Search found 8103 matches

by HomerJ
Sat Feb 06, 2016 12:38 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4200

Re: If SS covers expenses why invest?

Why do people always assume its so much cheaper to live in the rural south? My parents live on 110 acres in small but nice house with an amazing view of the Ozark foothills. The land and the house cost them $80,000 20 years ago... Might be worth $200k today... Not sure. Property taxes are $500 a ye...
by HomerJ
Sat Feb 06, 2016 12:33 am
Forum: Investing - Theory, News & General
Topic: Bogleheads investment philosophy at huge risk?
Replies: 29
Views: 3035

Re: Bogleheads investment philosophy at huge risk?

Hi, I read this article that brings up the point that by blindly just buying index funds and holding without considering whether they are overpriced etc (i.e. bogleheads investment philosophy) is recipe for long term disaster. Curious to see what others think. Here's the link: http://jessefelder.tu...
by HomerJ
Fri Feb 05, 2016 2:58 pm
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4200

Re: If SS covers expenses why invest?

most people who are living solely on SS benefits are living below the poverty line. Do you really think SS is going to cover ALL of your expenses? maybe only if you live extremely frugally in rural Alabama or Mississippi. A married couple who had very good jobs can pull down $5000-$6000 a month in ...
by HomerJ
Fri Feb 05, 2016 1:40 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4200

Re: If SS covers expenses why invest?

Most people don't need millions. If you have been living on 80k/yr (imagine a couple making like 130k/yr who have been paying income and payroll taxes, saving 10-20%,.... ), you might only need 30k or so of income to go along with SS to be back in the same spot as when you were working. It is the e...
by HomerJ
Fri Feb 05, 2016 1:36 am
Forum: Investing - Theory, News & General
Topic: If SS covers expenses why invest?
Replies: 64
Views: 4200

Re: If SS covers expenses why invest?

most people who are living solely on SS benefits are living below the poverty line. Do you really think SS is going to cover ALL of your expenses? maybe only if you live extremely frugally in rural Alabama or Mississippi. A married couple who had very good jobs can pull down $5000-$6000 a month in ...
by HomerJ
Thu Feb 04, 2016 11:36 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2641

Re: Prosper.com Update Total Return

I think it is extremely difficult to evaluate p2p lending as an investment until it is seen how it performs during an economic downturn. My intuition is that the currently available returns don't justify the downside risk. Haven't run any numbers to back this up, but I'd imagine default rates would...
by HomerJ
Thu Feb 04, 2016 11:09 am
Forum: Personal Finance (Not Investing)
Topic: How to get a 200k+/year job?
Replies: 107
Views: 9664

Re: How to get a 200k+/year job?

Finally, I want to point out that your real goal should not be to make the maximum salary, compared to salaries nationwide. Instead, it should be to maximize the spread between your salary and the cost of living. The key here is to look for cities with reasonable cost-of-living that are homes to Fo...
by HomerJ
Thu Feb 04, 2016 9:55 am
Forum: Personal Finance (Not Investing)
Topic: How to get a 200k+/year job?
Replies: 107
Views: 9664

Re: How to get a 200k+/year job?

Get a spouse that makes $100k, and it's much easier to hit $200k a year. :)

It's a lot easier for two people to find $100k jobs, than one person to get a $200k job.
by HomerJ
Thu Feb 04, 2016 1:43 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2641

Re: Prosper.com Update Total Return

How do they rate borrowers As and Bs? It would seem anyone who paid back their loans enough to get a good history would get themselves out of the hole of having to use Peer-to-Peer lending. *** For example, if you have a Prosper Rating of B and take a loan for $5,000, then you will be charged a $247...
by HomerJ
Thu Feb 04, 2016 12:45 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2641

Re: Prosper.com Update Total Return

all of the loans are less than $50. Who is borrowing less than $50? It's Peer to Peer. You borrow $25 a piece from 1000 people. Ah, I see... Never understood how it worked... So, if I can't get a car loan from a bank, I can borrow $4000 from 1000 people (all matched up by software). What happens to...
by HomerJ
Thu Feb 04, 2016 12:40 am
Forum: Investing - Theory, News & General
Topic: Prosper.com Update Total Return
Replies: 35
Views: 2641

Re: Prosper.com Update Total Return

mevans154 wrote:all of the loans are less than $50.


