Search found 478 matches

by Dirghatamas
Fri Jun 23, 2017 12:11 am
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 5974

Re: Your Favorite Portfolio Tilts

Dirghatamas, personal but respectful question: why aren't you retired already? :?: This is getting OT but fine. Two reasons 1) worries about future of healthcare 2) mental stimulation. I want a large safety margin because the future of healthcare in US is unknown. Still, my worry has gone down over...
by Dirghatamas
Thu Jun 22, 2017 11:49 pm
Forum: Investing - Theory, News & General
Topic: New Research Paper: Historical returns of the Global Market Portfolio
Replies: 5
Views: 755

Re: New Research Paper: Historical returns of the Global Market Portfolio

...Nobelist Bill Sharpe recommends the global market portfolio as a starting point for investors... Are you sure? I'd appreciate it if you could dig up Sharpe's own exact words and see if what he says amounts to a recommendation , i.e. "you should do this." There have been many threads on...
by Dirghatamas
Thu Jun 22, 2017 11:33 pm
Forum: Investing - Theory, News & General
Topic: New Research Paper: Historical returns of the Global Market Portfolio
Replies: 5
Views: 755

Re: New Research Paper: Historical returns of the Global Market Portfolio

Thesaints wrote:Dividends + earnings growth. And GDP growth is a proxy for EG.
2+3=5
QED :P


Haha. Short and insightful. I agree that dividend yield has been ~2-3% and GDP growth rates at ~2-3% so yep ~5% as the middle of the returns range seems reasonable. May be that's all there is to it.
by Dirghatamas
Thu Jun 22, 2017 12:06 am
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 5974

Re: Your Favorite Portfolio Tilts

I am a perma bear about Govt bonds (due to demographics and unfunded liabilities in developed countries) so never hold any bonds of any kind. If I pretend to accept your concern as valid so as to avoid any discussion in that direction, in general, where do you think money will flow in times of stoc...
by Dirghatamas
Wed Jun 21, 2017 11:46 pm
Forum: Investing - Theory, News & General
Topic: New Research Paper: Historical returns of the Global Market Portfolio
Replies: 5
Views: 755

New Research Paper: Historical returns of the Global Market Portfolio

There is an interesting (and well done) new research paper which showed up in my feed. It is about real returns from 1960 to 2015 on all global asset classes: global Private and Public equity, global real estate, global corporate bonds, global Govt bonds and short term treasury. The main idea was to...
by Dirghatamas
Mon Jun 19, 2017 10:00 pm
Forum: Investing - Theory, News & General
Topic: Best Financial Advice from Dad (in honor of father's day)
Replies: 79
Views: 4831

Re: Best Financial Advice from Dad (in honor of father's day)

Not much on actual investing but dad/extended family/culture gave strong lessons in childhood about debt (never ever have any), LBYM/frugal living and self reliance. Some of these childhood lessons are now so deeply ingrained as to be almost irrational. I finished college without debt but needed to ...
by Dirghatamas
Mon Jun 19, 2017 9:35 pm
Forum: Investing - Theory, News & General
Topic: is offering this [Vanguard] website feature feasible?
Replies: 29
Views: 1911

Re: is offering this [Vanguard] website feature feasible?

Apparently you find it trivial. I don't use excel spreadsheets, so for me it isn't trivial. I wasn't trying to be dismissive, rather helpful in providing the source information to download so that you could do this yourself. Sorry if my post came across as being dismissive. In the long run, I do th...
by Dirghatamas
Mon Jun 19, 2017 3:34 pm
Forum: Investing - Theory, News & General
Topic: is offering this [Vanguard] website feature feasible?
Replies: 29
Views: 1911

Re: is offering this [Vanguard] website feature feasible?

I'd love if Vanguard offered a feature through the website where you could enter a ticker symbol and be provided with a dollar value of your personal holding in that stock This is fairly trivial to create. A long time back I created a simple excel based spreadsheet (took maybe 10-15 minutes) and no...
by Dirghatamas
Sat Jun 17, 2017 1:42 pm
Forum: Investing - Theory, News & General
Topic: Anyone else gotten totally bored with investing?
Replies: 100
Views: 8697

Re: Anyone else gotten totally bored with investing?

