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Re: Poll: When did you retire? Would you do it all over agai

Do what you love as long as your good at it.


Best advice ever.
by ot1138
Tue Mar 25, 2014 8:09 am
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10681

Re: Poll: When did you retire? Would you do it all over agai

So the concept of retirement is interesting to me. If I were to liquidate everything today, I might be a bit shy given that I have a family of five. Let's say, maybe $85k/year in safe withdrawals. I wait 2 years, that jumps to $120k/year. Wait another six and that jumps to $160k (today's dollars). ...
by ot1138
Mon Mar 24, 2014 6:52 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10681

Re: Poll: When did you retire? Would you do it all over agai

fmhealth, I am so very intrigued by your post. I am wondering about a couple of things and maybe someone like you who has been there before me can help point the way. I am 42 and have just about 300k travel miles at this point so I'm a ways behind you. Still have a few places I'd like to check off t...
by ot1138
Sun Mar 23, 2014 10:48 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10681

Re: Investing in stocks--A surprising Google report ?

Bogleheads: I put two questions in Google about stocks and came up with these results: 1. "Stocks. 'I made a lot of money'" = 958,000 hits. 2. "Stocks. 'I lost a lot of money'" = 4,840,000 hits. I am surprised at the results because the long-term trend of stocks has been UP (har...
by ot1138
Mon Mar 17, 2014 4:48 pm
 
Forum: Investing - Theory, News & General
Topic: Investing in stocks--A surprising Google report ?
Replies: 37
Views: 4090

Re: Bubble Behavior?

No. In the late 90's people all around me were daytrading stocks in their cubes. Can't remember the last time I have heard anyone even mention a stock. Had lunch with some new employees about a month back. One of them told me he had a buddy who sold his house and car and started a day trading busin...
by ot1138
Mon Mar 17, 2014 4:46 pm
 
Forum: Investing - Theory, News & General
Topic: Bubble Behavior?
Replies: 18
Views: 2010

Re: Bubble Behavior?

Imagine that a cap-weighted package of S&P 500 stocks was selling for quadruple the total of the same stocks priced individually. Imagine that your friends were buying it, and that when you asked them why it seemed to be selling for four times what it was worth, one of them says "Who cares...
by ot1138
Mon Mar 17, 2014 9:38 am
 
Forum: Investing - Theory, News & General
Topic: Bubble Behavior?
Replies: 18
Views: 2010

Re: Poll: When did you retire? Would you do it all over agai

I haven't but have been thinking about it. I'm 42 and the only thing that's stopping me is that I don't really know what I do. I hear bad stories about a lot of retirees who slowly get dull (I'm guessing the group of brilliant overachievers on this board are the exception rather than the rule). I'll...
by ot1138
Wed Mar 12, 2014 7:59 pm
 
Forum: Investing - Theory, News & General
Topic: Poll: When did you retire? Would you do it all over again ?
Replies: 103
Views: 10681

Re: Lump Sum Investing in this Market

Valuations are anywhere from slightly low to sky high depending on who you ask. But nobody knows for sure. My personal opinion is that valuation is somewhat high but we have plenty of runway before things get "frothy". But what does my opinion matter? I recommend you VCA in. There's no evi...
by ot1138
Tue Mar 04, 2014 8:30 pm
 
Forum: Investing - Help with Personal Investments
Topic: Lump Sum Investing in this Market
Replies: 14
Views: 1227

Re: Warning about P2P Lending [Peer-to-Peer]

14.5% after adjusting for defaults/grace periods after 13 months. Stay the course.
by ot1138
Thu Feb 20, 2014 12:02 pm
 
Forum: Investing - Theory, News & General
Topic: Warning about P2P Lending [Peer-to-Peer]
Replies: 42
Views: 4770

Re: Do you roll your own investing "Dashboard?"

I use Mint for daily (close enough to real time) updating. Works great. I've created my own spreadsheet for tracking asset classes and rebalancing. I have since added a number of worksheets to this which include: * Transaction history - very useful for calculating IRR * Rental property income and fo...
by ot1138
Thu Feb 06, 2014 8:26 pm
 
Forum: Investing - Theory, News & General
Topic: Do you roll your own investing "Dashboard?"
Replies: 14
Views: 1409

Re: Just got a free consultation by Personal Capital. Though

I don't know about everything else but IMO I agree with them that your bond allocation is too high and your alternatives are too low. I base this on my own computer modeling which came up with a similar split as them. Don't for the life of me see what the advantage is of owning 60 individual stocks ...
by ot1138
Tue Feb 04, 2014 10:40 am
 
Forum: Investing - Theory, News & General
Topic: Just got a free consultation by Personal Capital. Thoughts?
Replies: 49
Views: 4811

Re: Option selling vs. buy-and-hold

As a former option trader, I would advise caution here. I knew several guys who made good money every month doing this. Until they didn't.

