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Re: canceled flight on AA: premium seat fee not refunded

Before i had elite status on AA, I ate plenty of seat upgrade fees changing my work flights (i paid for the upgrade myself, couldn't justify making work pay for it). Basically, at 6'8", if i can't book bulkhead or exit row, I don't take the flight. Now that I have status i don't have to worry ...
by richard
Wed Oct 29, 2014 7:57 pm
 
Forum: Personal Consumer Issues
Topic: canceled flight on AA: premium seat fee not refunded
Replies: 29
Views: 1869

Re: canceled flight on AA: premium seat fee not refunded

Is there any airline that will refund the premium seat fee if you cancel?
by richard
Wed Oct 29, 2014 7:52 pm
 
Forum: Personal Consumer Issues
Topic: canceled flight on AA: premium seat fee not refunded
Replies: 29
Views: 1869

Re: QE Ending, how does it affect Total Bond Fund?

If real interest rates increase, I will be delighted. I don't expect that though. There are a whole lot more borrowers than there are lenders, and zero real rates are apparently required to keep the borrowers afloat. Financial repression is not dead. Dale What borrowers really want is unexpected in...
by richard
Wed Oct 29, 2014 6:21 pm
 
Forum: Investing - Theory, News & General
Topic: QE Ending, how does it affect Total Bond Fund?
Replies: 8
Views: 1230

Re: QE Ending, how does it affect Total Bond Fund?

The market adjusted to the end of QE some time ago. Whether TBM increases or decreases in price will depend on what happens in the future. Generally markets only move on news, not things already known. Most likely yields will increase if the economy performs better than the market currently expects,...
by richard
Wed Oct 29, 2014 4:25 pm
 
Forum: Investing - Theory, News & General
Topic: QE Ending, how does it affect Total Bond Fund?
Replies: 8
Views: 1230

Re: How should we invest if interest rates never go up?

couple things, first ignore rate forecasts--100% of economists were wrong about rates this year and most have been wrong for many years. A group of economists surveyed by Bloomberg were all wrong. Many other economists got it right and have been consistently predicting low rates and low inflation f...
by richard
Wed Oct 29, 2014 11:45 am
 
Forum: Investing - Theory, News & General
Topic: How should we invest if interest rates never go up?
Replies: 17
Views: 1554

Re: A Backtest of the Dividend Growth Model, 1871-2010

Larry, I'm asking if there is any evidence that projecting returns with an accuracy of +/- 8% improves on starting out with some arbitrary model (e.g., save 15% of income) and adjusting based on whether you're on track. Is there any empirical work at all in this area (not evidence regarding the accu...
by richard
Tue Oct 28, 2014 1:21 pm
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 66
Views: 3396

Re: If holding cash, do you want a Great Depression?

Those who held cash during the Weimar republic in Germany were in a Depression, and the cash didn't help them one bit. I remember a picture of a wheelbarrow full of Reichmarks, it took an entire wheelbarrow to purchase one loaf of bread. The root cause of that was vicious inflation, and it was not ...
by richard
Tue Oct 28, 2014 11:30 am
 
Forum: Investing - Theory, News & General
Topic: If holding cash, do you want a Great Depression?
Replies: 50
Views: 3800

Re: Fed Quantitative Easing

"The end of QE" which seems to be accepted as the simple turning off the spigot that has been dripping millions into a bucket now brimming with trillions, is truly old news and surely already priced into the market. But to me, it's those trillions that constitute the elephant in the room....
by richard
Tue Oct 28, 2014 10:43 am
 
Forum: Investing - Theory, News & General
Topic: Fed Quantitative Easing
Replies: 15
Views: 1170

Re: Fed Quantitative Easing

Larry has it exactly right. Available information is already priced in. The only way you can do better (other than by sheer luck) is to figure out exactly what the market anticipates, do a better job of forecasting and figure out how the market will react to what actually happens. Just doing a good ...
by richard
Tue Oct 28, 2014 9:46 am
 
Forum: Investing - Theory, News & General
Topic: Fed Quantitative Easing
Replies: 15
Views: 1170

Re: A Backtest of the Dividend Growth Model, 1871-2010

Richard Even in your example how do you know how much to adjust based on what return you need if you don't estimate returns? Impossible. You have to know how much to adjust. And I would add not 4% as that is too high today for a 65 year old because yields are lower and valuations higher. 3% is the ...
by richard
Tue Oct 28, 2014 9:41 am
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 66
Views: 3396

Re: Who says a stock is either "value" or "growth"?