Bored? No way. I make a distinction between acting, observing and general curiosity. I have been a passive investor for a very long time now, so no changes happen to actual portfolio. It is all passive, just world stocks. However, I am always curious about financial research, just as I am curious ab...
by Dirghatamas
Sat Jun 17, 2017 1:16 pm
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 5974

Re: Your Favorite Portfolio Tilts

My favorite tilt is no tilt: always just invest with World Market capitalization. OK that is not quite accurate. If one takes the world market portfolio as representing the weighted sum of all invested assets, then it has a lot of bonds and real estate too, beyond stocks. I fully own my house but no...
by Dirghatamas
Fri Jun 16, 2017 7:42 pm
Forum: Investing - Theory, News & General
Topic: Stock Market become safer as holding periods lengthen - Maybe just a bias
Replies: 49
Views: 3787

Re: Stock Market become safer as holding periods lengthen - Maybe just a bias

There is an interesting (and well done) new research paper which showed up in my feed for some reason. This is about real returns from 1960 to 2015 on all global asset classes: global equity, global real estate, global corporate bonds, global Govt bonds and short term treasury. The main idea was to ...
by Dirghatamas
Thu Jun 15, 2017 8:43 pm
Forum: Investing - Theory, News & General
Topic: Stock Market become safer as holding periods lengthen - Maybe just a bias
Replies: 49
Views: 3787

Re: Stock Market become safer as holding periods lengthen - Maybe just a bias

I had a few minutes with my evening coffee so read the OP article in more depth (as well as the linked underlying "new" research). It is a fairly shallow article. Here are two quotes The U.S. got lucky over the last two centuries. It wasn’t preordained that regression to the mean would be ...
by Dirghatamas
Thu Jun 15, 2017 7:24 pm
Forum: Investing - Theory, News & General
Topic: Stock Market become safer as holding periods lengthen - Maybe just a bias
Replies: 49
Views: 3787

Re: Stock Market become safer as holding periods lengthen - Maybe just a bias

It's all one data set that has not been duplicated in most of the rest of the developed world. Given the ordeal Merrill/CRSP had to go through to construct the data we have, and the fact that the US almost alone has had no major wars on our soil since 1865, a lot of humility is in order in making a...
by Dirghatamas
Tue Jun 06, 2017 2:56 pm
Forum: Investing - Theory, News & General
Topic: Mr. Bogle Values the Market, 1928-2016
Replies: 29
Views: 2492

Re: Mr. Bogle Values the Market, 1928-2016

[ You’re opening a can of worms with your question, and I’m reluctant to get into the debate about dividends vs. share buybacks. Suffice it to say, as you suggest, there’s a strong economic argument that the two are functionally equivalent Yes I am opening a can of worms but the linked paper you ha...
by Dirghatamas
Tue Jun 06, 2017 2:22 pm
Forum: Investing - Theory, News & General
Topic: Mr. Bogle Values the Market, 1928-2016
Replies: 29
Views: 2492

Re: Mr. Bogle Values the Market, 1928-2016

Simplegift I just read Bogle's paper you linked while at lunch. I don't understand something basic about your equation. Why one piece of it is earning growth while the other is dividend yield, as opposed to earnings yield? Here is the simple way I have intuitively always thought about fundamental (n...
by Dirghatamas
Mon Jun 05, 2017 8:47 pm
Forum: Investing - Theory, News & General
Topic: Has Forbes really discovered the next Warren Buffett? I'm skeptical.
Replies: 20
Views: 2755

Re: Has Forbes really discovered the next Warren Buffett? I'm skeptical.

I had never heard of this company so checked the spreadsheet of my investments. Because I am a world stock investor, sure enough, I also seem to own this company (that I had never heard of). Spreadsheet says ~0.07% of my assets are in this company. It seems to be in the same range as my holdings in ...
by Dirghatamas
Mon Jun 05, 2017 4:11 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 206
Views: 11874

Re: Do you think about volatility drag on your portfolio?

