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by nisiprius
Mon Mar 18, 2024 5:49 pm
Forum: Investing - Theory, News & General
Topic: Any thoughts on sector rotation - March 2024?
Replies: 20
Views: 850

Re: Any thoughts on sector rotation - March 2024?

So let's see how the pros performed using sector rotation. I did a web search on "list of sector rotation ETFs," ignoring one that's less than two years old, and charted them using the S&P 500 as a benchmark.

I found four of them:

Sector Rotation Fund (NAVFX)
SPDR SSGA US Sector Rotation ETF (XLSR)
Main Sector Rotation ETF (SECT)
BlackRock U.S. Equity Factor Rttn ETF (DYNF)

Source

Image

Not one of them has beaten the S&P 500 ETF, VOO.

"Any thoughts?" My thoughts are that I am not better than the pros.
by nisiprius
Mon Mar 18, 2024 4:48 pm
Forum: Investing - Theory, News & General
Topic: Any thoughts on sector rotation - March 2024?
Replies: 20
Views: 850

Re: Any thoughts on sector rotation - March 2024?

Well, what does the the Bogleheads investment philosophy say? You don't need to follow it, many people who self-describe as Bogleheads depart from it one way or another, but it is still sort of the core of the investing philosophy here, and you really should give it a quick look.

In particular (my underlining):

Diversify
Rather than trying to pick the specific stocks or sectors of the market that may outperform in the future, buy funds that are widely diversified, or even approximate the whole market.
by nisiprius
Mon Mar 18, 2024 4:34 pm
Forum: Personal Finance (Not Investing)
Topic: Has the 401k been a net positive or negative?
Replies: 21
Views: 1118

Re: Has the 401k been a net positive or negative?

It used to be, 40 plus years ago, when you retired you had social security and a pension. Today, most companies no longer have pensions. Private industry has largely traded the pension for the 401k. I agree with points #2 and #3. The problem is with point #1. Although defined benefit pensions were much more common forty years ago, they were far from universal. I'm not sure exactly how to interpret this 1970 report I found in a Google search: https://imgur.com/v03tqbs.png I read it as meaning that the percentage of employees with pensions was only 22% in 1950, rising to 48% in 1970. What's more serious is that the employer contributions were only 2 to 3% of salary, i.e. less than a quarter of that contributed to Social Security. I don't kno...
by nisiprius
Mon Mar 18, 2024 10:27 am
Forum: Personal Finance (Not Investing)
Topic: Sending Copy of Driver License and SS Card by Email Question
Replies: 16
Views: 1644

Re: Sending Copy of Driver License and SS Card by Email Question

Oddly enough, I experienced a tax glitch and the state revenue office wants copies of my 1099-R's and proofs of identity. There want three pieces of ID from three lists but whatever you choose it seems to me to be a pretty good identity theft kit (passport AND copy of my Social Security card including the place where it says "not for identification" AND utility bill) I have reason to think it's perfectly legit--the letter asking for them show up online in my state tax account--but I felt uncomfortable enough about it to send it by paper mail, to the address given in the notice they sent ME via paper mail. I wouldn't just cave completely on this without at least trying to push back gently. I certainly wouldn't email to Depositresea...
by nisiprius
Mon Mar 18, 2024 8:16 am
Forum: Personal Finance (Not Investing)
Topic: Medigappers: which plan do you have and why
Replies: 21
Views: 1735

Re: Medigappers: which plan do you have and why

Equivalent of plan G. Most coverage available. It's important to understand the so-called "medical loss ratio" (offensive insurer-centric name, "benefit-to-premium ratio" would be better). It's typically 80-85%. It's actually 82.5% for the one I have. There are rules for how much they are required to pay, and one year when the plan I was on didn't meet the requirement, they had to send out rebate checks. When I looked into it, the medical loss ratio was a little higher for the higher-end plans, meaning that statistically they were a slightly better "buy." That wasn't the reason we went for the high-end plan but it did factor into the decision. What an 80-85% benefit-to-premium ratio tells me, is that even thoug...
by nisiprius
Mon Mar 18, 2024 6:43 am
Forum: Personal Finance (Not Investing)
Topic: IRS says I owe it money, but I don't
Replies: 28
Views: 3357

Re: IRS says I owe it money, but I don't

Did you download your Vanguard 1099-R directly from Vanguard? Go into TurboTax and see if it has your TIN number in the space where it's supposed to go. Tell me what you see, I'm really curious to know.

