: 1418

Re: What to do in a market correction

"When in danger, or in doubt,
Run in circles, scream and shout."
--Herman Wouk, The Caine Mutiny, 1951
by nisiprius
Mon Jul 21, 2014 8:52 am
 
Forum: Investing - Theory, News & General
Topic: What to do in a market correction
Replies: 25
Views: 2198

Re: Q&A with the Experts at 2014 Bogleheads Conference

It's endlessly argued, but I think there is a great deal of support in the Bogleheads forum for some degree of "tilt"--expanding on Total Stock, for example by adding extra allocations to small value and REITs. Yet Vanguard's all-in-one funds--Target Retirement and LifeStrategy--do not do ...
by nisiprius
Mon Jul 21, 2014 8:34 am
 
Forum: Investing - Theory, News & General
Topic: Q&A with the Experts at 2014 Bogleheads Conference
Replies: 24
Views: 7329

Re: a close look at value and momentum

why in the world wouldn't this excess return on the long side be over-grazed almost to the point of extinction? Since momentum does not require focusing on a small corner of the market like SV, it takes a lot more money to overgraze it. Small value represents a few percent of the market, so there i...
by nisiprius
Mon Jul 21, 2014 8:14 am
 
Forum: Investing - Theory, News & General
Topic: a close look at value and momentum
Replies: 253
Views: 15892

Re: VG Total Stock Market Index ETF performance?

The performance is going to be virtually identical, as the ETF is merely a special "share class" of the mutual fund. Furthermore, however innovative it was when Vanguard created the first index fund in 1976, a lot of mutual fund companies have mastered the art and you can be pretty sure th...
by nisiprius
Mon Jul 21, 2014 7:57 am
 
Forum: Investing - Help with Personal Investments
Topic: VG Total Stock Market Index ETF performance?
Replies: 3
Views: 325

Re: Value Overvalued

On page 5 of this report from JP Morgan, it shows Value stocks are overvalued, and Growth stocks are undervalued compare to their 20 years averages. https://www.jpmorganfunds.com/blobcontentheader/202/900/1158474868049_jp-littlebook.pdf Just want to point that out. This reminds me of a quote from W...
by nisiprius
Sun Jul 20, 2014 10:09 pm
 
Forum: Investing - Theory, News & General
Topic: Value Overvalued
Replies: 21
Views: 1654

Re: Total return chart for Barclays Global Aggregate ex-USD

I've used the PIMCO Global Bond Fund (U.S. Dollar Hedged), PGBIX, as a surrogate for what VTIBX/VTABX might have been, for no good reason except that I couldn't find anything else. And to confirm my general notion that dollar-hedged international bond funds are indeed bond-like, whereas unhedged int...
by nisiprius
Sun Jul 20, 2014 9:17 pm
 
Forum: Investing - Theory, News & General
Topic: Total return chart for Barclays Global Aggregate ex-USD
Replies: 2
Views: 524

Re: oil companies more risky

The entire stock market is risky. Sectors (e.g. energy, e.g. Vanguard Energy Fund) are riskier than the market. Individual industries (e.g. oil) are riskier than sectors. Individual stocks are riskier than entire industries. Should we expect the risk to be rewarded? Larry Swedroe has written, in The...
by nisiprius
Sun Jul 20, 2014 8:15 pm
 
Forum: Investing - Theory, News & General
Topic: oil companies more risky
Replies: 8
Views: 993

Re: Stop Loss on stocks/ ETFs

Stop loss sounds like a great way to minimize risk to the downside. The problem arises when trying to decide when to reinvest. I don't think it even "minimizes risk to the downside." It only reduces risk in situations where the downward drop continues . If you have a stop loss at -11% and...
by nisiprius
Sun Jul 20, 2014 5:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stop Loss on stocks/ ETFs
Replies: 12
Views: 866

Re: Faber: S&P 500 an Active Fund in Drag

It would be interesting to find 1950s sources that would speak to the issue of what S&P intended at the time. I've tried casually, with only limited success, to uncover the "prehistory of the S&P," that is to say, what there was before 1957. Innumerable graphs that purport to show ...
by nisiprius
Sun Jul 20, 2014 3:34 pm
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 43
Views: 2861

Re: Stop Loss on stocks/ ETFs

The name "stop loss" sounds great. But it is a fantasy to suppose there's a simple way to put a ratchet effect into your investments so that they only go up. The two-edged sword is that if you set the "stop loss" level low, then it doesn't trip and doesn't protect you. If you set...
by nisiprius
Sun Jul 20, 2014 12:49 pm
 
Forum: Investing - Help with Personal Investments
Topic: Stop Loss on stocks/ ETFs
Replies: 12
Views: 866

Re: Which kind of bike for recent retiree?