I assume we all rebalance for risk control. Rebalancing is for reducing volatility drag. :happy For example consider two asset A and B which are perfectly anti-correlated, and each time period, with equal probability, one gains 25% and the other loses 24%. More generally make it "one gains X% ...
by Dirghatamas
Mon Jun 05, 2017 2:32 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 206
Views: 11874

Re: Do you think about volatility drag on your portfolio?

...If the Boglehead Wiki has an article on that perhaps it should be worded more carefully Sorry, I didn't see this until now. There is indeed a wiki article: Variance drain =========== I don't understand why Rebalancing is part of this discussion, as I thought rebalancing risk was a totally differ...
by Dirghatamas
Wed May 31, 2017 5:51 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 206
Views: 11874

Re: Do you think about volatility drag on your portfolio?

Dave If you actually follow the book you just quoted and simply go to the next paragraph/next page, that BOOK basically says what many of us have been saying: "if you don't rebalance and the initial and final asset values are the same, the path followed doesn't matter." :happy That is lite...
by Dirghatamas
Wed May 31, 2017 4:46 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 206
Views: 11874

Re: Do you think about volatility drag on your portfolio?

I will add my 2 cents as I think I replied a lot to this thread when it started but we all kept talking past each other at that time. Perhaps I can be clearer in my explanation (how I think), this time. In my view there is NO volatility drag for practical, optimized portfolios. It is just plain nons...
by Dirghatamas
Tue May 30, 2017 11:36 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets Index Missing Big Names
Replies: 30
Views: 3032

Re: Emerging Markets Index Missing Big Names

Meanwhile, as for me, I assume that FTSE and MSCI both know their stuff... Vanguard has used both providers in the past... and the difference between FTSE's opinions and MSCI's can't possibly be worth the ER difference between 0.14% and 0.72%. With due respect, you are NOT up to date on this stuff ...
by Dirghatamas
Tue May 30, 2017 7:49 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets Index Missing Big Names
Replies: 30
Views: 3032

Re: Emerging Markets Index Missing Big Names

Do you see any evidence that there's ever been much difference between VEMAX and EEM? Not arguing your general point (they are very similar), but to be completely accurate, the time frame you chose will not show the difference, by definition. There are 3 key differences between those two funds 1) M...
by Dirghatamas
Tue May 30, 2017 7:34 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

Chip's issues illustrate the difficulties of adding a lifecycle perspective to the already complex problem of asset location for international. Modeling this is over my pay grade. Even ESPlanner won't drill down to this level of detail. My learnings: Don't ever get in a situation where over 20k of ...
by Dirghatamas
Sun May 28, 2017 10:14 pm
Forum: Investing - Theory, News & General
Topic: DON'T pay off your mortgage; instead reduce Sequence of Return Risk
Replies: 206
Views: 15337

Re: DON'T pay off your mortgage; instead reduce Sequence of Return Risk

But the mathematically optimal portfolio is only optimal if you know your risk tolerance and will stick with it. I agree with grabiner. It is not just about risk tolerance but how one feels psychologically about debt (quite different from general risk). This stuff isn't rational and usually has som...
by Dirghatamas
Sun May 28, 2017 9:43 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

If the former, then Vanguard deserves yet another medal. Why don't all fund families do this? Right :happy I am not familiar with the specific tax managed Vanguard fund you were talking (I only use total market index funds) about, so just made the comment in general about VG. Basically, if there is...
by Dirghatamas
Sun May 28, 2017 4:18 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

6) Other things equal, you will prefer an exchange-traded fund in a taxable account in order to avoid capital gains distributions. Here is an interesting case courtesy of M*: Vanguard Small-Cap TM has a .40 tax drag for a high bracket investor in a zero-tax state, while Vanguard US small cap ETF VB...
by Dirghatamas
Sun May 28, 2017 3:57 pm
Forum: Investing - Theory, News & General
Topic: Why Are U.S. Stocks So Expensive Today?
Replies: 41
Views: 4968

Re: Why Are U.S. Stocks So Expensive Today?