I performed the download (in H&R Block, not TurboTax), and this year the TIN was missing--blank. I didn't notice it. H&R Block caught that during their accuracy verification and said it could not e-File it until it was corrected, so I entered it by hand within the H&R Block software. It then went through and I got my refund. However... I am having a glitch in the processing of my state refund and they want to see copies of all my 1099-Rs. I am wondering if there could be a connection.
by nisiprius
Mon Mar 18, 2024 6:26 am
Forum: Personal Consumer Issues
Topic: What Book Are You Currently Reading? Part VI
Replies: 7638
Views: 1712672

Re: What Book Are You Currently Reading? Part VI

I am continuing to read The Power Broker: Robert Moses and the Fall of New York, by Robert Caro, more than halfway through and finding it amazingly compelling, fascinating, and readable. Of course I was put onto this book by a podcast, "99% Invisible," which is conducting a monthly "book club" in which they devote an hour-long episode to discussing part of the book, which I find enhances the experience. Uh. I did skip one chapter that seemed boring. I just finished reading The Goldfinch, by Donna Tartt, and never before have I found a book so gripping for the first two-thirds and so terrible for the last 10%. The first part reads like a just plain "novel" novel and an excellent one. Then it starts to deteriorat...
by nisiprius
Sun Mar 17, 2024 11:28 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

I do remember that, or similar posts. But it still doesn't address the question of what "diversification" measurably buys you. He's says only that it does not buy you lower risk, that diversification is different from de-risking. He gives an example of a benefit, but he doesn't say whether or not that is an expected benefit of a higher diversification ratio, and whether it is the main or one of the main benefits. Is the goal of diversification a higher safe withdrawal rate in decumulation when following some standardized withdrawal methodology? Is that the figure of merit for the "benefit of diversification?" Since Vineviz isn't posting, you can feel free to answer for yourself if you feel you agree with his approach.
by nisiprius
Sun Mar 17, 2024 11:23 am
Forum: Personal Consumer Issues
Topic: Surprise! Wellcare part D free drugs. And I paid DiRx. Refund?
Replies: 17
Views: 1457

Re: Surprise! Wellcare part D free drugs. And I paid DiRx. Refund?

All of those assistance programs from the manufacturers seem to disappear once you are on Medicare. I’ve been on Xarelto for 3 years now & probably will be for the balance of my life. This year my estimated total OOP cost for it is $991.86. I can also tell you that they have already increased my cost about 15%, 3 months into the year. Funny you should mention that. My best analysis last year when I was shopping was that that that my out-of-pocket cost attributable to Xarelto was going to be $1000/year ballpark no matter what I did . There were some very odd observations, like all cost comparisons between Xarelto and Eliquis being suspiciously nearly-identical despite being different drugs from different companies. I can't believe there...
by nisiprius
Sun Mar 17, 2024 11:06 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

I think you mean the "Diversification Ratio" which is trademarked. Vineviz did a good job at describing it and even provided a good template in excel to calculate it. Warning: the simplified version of the calculation which only looks at standard deviation of the components of a portfolio and the standard deviation of the portfolio as a whole is an oversimplification - you also need the correlations as well. His spreadsheet template uses that, with some matrix math, for the calculation. Looks like the spreadsheet is still available on dropbox here: https://www.dropbox.com/s/n5vnejnvilfhat4/DR%20Excel.xlsx?dl=0 Cheers. Yes, he defined what he meant by diversification. What I never saw, but may very well have missed, was a definiti...
by nisiprius
Sun Mar 17, 2024 11:03 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

In the ideal Nedsaid world, diversification perfectly exists in a portfolio where you have 3-4 asset classes with very similar performance but where correlation between them hovers around zero. Paul Merriman has expressed this in the construction of his portfolios. No, he hasn't. According to PortfolioVisualizer, the FundAdvice (Merriman) Ultimate Buy-and-hold Portfolio is VFINX Vanguard 500 Index Investor 6.00% VIVAX Vanguard Value Index Inv 6.00% NAESX Vanguard Small Cap Index Inv 6.00% VISVX Vanguard Small Cap Value Index Inv 6.00% VGSIX Vanguard Real Estate Index Investor 6.00% VTMGX Vanguard Developed Markets Index Admiral 12.00% VEIEX Vanguard Emerging Mkts Stock Idx Inv 6.00% EFV iShares MSCI EAFE Value ETF 12.00% VFITX Vanguard Int...
by nisiprius
Sun Mar 17, 2024 10:30 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

