Any Dangerous Boglehead Group-Think?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Any Dangerous Boglehead Group-Think?

Post by Fallible »

deleted.
Last edited by Fallible on Wed Oct 16, 2013 4:51 pm, edited 1 time in total.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
Leesbro63
Posts: 10640
Joined: Mon Nov 08, 2010 3:36 pm

Re: Any Dangerous Boglehead Group-Think?

Post by Leesbro63 »

The small cap value thing is something I wonder about. My portfolio is pretty much "set" and since it's taxable with large cap gains (as I tax loss harvested in 2009), I really can't do it without a huge cost. So I won't. But I've wondered about it and if it's not just another "Dogs of the Dow" type thing that works until I do it. I think most of what has come to be "groupthink" here is good math, perhaps science, and undeniable observations of what has worked, what hasn't worked, and what is just obvious reality. But since someone mentioned SCV, I agree that perhaps this is something that won't outperform now that everyone knows about it.
money
Posts: 57
Joined: Sun Jan 20, 2013 4:31 pm
Location: California

Re: Any Dangerous Boglehead Group-Think?

Post by money »

Yes, lots of group-think here. It makes me not come on as often. :( People can turn anything into a religion.
1Fi1LTvx8KmtotRqcha9mj5h43319mJvjY
User avatar
nisiprius
Advisory Board
Posts: 52216
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Any Dangerous Boglehead Group-Think?

Post by nisiprius »

There may be group-think within some virtual cliques within the forum, but all of these cliques post and exchange opinions.

In my opinion, the only truly dangerous group-think is the kind where you literally do not even know about the existence of dissenting opinions, and are confined within a bubble where it appears that "everyone" agrees on something.

"Tune out the noise" could be dangerous in this regard, but not unless one really succeeds in tuning it out completely.

Even "stay the course" does not go unchallenged here, as witness any number of current threads.

It is probably true that those of us who have decided for themselves to stay the course do come here to reassure themselves that others are doing the same thing, and to go someplace where they will hear confirmation of their views--come here to hear what we want to hear.

However, advisors frequently suggest that one of the ways advisors earn their keep is by coaching investors to stay the course, so I see no harm in exposing myself to a little of that--just as I try to control my weight by making sure my home environment contains plenty of moist, bulky fresh fruits and vegetables and not too much in the way of foods that induce "carbohydrate lust."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
The Wizard
Posts: 13356
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Any Dangerous Boglehead Group-Think?

Post by The Wizard »

Let me just say right now that I have a modest chunk of $$$ in a High-Yield Bond Fund, thus taking risk on the bond side of my portfolio in addition to the stock side.
So there...
Attempted new signature...
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Any Dangerous Boglehead Group-Think?

Post by Fallible »

nisiprius wrote:There may be group-think within some virtual cliques within the forum, but all of these cliques post and exchange opinions.

In my opinion, the only truly dangerous group-think is the kind where you literally do not even know about the existence of dissenting opinions, and are confined within a bubble where it appears that "everyone" agrees on something.

"Tune out the noise" could be dangerous in this regard, but not unless one really succeeds in tuning it out completely.

Even "stay the course" does not go unchallenged here, as witness any number of current threads.
...
From what I've seen here, nearly every principle has been challenged and received a variety of responses. And this is what I look for on the forum, a variety of responses, as much variety as I have time to read and ability to understand. Often I leave a long thread still undecided but always better informed. As I've posted earlier here, I believe in the principles because they have worked for me for many years and that's the bottom line. But I come to the forum for new thoughts about them, new challenges to them and to see how they stand up to the scrutiny.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
IlliniDave
Posts: 2388
Joined: Fri May 17, 2013 7:09 am

Re: Any Dangerous Boglehead Group-Think?

Post by IlliniDave »

William Million wrote:Any Bogleheads ideas repeatedly espoused here . . . to the extent that group-think occurs? That is, "the psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an incorrect or deviant decision-making outcome." (Wikipedia)

No. If I stated that 10/16/2013 fell on a Wednesday or that the shortened version of my first name is "Dave" someone would cry, "home country-biased market timing!" or imbed a Morningstar plot that proves my inherent place in the universe is not meaningfully different from a Vanguard Total Sock Market Index Fund growth of $10,000 curve.

No one here seems overly concerned about agreeing with everyone else, which makes the discussions valuable. If anything, it's diaspora-think around here. There are certainly enclaves of like-minded souls, but as a whole the membership seems quite diverse.
Last edited by IlliniDave on Wed Oct 16, 2013 12:51 pm, edited 1 time in total.
Don't do something. Just stand there!
User avatar
3CT_Paddler
Posts: 3485
Joined: Wed Feb 04, 2009 4:28 pm
Location: Marietta, GA

Re: Any Dangerous Boglehead Group-Think?

Post by 3CT_Paddler »

Noobvestor wrote:The idea that US-only investing gets one global exposure, and that ex-US investing is expensive and risky in a way that isn't compensated is persistent among some factions.

But ... now I'll play contrarian/group thinker :)
Noob, it seems like there is a large variety of opinions on here on the matter of international exposure... I don't see how that qualifies as groupthink.


