Search found 2651 matches

by lazyday
Wed May 24, 2017 4:49 am
Forum: Investing - Theory, News & General
Topic: Are all markets efficient?
Replies: 21
Views: 799

Re: Are all markets efficient?

Some markets are less efficient than others, but I wouldn't expect any alpha after expenses.

If there's a manager who produces alpha after expenses, they will likely increase fees and/or attract more money until performance suffers.
by lazyday
Sun May 21, 2017 2:17 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

I think if anything there is a premium to quality, but it's a premium in the insurance sense, not the positive sense. That's what would make sense to me in the long run. I'm a bit confused why Larry considers there to be an intuitive reason for a premium for profitability and quality. Intuitive: Th...
by lazyday
Sun May 21, 2017 6:29 am
Forum: Investing - Theory, News & General
Topic: Puzzle for you: Stocks returns vs. Economic Growth
Replies: 36
Views: 2368

Re: Puzzle for you: Stocks returns vs. Economic Growth

Why: I get headaches from the weekly threads on this forum on US vs. International investing :oops: These type of threads invariably end up with poor information content and jingoism. A rational investor is interested in underlying reasons for returns and correlations: are returns related to GDP gr...
by lazyday
Sun May 21, 2017 5:24 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

I once heard a tenuous Risk explanation that more profitable companies are most subject to new competition. The best positive explanation (for it being a risk factor) I've heard is that it relates to competitive advantages that can be targeted for reduction or elimination by rival companies. For ex...
by lazyday
Sun May 21, 2017 5:21 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

knpstr wrote:Why not just screen for stocks with "quality" or whatever other "factors", rather than funds?

Around 2010 or so, I did something like that. There were no Quality funds I cared for back then.

In this thread I'm not asking for funds I'll actually buy, but out of curiosity.
by lazyday
Sun May 21, 2017 5:19 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

Thanks for the replies on funds that screen. I've heard of DFA and Bridgeway having various screens and was curious about others. S&P's methodology for choosing stocks in the 500/400/600 seems to be something of a quality screen. But I already forgot about that when I asked! AQR Multi-Style, DFA...
by lazyday
Sat May 20, 2017 3:00 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

As a screen, I like it. I'm also more interested in "quality" factors as screening rather than independent sources of return. And the nice thing about that perspective is you can get quality screening, which shows up as "alpha" in three-factor regressions that disappears in five...
by lazyday
Sat May 20, 2017 2:54 pm
Forum: Investing - Theory, News & General
Topic: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel
Replies: 65
Views: 5078

Re: "Stocks, Bonds and Future Returns" by Prof. Jeremy Siegel

Slide 18: CAPE methodology forecasts forward 10 year real returns on stocks of only 2%, Sounds kind of low, I wonder what forecast method is used. Maybe it assumes some reversion to the mean. I think AQR used CAPE in January to predict a little over 4%, with no mean reversion. As I recall, they also...
by lazyday
Fri May 19, 2017 5:33 pm
Forum: Investing - Theory, News & General
Topic: "Why Value Stocks Have Disappointed"
Replies: 39
Views: 4503

Re: "Why Value Stocks Have Disappointed"

When Grantham says that times are difficult for a value investor, I don't think he's talking about bad times for value stocks. He seems to be talking about the entire stock market, and an investor who considers stocks too expensive.
by lazyday
Fri May 19, 2017 5:20 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Problems With The Factor Zoo
Replies: 24
Views: 2338

Re: Larry Swedroe: Problems With The Factor Zoo

Intuitive: There are logical risk-based or behavioral-based explanations for its premium and why it should continue to exist. The good news is that, among all the factors in the zoo, we show that you need to focus only on the eight that meet our criteria: beta, size, value, momentum, profitability,...
by lazyday
Thu May 18, 2017 2:23 pm
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2949

Re: Justification for holding Emerging Markets?