Who is borrowing less than $50?
by HomerJ
Wed Feb 03, 2016 12:28 am
Forum: Personal Finance (Not Investing)
Topic: Physician buying an 850k vs 1.25m house
Replies: 54
Views: 5056

Re: Physician buying an 850k vs 1.25m house

Is paying 45% of your post tax income in a mortgage too much (1.125 million mortgage = aprox 7k per month) This is doable at your high salary, but it IS expensive, plus don't forget heating and cooling a larger house, and furnishing a more expensive house, and landscaping more land, and keeping wit...
by HomerJ
Mon Feb 01, 2016 2:37 pm
Forum: Personal Finance (Not Investing)
Topic: Public school or private school (with school data)
Replies: 86
Views: 4492

Re: Public school or private school (with school data)

The lack of difference in AP scores is very strange to me. Number of test by graduate is roughly the same and passing rate is roughly the same. I double checked the school profile documents, the AP numbers are correct. Yes, it is strange that there is almost no difference between the public and pri...
by HomerJ
Mon Feb 01, 2016 2:09 pm
Forum: Investing - Theory, News & General
Topic: Why didn't bond funds go down?
Replies: 27
Views: 3408

Re: Why didn't bond funds go down?

The Fed raised interest rates from 1% to 5% from 2004-2006. Here's what bond funds did... http://s30.postimg.org/fvm4cofmp/Bond_Bear_Market2004_2006.png The Fed raising rates, contrary to popular belief, doesn't always equal ALL interest rates going up, and doesn't always equal bond funds crashing a...
by HomerJ
Mon Feb 01, 2016 11:57 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

Ignoring valuations and interest rates is foolish IMO. And can be very dangerous. I don't know if that's true. I wouldn't consider it foolish or dangerous to buy and hold a 60/40 stocks/bonds through 30-40 years, ignoring valuations and interest rates (which are usually short-term). On other hand i...
by HomerJ
Mon Feb 01, 2016 9:56 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

Also, one last point... The 10% historical return INCLUDES bad decades... So I don't understand why you think one should change their investing plan just because the "experts" are predicting a 7% expected return in the short-term. If you are very close to retirement, you should have a cons...
by HomerJ
Mon Feb 01, 2016 9:51 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

And on final note -there is a very big difference in forecasting a 10% (based on historical returns) vs. 7% based on current valuations because that leads to very different conclusions on AA or other decisions. And given current valuations IMO an investor is significantly more likely to get closer ...
by HomerJ
Sun Jan 31, 2016 9:44 pm
Forum: Personal Finance (Not Investing)
Topic: Public school or private school (with school data)
Replies: 86
Views: 4492

Re: Public school or private school (with school data)

Thought experiment: let's say that the private school would give the kids a 5% "improvement" in outcome (however you decide to measure outcome). If the tuition was not particularly painful to you (i.e., it will either be spent on tuition or added to the kids' inheritance), would you spend...
by HomerJ
Sun Jan 31, 2016 4:04 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

And a huge company like Amazon is going to have an outsize effect on Schiller P/E and CAPE which are supposedly telling us if the "market" is historically overpriced. That's a pretty good point... 474 P/E from one very large company is a pretty big effect... If 98% of the other companies ...
by HomerJ
Sun Jan 31, 2016 12:17 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

The other main point people seem to be missing is that no valuation model could explain future returns in the way people seem to think (predicting them accurately) I agree... It would be helpful if writers would state expected returns are 4% plus or minus 8%, instead of stating expected returns are...
by HomerJ
Sun Jan 31, 2016 11:56 am
Forum: Investing - Help with Personal Investments
Topic: Downward trend over?
Replies: 46
Views: 4033

Re: Downward trend over?

KyleAAA wrote:On the other hand...
On the other hand...
On the other hand...
On the other hand...


Heh... This sums up trying to predict the future of the market very well.... :)

"Nobody knows enough"
by HomerJ
Sat Jan 30, 2016 10:07 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

Cliff Asness had a good quote, along the lines of "The best way to look thin is to stand next to a fat guy" Look at historical CAPE ratios, and just imagine that the irrational exuberance of the 90s Tech Boom didn't happen .. Draw a line connecting 1995 to 2005 and imagine we're still whe...
by HomerJ
Sat Jan 30, 2016 11:41 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

Alchemist wrote:That is not the same as saying "nobody know's nothing", but rather that Nobody Knows enough to matter.


Well said...

"Nobody knows enough".

I will start using that... It's a much better way to state the problem.
by HomerJ
Sat Jan 30, 2016 11:38 am
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

"Nobody knows nothing" is both grammatically and philosophically anti-thought .. It's this fatalistic, binary thinking that's only good for the lottery industry and people selling you extended warranties While clearly not correct, I think the main benefit is behavioral. The vast majority ...
by HomerJ
Sat Jan 30, 2016 11:33 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4055

Re: Who else is holding in cash?

Oh, there you go: (not suggesting anyone follow, but El-Erian is a smart guy .. I'm 26% cash) Time to put 30% of your assets in cash: El-Erian Investment guru Mohamed El-Erian calls cash the best way to navigate what is turning out to be a volatile year for investors. He points out that cash is the...
by HomerJ
Sat Jan 30, 2016 2:50 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4055

Re: Who else is holding in cash?