...Roadbike seats aren't really the medieval torture devices that they initially appear to be... A reading recommendation for all bicycle riders: "Three Men on the Bummel," by Jerome K. Jerome. https://www.youtube.com/watch?v=-Cnif5EhMR0 “Can you think of any saddle ever advertised that y...
by nisiprius
Sun Jul 20, 2014 12:18 pm
 
Forum: Personal Consumer Issues
Topic: Which kind of bike for recent retiree?
Replies: 48
Views: 2328

Re: Faber: S&P 500 an Active Fund in Drag

It is nonsense, and it is a standard talking point against indexing that people have been dragging out for years. I can't figure out how to read Faber's words in detail without buying the book. But the standard argument goes like this. Assume, without ever stating it , that indexing means the S&...
by nisiprius
Sun Jul 20, 2014 7:11 am
 
Forum: Investing - Theory, News & General
Topic: Faber: S&P 500 an Active Fund in Drag
Replies: 43
Views: 2861

Re: Social Security Taxes?

...One of the reasons my social security is being taxed is that I have tax-exempt income. Now this is not my exact situation, but consider this: A person collects social security. None of it is taxed. The next year, he has $10,000 of tax-exempt income (line 8b). Now his social security is taxed. Qu...
by nisiprius
Sat Jul 19, 2014 9:04 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security Taxes?
Replies: 26
Views: 2182

Re: Vanguard Target retirement vs S&P500 indexing

The 2040 fund today is similar to what the 2030 fund was ten years ago. However since the 2030 fund only goes back to 2006, I'm going to to show the 2025 (blue) and the 2035 (orange) funds, and I'm going to plot them along with the Vanguard 500 Index (S&P 500 fund) (green). http://s30.postimg.or...
by nisiprius
Sat Jul 19, 2014 4:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Vanguard Target retirement vs S&P500 indexing
Replies: 7
Views: 1517

Re: Social Security Taxes?

...That led me to do some research and the taxes on SS did surprise me. On the SS site it indicated that if married and you have income over $44,000 a year, up to 85% of your SS benefit will be taxed... Anyone with expertise on this or actually in this situation care to comment? I think you misunde...
by nisiprius
Sat Jul 19, 2014 3:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: Social Security Taxes?
Replies: 26
Views: 2182

Re: Memory foam mattresses - any insight?

Bought a TempurPedic >10 years ago. We like it. It has been more durable than any conventional mattress we've ever owned. Re chemicals, there has never been a trace of odor from it. I can't speak to the question of whether it's any better than cheaper mattresses. It's not for everyone. Most mattress...
by nisiprius
Sat Jul 19, 2014 3:15 pm
 
Forum: Personal Consumer Issues
Topic: Memory foam mattresses - any insight?
Replies: 40
Views: 2397

Re: Ways to lose money and destroy personal wealth by invest

Not realizing that you are becoming addicted to the endorphin rush of speculating, until you are hooked. Thanks to jginseattle and Fallible I'm now reading American Sucker , by David Denby. I think it is a better, less guarded account of what goes on inside the head of someone who gets acculturated ...
by nisiprius
Sat Jul 19, 2014 2:55 pm
 
Forum: Investing - Theory, News & General
Topic: Ways to lose money and destroy personal wealth by investing
Replies: 81
Views: 8915

Re: What Book Are You Currently Reading? Part V

American Sucker , by David Denby. The author got caught up in the tech boom and bust. Here's a New York Times review... http://www.nytimes.com/2004/01/25/books/a-fool-and-his-money.html Thanks for mentioning this book, which I just read. Thanks to both of you, I'm halfway through and can't put it d...
by nisiprius
Sat Jul 19, 2014 10:04 am
 
