Search found 2907 matches

by SimpleGift
Tue May 08, 2018 8:36 pm
Forum: Investing - Theory, News & General
Topic: Stock Returns & Volatility — A Fickle Long-Term Relationship
Replies: 5
Views: 461

Re: Stock Returns & Volatility — A Fickle Long-Term Relationship

Looks like these periods of betrayal come about 35-40 years apart, so we should be good until about 2035 or so! :happy Of course! And looking again at the Sharpe ratio history of the U.S. market over the last century, it just reinforces to me the degree to which luck plays a role in one's lifetime ...
by SimpleGift
Tue May 08, 2018 6:14 pm
Forum: Investing - Theory, News & General
Topic: Happy 89th birthday to [Jack] Bogle
Replies: 44
Views: 2448

Re: Happy 89th birthday to Bogle

Happy 89th, Mr. Bogle! We don't get too many opportunities to express our appreciation, so we'll take advantage of this one. By creating Vanguard and pioneering the commercial index fund, not only have you saved my spouse and me several hundred thousand dollars in fund expenses over the years, but i...
by SimpleGift
Tue May 08, 2018 4:39 pm
Forum: Investing - Theory, News & General
Topic: Stock Returns & Volatility — A Fickle Long-Term Relationship
Replies: 5
Views: 461

Re: Stock Returns & Volatility — A Fickle Long-Term Relationship

But within an equity asset class there is no positive correlation. Yes, just out of curiosity, the chart below shows a simple regression of the S&P 500 returns and standard deviations for each 5-year period from 1926-2015 (the same data set used in the OP): https://i.imgur.com/6NSKDyQ.jpg Data sour...
by SimpleGift
Tue May 08, 2018 3:44 pm
Forum: Investing - Theory, News & General
Topic: Stock Returns & Volatility — A Fickle Long-Term Relationship
Replies: 5
Views: 461

Stock Returns & Volatility — A Fickle Long-Term Relationship

By holding stocks with the expectation of positive returns over an investing career, one is unavoidably exposed to the volatility of these returns (i.e., standard deviation). Leaving aside whether volatility is an adequate measure of risk, this post takes a brief look at the historical relationship ...
by SimpleGift
Tue May 08, 2018 11:40 am
Forum: Investing - Theory, News & General
Topic: Concerned about Total Bond Mkt duration increase?
Replies: 23
Views: 2379

Re: Concerned about Total Bond Mkt duration increase?

I would think one would want to manage duration in one's fixed income part of the portfolio. Thoughts? I'm one who prefers to manage portfolio bond duration. When first constructing my portfolio plan decades ago, I paired the Vanguard Total Bond Index Fund with the Vanguard Short-term Bond Index Fu...
by SimpleGift
Tue May 08, 2018 10:55 am
Forum: Investing - Theory, News & General
Topic: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?
Replies: 26
Views: 2618

Re: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?

Still it's strange that while GDP growth has been awesome in China, stock returns weren't that great. One issue could be share dilution. Share dilution is a major issue in emerging markets, where fast-growing companies are constantly raising capital by issuing new shares and spinning off new enterp...
by SimpleGift
Mon May 07, 2018 9:46 pm
Forum: Investing - Theory, News & General
Topic: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?
Replies: 26
Views: 2618

Re: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?

I am pretty sure they do not account for more than 50 per cent of world GDP today? I get somewhere in the 40s off the top of my head. I wrote emerging markets' percentage share of global GDP growth ... https://i.imgur.com/iTU01tp.jpg Source: OECD ...which is 70%-80% of the world's annual total thes...
by SimpleGift
Mon May 07, 2018 9:32 pm
Forum: Personal Consumer Issues
Topic: Tea supplier comparison
Replies: 20
Views: 1320

Re: Tea supplier comparison

Twinings English Breakfast — in individual tea bags, sealed in foil, purchased in boxes of 100 at our local import store. Obviously I'm not a tea connoisseur, but do drink it avidly every day (embarrassed to say how many cups) — and I highly value the convenience of the tea bag over the bother and m...
by SimpleGift
Mon May 07, 2018 9:05 pm
Forum: Investing - Theory, News & General
Topic: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?
Replies: 26
Views: 2618

Re: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?