John Bogle, as much as I admire him and credit him for helping my philosophical path, suffers a wide range of biases. The reality is that the United States might not "win" this century, or, more importantly, the chunk of it in which you're alive and investing. Agreed. We don't need to fol...
by lazyday
Thu May 18, 2017 2:15 pm
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2949

Re: Justification for holding Emerging Markets?

http://www.obliviousinvestor.com/8-lazy-etf-portfolios/ I was surprised how small the Emerging Market allocation was among these 8 popular lazy portfolios. Making feel I am asking the right question. The Swensen portfolio in that link is outdated. Around the time of the financial crisis when both R...
by lazyday
Thu May 18, 2017 2:12 pm
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2949

Re: Justification for holding Emerging Markets?

How can the components of an asset class be efficiently priced but when taken in aggregate they aren't? Isn't that sort of an anti-indexing argument? I think the idea is that individual securities in an asset class may be priced efficiently in relation to each other, but not in relation to securiti...
by lazyday
Thu May 18, 2017 8:41 am
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2949

Re: Justification for holding Emerging Markets?

Answering the original Q: Diversification.

Such as in Swensen's Unconventional Success.
by lazyday
Thu May 18, 2017 8:39 am
Forum: Investing - Help with Personal Investments
Topic: Justification for holding Emerging Markets?
Replies: 67
Views: 2949

Re: Justification for holding Emerging Markets?

You have to believe the markets are a very inefficient pricing mechanisms to believe an asset class is persistently cheap and undervalued. Which is not a belief I hold. Paraphrasing Jeremy Grantham: Within an asset class, individual securities are generally priced efficiently. But asset classes the...
by lazyday
Thu May 18, 2017 8:30 am
Forum: Investing - Theory, News & General
Topic: International: Where's the benefit?
Replies: 63
Views: 4745

Re: International: Where's the benefit?

The only reason anyone invests in stocks is because they've worked historically. That's a good reason to consider equities, but a terrible reason to buy. It didn't work out well for those who in late 1989 Japan or early 2000 US blindly bought just because stocks have done well historically. There w...
by lazyday
Thu May 18, 2017 6:41 am
Forum: Investing - Help with Personal Investments
Topic: When to take interest in a CD?
Replies: 18
Views: 1336

Re: When to take interest in a CD?

One advantage of taking the interest payments is that it reduces the "duration" of the CD. Some of the money gets back to you sooner, so it's like making the average dollar shorter in maturity. This might allow you to choose longer duration investments with your other money. Of course it d...
by lazyday
Thu May 18, 2017 6:08 am
Forum: Investing - Theory, News & General
Topic: International: Where's the benefit?
Replies: 63
Views: 4745

Re: International: Where's the benefit?

I'm sure we could find studies showing that past performance is negatively related to future performance.

Performance chasing might make sense if you're following recent momentum such as over the past year. For periods over 3 years, you'd probably be better off selling what has done well.
by lazyday
Wed May 17, 2017 5:34 am
Forum: Investing - Theory, News & General
Topic: TIPS Roll Return .6%?
Replies: 3
Views: 546

TIPS Roll Return .6%?

RA predicted a TIPS roll of .6% as of April 30. (Click on US TIPS) The Methodology paper says this is for the Barclays U.S. TIPS Index. The ETF TIP uses series L of that index, and has average maturity of about 8.5 years and duration under 8. At the end of April, yields were: 5 YR 7 YR 10 YR 20 YR 3...
by lazyday
Sat May 13, 2017 1:45 am
Forum: Investing - Theory, News & General
Topic: Rob Arnott [buy emerging market equities vs. US stocks]
Replies: 40
Views: 2933

Re: Rob Arnott

So, with the LONG-long-term (i.e., 20-40 years), I'd find it hard to believe that any model would be that good at predicting. I think things just change too much. I agree, but in my opinion it's better than just using historical returns as a best guess. Think of a Japanese investor in 1990, or US i...
by lazyday
Fri May 12, 2017 5:37 pm
Forum: Investing - Theory, News & General
Topic: Rob Arnott [buy emerging market equities vs. US stocks]
Replies: 40
Views: 2933