...Factors act like a spectral decomposition of the data; with a prominent few explaining most of the variation. All statistical models are disconnected from reality by a certain amount, but factor analysis is a decent approach. This approach, however, does not promise or even suggest a method of outperformance; this is over-interpretation of the data. I am open to different spectral techniques if better can be given. Seeking for an alpha source is a different analysis. Very well said. It's also notable how reluctant the factor community seems to be to come to grips with the implications of the Fama-French five-factor model. It really isn't a five-factor model, it's a four-factor model, but the problem is that "value" is no longe...
by nisiprius
Sun Mar 17, 2024 10:03 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

I don't understand that chart. What is "the" correlation of a portfolio with 10 assets? Are they assumed to be equally weighed? Continuously rebalanced? Does 0% correlation mean that each of the 45 pairs of assets has zero correlation? Is "return-to-risk ratio" the Sharpe ratio? ... If not, what is he using instead? What is his preferred measure of "risk?"... If "probability of losing money in a given year" is his chosen figure of merit, so be it, but it seems odd to me... I would assume 0 correlation. Between what and what? But I would say it's primarily about demonstrating the principle of diversification. You've missed the point of my question. I'm not looking for "a pictorial illustration of...
by nisiprius
Sun Mar 17, 2024 8:32 am
Forum: Personal Consumer Issues
Topic: Should I buy a $3k camera lens or get a cheaper lens instead?
Replies: 25
Views: 1559

Re: Should I buy a $3k camera lens or get a cheaper lens instead?

For that amount of money, I would go to some effort to try the lens out. Either by traveling to a photo store, renting from a lens rental outfit (might cost $100), or buying from a place with a good return policy even if there is a restocking charge.

I have a suspicion that you might be better off spending half the money your all-purpose "good enough" zoom lens, and the other half on a dedicated long lens and a good tripod for sports events.
by nisiprius
Sun Mar 17, 2024 8:15 am
Forum: Personal Consumer Issues
Topic: Surprise! Wellcare part D free drugs. And I paid DiRx. Refund?
Replies: 17
Views: 1457

Re: Surprise! Wellcare part D free drugs. And I paid DiRx. Refund?

The prices shown on the Medicare.gov "find a plan" website at the time you are signing up in the past USED TO BE accurate. Problems seem to have surfaced recently. Even now, so far at least, they have been accurate in the sense that if my cheap generic popular prescriptions show up with a zero co-pay when I am shopping plans, that's what I pay during the year. And ditto those with tiny co-pays. I don't want to get into the many complicated questions of the extent to which Part D is "insurance" and to what extent it's just a "prepaid purchase plan," but my experience, over about ten years, is that they play reasonably fair on the "cheap popular generic" drugs. However, if you don't check specific drugs...
by nisiprius
Sun Mar 17, 2024 7:51 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

I don't understand that chart. What is "the" correlation of a portfolio with 10 assets? Are they assumed to be equally weighed? Continuously rebalanced? Does 0% correlation mean that each of the 45 pairs of assets has zero correlation? Is "return-to-risk ratio" the Sharpe ratio? If so, why not call it that? If not, what is he using instead? What is his preferred measure of "risk?" How is the return-to-risk scale to be interpreted? The numbers aren't evenly spaced, and they don't line up with the right ends of the curves. I guess they line up with the Y axis scale but that's puzzling, too. The standard deviation of a portfolio doesn't determine the Sharpe ratio without other information. You need to know a) the ...
by nisiprius
Sun Mar 17, 2024 7:12 am
Forum: Investing - Theory, News & General
Topic: Dot.Com Era/AI Era?
Replies: 302
Views: 27391

Re: Dot.Com Era/AI Era?

Side note, question for those who might know. If AI has actually evolved emergent understanding and is improving at such a rapid pace, why do AI-generated images still have such trouble counting fingers and legs? Why haven't they learned from Wikipedia that The human hand usually has five digits and learned how to apply this fact? They are supposed to be able to write code, why can't they write "Do hand = new object. Draw(hand). If digits(hand)=5 then exit else repeat." The biological growth and development process, presumably without intelligence, is able to get this right about 99.8% of the time, why can't AI? Me: "Show me a picture of six people waving their hands enthusiastically." Microsoft Bing Copilot: https://img...
by nisiprius
Sun Mar 17, 2024 6:55 am
Forum: Investing - Theory, News & General
Topic: Dot.Com Era/AI Era?
Replies: 302
Views: 27391

Re: Dot.Com Era/AI Era?