Volatility in real GDP growth is simply a proxy for macroeconomic risk in this analysis (along with the volatility of inflation). Expected stock returns are not being compared with economic growth rates (which are uncorrelated, as you point out) — but rather to macroeconomic volatility and uncertai...
by Dirghatamas
Sun May 28, 2017 3:28 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

..., one simply needs to file form 1116, that again I have been filing for ever. I have never (so far in 25 years of investing) had a year where I couldn't get full credit for foreign taxes paid. Now that would be a great thread in the spirit of triceratop's spreadsheet and the TLH/wash sale exampl...
by Dirghatamas
Sun May 28, 2017 3:21 pm
Forum: Investing - Theory, News & General
Topic: Why Are U.S. Stocks So Expensive Today?
Replies: 41
Views: 4968

Re: Why Are U.S. Stocks So Expensive Today?

1) As the Volatility of Real GDP Growth has Fallen, so have Expected Returns The standard deviation of real GDP growth is nearly two times higher in the first half of this study period (1947-1981) than in the last half (1982-2017) — falling from 4.9% to 2.6%. Great post and narrative as usual but I...
by Dirghatamas
Sun May 28, 2017 2:21 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

Conclusion Based on the above discussion, one would want to give a preference to holding international equities as follows: 1. The best choice is to hold international equities in taxable because the foreign taxes are reimbursed (up to a certain limit). Rules Given infinite room in tax-deferred acc...
by Dirghatamas
Sun May 28, 2017 2:00 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

I So if I'm doing the math right, if you have an international allocation that goes into 6 figures, you can hit that $300 pretty easily... beyond that there's no advantage to holding the international in taxable unless you were already itemizing deductions. Well I hold mid 7 figures in my taxable a...
by Dirghatamas
Sun May 28, 2017 1:50 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

I feel like a celebrity in these parts! 8-) And the credit I gave your earlier in the thread is well deserved. Most of us who have been investing for a long time, probably have some version of a tax location/optimization spreadsheet. The difficulty is finding some information for funds that one doe...
by Dirghatamas
Sun May 28, 2017 1:41 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

Thanks for putting some magnitudes on the differences. Since most people are not in your tax bracket, are there any tax brackets where these differences are not significant? Sure. If one pays no/very little taxes, then tax location optimization is not important :wink: Still, more seriously I would ...
by Dirghatamas
Fri May 26, 2017 12:37 am
Forum: Investing - Theory, News & General
Topic: How dividends become irrelevant?
Replies: 146
Views: 7361

Re: How dividends become irrelevant?

IMO dividends are among the dumbest investment things in the 21st century. They are an 1817 concept still hurting us in 2017 (yes, I am always in max tax bracket, so every year at tax time I shake my fist at stupid dividends) :annoyed Remember that qualified dividends, at least in the United States...
by Dirghatamas
Thu May 25, 2017 11:42 pm
Forum: Investing - Theory, News & General
Topic: How dividends become irrelevant?
Replies: 146
Views: 7361

Re: How dividends become irrelevant?

Technically true, but false in practice. Can you choose to take your portions of the earnings in cash each quarter? No. In fact as a minority shareholder you have zero control over earnings. Therefore if the company earns great profits and chooses never to pay dividends to shareholders, you have no...
by Dirghatamas
Thu May 25, 2017 10:27 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

Dirghatamas - Looking over the distributions from EFA (the EAFE index ETF) for the past five years, I see interest income and dividend income, but no short- or long-term capital gains. Are you saying that the 1099 lists foreign company buybacks as (non-qualified?) dividends? Or as Interest? Neither...
by Dirghatamas
Thu May 25, 2017 10:24 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

But missing from this are the magnitudes of the differences. The reality now is that the magnitudes of the differences are so insignificant that they render all this analysis moot. It doesn't even rise to the level of dancing on the head of a pin. The above statement is grossly incorrect. I care ab...
by Dirghatamas
Wed May 24, 2017 10:58 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

Foreign tax credit is important but the difference in dividends vs. share buybacks is the big culprit. Can you elaborate your comment based on "dividends vs share buybacks"? How does this translate into a holding cost? Or does it only impact your ability to hold at market weight? Long rep...
by Dirghatamas
Wed May 24, 2017 3:32 pm
Forum: Investing - Theory, News & General
Topic: The Best Account for International Equities
Replies: 42
Views: 3861

Re: The Best Account for International Equities

No, your conclusion is simplistic. The problems are 2. 1) More of cash returned to shareholders maybe returned by dividends instead of buy back 2) even for the same % dividends, more maybe unqualified dividends. Note that if the dividends % and % qualified dividends were the same between US and Inte...
by Dirghatamas
Wed May 24, 2017 1:58 pm
Forum: Investing - Theory, News & General
Topic: Convenient listing of additions and removals of companies in international indices?
Replies: 7
Views: 455

Re: Convenient listing of additions and removals of companies in international indices?