<>Current assets like inventories are held at cost, not salable value Fixed assets are subject to depreciation or amortisation (for intangibles) and therefore are reducing in value all the time Own brands (eg Coke, Disney) are not valued on the BS, only acquired brands. So much of the value of a co...
by richard
Tue Oct 28, 2014 7:21 am
 
Forum: Investing - Theory, News & General
Topic: Who says a stock is either "value" or "growth"?
Replies: 25
Views: 1979

Re: Do stocks have an intrinsic fundamental value?

<>Do you agree that stocks have an objective intrinsic value, or do you agree with the Efficient Market Theory, that the market is always accurate in incorporating all present infortmation? What do you mean by "objective intrinsic value"? Current efficient market theory is that the market...
by richard
Tue Oct 28, 2014 7:00 am
 
Forum: Investing - Theory, News & General
Topic: Do stocks have an intrinsic fundamental value?
Replies: 31
Views: 1911

Re: A Backtest of the Dividend Growth Model, 1871-2010

<>As to no value, there is simply no logical way to determine an AA without having expected returns. In fact without them there is no reason to invest in stocks period. And there is no way to determine the need to take risk.<> You could start at 50/50, then adjust based on risk aversion and needed ...
by richard
Tue Oct 28, 2014 6:47 am
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 66
Views: 3396

Re: A Backtest of the Dividend Growth Model, 1871-2010

<> The problem: Using the historic average 140-year growth rate as the projected growth rate in effect gives your hypothetical historical investor a crystal ball. How would I, for example, go about figuring out the average growth rate for the US economy between now and 2150?<> This is a major probl...
by richard
Tue Oct 28, 2014 6:36 am
 
Forum: Investing - Theory, News & General
Topic: A Backtest of the Dividend Growth Model, 1871-2010
Replies: 66
Views: 3396

Re: If holding cash, do you want a Great Depression?

Why stop at a great depression? Consider the benefits of a major war or large scale disaster. If you survive, think of how much cheaper everything would be. I am sure you can work out why, if not then PM me. I will not reply to anything like that in this thread because otherwise this thread will be...
by richard
Mon Oct 27, 2014 6:48 pm
 
Forum: Investing - Theory, News & General
Topic: If holding cash, do you want a Great Depression?
Replies: 50
Views: 3800

Re: If holding cash, do you want a Great Depression?

Why stop at a great depression? Consider the benefits of a major war or large scale disaster. If you survive, think of how much cheaper everything would be.
by richard
Mon Oct 27, 2014 5:03 pm
 
Forum: Investing - Theory, News & General
Topic: If holding cash, do you want a Great Depression?
Replies: 50
Views: 3800

Re: One important role of advisers? - WSJ today

The article provides no data on the magnitude of sales or whether sales were due to panic rather than economic necessity. The evidence for panic selling is mostly of the form "I know people who panicked and sold". This is hardly reliable statistical methodology. It's important to remember ...
by richard
Mon Oct 27, 2014 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: Bad Stock-Market Timing Fueled Wealth Disparity
Replies: 9
Views: 1061

Re: Yield Curve Investigations

I believe conventional wisdom is that the most recently auctioned treasuries (on the run) are used for consistent comparison to earlier yield curves (changing methodology would obviously hurt the ability to compare) and because they are regarded as more liquid than older treasuries. A side effect is...
by richard
Mon Oct 27, 2014 3:02 pm
 
Forum: Investing - Theory, News & General
Topic: Yield Curve Investigations
Replies: 20
Views: 1548

Re: Airline Ticket Price Differences

All of the major airlines and many travel sites offer guarantees that they have the lowest fares. Google "airline price guarantee." I therefore find it hard to believe that there's widespread price disparity, although there are some cases. The usual explanation is that there are different ...
by richard
Mon Oct 27, 2014 2:33 pm
 
Forum: Personal Consumer Issues
Topic: Airline Ticket Price Differences
Replies: 6
Views: 1008

Re: Bad Stock-Market Timing Fueled Wealth Disparity

It's not clear how much stock had been owned by those who sold. Given the concentrated nature of stock ownership in this country, it's possible those who sold didn't own much to begin with. The article acknowledges that we don't know the magnitude of the issue: "Wealth inequality in the U.S. ha...
by richard
Mon Oct 27, 2014 2:28 pm
 
Forum: Investing - Theory, News & General
Topic: Bad Stock-Market Timing Fueled Wealth Disparity
Replies: 9
Views: 1061

Re: What funds are negatively correlated with stocks?