One similarity between the dot-com era and the AI era is the unhinged, extreme, rhetoric of some fans. Who was the guy who yammered in WIRED back in the late 1990s that old measures like earnings and profit were irrelevant because we were leaving the age of scarcity and entering an age of abundance?

Nowadays charismatic AI promoters are arguing, apparently not as a joke, that... uh... let me find the exact quotation:
Marc Andreessen wrote:We believe any deceleration of AI will cost lives. Deaths that were preventable by the AI that was prevented from existing is a form of murder.
Of course this is a characteristic of many bubbles and fads.

Usually the new technology is supposed to bring about world peace. Are they saying that about AI currently, I'm not sure.
by nisiprius
Sun Mar 17, 2024 6:42 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

Will someone please provide

1) a quantitative definition of "diversification" and how it can be measured, with a reference to the source of the definition, and

2) the exact benefit diversification is supposed to provide, and how that can be measured?

By "source" I don't mean a definition of some measure, I mean a source that says that it is consensus view of many economists that it is a good measure of what the word "diversification" means.
by nisiprius
Sat Mar 16, 2024 9:00 pm
Forum: Investing - Theory, News & General
Topic: Which industry will benefit from new real estate commission fee structure?
Replies: 51
Views: 4039

Re: Which industry will benefit from new real estate commission fee structure?

I think all aspects of the real estate business from benefit from the collapse of the fixed fee structure. They will add new fees and hide them in all kinds of new ways we can't even imagine today. In place of a single bundled commission fee there will be a plethora of new fees and charges to deal with. The possibilities are endless, advertising fees, fees for "for sale" sign placement, rental, and removal, open house charges, walk-through fees for showing the home to prospective purchasers, listing fees, hourly charges for accommodating appraisers and home inspections, etc, gobs and gobs of fees like you've never seen before. Many of the fees might not be dependent on the closing of a sale. That's a good point. Heck, top agents ...
by nisiprius
Sat Mar 16, 2024 8:55 pm
Forum: Investing - Theory, News & General
Topic: What is the appeal of Robinhood
Replies: 85
Views: 5905

Re: What is the appeal of Robinhood

Thank you! Anyway, Robinhood is a member of the SIPC.
by nisiprius
Sat Mar 16, 2024 8:38 pm
Forum: Investing - Theory, News & General
Topic: What is the appeal of Robinhood
Replies: 85
Views: 5905

Re: What is the appeal of Robinhood

...They claim to be [SIPC] so I'll look over [SIPC] to see if they are... (I think Robinhood is a Bad Thing, but...) ...with regard to SIPC, Robinhood is big enough and conspicuous enough and has been around long enough that it is inconceivable that they would be lying about it and would not have been caught. When they fibbed about their "savings accounts" and "checking accounts" being "insured by the SIPC" they were caught within less than two days, I think the financial news was quoting the SIPC chair as saying they weren't on the very next day. But it's easy enough to check. SIPC List of Members All registered brokers or dealers are SIPC members by law, with some exceptions. ... ROBINHOOD FINANCIAL LLC LAKE...
by nisiprius
Sat Mar 16, 2024 3:23 pm
Forum: Investing - Theory, News & General
Topic: Anybody heard stories of well "prepared" retirees running out of money?
Replies: 90
Views: 10278

Re: Anybody heard stories of well "prepared" retirees running out of money?

Josh5000 wrote: Sat Mar 16, 2024 3:23 pm What is AA? Any recommendation for long term care plan? Is this different than HSA?
Asset allocation. The chief asset allocation is the relative percentages of stocks and bonds.
by nisiprius
Sat Mar 16, 2024 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Quit claim deed has a lot of room for fraud
Replies: 28
Views: 3057

Re: Quit claim deed has a lot of room for fraud

Bobby206 wrote: Sat Mar 16, 2024 10:33 am ...Many notaries don't check ID's either and/or the ID could be stolen...
WHAT? Every time I've had something notarized they've checked my driver's license. Even when the notary was someone in the payroll department at work.

What say others? Is notarization without presenting ID common?
by nisiprius
Sat Mar 16, 2024 1:26 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces CEO Retirement and Appointment of President
Replies: 371
Views: 34668

Re: Vanguard Announces CEO Retirement and Appointment of President

"Deliberately annoy your less profitable customers in hopes of driving them away" was a management fad circa 2000. Business writers said that the most loyal customers were not necessarily the most profitable.

