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Re: IBM: Stock Buybacks Gone Wrong?

Buybacks are investments. They may give a positive return; however, they can also give a negative return if the company is overpaying for the stock. Stock buybacks are money paid to shareholders. They are very much like dividends that you might take optionally at capital gains rates, or reinvest wi...
by ogd
Wed Oct 22, 2014 2:07 am
 
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 23
Views: 910

Re: "You're invited to...." (nonsense talk and dinner)

Can you go and heckle? And film the whole thing? That would be awesome. I wouldn't go on principle, because I'd get paid from profits extracted from the retirement funds of other (hapless) attendees. You could say that they'd get ripped off anyway, but the cost of my dinner lowers their profit margi...
by ogd
Tue Oct 21, 2014 5:13 pm
 
Forum: Personal Consumer Issues
Topic: "You're invited to...." (nonsense talk and dinner)
Replies: 48
Views: 2313

Re: Sharebuilder, large account bonus - Good funds to use?

Vanguard does not play the same game of buying customers. I'm always ready to be bought. We, the owners of Vanguard, are not ready to buy you. In fact, we welcome your likely use of our funds at other brokers, reducing the account administration costs we pay to VBS but still contributing fairly to ...
by ogd
Tue Oct 21, 2014 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: Sharebuilder, large account bonus - Good funds to use?
Replies: 26
Views: 711

Re: Individual Bonds versus Bond Funds - Again

It's the same risk, really--it just shows up in different situations. I would say that I think it is far more likely that one would need to sell their own individual bonds early than it is that 75% of investors would suddenly bail on, say, VG Intermediate Term Tax Exempt. Well, yes and no. First of...
by ogd
Mon Oct 20, 2014 9:54 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Bonds versus Bond Funds - Again
Replies: 17
Views: 1187

Re: Limited Term Tax Exempt as a spot for short term savings

At 0.36%, there is no reason for any small investor to consider this fund, with 1% savings accounts available. Even the Limited Term fund at 0.80% is something I'd skip over a savings account. You get a little extra for a lot more risk and it's just not worth it when you're getting a deal some much...
by ogd
Mon Oct 20, 2014 9:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Limited Term Tax Exempt as a spot for short term savings?
Replies: 24
Views: 2321

Re: Advice sought for $6M investment

Makes sense. Still, the loss by lower yields is more abstract than looking at your 6 million shrink in your vanguard account. That's about the only advantage, yes. And the illusion would quickly dissipate if you needed to sell one of these things, and on top of the rate loss you lost a few more ten...
by ogd
Mon Oct 20, 2014 6:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice sought for $6M investment
Replies: 36
Views: 3595

Re: Advice sought for $6M investment

Fair enough but you can lose money in a bond fund if rates rise correct (NAV decreases) ?? If you buy individual bonds you cannot lose money if you hold to maturity. You lose money by not getting higher yields. Same amount, to the penny. It's just that the fund (or market value of individual bonds,...
by ogd
Mon Oct 20, 2014 5:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice sought for $6M investment
Replies: 36
Views: 3595

Re: Advice sought for $6M investment

The plan looks really good, except I too would consider a state municipal fund for half of the bond index investment, given your tax bracket. I limit my own muni investments to 50% of fixed income, even at the cost of tax efficiency, so I wouldn't recommend more to others either. Do not use individu...
by ogd
Mon Oct 20, 2014 3:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Advice sought for $6M investment
Replies: 36
Views: 3595

Re: 401K changing Pimco Tot Ret to VG Int Term Bond Index. O

Not because the percentage of Treasuries is such-and-such, but because it's fixed at 50%, whereas TBM will drift over time, albeit slowly, depending on government policies. I don't think that's exactly correct. I see that on the fund profile page the product summary says "This index fund offer...
by ogd
Mon Oct 20, 2014 3:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401K changing Pimco Tot Ret to VG Int Term Bond Index. OK?
Replies: 14
Views: 738

Re: Attending/Resident Physician Couple - Porfolio Review

Excellent advice above, but I too would not pay down a 3.5% mortgage. The fact that they may be moving is not a problem. It is increasing their net worth in the form of reducing their debt liability. And even at that low rate, paying down the mortgage still gives them an absolutely guranteed rate of...
by ogd
Mon Oct 20, 2014 3:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Attending/Resident Physician Couple - Porfolio Review
Replies: 20
Views: 3009

Re: Alternative Investments!