On a related note to the OP, from a Bloomberg article yesterday: China Is Quietly Setting Global Standards As China boosts overseas investment through its Belt and Road infrastructure program, it is increasingly dictating not just the terms of financing but also a broader set of technological applic...
by SimpleGift
Mon May 07, 2018 6:58 pm
Forum: Investing - Theory, News & General
Topic: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?
Replies: 26
Views: 2618

Re: Avoid Emerging Markets due to stricter securities regulation in Developed Markets? Lessons from SZSE..Maybe not?

A common trope one finds on Bogleheads is that foreign countries, and especially EM, have more corrupt markets and laxer regulations in all respects (in before complaints I am setting up a strawman ;) ) and so one should avoid investing there. To flog your strawman a bit more... Because of the a pr...
by SimpleGift
Mon May 07, 2018 8:44 am
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5987

Re: How does stock buyback benefit investors?

It looked to me that they did a net of dollars & so 1st question is whether there is an adjustment for inflation. Since it is large/mega cap, perhaps taking a company private would not make a material difference? But as companies/spinoffs moved in & out of the sp500, how was that addressed? Not an ...
by SimpleGift
Sun May 06, 2018 9:24 am
Forum: Investing - Theory, News & General
Topic: Investing is more like poker than chess
Replies: 91
Views: 6124

Re: Investing is more like poker than chess

Samuelson and Shiller both concluded that while markets are micro-efficient (ie the level of individual stocks), they are not macro-efficient (ie, at the level of entire indexes), meaning that above a certain level, passive investing (and by that I mean Bogle's "stay the course" regardless of valua...
by SimpleGift
Sat May 05, 2018 11:17 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

When 90% of the market is indexed, active guys will ramp up trying to find inefficiencies and then price discovery would get back on track. I just don't see it as a problem. Lay a pot of gold at the feet of active managers and expect them not to go for it? Hell they claim they can spot inefficienci...
by SimpleGift
Sat May 05, 2018 6:32 pm
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5987

Re: How does stock buyback benefit investors?

I wonder if anyone has compiled data to show if buybacks "stick, i.e., if you look 5 or 10 years down the road after a buyback, are there still the same number of shares outstanding, or is it back to the original number, or even increased from the pre-buyback levels. Can't speak for individual comp...
by SimpleGift
Sat May 05, 2018 4:13 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

Each individual stock will continue to have a market based on the individual companies dynamics influenced by the market as a whole (tail wagging dog), but more so by the fundamentals of that company and the fundamentals will eventually catch up, even though at times, they may not appear that way. ...
by SimpleGift
Sat May 05, 2018 1:54 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

The boundary between passive and active is also not black & white. It's a big continuum. Some index definitions are based on really complicated formulas, which do not seem terribly different from what some active funds do. I don't know, this all seems really hard to properly quantify. Agree totally...
by SimpleGift
Sat May 05, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: Do stocks outperform Treasury Bills? Almost never.
Replies: 25
Views: 4799

Re: Do stocks outperform Treasury Bills? Almost never.

Makes me think that second only to making wine out of water is the miracle of making money out of stocks. No doubt, the distribution of returns of individual stocks has a large positive skew, with most stocks having negative or very low returns, balanced by a minority of super outperformers (chart ...
by SimpleGift
Sat May 05, 2018 12:19 pm
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

But, OTOH, with your 15% figure you are assuming passive equity consists only of mutual funds and ETFs. Some institutional money is also passive. My pension fund is 38% passive and for the 457 plan, employer offers collective investment trusts in lieu of index mutual funds in several categories. Go...
by SimpleGift
Sat May 05, 2018 10:06 am
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

One-half of the trading seems OK but could the volume be too light to make things efficient? Good point. Then the question becomes, "What volume of trading is required to establish an accurate price?" Not ever having been a stock trader, others will have a better opinion about this — but there are ...
by SimpleGift
Sat May 05, 2018 9:33 am
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Re: Chart: When 90% of the Stock Market is Indexed