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part V
Replies: 3093
Views: 986357

Re: USPS Shipping Problem Again

(Shrug) I've personally never had a problem with USPS, and I've had two problems with Fedex, one a real nightmare. Stuff happens. (Correction. I HAVE had problems with USPS, but only with the strange hybrid "UPS mail innovations" ultracheap service that sends packages part of the way by UP...
by nisiprius
Sat Jul 19, 2014 9:40 am
 
Forum: Personal Consumer Issues
Topic: USPS Shipping Problem Again
Replies: 19
Views: 837

Re: If no access to DFA, Small Value worth it?

Rick Ferri's blog posting, To Tilt or Not To Tilt seems to me to be making an implicit recommendation when he says The fund I currently use in client portfolios is the iShares S&P Small-Cap 600 Value ETF (ticker: IJS). Another fund I like is the PowerShares Fundamental Pure Small Value Portfolio...
by nisiprius
Fri Jul 18, 2014 8:27 pm
 
Forum: Investing - Theory, News & General
Topic: If no access to DFA, Small Value worth it?
Replies: 18
Views: 2081

Re: How much energy does water heater use when I'm not home?

A thought. Others have suggested turning the setting all the way down. Check the instruction book for the water heater. If you don't have it, go online, search, and download it. It would not surprise me at all to find that ALL the way down is actually "Off." Just a wild guess, but lots of ...
by nisiprius
Fri Jul 18, 2014 7:34 pm
 
Forum: Personal Consumer Issues
Topic: How much energy does water heater use when I'm not home?
Replies: 32
Views: 2542

Re: Large Cap Value -- worth the effort?

1) I don't tilt, myself.
2) If I did, I would probably consider the Coffeehouse Portfolio (Bill Schultheis) and it does include large-cap value:

10% each
US large cap stocks
US large value stocks
US small cap stocks
US small cap value stocks
US REITS
International stocks

40%
US intermediate bonds
by nisiprius
Fri Jul 18, 2014 7:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Large Cap Value -- worth the effort?
Replies: 8
Views: 1098

Re: Jeremy Grantham pokes holes in EMH

Nice, Larry. ...[Grantham] believes that professionals should do better precisely because the market is full of major league inefficiencies... They should, but do they? Glendower: I can call spirits from the vasty deep. Hotspur: Why, so can I, or so can any man; But will they come when you do call f...
by nisiprius
Fri Jul 18, 2014 6:15 pm
 
Forum: Investing - Theory, News & General
Topic: Jeremy Grantham pokes holes in EMH
Replies: 16
Views: 2116

Re: [Poll] % of 3 funds in your financial asset portfolio?

What would 100% in Vanguard Target Retirement Income Be? 69%--until the next time they decide to jigger it. https://personal.vanguard.com/us/funds/snapshot?FundId=0308&FundIntExt=INT#tab=2 √ 39% Total Bond, check √ 21% Total Stock, check x 17% Short-Term Inflation Protected x 14% Total Internat...
by nisiprius
Fri Jul 18, 2014 5:59 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] % of 3 funds in your financial asset portfolio?
Replies: 31
Views: 1633

Re: [Poll] % of 3 funds in your financial asset portfolio?

I don't consider "cash" to be either part of, or a departure from, the 3-fund portfolio, and I consider short-term bond index, short-term inflation-protected bond index, and I bonds as "cash." So, excluding those: a) All my stock holdings are Total Stock and Total International; ...
by nisiprius
Fri Jul 18, 2014 4:44 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] % of 3 funds in your financial asset portfolio?
Replies: 31
Views: 1633

Re: Understanding I-bonds & TIPS

Forgive me for not answering your question and for answering a question you didn't ask. In my opinion THE BIG difference between the two, and I mention it because for some reason a lot of people don't understand this, is that I bonds have no interest rate risk . This makes them significantly less ri...
by nisiprius
Fri Jul 18, 2014 4:21 pm
 
Forum: Investing - Theory, News & General
Topic: Understanding I-bonds & TIPS
Replies: 17
Views: 1887

