Search found 284 matches

by TJSI
Mon Jul 31, 2017 3:46 pm
Forum: Investing - Theory, News & General
Topic: Living Off Dividends
Replies: 285
Views: 20912

Re: Living Off Dividends

Generally, corporations are not valued by cash on hand. It is the ability to generate revenue, earnings, and cash that gives a corporation value. Only if the divided payment impairs this ability does it reduce value . If a corporation makes the correct capital budget decisions, dividends don't reduc...
by TJSI
Mon Jul 31, 2017 9:09 am
Forum: Investing - Theory, News & General
Topic: Living Off Dividends
Replies: 285
Views: 20912

Re: Living Off Dividends

nedsaid,

When I read that Larry had convinced you that factors were the underlying cause of returns, the movie Invasion Of The Body Snatchers came to mind.
And I thought: By God they got him.

I guess there is no hope--we are all doomed.

TJSI
by TJSI
Tue Jul 25, 2017 5:10 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Dividend + Buyback Yield
Replies: 13
Views: 888

Re: S&P 500 Dividend + Buyback Yield

rmelvey, Thank you for your reply. You are correct with one provision. Absent any other effect, a buyback by reducing the number of shares will increase the div per share and also the earnings per share. Certainly this is a good thing. But it is more complicated than just the immediate effect of red...
by TJSI
Tue Jul 25, 2017 2:24 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Dividend + Buyback Yield
Replies: 13
Views: 888

Re: S&P 500 Dividend + Buyback Yield

rmelvey,

A basic question:

Which stockholders are getting the 4.5% yield?

Those who sold or those who held onto their shares? Or perhaps it is the average shareholder that sells a fraction of their shares?

TJSI
by TJSI
Thu Jul 06, 2017 5:12 pm
Forum: Investing - Help with Personal Investments
Topic: Accounting for Dividends in Safe Withdrawal Rate
Replies: 42
Views: 2492

Re: Accounting for Dividends in Safe Withdrawal Rate

FractualFan wrote: "Those who use dividends for income (take dividends in cash, rather than reinvesting the dividend in shares) lose both the future dividends from the shares that would have been acquired by reinvesting and potential capital gains from those shares." You are correct! If yo...
by TJSI
Wed Jul 05, 2017 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: Accounting for Dividends in Safe Withdrawal Rate
Replies: 42
Views: 2492

Re: Accounting for Dividends in Safe Withdrawal Rate

Warning: Although it is repeated often on this blog, it is incorrect to say that using dividend for income is the same as selling shares. When you sell shares you lose both future dividends from those shares and potential capital gains from the shares. When you use dividends for income, you only los...
by TJSI
Fri Jun 16, 2017 6:39 am
Forum: Investing - Theory, News & General
Topic: Is it safer to invest in gold or bond funds?
Replies: 30
Views: 2086

Re: Is it safer to invest in gold or bond funds?

TomCat96 wrote:


"When things get bad, you want to be in bonds.
When things get really bad, you want to be in gold.
When things get really really bad, you want to be in seeds."

An award winning summation!

TJSI
by TJSI
Mon Jun 05, 2017 3:47 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 13506

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

Random Walker, The example you give is correct but there may be a wrong implication. As you explain, when you add a volatile asset to a portfolio the expected return is just the weighted sum of the assets' returns. The volatility did not reduce the return. There was no drag on return. The volatility...
by TJSI
Wed May 31, 2017 5:22 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 13506

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

Dave, Yes, I am familiar with the formula showing the appox relationship between arith return and geo return. All it means is that if you use a different algorithm to compute return you get a different number. It does not mean there was a loss of money. If you computed the return using continuous co...
by TJSI
Wed May 31, 2017 1:56 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 13506

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

Dave, Sorry to disagree. The return of a portfolio only depends on the starting point and ending point. It does not depend on the number of cycles (volatility) it took to get there. If you compound or rebalance along the way, then the geometric return is correct. Up and downs only effect return if s...
by TJSI
Wed May 31, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 13506

