Search found 220 matches

by TJSI
Sat Feb 06, 2016 12:32 pm
Forum: Investing - Theory, News & General
Topic: Today's dumbest investment advice
Replies: 32
Views: 3638

Re: Today's dumbest investment advice

Bertilik, That statement by Investopedia is just plain wrong. Exchanges don't set prices nor can they lower them. The price is set by the bids and asks. The exchange just clears the bids and asks. Now apparently brokerage houses will lower bids by the dividend unless told otherwise. The opening pric...
by TJSI
Tue Feb 02, 2016 9:11 pm
Forum: Investing - Theory, News & General
Topic: What is your favorite Financial Quote or Metaphor??
Replies: 179
Views: 9327

Re: What is your favorite Financial Quote or Metaphor??

Mr Market is a manic depressive. ( I don't know who first said this.)

And he is off his meds today. (Added by me.)

TJSI
by TJSI
Sat Jan 30, 2016 12:47 pm
Forum: Personal Finance (Not Investing)
Topic: I got let go yesterday
Replies: 40
Views: 6245

Re: I got let go yesterday

I agree with soupcxan--it is highly likely that the company failed not you. It is possible that nobody-- no matter how smart or hard working could have succeeded without the needed experience. Whoever hired you probably did not understand the requirements of the position. A lot of engineering is boo...
by TJSI
Thu Jan 28, 2016 3:40 pm
Forum: Investing - Theory, News & General
Topic: Worldwide Dividend Trends
Replies: 12
Views: 1216

Re: Worldwide Dividend Trends

Dirghatamas, Unfortunately, you don't want to think more deeply about the issue. Instead you answer with something about selling shares to raise cash. I did not ask about the equivalents of buyback and dividends. I just asked a simple question: Do not the stocks that companies buyback have value? An...
by TJSI
Thu Jan 28, 2016 2:22 pm
Forum: Investing - Theory, News & General
Topic: Worldwide Dividend Trends
Replies: 12
Views: 1216

Re: Worldwide Dividend Trends

Dirghatmas, I would like to submit a question to you. Assume that companies are doing the right thing when they do a buyback. That is they are buying back their shares at a price that is less than the intrinsic value of the stock. In that case, are the companies not taking cash from stockholders? TJSI
by TJSI
Mon Jan 25, 2016 5:55 pm
Forum: Personal Finance (Not Investing)
Topic: Did the bears eat my retirement? - Sequence of Returns Risk
Replies: 70
Views: 5904

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

gth8857, Sequence of return risk is real and should be a concern of those at or near retirement. I think what you are doing in the short run is correct--putting excess cash into safe investments. No one can predict the trajectory of the market over the next couple of years. There have been numerous ...
by TJSI
Thu Jan 21, 2016 7:38 pm
Forum: Personal Finance (Not Investing)
Topic: Tracking growth - In Shares, not Dollars
Replies: 6
Views: 497

Re: Tracking growth - In Shares, not Dollars

Well before this is totally dismissed as a psychological problem, let me say there is a little something to it. The value of your investment at any point is equal to the number of shares times the price of the shares. And your return is a function of the growth in shares and the growth in price. Wha...
by TJSI
Tue Jan 19, 2016 10:22 pm
Forum: Investing - Theory, News & General
Topic: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe
Replies: 15
Views: 1561

Re: Dividend Growth Stock as Bond Substitutes?... Malkiel vs. Swedroe

I suspect that this is much like the advice that John Bogle gave when asked how those who need some additional income should invest. He replied that they should look to the corporate sector whose dividends look pretty safe. He did not say stocks were bonds or chase high yield. I believe it is good a...
by TJSI
Mon Jan 18, 2016 4:39 pm
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 272
Views: 16173

Re: why do investors prefer cash dividends

ogd, You are doing the same thing as Dirghatamas--putting words in peoples mouths to try and win an argument. I did not say that postponing taxes was a marginal event. That is something you made up. Taxes are very important. I did say that buybacks create a tax event --either now or in the future. I...
by TJSI
Mon Jan 18, 2016 3:01 pm
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 272
Views: 16173

Re: why do investors prefer cash dividends

dbr,

I am pretty confident that the dividend "cult" believes there is an anti-dividend crowd. Much of what they repeat over and over is just plain wrong.