I suspect that this was short-termism, and that they were not taking into account the length of time you hold a grudge against a company you think has not treated you properly, or the number of people you tell about it. My spouse will still not buy a particular brand of hot dog because one of their trucks cut her off in traffic in the 1970s.

I hope that the fad has faded. Around that time, banks would rope off a dedicated teller line that was only for customers with accounts of over $10,000. I haven't seen that in decades.
by nisiprius
Sat Mar 16, 2024 11:15 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces CEO Retirement and Appointment of President
Replies: 371
Views: 34668

Re: Vanguard Announces CEO Retirement and Appointment of President

exodusNH wrote: Fri Mar 15, 2024 10:59 am ...When they first removed the button, I dug around their HTML and JavaScript and found you could restore it by tweaking some variables. They were using JavaScript to hide it. One of the ways it would be enabled is if you had a message from them that required you to upload a document.

Did you ever need to upload something? Perhaps they didn't properly reset your status...
Oh, I love it. Sure, I uploaded stuff in the past.
by nisiprius
Sat Mar 16, 2024 11:07 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

...My read is that Logan is using a hypothetical "A" factor as a joke to highlight the "factor zoo" phenomenon whereby new "factors" can be conjured by anyone looking at a dataset retrospectively and identifying anomalies that are most likely due to chance. That's the definition of "data-mining."... And to me, the "'factor zoo' phenomenon" is itself evidence against the validity of factor research. In Campbell R. Harvey and Yan Liu (2019), A Census of the Factor Zoo , we read--emphasis supplied: We document over 400 factors published in top journals . Surely, many of them are false. We explore the incentives that lead to factor mining and explore reasons why many of the factors are simply l...
by nisiprius
Sat Mar 16, 2024 9:40 am
Forum: Personal Finance (Not Investing)
Topic: Vanguard and [SIPC] insurance
Replies: 4
Views: 476

Re: Vanguard and SPIC insurance

1) It's SIPC, not SPIC. 2) IT. IS. NOT. "INSURANCE." I think this is important and people get it wrong. The "I" in FDIC stands for insurance, Federal Deposit I nsurance Corporation. SIPC stands for "Securities I nvestor Protection Corporation." 3) The "protection" provided by SIPC is not terribly important, because it's protecting against a risk that isn't very big. Notice that it does not protect against your buying securities that are fraudulent. It is protection against a risk that was important in the late 1960s the risk that through negligence or fraud, the broker does not actually have the securities that it says you have on your brokerage statement. In the 1970s brokerage security was poor, bro...
by nisiprius
Sat Mar 16, 2024 9:14 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

To me, investing in factors, therefore, would at worst expose me to random chance of under or over performance during my lifetime. But at best, expose me to actual premiums and be completely worth it. ...I totally agree that this explanation could be a thing, and I have seen many people bring up these potential facts. But I have yet to see anyone proclaim to have a strong conviction in factor premiums state that they avoid investing in them for these reasons. Therefore I think the true underlying sentiment of these arguments falls in the "factors don't matter" category, which maybe we could change to be "factors don't matter enough ". I believe they don't matter enough to overcome a) random chance and b) other problems ...
by nisiprius
Fri Mar 15, 2024 3:41 pm
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

With respect to "robustness," I don't know of any recognized measure of "robustness." Nor do I know how to get "proof" of anything about investing. But I think there is strong evidence that the market factor is more robust than the size factor. My evidence is that there are numerous papers challenging the very existence of a small-cap premium, either in risk-adjusted return or even in raw return. One example is "Fact, Fiction, and the Size Effect" by Ron Alquist, Ronen Israel, and Tobias Moskowitz of AQR, who conclude that The bottom line is that, after addressing the facts and fictions of the size effect, we find neither strong empirical evidence nor robust theoretical support for a prominent size pr...
by nisiprius
Fri Mar 15, 2024 10:34 am
Forum: Investing - Theory, News & General
Topic: Vanguard Announces CEO Retirement and Appointment of President
Replies: 371
Views: 34668