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

I don't think or worry about volatility drag because in general, it does not exist. The example is always given that if the market drops by 30% and then goes up by 30% you end up in a different spot. That is true but it has no applicability to the actual market. Buried in that example is the assumpt...
by TJSI
Mon May 22, 2017 12:04 am
Forum: Investing - Theory, News & General
Topic: The Case for Dividend Stocks in Retirement (article)
Replies: 92
Views: 10590

Re: The Case for Dividend Stocks in Retirement (article)

Nedsaid, I would not worry about what the reclusive "cat" might say. Mr. Bogle would back you up. Much to the annoyance of the anti-dividend crowd he has spoken about the need to focus on secure income in retirement and the desirability of dividends over capital gains. SS, pensions, intere...
by TJSI
Fri May 05, 2017 12:00 pm
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 4793

Re: Increasing correlation between US and international equities

Zeugmite has got it right. When you add an asset with lower expected return to your portfolio, that's what you get-- lower expected return. No additional pizza. Unless you are very clever and can do some great timing or attempt to juice the returns with leverage.
by TJSI
Thu May 04, 2017 9:22 pm
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 4793

Re: Increasing correlation between US and international equities

Diversification benefit? Can I spend it? Can I buy a slice of pizza with it?

TJSI
by TJSI
Thu Apr 20, 2017 12:27 am
Forum: Personal Consumer Issues
Topic: Return Fraud at Big Box and "The Retail Equation"
Replies: 19
Views: 2648

Re: Return Fraud at Big Box and "The Retail Equation"

Certainly sounds like internal theft. If it is not too troublesome, you could report it to the store manager or store security. With the numerous security cameras in use they may be able to identify who made the false return.

TJSI
by TJSI
Wed Apr 19, 2017 11:57 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe says "Goodbye."
Replies: 336
Views: 39907

Re: Larry Swedroe says "Goodby."

Larry,

Best of luck and thank you for your many contributions and lively debates. You have given much to the forum in time and knowledge.

So thank you again,

TJSI

PS: If I hear of any good dividend paying stocks, I'll PM you.
by TJSI
Mon Mar 27, 2017 4:52 am
Forum: Investing - Theory, News & General
Topic: an in depth look at gold
Replies: 91
Views: 7164

Re: an in depth look at gold

AlohaJoe asked (about gold as a safe haven): "Or does gold only work in the US for some reason? " One study says it works elsewhere. Bauer & McDermott 2009, Is Gold A Safe Haven? International Evidence They say: " Yes for US and major European stock markets but not Australia, Cana...
by TJSI
Mon Mar 20, 2017 8:53 pm
Forum: Investing - Theory, News & General
Topic: an in depth look at gold
Replies: 91
Views: 7164

Re: an in depth look at gold

One property of gold as an investment that has not been discussed is its ability to act as a safe haven. Harvey & Erb sort of dismiss this by looking at one- month returns of gold and the S&P. They find that 17% of the time that both gold and the S&P have negative return. They say: "...
by TJSI
Wed Mar 08, 2017 3:42 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds and YTM -- Issue with The Bond Book's Claim
Replies: 14
Views: 1198

Re: Bonds and YTM -- Issue with The Bond Book's Claim

Congratulations enki on your efforts to understand bond yields and YTM. Yes, there is a debate and confusion on this most basic of financial terms. Probably the best analysis of the problem is given in the paper " Yield to Maturity & the Reinvestment of Coupon Payments" (w) by Forbes, ...
by TJSI
Thu Feb 16, 2017 11:13 am
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 4559

Re: Valuation does not matter (may be)

Note on Note: After getting some sleep, I see that my note only adds confusion. I was referring to the to the Michael Kitces analysis not the article first quoted. Mr Kitces found that indeed starting valuations at a 15 year span had a very significant effect on returns. After 30 years, the effect w...
by TJSI
Wed Feb 15, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 4559

Re: Valuation does not matter (may be)

Note on the analysis:

This is not an analysis of the effect of valuation changes but rather the effect on initial valuation on subsequent return.

