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Re: Is the collapse of oil price a "black swan"?

I couldn't say because truthfully, here's what I know about Oil: it's black and it burns. But when I see this many people talking about it and using word like "Black Swan", I know I gotta get me some. So I bought my first position about a month ago. It's a lot cheaper right now, so I'm goi...
by ot1138
Thu Dec 11, 2014 10:14 am
 
Forum: Investing - Theory, News & General
Topic: Is the collapse of oil price a "black swan"?
Replies: 87
Views: 7596

Re: lending club

I shudder whenever I hear someone say they treat Lending Club like bonds ... you have default, call, liquidity, institutional and concentration risks above and beyond typical bonds or bond funds: http://lazytraders.com/insights/5-lending-club-risks-why-peer-to-peer-may-lend-itself-to-problems/ They...
by ot1138
Wed Dec 10, 2014 9:52 am
 
Forum: Investing - Theory, News & General
Topic: lending club
Replies: 50
Views: 3928

Re: 2014 Portfolio Returns

Now, are you guys factoring in contributions? Say you had 10k on Jan 1st, and at the end of the year you had 15k, but throughout the year you put in 2,500 throughout the year. Would your return be based on 15-12.5 or are you considering just the start and the end? I have thought a lot recently abou...
by ot1138
Mon Dec 08, 2014 2:19 pm
 
Forum: Investing - Theory, News & General
Topic: 2014 Portfolio Returns
Replies: 23
Views: 1738

Re: 2014 Portfolio Returns

livesoft wrote:How is that relative to your benchmark? :twisted:


70/30 equity/bond benchmark is up +9.9% between Jan 1 and Dec 1. I'm not sure why that matters though, because you can't spend a benchmark.
by ot1138
Mon Dec 08, 2014 12:42 pm
 
Forum: Investing - Theory, News & General
Topic: 2014 Portfolio Returns
Replies: 23
Views: 1738

2014 Portfolio Returns

Well, I guess it's about that time of year and I don't see another thread already... so let's post those 2014 portfolio returns!

We still have about three weeks of the year left but I am currently +11.5%.
by ot1138
Mon Dec 08, 2014 12:25 pm
 
Forum: Investing - Theory, News & General
Topic: 2014 Portfolio Returns
Replies: 23
Views: 1738

Re: Any Momentum Investors Out There?

I'd feel better about books or papers that have been vetted by reputable academics or people whose opinion I trust, or ones written by academics or practitioners with a reputation for strong work. Are you interested mostly in momentum of asset classes, like I am? If you're also interested in moment...
by ot1138
Sat Dec 06, 2014 11:37 pm
 
Forum: Investing - Theory, News & General
Topic: Any Momentum Investors Out There?
Replies: 97
Views: 7488

Re: lending club

Do any of you whom participate manually choose the loans to back or do you use some kind of automation tool? I assume that some kind of service exists. I am not very familiar. I used a third-party automation tool for awhile. It was great but they ended up shutting down due to restrictions placed on...
by ot1138
Wed Dec 03, 2014 3:52 pm
 
Forum: Investing - Theory, News & General
Topic: lending club
Replies: 50
Views: 3928

Re: lending club

I am interested in hearing more about people's experiences with LC and Prosper. From what I gather, it's best to use an IRA, with at least $10k to invest. I would look at it as just another bond allocation in my accounts. I have read that the P2P market does not correlate with the equity or bond ma...
by ot1138
Wed Dec 03, 2014 3:50 pm
 
Forum: Investing - Theory, News & General
Topic: lending club
Replies: 50
Views: 3928

Re: Any Momentum Investors Out There?