Often people look for funds that are negatively correlated because they believe that they can construct a portfolio that will do better than the market portfolio - either higher return with the same risk or the same return with lower risk. If not, why are you looking for funds with negative correlat...
by richard
Mon Oct 27, 2014 5:26 am
 
Forum: Investing - Theory, News & General
Topic: What funds are negatively correlated with stocks?
Replies: 24
Views: 2867

Re: Who says a stock is either "value" or "growth"?

There have been empirical studies showing that companies with high "book to market" (btm) values outperform companies with low btm values. "Value" is shorthand for high btm and "growth" is shorthand for low btm. It is a continuum. Studies have shown that high btm compa...
by richard
Mon Oct 27, 2014 5:14 am
 
Forum: Investing - Theory, News & General
Topic: Who says a stock is either "value" or "growth"?
Replies: 25
Views: 1979

Re: Who says a stock is either "value" or "growth"?

Thanks for the replies everyone. I have read that small-cap value stocks have outperformed TSM ~2% over the last 100+ years; so does this mean that if you were to have invested in stocks w/a lower P/E or Price:book ratio compared to their peers that you would have done better than the TSM over this...
by richard
Mon Oct 27, 2014 5:07 am
 
Forum: Investing - Theory, News & General
Topic: Who says a stock is either "value" or "growth"?
Replies: 25
Views: 1979

Re: Google Docs

For my TaxAide group we maintain a series of folders in a Google Doc account with various content (IRS pubs, training doc etc.) that replicate automatically to all the PCs in the group (approximately 40). It is a good system once you learn how it work. If you're a member of a Google group then yes ...
by richard
Mon Oct 27, 2014 4:59 am
 
Forum: Personal Consumer Issues
Topic: Google Docs [to share a spreadsheet publicly]
Replies: 12
Views: 1417

Re: How to think about expected returns--continuing discussi

<> Weather forecasting models. Let's say you have a weather model to predict the weather one day ahead. Every day you get another data point to test and evaluate the model. In one year you have 365 new data points. Stock Return forecasting models. If you have a stock market model to predict the ret...
by richard
Sun Oct 26, 2014 9:12 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: How to think about expected returns--continuing discussi

Facts, people must agree on. But everyone is entitled to their opinion and opinions can vary. Expected return = X can not be a fact, since no one agrees on what X is. So it must be an opinion. And one guy's opinion is as good as another. There is no right or wrong opinion. By your definitions, of c...
by richard
Sun Oct 26, 2014 7:26 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: 100% of [surveyed] economists were dead wrong about yiel

Again I think most of the responses are along the lines 'market is too efficient, can't predict, why didn't they realize they can't predict as we BH's realize'. And that's not necessarily wrong. However, the basic reason rates haven't gone up is that growth is poor, has not responded to the stimula...
by richard
Sat Oct 25, 2014 1:07 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3943

Re: 100% of [surveyed] economists were dead wrong about yiel

This is not a sarcastic question. I am genuinely curious. Is there any demonstrable case in which an economist offers real value? If an astrologer says that people should wear red sweaters, that might increase the demand for red sweaters. But it has nothing to do with whether there is a valid reaso...
by richard
Sat Oct 25, 2014 12:41 pm
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3943

Re: Google Docs

How did you access Sidney's document?