Just to add: It's important to keep in mind also how truly far away we are from the U.S. stock market being 90% indexed. Passive investing is not taking over the U.S. market, not even close! Passive equity, including ETFs and index funds, make up about 15% of the total U.S. equity market capitalizat...
by SimpleGift
Sat May 05, 2018 9:30 am
Forum: Investing - Theory, News & General
Topic: Chart: When 90% of the Stock Market is Indexed
Replies: 20
Views: 2663

Chart: When 90% of the Stock Market is Indexed

In a Financial Times article from last October, Mr. Bogle was quoted as follows: "There must be some limit somewhere with how much indexing there can be without [reducing] the efficiencies of the market,” he said. “[But] if I had to guess, I’d put [the limit] in the area of 70 or 80 or 90 per cent —...
by SimpleGift
Fri May 04, 2018 6:19 pm
Forum: Investing - Theory, News & General
Topic: Stocks for the Long Run by Jeremy Siegel
Replies: 33
Views: 4337

Re: Stocks for the Long Run by Jeremy Siegel

\do you guys happen to remember... 1. ...what dollar amount or % of assets Siegel recommends Not holding in stocks, for short term needs? 2. ...if this dollar amount or % of portfolio is different in accumulation versus retirement phases? Looking at my 4th edition copy of Stocks for the Long Run (2...
by SimpleGift
Fri May 04, 2018 4:16 pm
Forum: Investing - Theory, News & General
Topic: Why International again?
Replies: 224
Views: 19983

Re: Why International again?

Does that mean VTSAX has more or less US stocks than Total World since it’s not free-float? I think you'll find that Vanguard's Total Stock Market Index is also a free-float index: Vanguard Total Stock Market Index Fund seeks to track the investment performance of the CRSP US Total Market Index, wh...
by SimpleGift
Fri May 04, 2018 3:43 pm
Forum: Investing - Theory, News & General
Topic: Why International again?
Replies: 224
Views: 19983

Re: Why International again?

It seems odd to me the weighted cap by country in this study is MUCH MUCH different than what is weighted in FTSE Global All Cap Index (which is tracked by VT/VTWSX). It gives 52% to the US and your link gives 38%. Any idea why? The FTSE Global All Cap Index includes only free-float shares from a c...
by SimpleGift
Fri May 04, 2018 8:42 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

• Net Buyback Yield = (Trailing 12 month stock repurchases - new stock issuance) / Market capitalization I didn't read that long Damodaran blog post. Does the 2017 single year chart above really show net buyback yield? Damodaran doesn't say specifically, but as far as I can tell, his 2017 data for ...
by SimpleGift
Fri May 04, 2018 1:18 am
Forum: Investing - Theory, News & General
Topic: Investing is more like poker than chess
Replies: 91
Views: 6124

Re: Investing is more like poker than chess

willthrill81 wrote:
Fri May 04, 2018 12:37 am
We're playing the odds when we invest, not solving a math problem.
:thumbsup Very much liked your post — it's an excellent perspective for investors to remember.
by SimpleGift
Thu May 03, 2018 11:39 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

Just to add: Interesting to note that the average total payout yield (dividends + net buybacks) of the U.S. market in recent decades (3.2% above) is exactly the same as the average total payout yield of all the world's regions in 2017 (3.2%, from the OP). Yes, a meaningless coincidence — but it does...
by SimpleGift
Thu May 03, 2018 10:53 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

I seem to recall Simplegift posting something in the past showing that total cash return to shareholders is not higher now than it used to be....it's just that dividends are lower and buybacks are higher. If this is true, then there has been no shift of money from reinvestment to cash returned to s...
by SimpleGift
Thu May 03, 2018 1:39 pm
Forum: Investing - Theory, News & General
Topic: Navigating the dark side of capitalism
Replies: 19
Views: 1479

Re: Navigating the dark side of capitalism

I sometimes find myself torn when I see certain publicly traded companies being caught for cheating customers or in general, the 'system'. Being a share owner, granted indirectly, I feel somewhat responsible for enabling this kind of behavior. How do the rest of you navigate the dark side of capita...
by SimpleGift
Thu May 03, 2018 11:08 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