One of those guys was me...
by ot1138
Thu Jan 30, 2014 8:20 am
 
Forum: Investing - Theory, News & General
Topic: Option selling vs. buy-and-hold
Replies: 14
Views: 1152

Re: Bonds - Throw it all on the table!!!

1) List the bond funds, individual bonds, CD's, etc. that you invest in Vanguard total bond market and Vanguard tax exempt. 2) In which account what fixed income securities are held I keep all fixed income in taxable accounts. This is the opposite of what the wiki suggests. My reasoning for this is ...
by ot1138
Wed Jan 29, 2014 7:53 pm
 
Forum: Investing - Theory, News & General
Topic: Bonds - Throw it all on the table!!!
Replies: 84
Views: 7447

Re: Do Bogleheads see this market dip as a buying point?

No changes here... my equity position is only down about 2.3% from ideal.
by ot1138
Wed Jan 29, 2014 7:48 pm
 
Forum: Investing - Theory, News & General
Topic: Do Bogleheads see this market dip as a buying point?
Replies: 127
Views: 13420

Re: Your thoughts - WSJ: A New Era in the Bond Market

If you use bonds to lower the risk of your portfolio, then this is good news Last year, the Barclays BARC.LN -0.86% U.S. Aggregate Bond Index, the most commonly used benchmark for the bond market, lost 2.1%. That marked its first decline since 1999 and the worst performance since 1994. I am sure I ...
by ot1138
Wed Jan 22, 2014 10:28 pm
 
Forum: Investing - Theory, News & General
Topic: Your thoughts - WSJ: A New Era in the Bond Market
Replies: 30
Views: 4591

Re: Evaluate my finances. Young guy.

OP should consider the fact that he is getting advice from a forum populated with an absurdly high percentage of millionaires and an even higher percentage of people with 20+ years of market experience. He sounds a bit overconfident. Simple answer: Pay off the debt. Who cares if it's from a relative...
by ot1138
Wed Jan 22, 2014 1:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Evaluate my finances. Young guy.
Replies: 49
Views: 3658

Re: "The market is at an inflection point"

When I was much younger, I got my hands on an exceedingly rare copy of one of Elliott's early works. There was no mention of waves at the time. Not one. This book discussed his method for multiplying each significant high and low by various "golden ratios". I did this using his method with...
by ot1138
Wed Jan 22, 2014 1:14 pm
 
Forum: Investing - Theory, News & General
Topic: "The market is at an inflection point"
Replies: 16
Views: 1910

Re: Deferred Income Annuity/Longevity Insurance

You can get longevity insurance adjusted to the CPI but it's probably far simpler and cheaper to just build in a reasonable inflation expectation into your projections.
by ot1138
Tue Jan 21, 2014 9:19 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1736

Re: Deferred Income Annuity/Longevity Insurance

Oh, almost forgot to add one of the best things I learned in my research. If you can, wait to purchase annuities until interest rates are high. You'll get a much higher payout then. Should interest rates eventually come down (and they always do), you'll be way ahead of the game.
by ot1138
Tue Jan 21, 2014 2:43 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1736

Re: Deferred Income Annuity/Longevity Insurance

Great question and some great answers. I looked quite a bit into this a few months ago. My calculations showed that on an infinite time frame, you would of course make more money by investing and withdrawing modest amounts as per the usual Boglehead approach. However, SPIAs come in handy when your t...
by ot1138
Tue Jan 21, 2014 2:32 pm
 
Forum: Investing - Theory, News & General
Topic: Deferred Income Annuity/Longevity Insurance
Replies: 32
Views: 1736

Re: Impending Bond Crash - What NOT to do!

I couldn't agree with you more. But a large fund has to deal with slippage and operating overhead, not the least of which includes salary. An individual doesn't. On a small scale, there is ample evidence that it is possible to reduce portfolio volatility and slightly enhance returns through TAA (an...
by ot1138
Fri Jan 17, 2014 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

Predicting equity returns: my current favorite paper says p/e (traditional and 10 year) is the best measure we have and it explains about 40% of the time variation in net-of-inflation returns. https://personal.vanguard.com/pdf/s338.pdf Most academic research I've seen also says p/e (or its variants...
by ot1138
Fri Jan 17, 2014 12:28 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

Grt2bOutdoors wrote:I agree with the others, your fixed income choices as defined above are far more riskier than bonds.