TJSI
by TJSI
Mon Jan 18, 2016 2:31 pm
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 272
Views: 16173

Re: why do investors prefer cash dividends

Dirghatamas, Sorry I never assumed that buybacks and dividends are equivalent. Please go back and read what I wrote. It is the anti-dividend crowd that often says you can create your own dividend by selling your stock. If I ever said or thought they were equivalent it was because I was smoking diffe...
by TJSI
Mon Jan 18, 2016 1:00 am
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 272
Views: 16173

Re: why do investors prefer cash dividends

Dirghatamas said that dividends are taxed but buybacks are not. So buybacks are better. Something like this is often said by the anti-dividend crowd. However it is not correct. The best that you could say is that buybacks might postpone a taxable event. If a stockholder participates in a buyback pro...
by TJSI
Sat Jan 16, 2016 12:18 pm
Forum: Investing - Theory, News & General
Topic: why do investors prefer cash dividends
Replies: 272
Views: 16173

Re: why do investors prefer cash dividends

I suspect it is hopeless but I will go through it one more time. First, the value of a company that is making the correct capital budgeting decisions does not decrease in value to stockholders when it pays a dividend. Dividends are paid out of excess cash (idle cash). This cash has no value to stock...
by TJSI
Mon Jan 04, 2016 12:06 pm
Forum: Investing - Help with Personal Investments
Topic: Is There Such a Thing as a 'Bad Time' to Purchase a Value Fund?
Replies: 23
Views: 1381

Re: Is There Such a Thing as a 'Bad Time' to Purchase a Value Fund?

joer1212, You asked what would be the metric that could be used to determine if a fund was truly a value fund. Since FF determined that the dominant factor in their value fund outperformance was valuation recovery, then I believe the best single metric would be P/E. A great study would be to look at...
by TJSI
Sun Jan 03, 2016 7:15 pm
Forum: Investing - Help with Personal Investments
Topic: Is There Such a Thing as a 'Bad Time' to Purchase a Value Fund?
Replies: 23
Views: 1381

Re: Is There Such a Thing as a 'Bad Time' to Purchase a Value Fund?

joer1212, You raise an interesting point. I suspect that there are periods of time when true value stocks vanish. Going back to the Graham & Dodd definition of a value stock ( selling below intrinsic value) , then when valuations are high, many of the value stocks in a value fund are no longer t...
by TJSI
Tue Dec 01, 2015 5:24 pm
Forum: Investing - Theory, News & General
Topic: To calculate CAGR, how long is "a year?"
Replies: 21
Views: 1997

Re: To calculate CAGR, how long is "a year?"

I think you are mixing metaphors. When computing CAGR for different investments the number of years is an integer. Say you had three investments. One increased by some mysterious stochastic process over 5 years. The second was a nice money fund that compounded daily. And the third was a bond which y...
by TJSI
Mon Nov 23, 2015 4:05 pm
Forum: Investing - Theory, News & General
Topic: Low beta, low volatility
Replies: 28
Views: 2073

Re: Low beta, low volatility

In addition to the references cited by MarcBecker above, I would add the excellent paper by Ibbotson & Kim " Risk & Return Within the Stock Market: What Works Best?" Jan 2015 They studied a 3,000 stock portfolio for 43 years (1972-2014) and found that the risk reward relationship w...
by TJSI
Wed Nov 18, 2015 7:31 pm
Forum: Investing - Theory, News & General
Topic: Low beta, low volatility
Replies: 28
Views: 2073

Re: Low beta, low volatility

Well there is a lot more to the topic of low beta and returns. I believe the majority of studies show that for long holding periods low beta portfolios have greater returns than high beta portfolios. And low beta beats the market portfolio for long holding periods. A lot of people don't like this as...
by TJSI
Sun Nov 08, 2015 1:18 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks and High P/E Ratios
Replies: 19
Views: 1220

Re: Stock Buybacks and High P/E Ratios

Timely article in todays (11/8) NYT Business Section by Jeff Sommer titled "Microsoft's Buyback Engineering". Microsoft has spent $123.6 billion on buybacks and its stock price has come back to its 1999 high. One item not often pointed out in discussions of buybacks is the combination of v...
by TJSI
Fri Nov 06, 2015 12:17 pm
Forum: Investing - Theory, News & General
Topic: Stock Buybacks and High P/E Ratios
Replies: 19
Views: 1220