I am thinking about some I Bonds, but might wait until interest rates rise to get a higher set rate for these. Anybody have any ideas about good alternative investments that might be good not or even sometime down the road? I think I Bonds are such a good deal comparatively that one should not cons...
by ogd
Mon Oct 20, 2014 2:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Alternative Investments!
Replies: 5
Views: 473

Re: Bond investing.

The best way is to trust that the market is pricing risk and return properly and in isolation they are equally good deals. Don't try to outsmart the average of thousands of professional bond investors, which is even better than any of them separately. In a portfolio, things change and safer bonds be...
by ogd
Mon Oct 20, 2014 2:45 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bond investing.
Replies: 3
Views: 272

Re: Limited Term Tax Exempt as a spot for short term savings

The SEC yield on Vanguard Short-Term Tax-Exempt is a little low at 0.28%, but note that the Distribution yield is 0.68%. In the case of the Admiral Shares the SEC yield is 0.36% with the Distribution yield at 0.76%. At 0.36%, there is no reason for any small investor to consider this fund, with 1% ...
by ogd
Mon Oct 20, 2014 2:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Limited Term Tax Exempt as a spot for short term savings?
Replies: 24
Views: 2321

Re: How does one hedge against deflation?

Though again let's hope to live to see how the Japan debt mountain is resolved, if it's not 'political' to discuss that (because it's Japan, you assume I'm not from Japan I take it?), to see if a floating fiat monetary system insures the long term safety of JGB's starting from 250% debt/GDP ratio. ...
by ogd
Mon Oct 20, 2014 1:58 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 48
Views: 3226

Re: How does one hedge against deflation?

1-3. Yes the whole point is that your theory means there can't be severe prolonged deflation. The point isn't that I'm saying any particular level of inflation would be caused by govt monetizing its debt, but it is *inflationary* relative to the scenario where it doesn't take such monetizing action...
by ogd
Mon Oct 20, 2014 1:25 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 48
Views: 3226

Re: Individual Bonds versus Bond Funds - Again

The article also makes the mistake of conflating income and return. Between these two Treasuries: 8/15/2019 3.625 110.2500 110.3125 -0.2813 1.405 8/15/2019 8.125 131.5781 131.5938 -0.3125 1.335 It really doesn't matter to me if the fund "has to" sell the second and buy the first; they are ...
by ogd
Mon Oct 20, 2014 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: Individual Bonds versus Bond Funds - Again
Replies: 17
Views: 1187

Re: 2 Fund Portfolio...which Bond fund?

Total Bond Market is safe, cheap, large and very available in 401k's. Intermediate funds are appropriate for most portfolios. For high equity allocations (80%+), long term bonds can also work well, but they have considerably higher volatility that would hurt the efficiency of lower equity portfolios...
by ogd
Mon Oct 20, 2014 12:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2 Fund Portfolio...which Bond fund?
Replies: 4
Views: 438

Re: The Euro-Boglehead way of Bonds

What would you see as the Boglehead way to seek a fairly safe exposure to bonds for investors in the Eurozone? The rates on safe Euro bonds are so low right now that I would keep doing what it sounds like you're doing, which is find good deals in safe banks. I would not overweight stocks for this r...
by ogd
Mon Oct 20, 2014 12:00 pm
 
Forum: Investing - Theory, News & General
Topic: The Euro-Boglehead way of Bonds
Replies: 6
Views: 583

Re: How does one hedge against deflation?

Your quote omitted and ignored my statement in the previous paragraph that some might claim a persistent deflation in USD is impossible, and it would be for the reason I took as obvious but you now state explicitly: the theory that the US govt would have to inflate to pay off debt if it couldn't pa...
by ogd
Mon Oct 20, 2014 11:53 am
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 48
Views: 3226

Re: 401K changing Pimco Tot Ret to VG Int Term Bond Index. O

This is a great fund; perhaps the only one that might be better than Total Bond Market. Not because the percentage of Treasuries is such-and-such, but because it's fixed at 50%, whereas TBM will drift over time, albeit slowly, depending on government policies. You don't see it showing up in discussi...
by ogd
Sun Oct 19, 2014 11:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401K changing Pimco Tot Ret to VG Int Term Bond Index. OK?
Replies: 14
Views: 738

Re: Rebalancing with dividends

This is probably silly but when I look at the transaction history showing individual purchases for a fund, I prefer to have fewer of them and I like having them in round numbers. It's just easier for me to visualize. +1 Particularly in a taxable account, these also have to make their way into a tax...
by ogd
Sun Oct 19, 2014 11:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Rebalancing with dividends
Replies: 8
Views: 944

Re: Why do people use age instead of life expectancy?