Re: Rob Arnott

Just read through (somewhat) of the AQR article, and have to admit it's a bit (or a lot) above my head. Is there anywhere which describes the overall approach or thought process in less technical terms? If you still want to read more, you can also try the RA methodology papers. William Bernstein co...
by lazyday
Fri May 12, 2017 1:26 pm
Forum: Investing - Theory, News & General
Topic: Rob Arnott [buy emerging market equities vs. US stocks]
Replies: 40
Views: 2933

Re: Rob Arnott

I've seen comments about expecting lower returns in the near future, but haven't quite understood those predictions - especially in light of common wisdom on this forum that no one can predict the future. How have you come to the conclusion that the future won't be as successful as the past? I thin...
by lazyday
Wed May 10, 2017 12:20 pm
Forum: Investing - Theory, News & General
Topic: Buffet - The Wrath of Ebit
Replies: 27
Views: 2797

Re: Buffet - The Wrath of Ebit

Some companies may push EBITDA and such to make their earnings look better, but we can always look at E. :) I'm not aware of any index funds that use measures like EBITDA... at least the major ones we discuss here don't use it. Value indexes instead might use price multiples or fundamental weighting...
by lazyday
Wed May 10, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: Buffet - The Wrath of Ebit
Replies: 27
Views: 2797

Re: Buffet - The Wrath of Ebit

EBITDA might be a better search term than EBIT. D=Depreciation. Here's a clip from the meeting with some commentary: https://finance.yahoo.com/news/charlie-munger-explains-called-popular-earnings-measure-horror-squared-164228068.html “The idea that depreciation doesn’t matter? … You have to replace ...
by lazyday
Wed May 10, 2017 11:33 am
Forum: Investing - Theory, News & General
Topic: When Buffett says that long term interest rates are best indicator of future stock perf. What does he mean?
Replies: 7
Views: 1058

Re: When Buffett says that long term interest rates are best indicator of future stock perf. What does he mean?

So essentially Buffett sees the bond market as VERY expensive, thus it should push investors into the stock market since it is relatively "cheaper" there, where you can buy more earnings per dollar. All investments must be weighed against all other investments. Sounds about right. 3 Quote...
by lazyday
Mon May 08, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3635

Re: Value Index Funds A Farse?

The quality screens for S&P seem to screen out a lot of expensive growth throughout the index. https://us.spindices.com/documents/methodologies/methodology-sp-us-indices.pdf snips Additions - S&P 500, S&P MidCap 400 and S&P SmallCap 600 Market Capitalization. US$ 450 million to US$ ...
by lazyday
Sun May 07, 2017 10:23 am
Forum: Investing - Help with Personal Investments
Topic: Bond Ladder Construction Tool??
Replies: 3
Views: 360

Re: Bond Ladder Construction Tool??

Not quite what you're asking for, but if you were to use ordinary Treasuries (with coupons) to construct a ladder that's much like a ladder of Zeros, this might help: viewtopic.php?t=216254#p3324487
by lazyday
Sun May 07, 2017 9:07 am
Forum: Investing - Theory, News & General
Topic: Berkshire Hathaway 2017 Annual Shareholders Meeting, Live Stream Replay
Replies: 26
Views: 1869

Re: Berkshire Hathaway 2017 Annual Shareholders Meeting, Live Streaming Today (5/6)

The replay is up: https://finance.yahoo.com/brklivestream The two Jack Bogle appearances are at 24:26 (recognition by Warren Buffett during the meeting and Happy 88th) and 3:58:45 (Jack interview). Interview WEB 8 WEB opens 14:15 WEB on Bogle 24:45 Q&A 30 Interview WEB, Ted, Todd 3:45:30 Bogle ...
by lazyday
Sun May 07, 2017 4:08 am
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3635

Re: Value Index Funds A Farse?