Momentum and value strategies are pretty much the bedrock of retail trading. They've stood the test of time (my father used to trade using both of these techniques in the 70s). Most strategies are simply variants of these. Ironically, I was a floor trader and that experience gave me a healthy fear o...
by ot1138
Wed Dec 03, 2014 3:49 pm
 
Forum: Investing - Theory, News & General
Topic: Any Momentum Investors Out There?
Replies: 97
Views: 7488

Re: lending club

I am quite fond of LendingClub. Been doing it almost two years, right after I saw a number of comments on this board discouraging it without good reason. I figured if such a bright group of people were shying away from it and were clearly wrong in their analysis, then it had to be a good investment....
by ot1138
Wed Dec 03, 2014 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: lending club
Replies: 50
Views: 3928

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

Who cares what returns will be or end up? LOL. I do. It is interesting why folks are so enamored on trying to control the one aspect of investing that can't be controlled and that is return. No, folks are enamored not with controlling it, but forecasting it reliably. Big difference. I don't want to...
by ot1138
Wed Nov 19, 2014 3:10 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 6634

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

When you say "predictable" do you mean retrospective predictions? I mean out-of-sample prediction. Would anyone take any research seriously if it were based only on in-sample predictions? That's nothing more than curve fitting. 8 Than to validate the approach you have to wait until the en...
by ot1138
Wed Nov 19, 2014 3:06 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 6634

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

When you say "predictable" do you mean retrospective predictions? I mean out-of-sample prediction. Would anyone take any research seriously if it were based only on in-sample predictions? That's nothing more than curve fitting. Do you really mean "confidence interval" or "p...
by ot1138
Tue Nov 18, 2014 3:40 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 6634

Re: Jack Bogle: expect 7% annualized for the foreseeable fut

I think it's a very good prediction.

10-year equity returns are highly predictable (this is a point well-supported by academic research). My own model currently outputs 10-year returns at 6.9%. However, my confidence intervals are 2.7%-9.9% with median return of 5.8% nominal return.
by ot1138
Tue Nov 18, 2014 12:56 pm
 
Forum: Investing - Theory, News & General
Topic: Jack Bogle: expect 7% annualized for the foreseeable future
Replies: 42
Views: 6634

Re: Prof Andrew Ang - Factor Investing Textbook Online

Thank you for sharing. Just read the preface and first chapter and learned a lot. A very interesting read and I look forward to the rest.
by ot1138
Mon Jun 02, 2014 12:52 pm
 
Forum: Investing - Theory, News & General
Topic: Prof Andrew Ang - Factor Investing Textbook Online
Replies: 9
Views: 1435

Re: How to decide your number?

What are your thoughts on how I am taking a shoot at this and how you would go about it? Start by calculating your SWR. If retiring younger, it will be lower. In my case, early 40s with wife and family, my SWR is 2.8%. For someone retiring at 65, probably around 4%. Invert that (1/SWR) to come up w...
by ot1138
Fri May 23, 2014 10:13 am
 
Forum: Personal Finance (Not Investing)
Topic: How to decide your number?
Replies: 61
Views: 7435

Re: Are Single Premium Annuities a good deal?

I don't think you're going to get a 8%-9% spend rate for a couple at age 60 with a 20 year guarantee. That's about what we would achieve today with today's rates if we implemented that plan. The way that is achieved is through using deferred annuities which result in a higher payout. A 10 year defe...
by ot1138
Thu May 15, 2014 8:20 am
 
Forum: Investing - Theory, News & General
Topic: Are Single Premium Annuities a good deal?
Replies: 91
Views: 4470

Re: The Great Bond prediction Bust of 2014

Interest rates can hold for another 6-18 months at these levels. If they go up slowly and/or don't increase as much as people thing, then a 4-5 duration bond position should exhibit positive returns. But then again, they might shoot up more than expected or more quickly. Who knows? Personally, I sti...
by ot1138
Thu May 15, 2014 7:31 am
 
Forum: Investing - Help with Personal Investments
Topic: The Great Bond prediction Bust of 2014
Replies: 12
Views: 1695

Re: "Fortune favors the bold" (or does it?)

Luck and Timing are the most important ingredients to success. As someone who first interviewed and studied a number of successful entrepreneurs before going out on my own, failing over and over again, struggling for a decade against string after unbelievable string of bad luck and setbacks... well...
by ot1138
Mon May 12, 2014 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: "Fortune favors the bold" (or does it?)
Replies: 31
Views: 2618

Re: "Fortune favors the bold" (or does it?)