Google writes that "Anyone who is given the link to the file or folder can access it."
by richard
Sat Oct 25, 2014 12:34 pm
 
Forum: Personal Consumer Issues
Topic: Google Docs [to share a spreadsheet publicly]
Replies: 12
Views: 1417

Re: How to think about expected returns--continuing discussi

<> :?: Which leads to my second question about expected return forecasts: Are these forecasts fact or simply someone's opinion? What do you mean? How would (or wouldn't) a prediction of the future be a fact? "Simply someone's opinion" is a rather dismissive characterization. Forecasting m...
by richard
Sat Oct 25, 2014 9:31 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: Elder Law attorney (Trusts, Medicaid, nursing homes)

An elder law attorney just told me that NY recently changed the rules on pooled trusts, making it much more difficult to satisfy Medicaid's income limits (for either a nursing home or home care). I understand how an irrevocable trust can decrease net worth to satisfy Medicaid's net worth test, but h...
by richard
Sat Oct 25, 2014 8:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Elder Law attorney (Trusts, Medicaid, nursing homes)
Replies: 30
Views: 1950

Re: Bond fund, why such high returns?

If you would hold a bond fund which buys high quality bonds for lets say, a duration of 10 years. Would it be theoretically possible to have a negative return if you would held the fund for a duration of 10 years? Interest rates might rise, and the fund's value therefore fall, in the tenth year. Lo...
by richard
Fri Oct 24, 2014 7:03 am
 
Forum: Investing - Help with Personal Investments
Topic: Bond fund, why such high returns?
Replies: 13
Views: 1581

Re: Phone for Europe trip

flyingaway wrote:Do you need a different SIM card for a different European country?

It's usually cheaper to get a local, but many plans allow roaming. The EU is cutting roaming costs, but they're still higher than local.
by richard
Thu Oct 23, 2014 2:16 pm
 
Forum: Personal Consumer Issues
Topic: Phone for Europe trip
Replies: 24
Views: 1454

Re: 30 yr TIPs auction announced 16 oct: yield=1.10%?

grok87 wrote:auction yield was 0.985%. actually relatively close to the 1% i was hoping for this morning.

The current market yield is 0.97%, up sharply since yesterday. Both stock prices and bond yields are up today, a level of optimism not seen for a week or two.
by richard
Thu Oct 23, 2014 1:39 pm
 
Forum: Investing - Theory, News & General
Topic: 30 yr TIPs auction announced 16 oct: yield=1.10%?
Replies: 93
Views: 6499

Re: US Chip & Signature --> Chip & PIN 2020

PINs can be changed with Chip & PIN cards, at least most versions. You have to go to an appropriate machine, such as an ATM with the necessary facilities. Unfortunately, the US lacks the infrastructure.
by richard
Thu Oct 23, 2014 9:52 am
 
Forum: Personal Finance (Not Investing)
Topic: US Chip & Signature --> Chip & PIN 2020
Replies: 24
Views: 1317

Re: Squaring the Circle

You have essentially contradictory goals. Investing may be thought of as a trade-off between current spending and, through your portfolio, future spending. More of one usually means less of the other. In order to increase both you'd need to take more risk, but more risk means the distinct possibilit...
by richard
Thu Oct 23, 2014 7:40 am
 
Forum: Personal Finance (Not Investing)
Topic: [Wants current income and to leave an estate]
Replies: 9
Views: 715

Re: Yes, 100% of economists were dead wrong about yields

I don't know who they surveyed, but many of the economists I follow have been predicting low yields. The most common mistakes appear to be: 1) Fed is drastically increasing base money, so inflation will explode and with it nominal yields. I've been hearing this for at least five years, but it makes ...
by richard
Thu Oct 23, 2014 7:05 am
 
Forum: Investing - Theory, News & General
Topic: 100% of [surveyed] economists were dead wrong about yields
Replies: 33
Views: 3943

Re: Three Possible Outcomes for Future Investment Returns

1) The real question is today's prices compared to future earnings. For bonds, this is relatively easy - we know how much interest a bond will pay in the future (at least, if it's a very high quality bond such as a treasury). For stocks this is harder and we assume past earnings (typically past year...
by richard
Thu Oct 23, 2014 6:59 am
 
Forum: Investing - Theory, News & General
Topic: Three Possible Outcomes for Future Investment Returns
Replies: 32
Views: 2312

Re: Leon Cooperman giving the same advice as Warren

... Inflation certainly has the potential to hurt investments. Fears are overblown, IMO. Every indication is that central banks have the tools to stop inflation and are eager to do so, even at the cost of employment and economic growth. See the US and especially Europe. Even central banks trying to...
by richard
Tue Oct 21, 2014 9:30 am
 
Forum: Investing - Theory, News & General
Topic: Leon Cooperman giving the same advice as Warren
Replies: 47
Views: 3269

