Search found 503 matches

by Dirghatamas
Thu Jul 20, 2017 11:32 pm
Forum: Investing - Theory, News & General
Topic: new Bogle written interview on marketwatch.com today 7/20/17
Replies: 17
Views: 1950

Re: new Bogle written interview on marketwatch.com today 7/20/17

In this interview today on marketwatch.com by Paul Merriman he writes that Mr. Bogle advocates the major indices like the S&P 500 for people because people get very disappointed when their investments do not track the market in general. He wrote that Bogle said people are more concerned with tracki...
by Dirghatamas
Thu Jul 20, 2017 10:31 pm
Forum: Investing - Theory, News & General
Topic: % bogleheads of overall population
Replies: 82
Views: 11571

Re: % bogleheads of overall population

I think folks that question the idea that 10% of the population may be millionaires are not factoring in that many people now have large retirement accounts that count as household assets that use to be tied up on defined benefit retirement plans thus not showing up in net worth calculations. Fully...
by Dirghatamas
Thu Jul 20, 2017 4:41 pm
Forum: Investing - Theory, News & General
Topic: % bogleheads of overall population
Replies: 82
Views: 11571

Re: % bogleheads of overall population

wrongfunds Did you bother going and reading the actual methodology paper I linked to earlier? Again, http://gabriel-zucman.eu/files/SaezZucman2014Slides.pdf These are highly respected academics (Piketty among them who might one day get the Nobel Prize). Because "Net Worth" is not on any tax forms, t...
by Dirghatamas
Thu Jul 20, 2017 2:38 pm
Forum: Investing - Theory, News & General
Topic: % bogleheads of overall population
Replies: 82
Views: 11571

Re: % bogleheads of overall population

Would somebody care to explain the following chart previously posted? It is being claimed that 10% of "something" (households? populations? Forbes subscribers?) have net worth greater than $0.9M and 5% are over $1.8M. Suffices to say, I do not believe this at all. Yes the data is ~similar from many...
by Dirghatamas
Wed Jul 19, 2017 10:30 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Distort Market Valuations?
Replies: 113
Views: 8902

Re: Do Index Funds Distort Market Valuations?

This place has become a cult. The argument about intermediate high quality bonds for diversification is similar. Wow! I spent some time on this thread trying to understand the dissenting view last couple of evenings. It is rational to have an open mind and listen to the opposing argument. Then one ...
by Dirghatamas
Tue Jul 18, 2017 11:41 pm
Forum: Investing - Theory, News & General
Topic: Stocks just got cheaper... per Vanguard [sudden change in Vanguard fund P/Es]
Replies: 29
Views: 4770

Re: Stocks just got cheaper... per Vanguard

I wouldn't worry about VG being very prompt and good about fund analytics projections. They only do backward looking earnings, do a fairly conservative handling of 0 and negative earnings and are not very prompt at updating the numbers. There are other sources which specialize in this stuff. The one...
by Dirghatamas
Tue Jul 18, 2017 11:23 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Distort Market Valuations?
Replies: 113
Views: 8902

Re: Do Index Funds Distort Market Valuations?

I was going to respond to your other post. You should be seeing an increase in shares from high P/E stocks that need financing. This trick doesn't work for all SP500 stocks and obviously doesn't apply to companies that don't need financing. Given that we are talking about TOTAL/ market cap weighted...
by Dirghatamas
Tue Jul 18, 2017 3:18 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Distort Market Valuations?
Replies: 113
Views: 8902

Re: Do Index Funds Distort Market Valuations?

jbolden1517 You have an interesting theory (or more accurately, you say the big banks have this theory), but the facts don't seem to line up. For your theory to be correct, we should be seeing 1) Significant increase in share count of S&P500 companies as the mechanism by which this valuation distort...
by Dirghatamas
Mon Jul 17, 2017 11:04 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Distort Market Valuations?
Replies: 113
Views: 8902

Re: Do Index Funds Distort Market Valuations?