Entrepreneurship isn't as risky as it appears on the outside, at least if you are young enough (20s to early-30s). If you're smart, you'll do the first couple of ventures on a part-time basis. Those inevitably fail but you figure out if you're cut out for it or not. Stick with it and utilize the res...
by ot1138
Mon May 12, 2014 1:36 pm
 
Forum: Investing - Theory, News & General
Topic: "Fortune favors the bold" (or does it?)
Replies: 31
Views: 2618

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 11:13 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 10:55 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: 2.5 mil to 10 mil - are we on track

sure sounds like timing to me, based on the comments. timing and planning - very similar to some degree. bottom line - save and invest, and ignore the noise. Savings can affect this equation a lot. An extra 10% saved is significant. So you're assuming that markets will go up in your lifetime? Sure ...
by ot1138
Mon May 12, 2014 10:20 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: 2.5 mil to 10 mil - are we on track

So to add to what an earlier poster wrote, Bogle, Ferri, Swedroe, Asness, Hussman, Shiller, Grantham, etc. all think that the coming 10 years are likely not going to be that great. They base that on current valuations and certainlly people like Swedroe and Ferrri aren't saying for sure or "ver...
by ot1138
Mon May 12, 2014 9:41 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: The Importance of Sequencing in Withdraw Plans

This is a very interesting concept. I'm familiar with the sequence of returns concept before but never really thought about the impact of trying to avoid two down years in a row. Momentum-based index trading strategies might work very well for this. They do not increase returns significantly but the...
by ot1138
Mon May 12, 2014 8:53 am
 
Forum: Investing - Theory, News & General
Topic: The Importance of Sequencing in Withdraw Plans
Replies: 9
Views: 1160

Re: 2.5 mil to 10 mil - are we on track

It seems like there was a suggestion that investors can predict the future. I'm not seeing where you got this idea. I understand market timing - thats how I made money in the market. I held an iPod many many years ago and I bought the stock. I ate at panera and chipotle a long time ago (panera a re...
by ot1138
Mon May 12, 2014 7:42 am
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: 2.5 mil to 10 mil - are we on track

What are the boglehead triggers for market timing, and predictions, and how can we use those to change our expected returns. That information would be very helpful for future planning, as it may indicate that I need to plan to work longer or shorter. Returns will be better than average after a 50% ...
by ot1138
Sun May 11, 2014 6:44 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: What does it take to make a banker notice you ?

I was burned pretty badly by a major bank back in 2008. I went there based on the advice of someone I thought knew better. In 2012, I reconnected with my best friend from college. Turns out he is a wealth manager. The bank wined and dined me and in the end got my business. They got my checking accou...
by ot1138
Sun May 11, 2014 4:42 pm
 
Forum: Investing - Help with Personal Investments
Topic: What does it take to make a banker notice you ?
Replies: 32
Views: 4403

Re: 2.5 mil to 10 mil - are we on track

It is interesting that people comment on private school - my question didn't ask about that, and I know the cost - I am writing the check, so obviously I am aware of the cost. Anyway, I appreciate your judgment and concern for my kids and their alternatives. It is also interesting that people think...
by ot1138
Sun May 11, 2014 4:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: 2.5 mil to 10 mil - are we on track

You need to get Jim Otar's retirement calculator. It will give you an answer you can be confident of very quickly.
by ot1138
Sun May 11, 2014 4:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: 2.5 mil to 10 mil - are we on track
Replies: 91
Views: 9704

Re: Economist Gary Becker has died

This is one of the reasons I love this forum. Smart people talking about even smarter people who created the ideas behind why I think I'm so smart.

Human capital is one of the most personally uplifting concepts I took my 20 years of education.
by ot1138
Tue May 06, 2014 8:08 pm
 
Forum: Investing - Theory, News & General
Topic: Economist Gary Becker has died
Replies: 6
Views: 1163

Re: Is it okay to keep all your assets with one fund company

Guess I should add that I agree that JPM and ML were rife with criminal activity. As were most of the others (GS comes to mind). I was a floor trader, I've just seen too much stuff firsthand to think otherwise. Vanguard and Fidelity have my respect in this regard. Been approached by young turks at a...
by ot1138
Tue May 06, 2014 8:06 pm
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 6069