Re: Vanguard Announces CEO Retirement and Appointment of President

Thanks. So the disappearance of the ability to communicate securely in text via the website, seemingly completely at random for some customers but not others, remains a complete and unexplained mystery, with no customer communication about it. It's not that it's so bad in itself--although if every one of my doctors' organizations can do it, why can't Vanguard?--it's just that it has been managed so very poorly. I just tried it and apparently I'm one of the lucky ones. Wonder if it has to do with Flagship/Flagship Select or not. We just need one counterexample.... It does not. I am not Flagship and I still have the "compose" button. This was one of the first explanations suggested and it doesn't hold water, there are Flagship clie...
by nisiprius
Fri Mar 15, 2024 10:16 am
Forum: Investing - Theory, News & General
Topic: Great news! No more [fixed real estate] agent commission
Replies: 163
Views: 15070

Re: Great news! No more agent commission

wellboy99 wrote: Fri Mar 15, 2024 9:52 am Should I postpone to sell my house to save 5-6% commission based on this news?
I don't know how it's going to play out, but I would bet dollars to doughnuts the result isn't a simple--or as good--as "wait and save 5-6%."
by nisiprius
Fri Mar 15, 2024 8:09 am
Forum: Investing - Theory, News & General
Topic: Considering ditching the Target-Date Fund, and making my own portfolio with small-caps overweighted
Replies: 7
Views: 1025

Re: Considering ditching the Target-Date Fund, and making my own portfolio with small-caps overweighted

I have enjoyed the Target-Date Fund as a one-stop shop for our retirement accounts. However the work of Paul Merriman is very convincing. Overweighting small-cap stocks and possibly small-cap value stocks seems to be a good bet for excess returns. Our time period is about 30 years to retirement, so we have a very long holding period.... To quote another poster, whom I believe is correct. (The "size factor" is the risk factor that small-cap stocks possess). It is pretty much acknowledged the size factor never existed as statistically significant after the data was corrected for delisting biases. Small-cap stocks may have had higher returns (but see below) than the total market, but they have also been riskier than the total market...
by nisiprius
Fri Mar 15, 2024 7:40 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

It is pretty much acknowledged the size factor never existed as statistically significant after the data was corrected for delisting biases. So here's one more (anecdotal) data point that what is "pretty much acknowledged" by factor cognoscenti is not what is reaching the general public: I have enjoyed the Target-Date Fund as a one-stop shop for our retirement accounts. However the work of Paul Merriman is very convincing. Overweighting small-cap stocks and possibly small-cap value stocks seems to be a good bet for excess returns. Our time period is about 30 years to retirement, so we have a very long holding period. Where is the current research on the general market cap index fund vs including some overweighting? Thank you!
by nisiprius
Fri Mar 15, 2024 7:27 am
Forum: Investing - Theory, News & General
Topic: What is the appeal of Robinhood
Replies: 85
Views: 5905

Re: What is the appeal of Robinhood

Popular investing app Robinhood became the focus of the controversy after it decided to freeze trades for GameStop on Jan. 28. https://www.cnet.com/personal-finance/investing/robinhood-backlash-what-you-should-know-about-the-gamestop-stock-controversy/ Let us be fair to Robinhood. The correct price for GameStop was infinite- or a price functionally as high. That isn’t a valid price. As such, the price would continue to go up until the weakest link broke. That weak link was Robinhood. If not them, it would have been another broker. They stopped trading GameStock because by regulation they couldn’t trade it anymore. As a result of Lehman Brother’s collapse brokers need to post collateral in case they go bankrupt in order to minimize counter ...
by nisiprius
Thu Mar 14, 2024 5:24 pm
Forum: Personal Consumer Issues
Topic: Happy Pi Day! (And what pie?)
Replies: 54
Views: 4544

Re: Happy Pi Day! (And what pie?)

Wikipedia's article on the Indiana pi bill is a much more complicated and interesting story than I had realized. It was not actually about the value of π, but an attempt by an amateur mathematician to get legislative recognition for his discovery of a method for squaring the circle. He wanted to charge royalties for the use of this discovery; the bill generously granted Indiana a license to use it in Indiana schools royalty-free. It doesn't contain a value for π, but implicitly contains claims that π = exactly 32/10 or 3.2, and that √2 is exactly 10/7. And it's not about I Kings 7:23 ("And he made a molten sea, ten cubits from the one brim to the other: it was round all about, and his height was five cubits: and a line of thirty cubits...
by nisiprius
Thu Mar 14, 2024 12:57 pm
Forum: Personal Consumer Issues
Topic: Do you need to carry your health insurance card?
Replies: 75
Views: 7337

Re: Do you need to carry your health insurance card?