I do think there is some selection bias on forum participation that may lead to limited perspectives/input or certain forms of groupthink. The main perspective seems to be upper middle class, white collar workers at jobs with a 401k/403B. Although that would probably be true of just about any financial forum.
mikem
Posts: 186
Joined: Fri Jun 01, 2012 6:28 pm

Re: Any Dangerous Boglehead Group-Think?

Post by mikem »

I get the impression, occasionally, especially from new posters that they may be seeking out a "groupthink" mentality in order to garner support or approval for their actions or plans. When confronted with all possible options, it can be confusing and may even be intimidating when faced with so many possible ways to "skin a cat". Even though one of the primary strengths of the forum is the uncanny ability of it's members to dig out and analyse every available option, sometimes it is difficult to come away with the "best one for me" answer. In any event, an informed investor, aware of all the possibilities and consequences, is much better prepared and more likely to make the right decision.
3504PIR
Posts: 979
Joined: Mon Jul 26, 2010 2:46 am

Re: Any Dangerous Boglehead Group-Think?

Post by 3504PIR »

Belief that the boglehead method is the definition of simplicity and then spend an unimaginable amount of time analyzing the various methods of not going broke in retirement, best AA, slicing and dicing, gold, TIPS, on and on.

Belief that past performance has no relationship with future performance and then base the whole ballgame (retirement) on past performance, not to mention using past performance to prove every point on why x is better than y.

Belief that all financial advisor's are evil, except the ones who post here.

Belief that they are right and everyone else is a sucker.
User avatar
Topic Author
William Million
Posts: 1132
Joined: Wed May 05, 2010 4:41 am
Location: A Deep Mountain

Re: Any Dangerous Boglehead Group-Think?

Post by William Million »

PE10 now seems like an entrenched instance of Boglehead group-think. I see 2 major threads debating this useful, yet extremely narrow, value metric.

I'm amazed there seem to be dozens of Bogleheads on this board who now base their investment or future earnings expectations on such a limited yeardstick.
User avatar
hoppy08520
Posts: 2193
Joined: Sat Feb 18, 2012 10:36 am

Re: Any Dangerous Boglehead Group-Think?

Post by hoppy08520 »

The Wizard wrote:Let me just say right now that I have a modest chunk of $$$ in a High-Yield Bond Fund, thus taking risk on the bond side of my portfolio in addition to the stock side.
So there...
There you go with the groupthink again, doing whatever John Bogle says :-)

Bogle: Swap Treasurys For Corporates (October 02, 2013)
During a recent conversation with IndexUniverse Managing Editor Olly Ludwig, Bogle held forth on a number of subjects, including his ongoing suspicions that ETFs tempt investors into making decisions that hurt them in the long haul, and his view that aggregate bond indexes have too much Treasury debt and not enough corporate credits.
User avatar
Raybo
Posts: 2244
Joined: Tue Feb 20, 2007 10:02 am
Location: San Francisco
Contact:

Re: Any Dangerous Boglehead Group-Think?

Post by Raybo »

Mining the forum for threads that you deem
William Million wrote:... an entrenched instance of Boglehead group-think ...
is starting to take on religious overtones of its own.
No matter how long the hill, if you keep pedaling you'll eventually get up to the top.
placeholder
Posts: 8421
Joined: Tue Aug 06, 2013 12:43 pm

Re: Any Dangerous Boglehead Group-Think?

Post by placeholder »

William Million wrote:PE10 now seems like an entrenched instance of Boglehead group-think. I see 2 major threads debating this useful, yet extremely narrow, value metric.
How can this be groupthink if it's being debated? I'm not sure you use that term to mean what others do.
User avatar
Topic Author
William Million
Posts: 1132
Joined: Wed May 05, 2010 4:41 am
Location: A Deep Mountain

Re: Any Dangerous Boglehead Group-Think?

Post by William Million »

placeholder wrote:
William Million wrote:PE10 now seems like an entrenched instance of Boglehead group-think. I see 2 major threads debating this useful, yet extremely narrow, value metric.
How can this be groupthink if it's being debated? I'm not sure you use that term to mean what others do.
. . . . because so many posters here now have more faith in PE10 than any rational index investor, such as John Bogle. A few posters seem to have launched the notion, then more and more just followed along. Same thing seemed to happen with the S/V tilt. . . .
Last edited by William Million on Wed Oct 16, 2013 5:08 pm, edited 2 times in total.
CantPassAgain
Posts: 577
Joined: Fri Mar 15, 2013 8:49 pm

Re: Any Dangerous Boglehead Group-Think?

Post by CantPassAgain »

William Million wrote:. . . . because so many posters here now have more in PE10 than any rational index investor, such as John Bogle.
What does this even mean?
leonard
Posts: 5993
Joined: Wed Feb 21, 2007 10:56 am

Re: Any Dangerous Boglehead Group-Think?

Post by leonard »

William Million wrote:PE10 now seems like an entrenched instance of Boglehead group-think. I see 2 major threads debating this useful, yet extremely narrow, value metric.