Re: Help with Title/Author of Science Fiction Novel

Very disturbing: I've read "The World of Null-A" several times, once as a kid, once within just the past couple of years... and didn't recognize it from that description! Oh, well. I always got distracted by the line: "The problem," Prescott continued, frowning, "is greatly ...
by nisiprius
Fri Jul 18, 2014 1:37 pm
 
Forum: Personal Consumer Issues
Topic: Help with Title/Author of Science Fiction Novel
Replies: 28
Views: 1672

Re: If interest rates would ever reach double digits again

Quite apart from the inflation issue--I once owned a CD paying 13%, but inflation was 10% that year, so big financial deal... It's easy to see amazing opportunities in hindsight, and tell yourself to be alert for the next one and resolve to grab it when it occurs. I think that's a mistake. In partic...
by nisiprius
Fri Jul 18, 2014 10:23 am
 
Forum: Investing - Theory, News & General
Topic: If interest rates would ever reach double digits again
Replies: 36
Views: 2972

Re: If you own a car, do you have a car payment?

I really recommend this maneuver: "when the loan ends, just go on making the payments, only make them to yourself." The first few were financed. They were 36-month loans, and even then we kept our cars for at least 5 or 6 years. These days you'd probably need a longer loan but on the other...
by nisiprius
Fri Jul 18, 2014 10:07 am
 
Forum: Personal Consumer Issues
Topic: If you own a car, do you have a car payment?
Replies: 97
Views: 4878

Re: Three questions about how mutual fund redemptions work

nisiprius: Amazing! sscritic: Elementary! My dear fellow, you know my methods--apply them! --"The Adventure of the Red-Faced League" Without fussing about what to do when a market value isn't available or current, the key phrase seems to be the first one you bolded: "fair value (the a...
by nisiprius
Fri Jul 18, 2014 8:19 am
 
Forum: Investing - Theory, News & General
Topic: Three questions about how mutual fund redemptions work
Replies: 6
Views: 798

Three questions about how mutual fund redemptions work

1) I believe that there isn't any bid-asked spread, none at all. For example, Morningstar says "bid-ask spreads aren't an issue for mutual fund buyers and sellers, at least not directly, because the fund is priced just once a day, and everyone pays and receives that same price." I believe ...
by nisiprius
Fri Jul 18, 2014 7:55 am
 
Forum: Investing - Theory, News & General
Topic: Three questions about how mutual fund redemptions work
Replies: 6
Views: 798

Re: Insurance Inflation ?

Don't be mean! <--Pun. Joke. Ha ha.
by nisiprius
Thu Jul 17, 2014 9:10 pm
 
Forum: Personal Finance (Not Investing)
Topic: Insurance Inflation ?
Replies: 14
Views: 799

Re: Poll - Do You Read Businessweek?

Well, you know, if it's a doctor's waiting room and the choice is "Businessweek," "Highlights for Children," or "Martha Stewart Living..."

However, if they have "Medical Economics" I'll go for that one every time.
by nisiprius
Thu Jul 17, 2014 9:04 pm
 
Forum: Personal Consumer Issues
Topic: Poll - Do You Read Businessweek?
Replies: 28
Views: 1798

Re: Leo Tolstoy, a Boglehead

...06. Keep away from women... :!: Leo Tolstoy: Personal Life ...Tolstoy married Sophia Andreevna Behrs... thirteen children... The marriage was marked from the outset by sexual passion and emotional insensitivity when Tolstoy, on the eve of their marriage, gave her his diaries detailing his extens...
by nisiprius
Thu Jul 17, 2014 8:51 pm
 
Forum: Personal Consumer Issues
Topic: Leo Tolstoy, a Boglehead
Replies: 8
Views: 677

Re: Insurance Inflation ?