Also, notably, the S&P definitions of value and growth are not structured as mutually exclusive. S&P 600 growth is arguably a QVM multifactor etf by its factor loadings. S&P Pure funds avoid splitting the market into value and growth. But S&P Style funds do: http://us.spindices.com/...
by lazyday
Sat May 06, 2017 1:52 pm
Forum: Investing - Theory, News & General
Topic: Berkshire Hathaway 2017 Annual Shareholders Meeting, Live Stream Replay
Replies: 26
Views: 1869

Re: Berkshire Hathaway 2017 Annual Shareholders Meeting, Live Streaming Today (5/6)

My internet cut for a minute, did he say that the BoA preferred & warrents was his idea, that he proposed to the bank?
by lazyday
Fri May 05, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3635

Re: Value Index Funds A Farse?

Same with FTSE Russell: In general, a stock with a lower CVS is considered growth, a stock with a higher CVS is considered value and a stock with a CVS in the middle range is considered to have both growth and value characteristics, and is weighted proportionately in the growth and value index. http...
by lazyday
Fri May 05, 2017 7:58 am
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3635

Re: Value Index Funds A Farse?

Unless I'm misreading this , CSRP does construct its value and growth indexes so that value+growth=market. That's too bad. I read too much into lack_ey's post above. The reason they can do this is that every stock is scored twice. It gets a value score and then a growth score using the measures lac...
by lazyday
Fri May 05, 2017 5:31 am
Forum: Investing - Help with Personal Investments
Topic: Early Retirement Calculus
Replies: 31
Views: 7132

Re: Early Retirement Calculus

Watty was trying to point out a white paper proposed by Wade Pfau. Before you start a reply stating, "The Wade Pfau thing is worthless", maybe you should read his thoughts. The Trinity Study is valuable, however, it is not the only study worthy of consideration on SWR. This is not the pla...
by lazyday
Fri May 05, 2017 5:16 am
Forum: Investing - Theory, News & General
Topic: Dividend yields :ADR vs standard stock
Replies: 2
Views: 239

Re: Dividend yields :ADR vs standard stock

For a yield difference that large, my first guess is bad data. Try to use primary sources if you can, such as the company's website, which may have a section for investor relations, and the website of the ADR bank.
by lazyday
Fri May 05, 2017 5:07 am
Forum: Investing - Theory, News & General
Topic: Value Index Funds A Farce?
Replies: 28
Views: 3635

Re: Value Index Funds A Farse?

CRSP uses Book-to-Price Ratio (BP), Future Earnings-to-Price Ratio (FEP), Historical Earnings-to-Price Ratio (HEP), Dividend-to-Price Ratio (DP), and Sales-to-Price Ratio (SP) to determine value; Future Long-term Growth in Earnings Per Share (FLGE), Future Short-term Growth in Earnings Per Share (F...
by lazyday
Thu May 04, 2017 3:14 am
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 47
Views: 7157

Re: Bill Sharpe's preferred portfolio

Why would an individual want to hold their bond percentage equal to the global market weight? I don't see any reason. All investors in total hold the market, but unless all investors are alike I don't see why an individual should market weight. I'm not like a pension, insurance company, foundation,...
by lazyday
Wed May 03, 2017 9:05 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe Article On Enhancing Momentum Strategies
Replies: 60
Views: 5507

Re: Larry Swedroe Article On Enhancing Momentum Strategies

So the new term here to me is "Idiosyncratic Momentum". For those that have a handle on this, is that appreciably different than Time series Momentum because at first glance they seem the same to me? I don't have a handle, but it seems to me that idiosyncratic momentum is a type of cross ...
by lazyday
Wed May 03, 2017 7:22 am
Forum: Investing - Theory, News & General
Topic: June 2017 Kiplinger's article [writing calls for income]
Replies: 8
Views: 1199

Re: June 2017 Kiplinger's article [writing calls for income]

Compared to buying and holding, does selling covered calls or cash backed puts on indexes like S&P 500 better meet the risk and reward profile of some investors? Maybe it makes sense for someone? I've seen a claim that selling S&P puts has returned nearly as much as holding the index, with m...
by lazyday
Mon May 01, 2017 12:04 pm
Forum: Investing - Theory, News & General
Topic: AQR/Asness - Factor Timing is Hard
Replies: 16
Views: 1720

Re: AQR/Asness - Factor Timing is Hard

triceratop,

In my posts above, I implied that some of Asness’s passion in arguing against timing factors (and RA's work) might be about a rivalry with Arnott.
by lazyday
Mon May 01, 2017 6:58 am
Forum: Investing - Theory, News & General
Topic: Best source for investment news?
Replies: 52
Views: 4143

Re: Best source for investment news?