I wanted to share hard data, not just opinion. On the subject of total number of shares, jbolden1517 is pointing out that companies in S&P500 can use it (indexing) to raise money cheaply so they will dilute shares. Here is the actual data on the total shares in underlying companies in the S&P500. ht...
by Dirghatamas
Mon Jul 17, 2017 10:22 pm
Forum: Investing - Theory, News & General
Topic: Why the world's biggest investor backs the simplest investment
Replies: 25
Views: 4092

Re: Why the world's biggest investor backs the simplest investment

I believe that goes to Rex Sinquefield of now DFA fame. I thought he started the first index fund albeit marketed to institutional investors a couple years before the now named vanguard sp500 fund by Mr. Bogle. Well to be Geeky/Precise, I don't know how one should call out the Wells Fargo one. It w...
by Dirghatamas
Mon Jul 17, 2017 10:09 pm
Forum: Investing - Theory, News & General
Topic: Is now time to move into international stocks?
Replies: 57
Views: 7439

Re: Is now time to move into international stocks?

Nothing changes on my end. I don't own any international stocks or bonds. A simple two fund all U.S. 60/40 portfolio or one fund Vanguard Balanced Index Fund is all you need. Stay the Course and keep it Simple!! Vanguard Total World Stock + Total Bond Market is as simple or simpler. Vanguard Total ...
by Dirghatamas
Mon Jul 17, 2017 10:02 pm
Forum: Investing - Theory, News & General
Topic: Do Index Funds Distort Market Valuations?
Replies: 113
Views: 8902

Re: Do Index Funds Distort Market Valuations?

The real problem for indexers is float manipulation. If 70% of a stock's float is going to be bought regardless of price it becomes incredibly profitable for a company to create float and sell shares to index funds (I'm including quasi-indexing and passive here) as a way to use index funds as a che...
by Dirghatamas
Fri Jul 07, 2017 7:31 pm
Forum: Investing - Theory, News & General
Topic: Vanguard brokerage automatic reinvestment price
Replies: 11
Views: 1072

Re: Vanguard brokerage automatic reinvestment price

Even skewing reinvestment price by a few cents, which makes no difference for an individual investors, would allow Vanguard to cash a nice bonus. You do realize that Vanguard is structured differently. For a profit oriented company like BlackRock, it is certainly reasonable to suspect "competent bu...
by Dirghatamas
Fri Jul 07, 2017 7:12 pm
Forum: Investing - Theory, News & General
Topic: Weak Evidence for International in Vanguard Research - Am I Missing Something?
Replies: 77
Views: 6943

Re: Weak Evidence for International in Vanguard Research - Am I Missing Something?

The way you are posing the question is backwards (IMO) The logical starting position for investors is to start with market cap weighted stocks. That is called the world stock index. Then you tilt (if desired) in favor of or away from certain sectors (energy, technology, financial whatever) or factor...
by Dirghatamas
Thu Jul 06, 2017 10:00 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

Yes, I've seen the same 5% number, and that is my default assumption for stock returns in the coming decades too (including in the US), current valuations notwithstanding. I would be wary of assuming that this is a constant of the universe though. I really don't see why there would be such a consta...
by Dirghatamas
Wed Jul 05, 2017 11:11 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

Bottom line: It’s unrealistic to project the United State's EPS growth trends of recent decades to the world as a whole. At best, future world EPS growth rates will be bounded by world GDP growth rates — and will likely be a bit less, due to global share dilution (0.5% per year since 1970). Simpleg...
by Dirghatamas
Tue Jul 04, 2017 5:54 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

Well I am back from a wonderfully long and quiet bike ride to celebrate 4th of July. One more voice arguing that equity risk premium today is actually pretty reasonable compared to historical average (because bonds are so expensive) Prof Aswath Damodaran as of June 6th, 2017 http://aswathdamodaran.b...
by Dirghatamas
Mon Jul 03, 2017 11:12 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

One other thing I forgot to put in my original reply: the companies themselves. We tend to think too much from the viewpoint of the retail investor. However, let's think about it from the viewpoint of the public company whose shares we own. For them, it becomes a question of cost of capital. When th...
by Dirghatamas
Mon Jul 03, 2017 10:58 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