Though much of the commentary about share buybacks that one sees in the financial press is negative (and often sensational), this recent research paper by Cliff Asness of AQR Capital presents a more measured and positive viewpoint: Buyback Derangement Syndrome The popular press is replete with comme...
by SimpleGift
Wed May 02, 2018 9:48 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

From Mr. Damodaran's data, one can also compute the total shareholder payout yields (dividends + net buybacks) for the various world regions in his data set (chart below): https://i.imgur.com/zWnbhB0.jpg NOTE: Average total payout yield is simple arithmetic mean, not cap-weighted. Data source: Damod...
by SimpleGift
Wed May 02, 2018 11:06 am
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

To me, a stock buy back means that the leaders of the company have decided that they don't know how to use money to make more money, profits, gain efficiency or develop new products that will become future profits. Certainly if share repurchases are coming at the expense of innovation and capital i...
by SimpleGift
Tue May 01, 2018 7:21 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Re: Stock Buybacks as a Global Trend?

Just to see if share buybacks are increasing at the expense of dividends (or in addition to dividends), Mr. Damodaran also provides dividend yield data for each of the world regions, ranked below in the same order as the chart in the OP: https://i.imgur.com/fChOBTB.jpg Data source: Damodaran Just ey...
by SimpleGift
Tue May 01, 2018 5:04 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks as a Global Trend?
Replies: 39
Views: 2889

Stock Buybacks as a Global Trend?

Most investors are aware that stock buybacks have been making up over 50% of the cash that U.S. companies are returning to shareholders in recent years (in addition to dividends) — but it appears this shift toward stock buybacks has also started to spread to other parts of the world (chart below). h...
by SimpleGift
Tue May 01, 2018 2:31 pm
Forum: Investing - Theory, News & General
Topic: Best Fixed Income Outlooks (Muni & US Fixed Income)
Replies: 4
Views: 673

Re: Best Fixed Income Outlooks (Muni & US Fixed Income)

You might find these occasional bond market reports from R.W. Baird & Company helpful:
Every few weeks, they publish updates and outlooks on various U.S. bond markets, e.g., muni, corporate, etc.
by SimpleGift
Tue May 01, 2018 1:39 pm
Forum: Investing - Theory, News & General
Topic: Historical Correlation Between Stocks and Bonds
Replies: 15
Views: 1459

Re: Historical Correlation Between Stocks and Bonds

^ Nice chart and analysis, CULater. A couple of thoughts: 1) In the long run, bonds will likely still diversify stocks, but the correlations may be higher and even positive due to the influence of higher inflation and higher real interest rates. 2) In the short run, the flight-to-safety response dur...
by SimpleGift
Tue May 01, 2018 11:40 am
Forum: Investing - Theory, News & General
Topic: Historical Correlation Between Stocks and Bonds
Replies: 15
Views: 1459

Re: Historical Correlation Between Stocks and Bonds

Since about 2000, investors have come to expect a negative correlation between stocks and bonds in the major developed countries — though clearly this hasn't always been the case over the last 50 years since 1970 (chart below). https://i.imgur.com/d1nIbh4.png Source: SR/SV In any event, stock/bond c...
by SimpleGift
Mon Apr 30, 2018 1:52 pm
Forum: Investing - Theory, News & General
Topic: Dropping equities dividend rates and loss of compounding
Replies: 15
Views: 1716

Re: Dropping equities dividend rates and loss of compounding

How big is the effect of the dividend rate overall drop on compounding of shares through DRIP. Seems like more emphasis on capital investment over rewarding the shareholders offsets this with stock price appreciation. Is this correct? Share buyback programs also help this, or no? How much better or...
by SimpleGift
Sun Apr 29, 2018 8:20 pm
Forum: Investing - Theory, News & General
Topic: Historical Correlation Between Stocks and Bonds
Replies: 15
Views: 1459

Re: Historical Correlation Between Stocks and Bonds

My question for the community is do you think this "step" pattern will continue into the future (in other words, will bonds become more negatively correlated to stocks over time) or will the trend reverse itself? Does this have any impact in portfolio allocation planning? This recent Forum thread t...
by SimpleGift
Sun Apr 29, 2018 8:10 pm
Forum: Investing - Theory, News & General
Topic: International Stock and Currency Issues
Replies: 40
Views: 2396