I'm not disputing that. Per my early response, these aren't really fixed income. Maybe I should just call them "non-equities".
by ot1138
Fri Jan 17, 2014 12:27 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

How would you use this to make billions from grateful clients? This statement tells me that you aren't grasping what I am really saying. Simple: start a balanced MF or hedge fund promising enhanced risk-adjusted returns through tactical allocation. Deliver on that promise, grab half of the extra fo...
by ot1138
Fri Jan 17, 2014 12:24 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

ot1138: There are only two relevant pieces of Boglehead "dogma" (more like core beliefs): 1) You can't time the market. No matter how many research reports you receive. #1. I believe it is quite possible to forecast 10-year equity and bond returns with surprising accuracy. Lot of academic...
by ot1138
Thu Jan 16, 2014 6:14 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

ot1138, it's sort of irrelevant unless you are willing to make some quantitative statements about the actual percentage you think bonds are overvalued, and by how much you think they will crash. To state it in Boglehead terms, please make those estimates for the Vanguard Total Bond Market Fund and/...
by ot1138
Thu Jan 16, 2014 4:52 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

ot1138: There are only two relevant pieces of Boglehead "dogma" (more like core beliefs): 1) You can't time the market. No matter how many research reports you receive. 2) Bonds are an efficient way to reduce volatility in a portfolio. Which do you disagree with? #1 is reinforced by your ...
by ot1138
Thu Jan 16, 2014 4:40 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

Personally, I lowered my bond allocation dramatically in accordance with these facts and others (eg: I forecast 10 year real equity returns @ 3.6%, availability of higher yield alternative fixed income assets, etc). May I ask what fixed-income vehicles you're using in lieu of bonds? Sure. But befor...
by ot1138
Thu Jan 16, 2014 4:36 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

What NOT to do? 1. Don't forget that we already had a bond crash last year. 2. Don't forget that you forgot about last year's bond crash till I reminded you of it because it was such a non-event. We had a crash? I didn't forget. I never knew about it because I don't follow my portfolio that closely...
by ot1138
Thu Jan 16, 2014 4:33 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

You are free to call it whatever you'd like, but the rest of the world generally calls it a 30-year bond bull market. Here's just one webpage taken at random which is representative. FWIW, I receive research reports from three different banks (Fifth Third, Barclays, and Credit Suisse) who all refer ...
by ot1138
Thu Jan 16, 2014 3:58 pm
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: Impending Bond Crash - What NOT to do!

This is the same logic that gamblers use when they buy a penny stock and it goes up. The macro environment is against bonds right now in a big way. QE is tapering down for one thing. End of a 30-year bull run is another. Uncharted territory yet another. And the academic research squarely supports th...
by ot1138
Thu Jan 16, 2014 10:21 am
 
Forum: Investing - Theory, News & General
Topic: Impending Bond Crash - What NOT to do!
Replies: 50
Views: 6360

Re: "What Five Days of Trading Tell Us About 2014"

Seems to me that there might be some truth to this, although not for the obvious reasons. If the market has an ever-so-slight upward drift (let's say 3%), then the best prediction for one year from today would be today's price + 3%. If the first five days of the year are up, then the market has a he...
by ot1138
Thu Jan 16, 2014 10:07 am
 
Forum: Investing - Theory, News & General
Topic: "What Five Days of Trading Tell Us About 2014"
Replies: 18
Views: 1767

Re: [Poll] What was your 2013 return?

Thanks for that link. I've always wondered how to compute returns properly while one is investing additional contributions over the course of the year.

15.0% on the nose. I made very sizable contributions throughout the year. I was about 70% equities, the rest in various forms of fixed income.
by ot1138
Fri Jan 03, 2014 6:58 pm
 
Forum: Investing - Theory, News & General
Topic: [Poll] What was your 2013 return?
Replies: 209
Views: 8518

Re: Shiller P/E 10 hits 25

Nothing has worked so far, barring buffet and Peter lynch over any amount if time, and most investors in Magellan fund didn't get the reruns...... To be frank, this is quite incorrect. The problem is not beating the indexes, the problem is beating them by enough to make up for fees. Simple timing m...
by ot1138
Tue Nov 26, 2013 10:56 am
 
Forum: Investing - Theory, News & General
Topic: Shiller P/E 10 hits 25
Replies: 268
Views: 15579

Re: who here is tempted to pullback on stocks?

With CAPE above 25, Cliff Asness article suggests that expected return of next 10 years will be 0.1% with the range of +6 and -6%. That's based on a naïve model. Once you factor in interest rates (ERPs are not static - they expand and contract in conjunction with 10 year treasuries), one comes to v...
by ot1138
Mon Nov 25, 2013 10:54 am
 
Forum: Investing - Theory, News & General
Topic: who here is tempted to pullback on stocks?
Replies: 104
Views: 7870

Re: who here is tempted to pullback on stocks?