I know market timing is a bad idea So why are you doing it? but lets face it we are long overdue for a significant drop and I think it could happen right before the election. Even if it happens next year I want to have cash ready to invest since I missed out on the big buying opportunity of 2008. W...
by HomerJ
Sat Jan 30, 2016 2:36 am
Forum: Investing - Theory, News & General
Topic: Who else is holding in cash? [For future investing]
Replies: 66
Views: 4055

Re: Who else is holding in cash?

Kelli, About 10% of my portfolio is cash. I've been waiting about 3 years now for the big drop. It will be here some day. . . or another opportunity will present itself. The market is up 34% since 3 years ago.... I don't worry if I don't fund at the bottom exactly. As long as I get a better price t...
by HomerJ
Fri Jan 29, 2016 3:04 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

Mean reversion is a long-term tendency - not a 10-year tendency Also, people in 1996 certainly assumed mean reversion to happen in the short-term... Up to that point, mean reversion occurred within a few years of hitting such high valuations. Mean reversion being a "long-term tendency" is...
by HomerJ
Fri Jan 29, 2016 2:49 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

... But even at 2.5%, this is well within normal standard deviation ... It's 5.5% off... Predicts 2.5% nominal, actual was 8% nominal. If you mean 5.5% difference is one standard deviation, then there's no point in estimating returns at all with that large of a spread. We do lots of things to corre...
by HomerJ
Fri Jan 29, 2016 1:29 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

But anyway, 8.2% nominal is a lot better than what was predicted by CAPE. At the time, in 1996, CAPE was at record highs not seen since 1929, right before the Great Depression. Anyone who followed CAPE was pretty sure doom was coming. Shiller himself predicted 0% real returns. I don't understand ho...
by HomerJ
Fri Jan 29, 2016 11:01 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

... especially considering how good the US markets have been in the past 20 years. Odd to put "especially" before the second half of your sentence when it contradicts the first half. Also especially odd given history. The past 20 year period (from 1/1/1996 - 12/31/2015) for the S&P500...
by HomerJ
Thu Jan 28, 2016 4:49 pm
Forum: Investing - Theory, News & General
Topic: Hedge Funds blame Index funds: Bogleheads referenced
Replies: 80
Views: 6686

Re: Hedge Funds blame Index funds: Bogleheads reference

On George Soros, for example: "Four hundred seventy-three million to one. Those are the odds against George Soros compiling the investment record he did as manager of the Quantum Fund from 1968 through 1993 ..." - Paul Tudor Jones' intro to The Alchemy of Finance Yeah, those odds are so e...
by HomerJ
Thu Jan 28, 2016 1:40 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2666
Views: 528385

Re: U.S. stocks in freefall

From that article http://s22.postimg.org/8is9ox46p/Capture.png Are those both in 2000 dollars? $9,627 was worth the same as $17,263 in 2000. Also, if one DIDN'T take an annuity, the person retiring in 1984 got to watch their nest egg grow far beyond a million dollars, even while taking out 5% a year...
by HomerJ
Thu Jan 28, 2016 1:30 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2666
Views: 528385

Re: U.S. stocks in freefall

I don't believe most begin to save for retirement before 45. Should they count on any 8 year period to give them the long-term market average return? I guess I understand what they are saying... Someone who starts at 45 and only saves 10% isn't going to have a good pile of money until 57 or so. But...
by HomerJ
Wed Jan 27, 2016 9:01 pm
Forum: Investing - Help with Personal Investments
Topic: Starting off 2016: If you had $15,000.00 to invest, what would you do with it?
Replies: 21
Views: 2212

Re: Starting off 2016: If you had $15,000.00 to invest, what would you do with it?

You want to make $500 a week, or $26,000 a year off a $15,000 investment? Start a business with it or become a professional gambler I guess. Pretty likely to lose the whole $15,000 though, and both of those options are full-time jobs. This site really isn't about get-rich-quick schemes. Edit: Reread...
by HomerJ
Tue Jan 26, 2016 3:21 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in freefall
Replies: 2666
Views: 528385

Re: U.S. stocks in freefall

So what's the reason our returns haven't been as good as Australia's or South Africa's? Because you're not looking at them in USD? http://www.xe.com/currencycharts/?from=AUD&to=USD&view=5Y http://www.xe.com/currencycharts/?from=ZAR&to=USD&view=5Y L. Wait, what are you trying to show...
by HomerJ
Tue Jan 26, 2016 10:13 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

I said 10-year estimates are as good as they always have been You are incorrect. Since 1992, the 10-year estimates have been not been good. The data is right there. If we get the bear market we need now, and stocks only go back to average valuations (not even under shooting on the cheap), then when...
by HomerJ
Tue Jan 26, 2016 10:02 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

duplicate
by HomerJ
Mon Jan 25, 2016 11:49 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

Maynard F. Speer wrote:I've always said you can split investors (society in general) into those who understand statistics and those who don't


You can also split investors into those who know they can't predict the future, and those who don't know they can't predict the future.