Re: Is it okay to keep all your assets with one fund company

I am 50-50 between Fidelity and Vanguard. I realize I pay a few extra dollars a year for having holdings at Fidelity but my discomfort with that is dwarfed by the fear of having to work for the rest of my life if for some ungodly reason one of them folds. My bigger worry is that if one goes under, s...
by ot1138
Tue May 06, 2014 8:03 pm
 
Forum: Investing - Theory, News & General
Topic: Is it okay to keep all your assets with one fund company?
Replies: 48
Views: 6069

Re: Variable Percentage Withdrawal (VPW)

I have been modeling this a lot lately and have discovered a few things: * If you have more than 33x your initial income (withdrawal amount including taxes) then you're very likely to have a large estate when you die. Between 25-33x, you are taking a risk. Below 25x and you stand a very high chance ...
by ot1138
Tue May 06, 2014 5:42 pm
 
Forum: Investing - Theory, News & General
Topic: Variable Percentage Withdrawal (VPW)
Replies: 510
Views: 86844

Re: Maybe Bonds Are Normal Now

Five years of very active Fed intervention in the bond market is not normal. If it does become the norm we are in deep doo doo. Not true. The federal government has been interfering with bond markets since the 1790s. It is quite normal. The Fed has been influencing interest rates for a long time. I...
by ot1138
Tue May 06, 2014 5:25 pm
 
Forum: Investing - Theory, News & General
Topic: Maybe Bonds Are Normal Now
Replies: 19
Views: 3331

Re: Maybe Bonds Are Normal Now

http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=zEh http://research.stlouisfed.org/fred2/graph/?g=zEh Five years of very active Fed intervention in the bond market is not normal. If it does become the norm we are in deep doo doo. Not true. The federal government has been interfering with...
by ot1138
Mon May 05, 2014 5:48 pm
 
Forum: Investing - Theory, News & General
Topic: Maybe Bonds Are Normal Now
Replies: 19
Views: 3331

Re: Regret - Stock % too high in taxable, and too low in Rot

Now reverse that so that equities are in TAA and bonds are in taxable. This is the mistake and is exactly what my example was meant to illustrate. If you simply switch the location where each asset is held, the second portfolio has a higher effective allocation to stocks since a Roth account is mor...
by ot1138
Fri May 02, 2014 4:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3130

Re: Enough to retire? Advise on LTC and investing inheritan

1) Do we have enough to retire? We have no investing experience, have always been employees, and frankly are a bit frightened of the prospect of living without a paycheck. Yes, you have 36x annual expenses, a pension, and social security coming. The question is not whether you have enough to retire...
by ot1138
Fri May 02, 2014 3:39 pm
 
Forum: Investing - Help with Personal Investments
Topic: Enough to retire? Advise on LTC and investing inheritance
Replies: 18
Views: 2348

Re: Regret - Stock % too high in taxable, and too low in Rot

Portfolio 1 100% equities in taxable, investor has 25% marginal tax rate Portfolio 2 80% equities in Roth 20% money market fund in Roth These have about the same riskiness. Whatever happens with equities, the taxable portfolio will gain/lose about the same amount as the Roth portfolio. If you ignor...
by ot1138
Fri May 02, 2014 3:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3130

Re: Regret - Stock % too high in taxable, and too low in Rot

Ketawa wrote:
ot1138 wrote:The assumption that stocks return more than bonds will result in a riskier portfolio returning more.


I have no problem with that assumption.

However, I assumed nothing. My model did all the work for me. And it was based on after-tax returns (obviously).
by ot1138
Fri May 02, 2014 1:27 pm
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3130

Re: Regret - Stock % too high in taxable, and too low in Rot

I followed the standard Boglehead advice about putting stocks in taxable accounts and bonds in TAA for a few years. Then I modeled what would happen over a 10 year time frame and came to the same conclusions as you... it's silly for someone in accumulation phase to follow this advice. The after-tax ...
by ot1138
Fri May 02, 2014 11:01 am
 
Forum: Investing - Help with Personal Investments
Topic: Regret - Stock % too high in taxable, and too low in Roths
Replies: 41
Views: 3130

Re: Convince me to lump sum into the market

I'm not aware of any convincing research that shows DCA provides any benefit. I would recommend VCA'ing into the market though as it has been shown to enhance returns (slightly). VCA requires a prediction of returns. It is entirely impossible to prove it does anything. Of course, it can be tuned to...
by ot1138
Wed Apr 30, 2014 12:13 pm
 
Forum: Investing - Help with Personal Investments
Topic: Convince me to lump sum into the market
Replies: 57
Views: 11322

Re: Why will stocks/bonds do worse than in the past?