I have always found the "age in bonds" discussions a bit bizarre. Your age as such MEANS NOTHING from an investment point of view. It is a useless factoid. It is being used as a proxy for life expectancy by people whose Victorian delicacy prohibits talking about death. . So the question i...
by ogd
Sun Oct 19, 2014 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: Why do people use age instead of life expectancy?
Replies: 43
Views: 2889

Re: ETF or index fund as merchant deposit account?

The obvious problem is that ETFs take 3 days to settle. Sale proceeds are unavailable till then. The other problem is the one you mention, safety. Anything making reasonable yields right now has the potential to undo years of those yields overnight, or worse. You should use money market accounts, it...
by ogd
Sun Oct 19, 2014 2:47 pm
 
Forum: Personal Finance (Not Investing)
Topic: ETF or index fund as merchant deposit account?
Replies: 2
Views: 133

Re: How does one hedge against deflation?

garland: very well said! The one thing I'd add is one can prevent "safe instruments being bid up" by holding some longer term Treasuries, or in the short end of the spectrum being able to retreat to 0% cash, which individual investors always are unlike institutional investors who might not...
by ogd
Sun Oct 19, 2014 2:41 pm
 
Forum: Investing - Theory, News & General
Topic: How does one hedge against deflation?
Replies: 48
Views: 3226

Re: need advice for bond fund in taxable low income high as

Thanks for that reminder, David. I keep forgetting that the percentage threshold applies to the Treasury tax discount, not just the proportion of in-state munis. It doesn't affect me personally because my taxable bond investments in taxable are either CDs or Treasuries, but I'll keep it in mind for ...
by ogd
Sat Oct 18, 2014 6:08 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1256

Re: Stocks as long term investments

Michael_Fisher1 wrote:Do you see potential for CSCO and MSFT? they are both cheap now. i favor tech stocks too

Michael: respectfully, this is probably the wrong forum for such questions. Try seekingalpha.com. What we can do here is present arguments for why you should not be investing in MSFT and CSCO separately.
by ogd
Sat Oct 18, 2014 3:00 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks as long term investments
Replies: 46
Views: 2817

Re: Stocks as long term investments

because you are simply putting more money in J&J than its market cap would indicate. Off topic from the OP, but a genuine question - if I've $20,000 to add to stocks and I fancy tilting to tech sector stocks, why should I drop three times as much into MSFT than as much invested into Cisco simpl...
by ogd
Sat Oct 18, 2014 2:57 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks as long term investments
Replies: 46
Views: 2817

Re: LASTPASS Password Program

Thanks for the reply. I guess I can try that, but now I need to know/store a good master password. Suggestions? There's an old thread with some file that worked on Window XP but that's not an option anymore for storing a master password. I guess I could just memorize something, probably with 10 or ...
by ogd
Sat Oct 18, 2014 1:33 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 16
Views: 1934

Re: Stocks as long term investments

I know you guys aren't big fans of investing in individual stocks but i feel some diversification in a few stocks can be good for the long term. My uncle put $8K in J and J in the 80s and was able to pay for my cousins college tuition with his earnings. This isn't diversification, it's concentratio...
by ogd
Sat Oct 18, 2014 1:25 pm
 
Forum: Investing - Theory, News & General
Topic: Stocks as long term investments
Replies: 46
Views: 2817

Re: How does Vanguard shield ETF shareholders from turnover

How does this all play out with funds where the holdings are less liquid -- say, international small cap or fixed income? Wouldn't the bid/ask spreads of the individual positions within a fund make a greater difference to the ETF investor who wouldn't bear those costs with another ETF provider? Sim...
by ogd
Sat Oct 18, 2014 1:15 pm
 
Forum: Investing - Theory, News & General
Topic: How does Vanguard shield ETF shareholders from turnover cost
Replies: 20
Views: 1381

Re: need advice for bond fund in taxable low income high as

Thanks a lot for this explanation. I never understood why the VG CPA was proposing that I buy "Vanguard California Intermediate-Term Tax-Exempt Fund" for my bond portion in the taxable space given that I am in a high tax bracket. Now it makes sense. But looks like this may be a bad choice...
by ogd
Sat Oct 18, 2014 1:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1256

Re: LASTPASS Password Program

runner9: you can set it to log out when idle or when browsers are closed.

