Search found 5635 matches

by nedsaid
Thu Aug 25, 2016 9:04 pm
Forum: Personal Finance (Not Investing)
Topic: Self-made Millionaires: how did hitting 7 figures change you?
Replies: 261
Views: 28246

Re: Self-made Millionaires: how did hitting 7 figures change you?

As Yogi Berra famously said, "A nickel ain't worth a dime anymore." By the time I hit $1,000,000 net worth, I won't feel rich. First, a million dollars isn't what it once was in purchasing power. Second, a million dollars doesn't seem like a lot when you have to live off that for the rest ...
by nedsaid
Thu Aug 25, 2016 8:53 pm
Forum: Investing - Theory, News & General
Topic: "How to Tell if Your Retirement Nest Egg Is Big Enough"
Replies: 28
Views: 6000

Re: "How to Tell if Your Retirement Nest Egg Is Big Enough"

Taylor, thanks for posting. I am retiring this year and I am so busy that I haven't checked my allocation lately and did not realize that it was time to pay attention. So I made a rough estimate and transferred some money to bonds - very unscientific - but thanks - I'll make a better calculation wh...
by nedsaid
Thu Aug 25, 2016 8:47 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Um the hedge fund universe is tenfold the size it was a decade ago, what are you talking about. And I cannot help you if you think computer trading in the 80s is at the same level it is today. Nedsaid: Yes, I realize trading volumes are way up since then. Yes, I realize there is a large hedge fund ...
by nedsaid
Thu Aug 25, 2016 7:55 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

It's very hard to nail down something as nebulous as risk. If you want to know how warm it is in the room, you just use a thermometer, and it would tell you, and there's your answer. But if you want to know how risky an investment is, there is no absolute truth or yardstick of that -- that I know o...
by nedsaid
Thu Aug 25, 2016 6:19 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

I have thought of Value as buying good stuff at a discount and not getting the last few puffs from a cigar butt. My definition is probably more situational and flexible: it could be blue chips companies cheap because of the market as a whole being significantly down, good companies with temporary p...
by nedsaid
Thu Aug 25, 2016 1:33 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

What do you think? I may still be missing something. backpacker: I think you are allowing Larry to lead you down too many ratholes. :) I'd suggest that readers go back and re-read the original post, which was still the best one in this entire thread, IMO. Several comments on this which mostly repea...
by nedsaid
Wed Aug 24, 2016 9:29 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Larry, all models have flaws in them but they do help us understand the real world. I suppose someone could find examples where the model comparing P/E ratios to Bond duration doesn't work. But it works most of the time. It is true enough that it helps investors understand how markets work. For me, ...
by nedsaid
Wed Aug 24, 2016 9:06 pm
Forum: Investing - Theory, News & General
Topic: Why Does Wealthfront Allocate So Much To Emerging Markets?
Replies: 9
Views: 1145

Re: Why Does Wealthfront Allocate So Much To Emerging Markets?

I am reminded of Peter Lynch's comments in his two books on stock picking. When you boil it all down, investors whether they be individual or institutional, will buy what they like. Once you decide that you like something, the mind is very creative in coming up with compelling reasons for that choic...
by nedsaid
Wed Aug 24, 2016 8:38 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

bjr Nedsaid: This was a very good post. I can see that you took some serious time on this post and indeed on this thread. It is worthy of response and further comment. As I said, my point has been that one can "concoct" a highly unrealistic scenario to justify a theory, but in real world ...
by nedsaid
Wed Aug 24, 2016 7:50 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

in reality Re your comment of when markets are in turmoil, and that is not only correct but identified in the literature as very important because investors demand large premiums for assets whose risks turn up at the wrong time. So let's assume that value is less risky in good economies (it's true)...
by nedsaid
Tue Aug 23, 2016 11:30 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

This has been an interesting thread. Sort of like watching a pie fight or a barroom brawl. I will have to add this to my list of hot button issues. After getting beat up on the dividend threads, I am now into the Value premium brawls. I feel like a moth being drawn to the bug zapper, and boy do I ge...
by nedsaid
Tue Aug 23, 2016 8:53 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Backpacker, Value over time does so well because it is so boring. Do you really think the screaming maniacs on CNBC will hit the buzzer for value and say buy, buy, buy!! There is no excitement. It is like watching paint dry or tumbleweeds tumble. Nothing in it for the adrenalin junkies. You don't lo...
by nedsaid
Tue Aug 23, 2016 8:21 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

I think backpacker and Larry are talking past one another, hence the frustration. As a completely objective observer (yes, you are supposed to laugh at that :happy ), let me attempt to mediate. I don't think Larry disagrees with backpacker's math at all. I think Larry's argument is simply that back...
by nedsaid
Tue Aug 23, 2016 5:47 pm
Forum: Investing - Theory, News & General
Topic: "Research Highlights Active Management Shortcomings"
Replies: 2
Views: 284

Re: "Research Highlights Active Management Shortcomings"

My pleasure Taylor, glad you found it helpful And for those interested in more of the research and the evidence and logic suggest reading The Incredible Shrinking Alpha Best wishes Larry It was the entrance of a lot of very smart and talented people into the investment business that shrunk the alph...
by nedsaid
Tue Aug 23, 2016 5:40 pm
Forum: Personal Finance (Not Investing)
Topic: Hidden Wealth of the Silent Generation
Replies: 9
Views: 1298