...My insurer still sends a plastic card (for now), but updated their mobile app so that you can get a digital card that lives in your Apple/Google wallet. They seem to be promoting that feature, probably because it's cheaper for them than printing millions of plastic cards every year. My vision and dental insurer went completely card-less a few years ago. The dentist and optometrist just looks up your info on their portal. I didn't even remember who the company was, but they were able to find it by searching my info. I guess carrying the physical card isn't really necessary to get the best care, it's just convenient if a provider asks for it. 1) Not my health insurance card, but our zoo family membership--I signed up online and they toute...
by nisiprius
Thu Mar 14, 2024 7:38 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

...The size factor, discovered in 1981, is the granddaddy of all factors. Nobody in the factor crowd is willing to come right out and say that it doesn't exist and never did, but it sure ain't what it was. Your statement about the size factor is not really correct or at least incomplete. It is pretty much acknowledged the size factor never existed as statistically significant after the data was corrected for delisting biases. However the other factors such as size and quality are more pronounced in smaller stocks. Of course, sociological statements about "what is generally acknowledged" are hard to prove one way or another. I don't think it is acknowledged, or at least there's tapdancing around it, or at least it isn't acknowledg...
by nisiprius
Thu Mar 14, 2024 7:28 am
Forum: Investing - Theory, News & General
Topic: More Evidence Against Factor Investing
Replies: 473
Views: 33807

Re: More Evidence Against Factor Investing

Cliff Asness has weighed in... :D And his only argument is "they are wonderful, brilliant, and honest", so please, believe them. Expected more from him. If Cliff Asness had posted that in the forum himself, which he didn't, and if Pat Akey were a forum poster, which he isn't, that post might have gotten removed by moderators as a violation of forum policy. It is 100% ad hominem . It's "how dare these unknowns criticize these famous people?" He obviously think Akey & al's criticisms are worse than garbage, but he didn't comment directly on the validity of those criticisms. Two of them, I think, remain unanswered in Fama and French's not-a-reply-reply paper. A) why don't Fama & French publish the actual code they ...
by nisiprius
Thu Mar 14, 2024 7:07 am
Forum: Personal Consumer Issues
Topic: Do you need to carry your health insurance card?
Replies: 75
Views: 7337

Re: Do you need to carry your health insurance card?

Fraudulent claims would be a problem for the insurer. I don't think they would give you a card to carry if they didn't want you to carry it. I don't remember them giving me any stern red warnings about it. At worst, it's one more place to contact if you lose your wallet. I guess if you're really being a good doobie you'd contact the insurance company even if you get the wallet back with the card still in it. I also guess that a cell phone image of the card would work, but so many places want a card they can run through a little scanner that that would slow things down. EMT here, we transport to the closest APPROPRIATE facility for life-threatening care. Traumas may go to a different hospital than strokes would for example. But for non-life-...
by nisiprius
Thu Mar 14, 2024 6:45 am
Forum: Investing - Theory, News & General
Topic: Is Raymond James beating the SP500? That's what they are claiming.
Replies: 59
Views: 4606

Re: Is Raymond James beating the SP500? That's what they are claiming.

fvaldes, did your brother direct you to the paper? I.e. is Raymond James currently showing it to clients? Or did you find it yourself, and, if so, how? I see that it is the top hit if I perform a Google search for Raymond James beats S&P 500.
by nisiprius
Wed Mar 13, 2024 6:19 pm
Forum: Investing - Theory, News & General
Topic: What is the appeal of Robinhood
Replies: 85
Views: 5905

Re: What is the appeal of Robinhood

Probably because it is unintimidating. The whole approach is "you can do it!" It makes inexperienced investors feel empowered. In effect they say "We let you buy crypto, we let you trade options, we give you free money so you can make your first transaction minutes after you create your account, we don't make you sign forbidding legal documents say that you are a sophisticated investor and totally cool with losing more money than you have. If you can work a slot machine, you can work RobinHood." Banks used to resemble Greek temples and communicated a message that money was a serious, solemn business. Now they resemble check-cashing storefronts and communicate a message that banking is informal, goofy fun. Redneck Bank's ...
by nisiprius
Wed Mar 13, 2024 6:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Announces CEO Retirement and Appointment of President
Replies: 371
Views: 34668

Re: Vanguard Announces CEO Retirement and Appointment of President

Thanks. So the disappearance of the ability to communicate securely in text via the website, seemingly completely at random for some customers but not others, remains a complete and unexplained mystery, with no customer communication about it.