TJSI
by TJSI
Sun Feb 12, 2017 2:50 pm
Forum: Investing - Theory, News & General
Topic: The Ned Said Effect strikes again
Replies: 52
Views: 4518

Re: The Ned Said Effect strikes again

However it is awesome to have an EFFECT named after you.

TJSI
by TJSI
Wed Feb 08, 2017 8:23 am
Forum: Personal Consumer Issues
Topic: Where to stay in Siesta Key
Replies: 10
Views: 1520

Re: Where to stay in Siesta Key

As a coincidence a relative of mine just visited Siesta Key for a short stay(3 day) with their family. They stayed at the Tropical Breeze and liked it.
Very good location but not on the water. It is adjacent to the village and a short walk to the ocean. Weather was great.
by TJSI
Tue Feb 07, 2017 3:06 pm
Forum: Investing - Theory, News & General
Topic: [Seth Klarman NY Times Article]
Replies: 19
Views: 1888

Re: SETH KLARMAN NY Times ARTICLE

His non-political comments are interesting. Here is part of his comments: "stocks outside the indices may be cast adrift, no longer attached to the valuation grid but increasing off of it. This should give long-term value investors a distinct advantage." His thesis is the fewer people doin...
by TJSI
Sat Feb 04, 2017 12:07 pm
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2112

Re: Bogle advocating bonds=age-15?

Here is the actual quote: On whether he still advises most investors to take on an age-based, bond-heavy portfolio, where Social Security is factored in as if it was a bond: Bogle: The original statement, going way back to my first book in 1993, was to set up a rule of thumb -- not a rule -- that ea...
by TJSI
Sat Feb 04, 2017 11:11 am
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2112

Re: Bogle advocating bonds=age-15?

Mr. Bogle made an interesting comment recently about the "age in bonds rule". He said something like" When I made that rule, yields were much higher." This implied to me that he would suggest a different rule now that reflected the current low bond yields. So it would not surpris...
by TJSI
Sat Feb 04, 2017 11:11 am
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2112

Re: Bogle advocating bonds=age-15?

Mr. Bogle made an interesting comment recently about the "age in bonds rule". He said something like" When I made that rule, yields were much higher." This implied to me that he would suggest a different rule now that reflected the current low bond yields. So it would not surpris...
by TJSI
Thu Feb 02, 2017 4:33 pm
Forum: Personal Finance (Not Investing)
Topic: Thoughts on Living Off Interest/Dividends
Replies: 54
Views: 6220

Re: Thoughts on Living Off Interest/Dividends

bucky6225, You have it right. If you can live off your SS, interest, and dividends you are doing well. There is no equivalence between using dividends and selling your productive assets. John Bogle in a recent interviews(m) discussed the use of dividends in retirement. When you get near retirement, ...
by TJSI
Thu Jan 12, 2017 12:25 am
Forum: Investing - Theory, News & General
Topic: Lazy Portfolio with Sector Funds
Replies: 33
Views: 2618

Re: Lazy Portfolio with Sector Funds

nedsaid,

Isn't everything overvalued due to low interest rates? Are consumer staples more, less, or about the same overvalue as the market?

Is there a Shiller P/E for consumer staples? Might be interesting to find out.

TJSI
by TJSI
Tue Jan 10, 2017 8:28 pm
Forum: Local Chapters and Bogleheads Community
Topic: Sad News About a Respected Forum Member
Replies: 118
Views: 21183

Re: Sad News About a Respected Forum Member

Thank you for the gift of your knowledge. You have helped many along the way and it is appreciated.