OK I will bite. I don't know if there is an official site but here is what I do. Because I am a world stock investor, I keep a spreadsheet which lists all the companies I own and how many dollars I have invested in them. Why? I don't worry about countries but when random news happens e.g. VW diesel ...
by Dirghatamas
Tue May 23, 2017 9:17 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

Curious on the source for the mean P/E figure for China. These are forward PE figures. For the present, I averaged between these sources http://www.yardeni.com/pub/mscipe.pdf fig 21, page 13 which estimates it at 12.6 and the index provider MSCI https://www.msci.com/documents/10199/aa99c3a4-d48b-44...
by Dirghatamas
Mon May 22, 2017 10:49 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

Wow thank you JoMoney The document I could find by searching on the MSCI site itself was the Gross returns one I included that only goes back to 2002 in terms of detailed data. Thank you for the Morningstar link which goes back much further. One of these rainy/ lazy weekends I will dig in and do the...
by Dirghatamas
Mon May 22, 2017 9:49 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

In your contest, expectations based on economic growth were too high for China, India had lower expectations for growth than for China but still too high compared to the United States. The old expectations vs reality thing. That's a very good narrative (I would have guessed the same) except that's ...
by Dirghatamas
Mon May 22, 2017 9:42 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

How much did currency effect play into the order? I created the data from my perspective (US investor which also covers the majority of folks on this forum). So, the returns are in nominal USD. For US stock market, this is a reasonable way to do the math (you could also calculate real not nominal)....
by Dirghatamas
Sun May 21, 2017 9:53 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

Observations: based on priors of your point of view on international investing we infer that A cannot be USA or this thread would not prove what we expect you to want to impart. Also, if US Stocks returned 1.25% nominal USD over 25 years, it would be a significant story which I would have seemed to...
by Dirghatamas
Sun May 21, 2017 9:45 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

OK, I am back with results. First, 750 views but only 12 people were brave enough to play. Rest are chicken! There were 12 unique posters with answers. Other posters replied to the thread but didn't venture a guess. Out of these, 2 were correct answers and 10 were wrong :twisted: Country A was USA, ...
by Dirghatamas
Sat May 20, 2017 11:20 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Re: Puzzle for you: Stocks returns vs. Economic Growth

Hah! Keep them coming. My prediction over/under still stands :twisted: I will be surprised if > 10% guess right. Investing really is hard.
by Dirghatamas
Sat May 20, 2017 10:57 pm
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2694

Puzzle for you: Stocks returns vs. Economic Growth

Country Returns 2017 USD value of $1000 invested in 1994 CountryA 9.56% $8,165 CountryB 7.5% $5,277 CountryC 1.25% $1,330 Here is a puzzle to make you think (narrative on why this thread below). There are 3 countries, A,B,C listed above in the table. They are China, USA and India (which is which is...
by Dirghatamas
Sat May 20, 2017 1:40 pm
Forum: Investing - Theory, News & General
Topic: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel
Replies: 65
Views: 5528

Re: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel

I don't think that Siegel was suggesting at all that one should expect U.S. equities to return 6.7% over the next 10 or even 20 years since the data he showed clearly illustrated that there have been several periods in the last 70 years where that didn't happen. Right. I didn't mean that Siegel's e...
by Dirghatamas
Sat May 20, 2017 12:44 pm
Forum: Investing - Theory, News & General
Topic: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel
Replies: 65
Views: 5528

Re: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel

So does he use global stock return data to come up w/ the 6.7% real return since 1802 or is that just US data? From what I've read on other sources, the global real return going back as far as we can is only 5%... 6.7% real since 1802, if that is based on global markets, sounds too good to be true....

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