:)
by HomerJ
Mon Jan 25, 2016 8:20 pm
Forum: Personal Consumer Issues
Topic: Do you pay for exercise?
Replies: 207
Views: 10476

Re: Do you pay for exercise?

KyleAAA wrote:I'm slightly more likely to work out at home but I tend to go much harder when I'm at the gym.


This. I have a half-price family gym membership (work pays for the other half).

We only go once a week, but we work out hard on that day. Much harder than I work out at home the rest of the week.
by HomerJ
Mon Jan 25, 2016 4:23 pm
Forum: Personal Finance (Not Investing)
Topic: Did the bears eat my retirement? - Sequence of Returns Risk
Replies: 70
Views: 5898

Re: Did the bears eat my retirement? - Sequence of Returns Risk

But now, six months after the principal apex, and watching it fall by double-digits percentage What are you invested in? 50/50 stocks/bonds, you should not have seen a double-digit loss yet... Is that 50% stocks all international stocks? Probably a good idea to go a little more conservative... Mayb...
by HomerJ
Mon Jan 25, 2016 3:38 pm
Forum: Investing - Theory, News & General
Topic: Rebalancing in Retirement.
Replies: 28
Views: 1963

Re: Rebalancing in Retirement.

I would appreciate the forums thoughts on whether or not a person should rebalance their AA during retirement. I'm not retired, but I'm close enough to retirement, that I mostly only rebalance on the upside. I'm 50/50 stocks/bonds, and when I get close to 60/40, I rebalance back to 50/50. If we hav...
by HomerJ
Mon Jan 25, 2016 2:19 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

For all of Jack Bogle saying that nobody knows nothing, he certainly means this in a different sense than you're implying. He's gone over expected returns All. The. Time. https://www.bogleheads.org/wiki/Historical_and_expected_returns#John_Bogle http://www.morningstar.com/cover/videocenter.aspx?id=...
by HomerJ
Mon Jan 25, 2016 2:00 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

As always, nobody knows how right or wrong any of these are at determining what is most likely to happen. I agree. So we come back to Jack Bogle's statement "Nobody knows nothing." There's been a ton of people lately on these boards who seem to think they DO know something about the future.
by HomerJ
Mon Jan 25, 2016 1:56 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

Re: The failure of valuation predictions

But just because the actual returns did not, in this case, fall within the probability range of expected returns, does not mean the model failed. It just proves that no model is accurate 100% of the time. We're just playing the odds. And you know very well that if you had looked at 5 year returns, ...
by HomerJ
Mon Jan 25, 2016 1:24 pm
Forum: Investing - Theory, News & General
Topic: The failure of valuation predictions
Replies: 121
Views: 7231

The failure of valuation predictions

So I found this interesting article written in 1996 by Shiller himself. http://aida.wss.yale.edu/~shiller/data/peratio.html we come up with an expected total return over the succeeding ten years of .009, or about a tenth of a percent a year. Actual ten year returns from 1996-2006 was 9.3% a year 20-...
by HomerJ
Mon Jan 25, 2016 12:44 pm
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

Let's start over. Since the mid-90s we've been predicting 10-yr [nominal] returns peaking at around 5-7%, and that's generally what we've had The majority of the 10-year nominal returns since the mid-90s have been much higher than 5%-7%. Indeed, they've been in the 9%-11% range, which is the histor...
by HomerJ
Mon Jan 25, 2016 11:30 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

Let's start over. Since the mid-90s we've been predicting 10-yr [nominal] returns peaking at around 5-7%, and that's generally what we've had The majority of the 10-year nominal returns since the mid-90s have been much higher than 5%-7%. Indeed, they've been in the 9%-11% range, which is the histori...
by HomerJ
Mon Jan 25, 2016 1:46 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

But remember these are nominal returns, so we can knock between 1 and 4% off adjusting for inflation Wait, CAPE is predicting 5%-7% REAL? And there are DOOM posts about this? 7% REAL is about the normal historical average for the U.S. stock market... So you're basically saying valuations don't matt...
by HomerJ
Mon Jan 25, 2016 1:36 am
Forum: Investing - Theory, News & General
Topic: The last 15 years
Replies: 100
Views: 10373

Re: The last 15 years

Being married to an accountant, I think there's some credence in saying that the changes in accounting standards have made what is now a PE of 20 what would have been a PE of 15. It becomes especially true after Sarbanes-Oxley. Yes, this article explains it. https://philosophicaleconomics.wordpress...

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