TJSI
by TJSI
Mon Jan 09, 2017 5:44 pm
Forum: Investing - Theory, News & General
Topic: Lazy Portfolio with Sector Funds
Replies: 33
Views: 2618

Re: Lazy Portfolio with Sector Funds

Ethelred asked : "Can you link some of that research?" A good study by Ibbotson & Kim (Jan 2016) is " "Risk & Return Within the Stock Market: What Works Best? " Another reference is: "The Low-Volatility Effect: A Comprehensive Look" (m) As lack_ey said : Ty...
by TJSI
Mon Jan 09, 2017 3:39 pm
Forum: Investing - Theory, News & General
Topic: Lazy Portfolio with Sector Funds
Replies: 33
Views: 2618

Re: Lazy Portfolio with Sector Funds

The Vanguard paper said: " An investor should expect high volatility from the fund." Wow, they are living in a different universe. Consumer Staples is a low volatility sector and as a defensive investment is not bad. And there is a lot of research that over long periods, low volatility sto...
by TJSI
Sun Jan 08, 2017 1:51 pm
Forum: Investing - Theory, News & General
Topic: Are Commodities Still a Good Portfolio Diversifier?
Replies: 51
Views: 3347

Re: Are Commodities Still a Good Portfolio Diversifier?

Sorry Tony, meant that as humor. Guess it was not funny.

TJSI
by TJSI
Sun Jan 08, 2017 12:27 pm
Forum: Investing - Theory, News & General
Topic: Are Commodities Still a Good Portfolio Diversifier?
Replies: 51
Views: 3347

Re: Are Commodities Still a Good Portfolio Diversifier?

TonyDAntonio, Trader/Investor,

You are confusing strategy with outcome!

TJSI
by TJSI
Thu Dec 29, 2016 10:11 pm
Forum: Investing - Theory, News & General
Topic: frustrating to keep investing in international/EM
Replies: 179
Views: 19336

Re: frustrating to keep investing in international/EM

Shouldn't we be wary of the "Nedsaid Effect"?

TJSI
by TJSI
Mon Dec 19, 2016 7:50 pm
Forum: Investing - Theory, News & General
Topic: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"
Replies: 91
Views: 9027

Re: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"

sharpjm, From" Drained by Drips: The Hidden Cost of Buying on the Dividend Pay Date by H. Berkman "In this study we document surprisingly strong evidence of a predictable temporary price increase around the dividend pay date, which has grown in magnitude each decade since the 1970’s. For t...
by TJSI
Sun Dec 18, 2016 6:11 pm
Forum: Investing - Theory, News & General
Topic: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"
Replies: 91
Views: 9027

Re: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"

PJW I would say the difference in our examples is that you recognize a drop in price after the dividend is paid but won't recognize the increase in price before dividend pay date. And that goes to the heart of much of what is incorrect about the frequent analysis of dividends. In the real world, the...
by TJSI
Sun Dec 18, 2016 5:25 pm
Forum: Investing - Theory, News & General
Topic: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"
Replies: 91
Views: 9027

Re: Over the last 40 years, 71% of the stock market's return came from dividends, not capital appreciation,"

Whoppee, What you are missing in your example is that the market price ( and by this I assume you mean fair price) would rise to $12 before the dividend was paid and settle back down to $11 after the payment. Whenever dividends are discussed, the rise in price before the dividend payment is often ig...
by TJSI
Thu Nov 24, 2016 2:58 pm
Forum: Investing - Theory, News & General
Topic: Approaching the S&P 500 like Benjamin Graham
Replies: 13
Views: 2657

Re: Approaching the S&P 500 like Benjamin Graham

nedsaid, I expect that if Mr Graham was still around for the dotcom boom, he would change his opinion again about the smart, well-educated analysts. I believe it was Prof Shiller who said that the idea of the market being governed by analysts doing careful valuation studies was just an illusion. I s...
by TJSI
Mon Oct 10, 2016 4:09 pm
Forum: Investing - Theory, News & General
Topic: "Yield and Return"
Replies: 29
Views: 3445

Re: "Yield and Return"

I'm with BolderBoy on this. This article adds nothing to help a novice understand the use of the terms yield or return. Both terms are ambiguous unless the user of the term explains exactly what they mean. If they mean dividend yield, then they should state it that way--dividend yield. Why they can ...
by TJSI
Thu Sep 29, 2016 3:46 pm
Forum: Investing - Theory, News & General
Topic: Lower risk, higher returns?
Replies: 18
Views: 2228

Re: Lower risk, higher returns?