You also can do this: take nisiprius's link (in its raw form; English just gets in the way) http://www.bls.gov/cpi/cpid1405.pdf change 14 to 05, say http://www.bls.gov/cpi/cpid0505.pdf This is the detailed report; as you can see, the 12 month overall medical care inflation was that same 4.3%. Rinse...
by nisiprius
Thu Jul 17, 2014 7:36 pm
 
Forum: Personal Finance (Not Investing)
Topic: Insurance Inflation ?
Replies: 14
Views: 799

Re: Total Bond Yield vs. 5 year CD Interest Rates

...Bill Bernstein, in his new book, refers to these people (CD high-rate seekers) as "clever and aggressive". So far, I've only used a Synchrony 3-year CD ladder to improve the return on my cash... I don't quite understand. Let me speak directly to the my point of complexity. a) For how m...
by nisiprius
Thu Jul 17, 2014 7:18 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2240

Re: Total Bond Yield vs. 5 year CD Interest Rates

Now, the reality check. What ARE CD rates today, just a quick peek. Let's say Ally. 5 years, 1.6%. What's the SEC rate for Total Bond? 1.99%. What has the the total return been for Total Bond, 1-3-5-10, not saying anything about the future, just how has it fared recently? 4.15%, 3.49%, 4.63%, 4.80%...
by nisiprius
Thu Jul 17, 2014 5:10 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2240

Re: POLL: Do you have a dedicated REIT allocation?

I have kept 10% of my portfolio in real estate funds for years (previously TIAA-CREF before I rolled this over to a Vanguard IRA, now Vanguard REIT and Global Real Estate Index). I didn't change this when I bought my home, because I don't view the home as an investment; if the value of my home chan...
by nisiprius
Thu Jul 17, 2014 3:47 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: Do you have a dedicated REIT allocation?
Replies: 123
Views: 6471

Re: Why I can't be a day trader.

Tangentially, it's been a while since I heard the term "day trader." I didn't think it just meant occasional casual intraday speculation. I thought that margin and high leverage were an intrinsic part of day-trading, and that the meaning of "day" traders is that they were traders...
by nisiprius
Thu Jul 17, 2014 1:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Why I can't be a day trader.
Replies: 38
Views: 2925

Re: Total Bond Yield vs. 5 year CD Interest Rates

CDs do have a small risk--the risk that you need they money before maturity, need to "break" them before maturity and pay a penalty. CDs have an indefinable risk--we are accustomed to think that, just as we have a right to redeem a mutual fund at end-of-day NAV, we have a right to break a ...
by nisiprius
Thu Jul 17, 2014 1:20 pm
 
Forum: Investing - Theory, News & General
Topic: Total Bond Yield vs. 5 year CD Interest Rates
Replies: 16
Views: 2240

Re: New Edition of Random Walk in January 2015

...Did he have the stuff about how he was investing in closed-end funds that were priced below the sum of the parts back in the first edition... Yes. See my post, Walking Down Wall Street in 1973 . There's relatively little about mutual funds as we know them, and he does mention closed-end funds ex...
by nisiprius
Thu Jul 17, 2014 11:56 am
 
Forum: Investing - Theory, News & General
Topic: New Edition of Random Walk in January 2015
Replies: 33
Views: 2214

Re: Living on Dividends

Two criticisms. ...I'm not really interested in bonds, as stocks have a higher historical return, which is what matters to me in my situation. No, what matters is not the historical return, but the future return. Not the "expected return," not the estimated future return for all of eternit...
by nisiprius
Thu Jul 17, 2014 11:23 am
 
Forum: Investing - Help with Personal Investments
Topic: Living on Dividends
Replies: 16
Views: 3538

Re: Withdrawal Rate and Net Worth

Do any of you use net worth when calculating your withdrawals. Eg, you are withdrawing 4% of your net worth rather than just your portfolio. After all, let's say your home equity is a big part of your net worth and you are willing/ready to downsize than why not include that total as your real asset...
by nisiprius
Thu Jul 17, 2014 9:00 am
 
Forum: Investing - Theory, News & General
Topic: Withdrawal Rate and Net Worth
Replies: 16
Views: 1770

Re: Very high interest rate in other countries? How come?

I just looked at historical US rates: Does this mean when it was 15-10%, the US was high risk currency? No, it just means there was high inflation. You always need to think in "real" terms, i.e. compensate for inflation. I once had a CD paying 13.602%, ...but since the inflation rate was ...
by nisiprius
Thu Jul 17, 2014 8:47 am
 
Forum: Investing - Theory, News & General
Topic: Very high interest rate in other countries? How come?
Replies: 44
Views: 3151
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