This is my baseline case (5% real returns). I think there is a decent probability of being > 5%. You make in intriguing case. But your argument for higher future global returns appears largely based on ever-increasing price-earnings multiples in the years ahead — since global GDP and EPS growth rat...
by Dirghatamas
Mon Jul 03, 2017 8:34 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

5-6% real is not impossible but seems a tad optimistic. In a low-growth world who's gonna pay for the "P" supporting your P/E ratio ? There are several groups of buyers coming in. First, realize that if you look at the P/E of the US stock market, it used to average at ~12-15 till about 40 years bac...
by Dirghatamas
Mon Jul 03, 2017 8:02 pm
Forum: Investing - Theory, News & General
Topic: High Stock Returns in a Low-Growth World?
Replies: 63
Views: 6220

Re: High Stock Returns in a Low-Growth World?

Bottom Line: No one can predict the future, but it may be unrealistic to expect high or even historical-average global stock returns in a period of lower global economic growth, such as currently forecast for the world today. Thoughts? I tend to disagree. In a recent thread I started, I had linked ...
by Dirghatamas
Sat Jul 01, 2017 8:57 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone else got all their eggs in only the Vanguard basket?
Replies: 41
Views: 4627

Re: Anyone else got all their eggs in only the Vanguard basket?

"All eggs in one basket" question is too simplistic. You need to differentiate between a brokerage company (say Vanguard or Fidelity or whatever), the mutual funds/ETF (Vanguard World stock or Ishares US total stocks or whatever) and the custodian bank of the assets (JP Morgan or Bank of New York M...
by Dirghatamas
Sat Jul 01, 2017 8:36 pm
Forum: Investing - Theory, News & General
Topic: When Did You Start Investing Your Own Money?
Replies: 47
Views: 3584

Re: When Did You Start Investing Your Own Money?

Age 21 or maybe just turned 22 in the month the actual 401K transaction took place in 1992. This was just after graduating college. I had a savings account but no real money to invest while in college. I paid fully for college myself (not burdening my parents) with academic scholarship and RA/TA job...
by Dirghatamas
Sat Jul 01, 2017 1:23 pm
Forum: Investing - Theory, News & General
Topic: Why Diversify? Why Not 100% Global Stocks
Replies: 31
Views: 3419

Re: Why Diversify? Why Not 100% Global Stocks

If investing for 20 years down the line - Why not just invest in 100% Global Stock? How much do Bonds, REITS, Commodities really help? I agree. I have invested this way (100% world stocks) for 25 years now and the results have been OK. I expect to be invested that way as far as I can see in the fut...
by Dirghatamas
Sat Jul 01, 2017 1:12 pm
Forum: Investing - Help with Personal Investments
Topic: Anyone else got all their eggs in only the Vanguard basket?
Replies: 41
Views: 4627

Re: Anyone else got all their eggs in only the Vanguard basket?

"All eggs in one basket" question is too simplistic. You need to differentiate between a brokerage company (say Vanguard or Fidelity or whatever), the mutual funds/ETF (Vanguard World stock or Ishares US total stocks or whatever) and the custodian bank of the assets (JP Morgan or Bank of New York Me...
by Dirghatamas
Fri Jun 23, 2017 12:11 am
Forum: Investing - Theory, News & General
Topic: Your Favorite Portfolio Tilts
Replies: 86
Views: 7991

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: 6
Views: 1254

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 this foru...
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: 6
Views: 1254

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: 7991

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: 6
Views: 1254

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: 78
Views: 6602

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: 2522

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: 2522

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: 127
Views: 15799

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: 7991

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: 4815

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: 4815

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 the domina...
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: 4815

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: 3115

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: 3115

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: 3391

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: 211
Views: 15882

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% and t...
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: 211
Views: 15882

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: 211
Views: 15882

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 literally what...
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: 211
Views: 15882

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: 31
Views: 4293

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: 31
Views: 4293

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: 4569

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: 18408

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: 4569

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...