Like the Efficient Market Theory, I have long felt that the Risk Story belongs in the fiction section of the library. And fundamentally you are rewarded by eliminating as much risk as you can and punished for taking risk.

But it does provide a lot of interesting math.
by TJSI
Mon Jul 04, 2016 9:59 am
Forum: Investing - Theory, News & General
Topic: A favorite Peter Lynch quote.
Replies: 26
Views: 4008

Re: A favorite Peter Lynch quote.

Excellent words of wisdom from nedsaid on this 4th of July! And let us not forget the Founders of this great nation who seem to receive a lot of criticism hundreds of years after they have passed. We are blessed today by what they accomplished.
by TJSI
Wed Jun 22, 2016 11:59 am
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

dkturner, You have raised a good point. Buybacks could be an excellent tool to damp the volatility of stock price. They could step in if prices dropped significantly below their estimate of intrinsic value. And I am sure than some companies do make a good faith estimate of intrinsic value. But there...
by TJSI
Tue Jun 21, 2016 8:55 pm
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Lobster, Mr. Buffett has commented several times on buybacks and I believe most recently on IBM and their repurchase program. He believes IBM did the right thing. He is a very firm believer in buying stocks below intrinsic value. He has never said that buybacks are good in general. In one of letters...
by TJSI
Tue Jun 21, 2016 7:58 pm
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Thank you Simplegift for that Credit Swiss reference. It is by far the best discussion of buybacks I have seen. They recognize the difference between holding and selling shareholders. And from their conclusion: " Buybacks only benefit continuing shareholders when management executes them when t...
by TJSI
Tue Jun 21, 2016 11:47 am
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Simplegift, You wrote "It seems there's a return to shareholders." There is indeed a return to shareholders but the calculation of it is difficult. One set of shareholders wins while the others lose. That is why it would be great if those who write about buybacks clearly state which stockh...
by TJSI
Tue Jun 21, 2016 11:09 am
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Ogd, You conveniently forget that when a company does a buyback they take from stockholders something of value. The stock surrendered does have value. And in some cases it is worth more than the cash received. The value of stock removed from stockholders needs to be netted out of any calculation of ...
by TJSI
Tue Jun 21, 2016 12:38 am
Forum: Investing - Theory, News & General
Topic: Dividend and Buyback Yields, S&P 500, 1982-2015
Replies: 86
Views: 7593

Re: Dividend and Buyback Yields, S&P 500, 1982-2015

Simplegift, That buyback yield is not a yield in any conventional definition of yield. You are just adding two dissimilar percent changes to produce a number which means nothing. A yield is a return on investment. It tells you what you are gaining from your investment. When people talk of stockholde...
by TJSI
Sat Jun 11, 2016 1:02 pm
Forum: Personal Finance (Not Investing)
Topic: RMDs- Is this accurate?
Replies: 9
Views: 1342

Re: RMDs- Is this accurate?

Yes, you can do a transfer to a taxable account and not sell the securities. You will pay tax on the amount transferred.

TJSI
by TJSI
Wed Jun 08, 2016 4:02 pm
Forum: Investing - Theory, News & General
Topic: Yale scholars on tax treatment of stock buybacks
Replies: 28
Views: 1491

Re: Yale scholars on tax treatment of stock buybacks

When a company executes a buyback someone or some entity sells their stock. That is a taxable event. If a capital gain, the piper gets paid. For the non-participating stockholders they may see their stock go up in price or if the market things it was a mistake, they may see their stock price go down...