See https://helpdesk.lastpass.com/extension ... /#Security . It's a big step down in convenience, to be sure.
by ogd
Fri Oct 17, 2014 6:46 pm
 
Forum: Personal Consumer Issues
Topic: LASTPASS Password Program
Replies: 16
Views: 1934

Re: So do we care more about change in bond price or bond yi

Doc: in your first message you asked what is the risk difference that produces extra yield. I answered that there is indeed one, and I also made an argument why it's a good tradeoff for the typical investor who is not using margin and who is not on the cusp of Flagship. This investor can match the l...
by ogd
Fri Oct 17, 2014 6:34 pm
 
Forum: Investing - Theory, News & General
Topic: So do we care more about change in bond price or bond yield?
Replies: 153
Views: 10497

Re: So do we care more about change in bond price or bond yi

Doc: the simple risk story that I believe you're looking for is this: the 5-to-zero fund has a fifth of its assets in Treasuries in their final year making 0.09% yield; these Treasuries are, for the purposes of the individual investor with 1% bank accounts, deadbeats. The 5-to-1 fund doesn't, and i...
by ogd
Fri Oct 17, 2014 5:45 pm
 
Forum: Investing - Theory, News & General
Topic: So do we care more about change in bond price or bond yield?
Replies: 153
Views: 10497

Re: So do we care more about change in bond price or bond yi

This is an example of the kind of wordy abstraction, and not enough bond math that leads to endless debate. Can you quantify "risky in isolation", "present state of uncertainty", and "reaping the fruit of that uncertainty, not just the risks"? Sure. "risky in isol...
by ogd
Thu Oct 16, 2014 10:13 pm
 
Forum: Investing - Theory, News & General
Topic: So do we care more about change in bond price or bond yield?
Replies: 153
Views: 10497

Re: Siren song of increased stock allocation

Where to start, where to start. You could start by ordering decaf for your next cup :beer It's gonna be over-roasted like everything else in your hangout of choice, but it should help with the creation of new portfolios . Your first post had it right -- if you want to be brave, be brave. Discoverin...
by ogd
Thu Oct 16, 2014 10:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: Siren song of increased stock allocation
Replies: 38
Views: 2880

Re: need advice for bond fund in taxable low income high as

Thanks a lot for this explanation. I never understood why the VG CPA was proposing that I buy "Vanguard California Intermediate-Term Tax-Exempt Fund" for my bond portion in the taxable space given that I am in a high tax bracket. Now it makes sense. But looks like this may be a bad choice...
by ogd
Thu Oct 16, 2014 9:32 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1256

Re: Balanced Index vs. TSM and TBM

ERs need to be weighted 60% and 40% respectively, so the combined ER is 0.06%.

But it isn't as much about that as it is about taxes. If in IRA or 401k, go for it, the ER difference is tiny.
by ogd
Thu Oct 16, 2014 9:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Balanced Index vs. TSM and TBM
Replies: 10
Views: 1033

Re: So do we care more about change in bond price or bond yi

Doc: the simple risk story that I believe you're looking for is this: the 5-to-zero fund has a fifth of its assets in Treasuries in their final year making 0.09% yield; these Treasuries are, for the purposes of the individual investor with 1% bank accounts, deadbeats . The 5-to-1 fund doesn't, and i...
by ogd
Thu Oct 16, 2014 9:13 pm
 
Forum: Investing - Theory, News & General
Topic: So do we care more about change in bond price or bond yield?
Replies: 153
Views: 10497

Re: need advice for bond fund in taxable low income high as

15% bracket ----> Total Bond Market or bank direct CDs. I thought this originally. The two credit unions I bank with are currently offering CD's around 1.9% which seems so low. Can anyone tell me if I am calculated this correctly? Vanguard int. term tax exempt bond VWITX has a SEC yield of 1.60%. S...
by ogd
Thu Oct 16, 2014 5:43 pm
 