Re: Stock Buybacks and High P/E Ratios

The question that always comes to my mind when I see this is: Would you give the same valuation to a company which increases eps through increased revenue and operating earnings as you would to company that increases eps through reduction in shares outstanding?
by TJSI
Mon Sep 07, 2015 10:52 pm
Forum: Investing - Theory, News & General
Topic: The Final, Definitive Thread on Rebalancing
Replies: 41
Views: 4414

Re: The Final, Definitive Thread on Rebalancing

stlutz,

On balance--the best.

TJSI
by TJSI
Mon Aug 24, 2015 11:19 pm
Forum: Investing - Theory, News & General
Topic: Who's selling now?
Replies: 63
Views: 7102

Re: Who's selling now?

TwobyFour, thanks for the chart showing ownership of the equity market. Now the question is who is doing all the trading? Bloomberg says there were 14 billion shares traded compared to an average of 6.6 billion. Is this hedge funds, high frequency traders, a bunch of software? I have never seen a go...
by TJSI
Wed Aug 19, 2015 10:23 am
Forum: Investing - Theory, News & General
Topic: Bogle: retirees should focus on dividends
Replies: 157
Views: 16350

Re: Bogle: retirees should focus on dividends

tennisplyer, you are confused by the constant repetition of incorrect and incomplete information. The price of a stock increases before the dividend is paid and then decreases after it is paid. Most studies show that the increase is slightly more than the decrease. If a company is making the correct...
by TJSI
Sat Jul 18, 2015 8:37 pm
Forum: Investing - Theory, News & General
Topic: leverage and beating the market
Replies: 37
Views: 2793

Re: leverage and beating the market

privatefarmer, I think part of the answer was contained in your question. Many professional money managers don't have a "long term" to produce results. They are often judged on yearly results and if it takes 10 years or more for a tilt to show its effect, than as lack_ey said "it can ...
by TJSI
Wed Jul 15, 2015 11:12 pm
Forum: Investing - Theory, News & General
Topic: Do Dividends Actually Add To The Total Return of a Stock?
Replies: 40
Views: 4567

Re: Do Dividends Actually Add To The Total Return of a Stock?

Why not consult the SEC about the movement of stock prices around the ex-dividend date? See: http://edgar.sec.gov/answers/dividen.htm . Before the ex-dividend date the price rises and then settles back down after ex-dividend date. And generally the rise slightly exceeds the roll-down in price.
by TJSI
Thu Jun 04, 2015 9:12 pm
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 10324

Re: Dividend yield is a lot less important than buyback yield

Nisiprius, Generally, there are no tender offers with buybacks. The only exception that I can think of is when a company is going private which might be considered an extreme form of buyback. As a private stockholder you must trade on an open market. There will be an announcement at a board of direc...
by TJSI
Wed Jun 03, 2015 5:56 pm
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 10324

Re: Dividend yield is a lot less important than buyback yield

Something that always seems to be forgotten when buybacks are discussed is that companies do not give cash to stockholders who sell during a buyback campaign. They exchange cash for shares. Those shares have a real value which could in fact be greater than the cash exchanged. A dividend is cash rece...
by TJSI
Tue Jun 02, 2015 5:42 pm
Forum: Investing - Theory, News & General
Topic: Dividend yield is a lot less important than buyback yield
Replies: 192
Views: 10324

Re: Dividend yield is a lot less important than buyback yield

Bfwolf said " there is no logical argument for dividends over buybacks". Well there is one. Whenever the intrinsic value of a stock is greater than the current market price, the seller of the stock losses money. So in a down market, you will lose money every time you manufacture a divided ...
by TJSI
Sun May 31, 2015 9:57 pm
Forum: Investing - Theory, News & General
Topic: Value Outperformance ex-Dividends
Replies: 11
Views: 1138

Re: Value Outperformance ex-Dividends

fortyoffforty, I think the best answer to your question can be found in the classic paper by Fama & French "The Anatomy of Value and Growth Stock Returns" Financial Analyst Journal, 2007. In that paper they give the breakdown of return for small value and big value from capital gains a...
by TJSI
Fri May 22, 2015 12:46 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 3226

Re: Silver lining for bond fund NAV declines?