Re: Leon Cooperman giving the same advice as Warren

... If you're a long-term investor, a collapse in bond prices would be excellent news. If rates stay low, you get low returns. If rates rise, principal value goes down, but the increased interest makes up for it after a while, then you get the benefits of a higher returns going forward. ... I see t...
by richard
Mon Oct 20, 2014 7:29 pm
 
Forum: Investing - Theory, News & General
Topic: Leon Cooperman giving the same advice as Warren
Replies: 47
Views: 3269

Re: Why not 100% Stocks?

letsgobobby wrote:
Yesterdaysnews wrote:I decided to go 100% stock in my portfolio after I paid off my house. Seems like a no brainer to me. House is kinda like a big bond anyways.

Though in a true crisis/left tail event pretty hard to rebalance from.

Hard to rebalance from in any event, especially if you want to remain debt free.
by richard
Mon Oct 20, 2014 4:14 pm
 
Forum: Investing - Theory, News & General
Topic: Why not 100% Stocks?
Replies: 274
Views: 20859

Re: Leon Cooperman giving the same advice as Warren

"...Don't fear interest rates rising, fear if they don't rise..." [/quote] If you're a long-term investor, a collapse in bond prices would be excellent news. If rates stay low, you get low returns. If rates rise, principal value goes down, but the increased interest makes up for it after ...
by richard
Mon Oct 20, 2014 4:12 pm
 
Forum: Investing - Theory, News & General
Topic: Leon Cooperman giving the same advice as Warren
Replies: 47
Views: 3269

Re: How to think about expected returns--continuing discussi

<>FWIW: I don't have a problem with the argument that one should plan on low returns for a while going forward since valuations of stocks (and bonds) are not favorable. I just have a problem with all the false precision of what that means (for example save more, wait a bit to retire, etc. vs fiddle...
by richard
Mon Oct 20, 2014 9:55 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: How to think about expected returns--continuing discussi

Richard Yes, exactly, and it is based on history, results from study by Asness. Even when forecast low returns still possibility of very high real returns, and vice versa. Larry, do you have a title, link or other means of finding the Asness study? On MCS, I continue to wonder what MCS gets you com...
by richard
Mon Oct 20, 2014 8:22 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: How to think about expected returns--continuing discussi

few thoughts First, there is clearly no exact "science" here --the best models only explain about 40% of the future outcomes. But of course this should not be a surprise, for if the models explained 100% then there would be no risk. And for those who haven't thought this through, no risk ...
by richard
Sun Oct 19, 2014 3:08 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: How to think about expected returns--continuing discussi

THIS is why projecting expected returns is important to me - in your 20s and 30s it doesn't matter much, but I'm 54 and contemplating early retirement, and it is REALLY important to have a point of view on what sort of lifestyle/legacy my portfolio will support - conservatively applying a lot of di...
by richard
Sun Oct 19, 2014 2:56 pm
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: How to think about expected returns--continuing discussi

I tend to prefer e/p over Gordon because with e/p you don't have to estimate future earnings growth.

Arnott and Asness claim that higher dividends equal higher earnings growth. http://www.rallc.com/Production%20conte ... Growth.pdf
by richard
Sun Oct 19, 2014 5:50 am
 
Forum: Investing - Theory, News & General
Topic: How to think about expected returns--continuing discussion
Replies: 105
Views: 8284

Re: Anyone cancelling travel plans?

You have a much larger chance of dying from furniture tipping over than from Ebola. How freaked out should you be: Council on Foreign Relations scholar Micah Zenko found that tip-over kills about as many Americans per year as terrorism does, and injures many more. In theory, then, you should be just...
by richard
Sat Oct 18, 2014 2:18 pm
 
Forum: Personal Consumer Issues
Topic: Anyone cancelling travel plans?
Replies: 117
Views: 6316

Re: Debit Card was hacked. Should I just use cash from now

Credit cards provide lots of protection. As I understand, there's not as much legal (or practical) protection for debit cards, so I wouldn't use a debit card. Carrying cash has its own risks.

The imminent move towards chip cards should help with the hacks.
by richard
Sat Oct 18, 2014 9:33 am
 
Forum: Personal Finance (Not Investing)
Topic: Debit Card was hacked. Should I just use cash from now on?
Replies: 54
Views: 3369
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