Forum: Investing - Help with Personal Investments
Topic: need advice for bond fund in taxable low income high assets
Replies: 16
Views: 1256

Re: Dry Powder

What if the overwhelming majority of your portfolio is in a taxable account? Then a rebalance funded by selling one security class to buy another will likely have tax implications. In the best case, the stars might align and one could both rebalance and tax loss harvest. But if you're selling somet...
by ogd
Thu Oct 16, 2014 2:59 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3495

Re: Does "substantially identical" apply to combined securit

I've found and quoted recently at least one article that suggest combined securities aren't entirely safe: Or the tax expert/author quoted in this article: http://seekingalpha.com/article/44749-tax-loss-harvesting-and-the-wash-sale-rule, Robert Willens, again directly relevant: Replacing an S&P ...
by ogd
Thu Oct 16, 2014 1:35 pm
 
Forum: Investing - Help with Personal Investments
Topic: Does "substantially identical" apply to combined securities?
Replies: 31
Views: 1427

Re: TBM too much treasury?

"Rather than trying to pick the specific securities or sectors of the market (US stocks, international stocks, and US bonds) that will outperform in the future, Bogleheads buy funds that are widely diversified, or even approximate the whole market. This guarantees they will receive the average...
by ogd
Thu Oct 16, 2014 1:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: TBM too much treasury?
Replies: 67
Views: 4071

Re: TBM too much treasury?

Apparently diversification is good for equities, but bad for bonds. Not bad, just unimportant. Your entire bond portfolio can be in one asset -- a bank account or a single Treasury -- and you'll do just fine. There is no perfectly safe stock that I'm aware of, or sector, or even country. Don't redu...
by ogd
Thu Oct 16, 2014 1:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: TBM too much treasury?
Replies: 67
Views: 4071

Re: TBM too much treasury?

Yes, I would. Why not? There's additional risk but it is compensated. Why not indeed. You are being consistent in your view, and I agree. What bothers me is when some people preach the gospel of "investing in the market" when it comes to equities, but when it comes to bonds, all of a sudd...
by ogd
Thu Oct 16, 2014 1:03 pm
 
Forum: Investing - Help with Personal Investments
Topic: TBM too much treasury?
Replies: 67
Views: 4071

Re: Dry Powder

Now as we are seeing significant volatility,I thought I would revisit the topic and see whether there is any change in this perception. I had about 2% in cash and I have used it in the past week to put it to work, now it has dropped to about 1.5% and if I see more drops I can buy more. Arguably I c...
by ogd
Thu Oct 16, 2014 12:57 pm
 
Forum: Investing - Theory, News & General
Topic: Dry Powder
Replies: 49
Views: 3495

Re: TBM too much treasury?

This forum is bipolar when it comes to TBM. On one hand, you have those who claim it doesn't have enough corporates because of various problems, real or perceived, with the size of the Treasury market. On the other, you have those who say you're better off with a large amount of Treasuries, perhaps ...
by ogd
Thu Oct 16, 2014 12:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: TBM too much treasury?
Replies: 67
Views: 4071

Re: Find a way to explain to me "WHY" should I break up w/ M

Two names to research: Bill Miller and Bruce Berkowitz. Both are former star managers who (dollar weighted) have done extreme damage to their investors after long periods of outperformance.
by ogd
Wed Oct 15, 2014 5:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: Find a way to explain to me "WHY" should I break up w/ MDISX
Replies: 23
Views: 1101

Re: What happened to the audiophile?

Ahh, but the true pursuit of a true audiophile is the elimination of the negative traits of vinyl. Then and only then can the pure organic sound of vinyl be experienced. Buying higher end turntables, higher end cartridges, better phono pre-amps, higher quality cables. The next best pre-amp, an even...
by ogd
Wed Oct 15, 2014 5:08 pm
 
Forum: Personal Consumer Issues
Topic: What happened to the audiophile?[High quality music sources]
Replies: 71
Views: 3678

Re: How does Morningstar calculate bond fund return?

Yes, total return with dividends reinvested. All "growth of $10K" graphs work like that and we love'em.
by ogd
Wed Oct 15, 2014 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: How does Morningstar calculate bond fund return?
Replies: 1
Views: 169
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