Using a PE10 model we should expect the mean of the distribution curve for stocks for the next 10 years to be 6.17% nominal. (1/PE10 + 10yr treasury yield - 10yr TIPS yield) Using an attribution model stocks should return (dividend yield + productivity growth rate + population growth rate + inflati...
by ot1138
Wed Apr 30, 2014 10:35 am
 
Forum: Investing - Theory, News & General
Topic: Why will stocks/bonds do worse than in the past?
Replies: 30
Views: 5637

Re: Convince me to lump sum into the market

I'm not aware of any convincing research that shows DCA provides any benefit. I would recommend VCA'ing into the market though as it has been shown to enhance returns (slightly).
by ot1138
Wed Apr 30, 2014 10:31 am
 
Forum: Investing - Help with Personal Investments
Topic: Convince me to lump sum into the market
Replies: 57
Views: 11322

Re: Time to go on defense? Win by not losing?

You didn't say what your thought process is behind "going defensive". Is this motivated by the size of your portfolio or your opinion of equity prices?

70/30 seems just fine to me and I see little practical difference from 50/50.
by ot1138
Tue Apr 29, 2014 8:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Time to go on defense? Win by not losing?
Replies: 7
Views: 1364

Re: POLL: the WORST financial advice you've given/received?

2007: my wealth manager gives me the following great advice: 1. Diversify by purchasing three actively managed hedge funds. 2. Instead of bonds, buy a privately traded REIT. Several months later, we met and he seemed absolutely shocked that my account was up $40k. That should've been a warning sign....
by ot1138
Tue Apr 29, 2014 7:15 pm
 
Forum: Investing - Theory, News & General
Topic: POLL: the WORST financial advice you've given/received?
Replies: 61
Views: 15424

Re: Most reliable way to double a portfolio in 12 years

If you wanted to double the size of a portfolio in 12 years how would you invest the money. If it goes over that's fine but not necesssary. The goal is to fine the most likely and least risky investment option to achieve this goal. I'm glad you said "least risky" because there's currently...
by ot1138
Tue Apr 29, 2014 4:58 pm
 
Forum: Investing - Theory, News & General
Topic: Most reliable way to double a portfolio in 12 years
Replies: 55
Views: 14957

Re: Bernstein retirement plan

I get the logic of reducing exposure to equities as it reduces volatility. Reduce it too much and your portfolio will deplete much faster. If you have 30x savings, you have more years of padding. It's all a tradeoff. But I don't get the logic of keeping the funds separate from the rest of the portfo...
by ot1138
Tue Apr 29, 2014 4:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bernstein retirement plan
Replies: 41
Views: 7399

Re: Thinking about retiring early - tell me what I've missed

Hi everyone, I wanted to thank you for your feedback. This thread inspired me to take a self-guided crash course in retirement planning. One point I had completely misunderstood was that the "4% rule" just doesn't apply to someone as young as myself. I've looked at a few different approach...
by ot1138
Tue Apr 29, 2014 4:46 pm
 
Forum: Investing - Help with Personal Investments
Topic: Thinking about retiring early - tell me what I've missed
Replies: 42
Views: 5968

Re: Does it make any sense to hold "cash" as an asset?

Speaking from personal experience: 1) You need some cash for day-to-day needs. 2) If you are VCA'ing into the market, you will be holding on to a significant amount of cash for 3-5 years. Personally, I'm still 25% in cash and won't be fully invested in the market for 2 more years. 3) If you follow t...
by ot1138
Fri Apr 25, 2014 8:48 pm
 
Forum: Investing - Theory, News & General
Topic: Does it make any sense to hold "cash" as an asset?
Replies: 39
Views: 9393
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