I'm confused. What evidence is there that this rally won't continue?

CAPE/PE10 is just fine. My simulations suggest a 6.1% 10 year CAGR on equities which isn't much lower than it has been for the past year.

Seems to me that years like this are just par for the course.
by ot1138
Sun Nov 24, 2013 12:07 am
 
Forum: Investing - Theory, News & General
Topic: who here is tempted to pullback on stocks?
Replies: 104
Views: 7870

Re: Brent Arends: you can beat the market with smart timing

Most financial economists now believe that there is a certain amount of predictability in the stock market. They believe that discount rates or expected returns vary over time. One guy was just award the Nobel Prize for his work that showed that higher valuation forecasts lower returns, and vive ve...
by ot1138
Wed Nov 06, 2013 9:32 am
 
Forum: Investing - Theory, News & General
Topic: Brent Arends: you can beat the market with smart timing
Replies: 89
Views: 5427

Re: The cult of PE10 - so what?

... but I will tell you that I have a research background so I'm well equipped to do the analysis. That would make your comments on the paper more valuable. Ok, I'll bite. I can tell you that on a monthly basis using data using data from April 1953 to Sept 2002, I get a R2=.51 when regressing PE10 ...
by ot1138
Tue Oct 29, 2013 10:15 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

I couldn't agree more with this. The misunderstanding of the utility of PE10 seems to stem from confusing the ability predict a specific outcome vs. a probability of outcomes. PE10 is useful in the latter regard only. That suggests that it *should* be useful as a tactical allocation tool. How? I don...
by ot1138
Tue Oct 29, 2013 9:43 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

^The Vanguard paper looked at 10-year returns, not 1-year returns. Why don't you read it and tell us how your research is superior to theirs? Kevin I'm not interested in comparing sizes with Vanguard but I will tell you that I have a research background so I'm well equipped to do the analysis. I ca...
by ot1138
Tue Oct 29, 2013 4:39 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

Yes, some time ago. I found no value in PE1 either alone or in conjunction with other variables I tested. For what that's worth. Did you read the Vanguard research paper linked above? They found PE10 only slightly more predictive than PE1 for 10-year returns--very different than your conclusion of ...
by ot1138
Tue Oct 29, 2013 3:26 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

Also, it makes no sense to look at valuations in isolation. If bond returns are very low that also effects how the future may play out. I am very surprised we never seem to see a P/E10 AND bond yield market prediction. That would make more sense but I still doubt it would have much predictive power...
by ot1138
Tue Oct 29, 2013 3:20 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

Also, it makes no sense to look at valuations in isolation. If bond returns are very low that also effects how the future may play out. I am very surprised we never seem to see a P/E10 AND bond yield market prediction. That would make more sense but I still doubt it would have much predictive power...
by ot1138
Tue Oct 29, 2013 3:07 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

PE10 is barely more predictive than PE1. I wonder if anyone has run numbers to see whether combining PE1 and PE10 is more "predictive" in long-term backtests than either individually, and if so by how much. My hunch is that the combo is more predictive. Best, Neil Yes, some time ago. I fo...
by ot1138
Tue Oct 29, 2013 2:54 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: The cult of PE10 - so what?

We have PE10 because we have a decimal (base-10) number system. We came to use base-10 because our ancestors had 10 fingers. There is no logical reason that PE10 is a more accurate predictor than PE7 or PE9 or PE11. While it is due to cultural evolution that we have base-10 and PE10, we should not ...
by ot1138
Tue Oct 29, 2013 2:53 pm
 
Forum: Investing - Theory, News & General
Topic: The cult of PE10 - so what?
Replies: 69
Views: 4063

Re: Employer-held tax deferred plans

Thanks for the feedback. The phrase I was not aware of was nonqualified deferred compensation plan. Some good threads on Bogleheads already about it.
by ot1138
Mon Oct 21, 2013 4:49 pm
 
Forum: Investing - Theory, News & General
Topic: Employer-held tax deferred plans
Replies: 4
Views: 200

Employer-held tax deferred plans

My employer offers an odd tax-deferred plan aimed at high-income employees that I've not heard of before. It allows you to contribute dollars above the usual 401k/IRA/HSA limits on a tax-deferred basis. For instance, if I contribute $17.5k to my 401k, $5500 to my IRA, and ~$6k to my HSA, I would nor...
by ot1138
Mon Oct 21, 2013 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: Employer-held tax deferred plans
Replies: 4
Views: 200

Re: How much I need to retire.

You'll need at least $2M. More is better.
by ot1138
Sat Jul 13, 2013 8:05 pm
 
Forum: Investing - Theory, News & General
Topic: How much I need to retire.
Replies: 65
Views: 10958
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