Re: International Stock and Currency Issues

No one understands exchange rates and anyone who tells you otherwise is fibbing. There is nothing close to agreement within the economics profession when it comes to the theories underlying exchange rates. AlohaJoe, thank you for taking the time to clarify in such detail the confusion of the econom...
by SimpleGift
Sun Apr 29, 2018 2:30 pm
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

Inside of trying to pick the very few stocks that are above average, why not try to pick some of the worst and leave them out. I'm sure this is the aim of many active fund managers. But just as one can't reliably predict the big winners, I imagine it's also difficult to reliably choose the big lose...
by SimpleGift
Sun Apr 29, 2018 12:13 pm
Forum: Investing - Theory, News & General
Topic: New Source For Older Stock Data
Replies: 9
Views: 855

Re: New Source For Older Stock Data

Overall, it seems to me that this IIA data set is well suited for various point studies, but its applicability for something more general-purpose and somewhat US-centric as Simba might be more limited. Thoughts? The beauty of the Simba spreadsheet, in my view, is that it provides return series for ...
by SimpleGift
Sun Apr 29, 2018 9:41 am
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

Bogle once wrote "reversion to the mean is an Iron Law of stock investing". I've often wondered how to square notions of reversion to the mean (which are nearly pervasive, at least at a gut feel "the market's too high" or "it'll bounce back" level) with charts like the above -- or Bessembinder's pa...
by SimpleGift
Sun Apr 29, 2018 12:20 am
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

Question: The first two columns are for negative returns. What does -100% mean? Did the company lose all of its value (ie, go bankrupt)? The first two columns on the left of the histogram chart I read as intervals: -100% to -50% and -50% to 0%. So the cumulative returns of companies in these first ...
by SimpleGift
Sat Apr 28, 2018 11:23 pm
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

This data reinforces for me two stock investing messages. (1) It is always a stock pickers market. Why don't they do better? If active managers can identify in advance even the above median companies, they should always be able to beat the market averages. That that's not observed says that that id...
by SimpleGift
Sat Apr 28, 2018 6:15 pm
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

If interested in more on this topic, these two recent papers offer in-depth perspectives: Why Indexing Works , Heaton, Polson & Witte, May 2017. We develop a simple stock selection model to explain why active equity managers tend to underperform a benchmark index. We motivate our model with the empi...
by SimpleGift
Sat Apr 28, 2018 4:39 pm
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1552

Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

This topic has been discussed previously on the Forum, but I always find it fascinating. S&P recently published the chart below, showing the distribution of S&P 500 stocks' cumulative returns for the 20-year period from 1997-2017. Unlike in Lake Wobegon (where all children are above average), in the...
by SimpleGift
Sat Apr 28, 2018 11:55 am
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6323

Re: What's wrong with this critique of indexing?

ok, I see your point, though intuitively it seems that a market cap weighted allocation is more vulnerable to the eventuality that something specific might go wrong to a large firm (think of BP (which made up a large proportion of the FTSE100) and Deepwater Horizon). Honestly, the unsystematic risk...
by SimpleGift
Sat Apr 28, 2018 11:23 am
Forum: Investing - Theory, News & General
Topic: What's wrong with this critique of indexing?
Replies: 110
Views: 6323

Re: What's wrong with this critique of indexing?

Yet by indexing, for every 100$ invested in the S&P500, I invest more than 3.5$ in Apple and less than one cent on News Corporation. How can this make sense? (i.e. what justifies this much bigger bet on Apple, just because it's bigger and more money is invested in it by other people?). If one assum...
by SimpleGift
Sat Apr 28, 2018 8:35 am
Forum: Investing - Theory, News & General
Topic: Backtesting Int'l Small Stocks => revisiting data sources
Replies: 13
Views: 1669

Re: Backtesting Int'l Small Stocks => revisiting data sources

To stay more factual, here is a comparison between the MSCI Int'l SC and MSCI In'tl MC for the known history of those two indices. The roller coaster is basically the same. The comparison chart is fairly persuasive, thank you. Taken as a whole then, I'm not seeing anything particularly disqualifyin...