Ogd, You don't see the error in your statement that "Its only defaults that bring down the NAV without higher yields" because you use an incomplete concept of NAV computation. A more accurate computation of NAV is that NAV = market value of assets + revenue - expenses. If there is a liquid...
by TJSI
Thu May 21, 2015 10:05 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 3226

Re: Silver lining for bond fund NAV declines?

ogd, Your statement is not true because you ignore the real world operation of funds. Funds like most things in life work on cash not yield. Funds have real expenses that must be paid. A panic induced run on a fund can cause a loss in liquidity. In matters not if the yield on remaining bonds goes up...
by TJSI
Thu May 21, 2015 2:38 pm
Forum: Investing - Theory, News & General
Topic: Silver lining for bond fund NAV declines?
Replies: 33
Views: 3226

Re: Silver lining for bond fund NAV declines?

Ogd said: "It's only defaults that bring down the NAV without higher yields". I don't believe this is correct. If there is a run on a fund during a panic, they may be forced to sale assets at the depressed NAV rate. Once sold there is no yield rate increase benefit.

TJSI
by TJSI
Mon Mar 30, 2015 9:17 am
Forum: Investing - Help with Personal Investments
Topic: Increasing REIT holding in a ROTH
Replies: 10
Views: 1159

Re: Increasing REIT holding in a ROTH

Scotthew asked about a study of REIT correlations and other sectors.

Google REITs: Making Property Accessible and see Exhibit 7 which presents a correlation matrix for the period Dec 31, 1992 to Aug 29, 2014.

(correlation with S&P 500 = .54 )

TJSI
by TJSI
Wed Mar 25, 2015 1:30 pm
Forum: Investing - Theory, News & General
Topic: U.S. cash pouring into international
Replies: 23
Views: 2880

Re: U.S. cash pouring into international

Or, for a slightly different view on the matter see "Torrent of Cash Exits the Eurozone" WSJ 3/22(I think). Seems more cash is leaving the Eurozone for safe investments at the same time cash is flowing into Europe's higher yielding investments. Smart money chasing yield on a large scale.
by TJSI
Mon Mar 23, 2015 11:05 pm
Forum: Investing - Theory, News & General
Topic: How important is an international allocation?
Replies: 104
Views: 9920

Re: How important is an international allocation?

Some interesting stats and comments relative to international investing in today's WSJ (3/23) Pg C1. Title of story: "Strong Dollar Slams Profits They provide a breakdown of foreign sales as a % of total sales by S&P Sector: IT 57% Energy 55% Materials 54% Health Care 51% S&P 500 46% In...
by TJSI
Sun Mar 01, 2015 10:45 pm
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 4228

Re: Dividends and Market Slides

Nisiprius, The Arnott & Asness paper shows that higher dividend payout in general means higher earnings growth (see Fig 2 of their paper). They were not talking about total return. And higher earnings in general should mean higher price appreciation. William Bernstein discusses why this is so. T...
by TJSI
Sun Mar 01, 2015 7:37 pm
Forum: Investing - Theory, News & General
Topic: Dividends and Market Slides
Replies: 55
Views: 4228

Re: Dividends and Market Slides

Nisiprius said: "The company that retains dividends grows faster. The company that pays dividends grows slower." Although this may have some intuitive appeal, the facts are otherwise. Suggest those interested read: Surprise! Higher Dividends = Higher Earnings Growth by Arnott & Asness ...
by TJSI
Thu Feb 26, 2015 8:00 pm
Forum: Investing - Theory, News & General
Topic: Capital gains and dividends real income ?
Replies: 12
Views: 913

Re: Capital gains and dividends real income ?

It is tax time. What income do you report to the IRS. That is your income.
by TJSI
Wed Feb 25, 2015 3:46 pm
Forum: Personal Consumer Issues
Topic: Should I shut off water in a vacant home in winter?
Replies: 15
Views: 2011

Re: Should I shut off water in a vacant home in winter?