I'm amazed there seem to be dozens of Bogleheads on this board who now base their investment or future earnings expectations on such a limited yeardstick.
You think timing the market based on a metric - like PE10 - is boglehead.

To be clear, do you think a fundamental tenant of the boglehead point of view is market timing of any kind.

Your statement above seems to imply you believe this.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
placeholder
Posts: 8421
Joined: Tue Aug 06, 2013 12:43 pm

Re: Any Dangerous Boglehead Group-Think?

Post by placeholder »

I can't even figure out what the thread means. Pretty useless.
technovelist
Posts: 3611
Joined: Wed Dec 30, 2009 8:02 pm

Re: Any Dangerous Boglehead Group-Think?

Post by technovelist »

IlliniDave wrote:
William Million wrote:Any Bogleheads ideas repeatedly espoused here . . . to the extent that group-think occurs? That is, "the psychological phenomenon that occurs within a group of people, in which the desire for harmony or conformity in the group results in an incorrect or deviant decision-making outcome." (Wikipedia)

No. If I stated that 10/16/2013 fell on a Wednesday or that the shortened version of my first name is "Dave" someone would cry, "home country-biased market timing!" or imbed a Morningstar plot that proves my inherent place in the universe is not meaningfully different from a Vanguard Total Sock Market Index Fund growth of $10,000 curve.

No one here seems overly concerned about agreeing with everyone else, which makes the discussions valuable. If anything, it's diaspora-think around here. There are certainly enclaves of like-minded souls, but as a whole the membership seems quite diverse.
What about the glove index? :D
In theory, theory and practice are identical. In practice, they often differ.
Professor Emeritus
Posts: 2628
Joined: Mon Aug 13, 2012 6:43 am

Re: Any Dangerous Boglehead Group-Think?

Post by Professor Emeritus »

Jfet wrote:The only group think I can come up with on here that is 100% accepted as law is "Stay the course".

Now, was this the right move for the captain of the Titanic? I guess time will tell.
Actually it was Officer Murdoch's attempt to "port around" the iceberg that doomed the RMS Titanic. It did not "stay the course" The Titanic thus presented its side rather than its stem to the hazard. Bad move. Better complaint would be on Captain Smith's risk analysis related to speed, which is more like asset allocation.
Fallible
Posts: 8798
Joined: Fri Nov 27, 2009 3:44 pm

Re: Any Dangerous Boglehead Group-Think?

Post by Fallible »

Professor Emeritus wrote:
Jfet wrote:The only group think I can come up with on here that is 100% accepted as law is "Stay the course".

Now, was this the right move for the captain of the Titanic? I guess time will tell.
Actually it was Officer Murdoch's attempt to "port around" the iceberg that doomed the RMS Titanic. It did not "stay the course" The Titanic thus presented its side rather than its stem to the hazard. Bad move. Better complaint would be on Captain Smith's risk analysis related to speed, which is more like asset allocation.
Initially, as I understand it, the Titanic stayed the course in terms of top speed, despite conditions and iceberg warnings, leaving it too little time (especially under the weather conditions and an unusually calm sea) to completely avoid the berg or to at least graze it with less damage.

What's most important to me in staying the course is to first be invested wisely and for the long term. Still, the Bogleheads' "stay the course" has different meanings to different Bogleheads (no groupthink there...) as previous threads show. Here are just a couple:

http://www.bogleheads.org/forum/viewtop ... 10&t=90594
http://www.bogleheads.org/forum/viewtop ... 0&t=119035
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
money
Posts: 57
Joined: Sun Jan 20, 2013 4:31 pm
Location: California

Re: Any Dangerous Boglehead Group-Think?

Post by money »

3504PIR wrote:Belief that the boglehead method is the definition of simplicity and then spend an unimaginable amount of time analyzing the various methods of not going broke in retirement, best AA, slicing and dicing, gold, TIPS, on and on.

Belief that past performance has no relationship with future performance and then base the whole ballgame (retirement) on past performance, not to mention using past performance to prove every point on why x is better than y.

Belief that all financial advisor's are evil, except the ones who post here.

Belief that they are right and everyone else is a sucker.
Those are good points. Also condescending attitudes towards certain asset classes.

As a younger investor, sometimes, I feel the advice here is coming from some people trying to prop the market up through their retirement. I had heard a few years ago (from someone who interviewed at Vanguard) Bogle runs funds that use algorithmic trading that are constantly buying and selling equities. These funds are not available to retail investors. :confused
1Fi1LTvx8KmtotRqcha9mj5h43319mJvjY
Alistair
Posts: 209
Joined: Fri Oct 17, 2008 9:01 am

Re: Any Dangerous Boglehead Group-Think?

Post by Alistair »

money wrote:... I had heard a few years ago (from someone who interviewed at Vanguard) Bogle runs funds that use algorithmic trading that are constantly buying and selling equities. These funds are not available to retail investors. :confused
Just quoting for the comedy value :)
User avatar
ruralavalon
Posts: 26353
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Any Dangerous Boglehead Group-Think?

Post by ruralavalon »

gerrym51 wrote:there are plenty of dissenting opinions on this board on just about every subject. I wouldn't worry about it.
I agree :) .
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
Post Reply