I sometimes read shareholder letters, which can be found online. For example Berkshire Hathaway for Warren Buffett's letters. You can go back and read many years worth. I used to read Marty Whitman's letters, but don't know if he still writes Third Avenue's letters. If you follow a few active fund m...
by lazyday
Mon May 01, 2017 3:53 am
Forum: Investing - Theory, News & General
Topic: AQR/Asness - Factor Timing is Hard
Replies: 16
Views: 1720

Re: AQR/Asness - Factor Timing is Hard

Maybe AQR is open to some mild factor timing. Isreal: “We’re not saying don’t do it at all” http://beta.morningstar.com/videos/805645/is-value-investing-losing-its-edge.html 8:05-9:35 Mostly just restating some of the article from March, so might not be worth your minute and a half if you're just in...
by lazyday
Mon May 01, 2017 3:25 am
Forum: Investing - Theory, News & General
Topic: Best source for investment news?
Replies: 52
Views: 4143

Re: Best source for investment news?

I've read many of the recommended books, and peek this forum daily, but am starting to plateau as many of the same questions/themes are discussed. A book can't tell me why to invest in Amazon over Home Depot, today. That kind of analysis interests me as much as historical insight. Guess that's wher...
by lazyday
Sun Apr 30, 2017 4:31 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: I don't understand the case for EE bonds

If anyone missed it, this thread attempts to estimate the value of EE bonds, including the value of the "put" option to redeem early: Valuation of EE Savings Bonds
by lazyday
Sat Apr 29, 2017 8:16 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: something odd regarding EE bonds

jdilla1107 wrote:People on this board keep trying to compare EE bonds to stocks and other investments. They should only be compared to long term bonds. ....

If Larry were here, he might say to think about each within the context of the whole portfolio, not in isolation.
by lazyday
Sat Apr 29, 2017 8:09 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: I don't understand the case for EE bonds

[after dividends] , I'd rather just take out the remainder of my desired earnings through selling a few shares If you’re taking out all of the earnings, then I think you need to worry about dilution. I believe Bill Bernstein and Rob Arnott estimated (pdf) 2% dillution, and that Bernstein later poste...
by lazyday
Thu Apr 27, 2017 11:43 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: I don't understand the case for EE bonds

This sounds pretty reasonable, if you can get at those earnings somehow. If you’re wealthy enough, you could simply spend 50% of dividends as Bill Bernstein mentions in Deep Risk. Some people try to buy companies with steady earnings and dividends, and perhaps high payout ratios, and use 100% of div...
by lazyday
Thu Apr 27, 2017 11:18 am
Forum: Investing - Theory, News & General
Topic: Shiller: Europe's low CAPE "reflects psychology"
Replies: 17
Views: 2088

Shiller: Europe's low CAPE "reflects psychology"

... (I've argued against for years) The idea that these ratios represent forecasts for the underlying value is just not right; they are mostly psychological narratives. We have a lot of bad narratives about Europe... Above quote at 1:30 of the interview, which is only 2 1/2 minutes. http://www.cnbc...
by lazyday
Thu Apr 27, 2017 9:47 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: I don't understand the case for EE bonds

my bold It seems you did your valuation change all at the beginning which is generous, and I may have done mine all at the end, quite harsh. Fair point. As an aside, this is part of why in my personal planning, I try to set this up so I never actually have to sell shares except to the extent they ar...
by lazyday
Wed Apr 26, 2017 9:31 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 321
Views: 17797

Re: I don't understand the case for EE bonds

First, keep in mind that a lot of these same people that are predicting 4% real returns going forward have been predicting that for the last six years. It could still happen, but their prognostications have been ill timed to say the least. I won't get into a battle over CAPE-based models (since I d...

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