It's not that it's so bad in itself--although if every one of my doctors' organizations can do it, why can't Vanguard?--it's just that it has been managed so very poorly.
by nisiprius
Wed Mar 13, 2024 5:54 pm
Forum: Personal Finance (Not Investing)
Topic: Mega Thread on Speed of 2023 Tax Refunds
Replies: 43
Views: 5020

Re: Mega Thread on Speed of 2023 Tax Refunds

madbrain wrote: Tue Mar 12, 2024 10:21 pm
nisiprius wrote: Sat Mar 09, 2024 7:58 pm IRS Efiled, accepted 3/1/2023.
Refund direct deposited and showing as "available funds" 3/8/2023.
Those dates are remarkable, for a 2023 tax year filing ;)
:oops: Fixed
by nisiprius
Wed Mar 13, 2024 2:07 pm
Forum: Investing - Theory, News & General
Topic: Is Raymond James beating the SP500? That's what they are claiming.
Replies: 59
Views: 4606

Re: Is Raymond James beating the SP500? That's what they are claiming.

i'm not going to take a real look at this but one thing to watch out for in this sort of claim is whether or not they are including dividend returns or are they only comparing to the S&P's change in price. It's a good point, but since the author is a professor with publications in peer-reviewed journals, and because this one did appear in a peer-reviewed journal, I'd expect it to be OK. We can check. https://imgur.com/mT2LO4r.png First of all, "cumulative wealth index" should be total return. $1,000 growing to $3,700.45 in ten years = 13.98% CAGR and $1,000 growing to $2,443.46 in ten years = 9.35% CAGR, confirming that the "average annual return" numbers are total return. Second, we can check the S&P 500 number...
by nisiprius
Wed Mar 13, 2024 1:50 pm
Forum: Investing - Theory, News & General
Topic: Is Raymond James beating the SP500? That's what they are claiming.
Replies: 59
Views: 4606

Re: Is Raymond James beating the SP500? That's what they are claiming.

the_wiki wrote: Wed Mar 13, 2024 11:52 am Did their actual clients outperform S&P500 index funds?
THIS.
by nisiprius
Wed Mar 13, 2024 9:00 am
Forum: Investing - Theory, News & General
Topic: Is Raymond James beating the SP500? That's what they are claiming.
Replies: 59
Views: 4606

Re: Is Raymond James beating the SP500? That's what they are claiming.

If you can provide the ticker of the RJ fund a comparison can be done. I think this "report" is for actively picking stocks.. and conveniently only reports the results from 1993 to 2002. And of course, no mention of fees. It sort of does: Calculations done for the Journal by Zacks Investment Research in Chicago take into account capital gains or losses, dividends and theoretical commissions of 1% on each trade. I haven't been able to check the actual paper, but it was published in the Journal of Investing in 2004. The abstract from the published article is: Examination of performance over 1993–2002 indicates that average quarterly and cumulative returns of stocks recommended by brokerage firms are slightly below the returns of th...
by nisiprius
Wed Mar 13, 2024 7:54 am
Forum: Personal Investments
Topic: BND or Stable fund
Replies: 106
Views: 10536

Re: BND or Stable fund

That’s just not how investments work. Sometimes things go down at the same time. The only way to do what you propose would have been to also hold a short position in stocks, so that it would go up when stocks went down. NOW is when everyone is telling us that. Surely no one did, prior to 2022. 2007: Scenario Three: Stocks and bonds are both down. 2014: Stocks and bonds have zero correlation, not negative correlation. There is no consistent long-term tendency for bonds to move in the opposite direction as stocks, although anything can happen over short periods of time. Because diversification is hard to explain, there is a universal tendency to use a misleading illustration. It's not correct to say "bonds zig when stocks zag." Wha...
by nisiprius
Tue Mar 12, 2024 8:21 pm
Forum: Personal Investments
Topic: Gold and Risk Adjusted Return
Replies: 33
Views: 3769

Re: Gold and Risk Adjusted Return

naturewalker420 wrote: Sun Feb 25, 2024 10:18 am...Gold protects your purchasing power in that aspect of its return is 0% real because gold itself is the money. Currencies lose value over time against gold resulting in the "rising fiat price of gold". So I am in agreement with 10% allocation to gold to help risk adjusted returns.
The worst price inflation in the history of the CPI took place around 1920-1925 when the US was on the gold standard and the dollar was equivalent to gold.