Unfortunately, there is no free lunch in turning off the heat. As you have surmised there is a downside to leaving a home unheated. If you have a prolonged cold spell anything that uses glue may fail. Furniture may become loose and wallpaper may start to peal. In addition if there is heavy snowfall,...
by TJSI
Fri Jan 30, 2015 4:02 pm
Forum: Investing - Theory, News & General
Topic: Forecasting REIT dividends
Replies: 13
Views: 1558

Re: Forecasting REIT dividends

I question the correctness of backing out capital distributions from the dividend yield part of the Bogle Return Estimate formula. This term represents the rate at which shares are compounded. Since capital distributions would be used for the same purpose, there would be no reason to back them out o...
by TJSI
Tue Jan 27, 2015 9:00 pm
Forum: Investing - Theory, News & General
Topic: Chaos, complexity and entropy [for non-physicists]
Replies: 113
Views: 8865

Re: Chaos, complexity and entropy simplified

protagonist,

Thanks for the great article!

TJSI
by TJSI
Wed Jan 21, 2015 3:16 pm
Forum: Investing - Theory, News & General
Topic: Adjusted Closing Price
Replies: 29
Views: 1676

Re: Adjusted Closing Price

PapaGeek,

Thanks for your remark. However, my comment was directed at Tanelorn who believes I am "dense". I was once accused of having the "mind of a lizard" so maybe this is a step in the right direction.

TJSI
by TJSI
Wed Jan 21, 2015 11:17 am
Forum: Investing - Theory, News & General
Topic: Adjusted Closing Price
Replies: 29
Views: 1676

Re: Adjusted Closing Price

Tanelorn, You are being insulting, perhaps deliberately so. If one is computing total return, they should of course include dividends. If they sell/buy at closing, they will get the closing price. If they buy/sell at opening they will get the opening market price. Total return will be a function of ...
by TJSI
Wed Jan 21, 2015 12:38 am
Forum: Investing - Theory, News & General
Topic: Adjusted Closing Price
Replies: 29
Views: 1676

Re: Adjusted Closing Price

I will repeat my strongly held belief: The closing price is the closing price as it happened in the real word and the opening price is the opening price as it happens. Mr Market knows about dividends and includes it in its pricing. Unless someone is willing to make a market at an "adjusted clos...
by TJSI
Tue Jan 20, 2015 11:40 pm
Forum: Investing - Theory, News & General
Topic: Adjusted Closing Price
Replies: 29
Views: 1676

Re: Adjusted Closing Price

dbr, Just goes to prove you should not take financial advice from something called Yahoo. The closing price is the closing price. Mr Market although a manic depressive knows enough to include the fact that a stock is trading ex-dividend. The effect no matter what its size is baked into the closing p...
by TJSI
Tue Jan 20, 2015 10:42 pm
Forum: Investing - Theory, News & General
Topic: Adjusted Closing Price
Replies: 29
Views: 1676

Re: Adjusted Closing Price

PapaGeek, If you are talking about common stocks, there is no such thing as an adjusted closing price. The closing price is exactly that--the price at market close. If you are taking about funds with NAVs, the NAV will include the effect of dividends paid out when they are paid out. The funds report...
by TJSI
Sun Jan 11, 2015 10:56 pm
Forum: Investing - Theory, News & General
Topic: We miss Larry Swedroe
Replies: 38
Views: 11272

Re: We miss Larry Swedroe

And here I thought he was at an undisclosed location counting his dividends.

He certainly deserves a good vacation.
by TJSI
Wed Dec 10, 2014 11:28 pm
Forum: Investing - Theory, News & General
Topic: Is the collapse of oil price a "black swan"?
Replies: 133
Views: 15348

Re: Is the collapse of oil price a "black swan"?

As a consumer who pays for gasoline and home heating oil, I consider it a Goose That Lays A Golden Egg.
by TJSI
Mon Dec 08, 2014 1:30 am
Forum: Investing - Theory, News & General
Topic: IBM: Stock Buybacks Gone Wrong?
Replies: 66
Views: 5861

Re: IBM: Stock Buybacks Gone Wrong?

Comments from IBM CFO on why they are doing buybacks: http://www.cnbc.com/id/102241195

I guess he wouldn't say they were making a mistake.

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