Re: Hidden Wealth of the Silent Generation

The silent generation, my parents group, had a lot in common with the greatest generation or the WWII generation. My father was in the army during the Korean War but did his duty stateside. A lot of their friends were of the WWII generation vintage. They also were old enough to have memories of the ...
by nedsaid
Tue Aug 23, 2016 5:29 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Oddly, despite Vanguard CRSP value/growth indexes, the Russell 1000 Growth vs Value has a larger market cap on the growth side. https://personal.vanguard.com/us/funds/snapshot?FundId=3350&FundIntExt=INT#tab=2 https://personal.vanguard.com/us/funds/snapshot?FundId=3349&FundIntExt=INT#tab=2 I...
by nedsaid
Tue Aug 23, 2016 4:11 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Looks like Larry is right here. These are all funds that I own except for Vanguard Value Index and DFA. All except for my Plain Old Boring Large Value fund had a higher volatility measure than the S&P 500. An interesting observation here nedsaid. One question that I don't know the answer to is ...
by nedsaid
Tue Aug 23, 2016 3:43 pm
Forum: Investing - Help with Personal Investments
Topic: How much MLP is reasonable in a portfolio?
Replies: 18
Views: 1176

Re: How much MLP is reasonable in a portfolio?

You are talking about a 401k and this should not an issue unless there is over $1,000 in UBTI income, then tax is owed and the 401k sponsor needs to file a tax return and the 401k needs to pay the tax out of your plan balance. The investment is a fund and avoids potential UBTI taxation. I'm actuall...
by nedsaid
Tue Aug 23, 2016 3:32 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Looks like Larry is right here. These are all funds that I own except for Vanguard Value Index and DFA. All except for my Plain Old Boring Large Value fund had a higher volatility measure than the S&P 500. An interesting observation here nedsaid. One question that I don't know the answer to is ...
by nedsaid
Tue Aug 23, 2016 3:08 pm
Forum: Investing - Theory, News & General
Topic: "How to Tell if Your Retirement Nest Egg Is Big Enough"
Replies: 28
Views: 6000

Re: "How to Tell if Your Retirement Nest Egg Is Big Enough"

This was a very good article by Dr. Bernstein. It raises a good point about people perhaps being too aggressively invested near or in retirement. As I looked at the formula in the article, I felt a lot better about my own retirement. Pretty much, if you take your retirement income pre-tax needs and ...
by nedsaid
Tue Aug 23, 2016 11:09 am
Forum: Investing - Help with Personal Investments
Topic: How much MLP is reasonable in a portfolio?
Replies: 18
Views: 1176

Re: How much MLP is reasonable in a portfolio?

You are talking about a 401k and this should not an issue unless there is over $1,000 in UBTI income, then tax is owed and the 401k sponsor needs to file a tax return and the 401k needs to pay the tax out of your plan balance. The investment is a fund and avoids potential UBTI taxation. I'm actuall...
by nedsaid
Tue Aug 23, 2016 11:01 am
Forum: Personal Consumer Issues
Topic: Book - Criticism of behavioral economics.
Replies: 18
Views: 1838

Re: Book - Criticism of behavioral economics.

From what I have read about behavioral economics, it is very useful. You have to realize that all good concepts have their limits to their explanatory power. People often take one great idea and try to make it into something that explains everything, in real life "the theory of everything"...
by nedsaid
Tue Aug 23, 2016 10:50 am
Forum: Investing - Help with Personal Investments
Topic: TIPs, I've read the posts, still confused
Replies: 20
Views: 1014

Re: TIPs, I've read the posts, still confused

Don't feel bad if you are confused by TIPS. I have been an investor for over 30 years and I myself am trying to understand how the market values these instruments. The standard advice here used to be to put half of your bonds into TIPS. In recent years, a lot of folks have soured on them and have e...
by nedsaid
Tue Aug 23, 2016 10:40 am
Forum: Investing - Help with Personal Investments
Topic: How much MLP is reasonable in a portfolio?
Replies: 18
Views: 1176

Re: How much MLP is reasonable in a portfolio?

The Master Limited Partnerships ran into trouble as many of these are energy based. Oil prices dropped and it is not too hard to figure out why this affected MLP stock prices. Held in a taxable account, these generate K-1 forms and create extra tax complexity. Sometimes the K-1 forms don't arrive on...
by nedsaid
Tue Aug 23, 2016 9:31 am
Forum: Investing - Help with Personal Investments
Topic: Factor Based Portfolio Review
Replies: 20
Views: 1319

Re: Factor Based Portfolio Review

From what I see, it looks like you have a well thought out plan. There are Bogleheads here that are real whizzes at this stuff and whose posts I read. Hopefully some of those will comment. You could send a Private Message to Larry Swedroe and ask him to look at this thread and comment. The problem w...
by nedsaid
Tue Aug 23, 2016 9:23 am
Forum: Investing - Help with Personal Investments
Topic: TIPs, I've read the posts, still confused
Replies: 20
Views: 1014

Re: TIPs, I've read the posts, still confused

Don't feel bad if you are confused by TIPS. I have been an investor for over 30 years and I myself am trying to understand how the market values these instruments. The standard advice here used to be to put half of your bonds into TIPS. In recent years, a lot of folks have soured on them and have ei...
by nedsaid
Tue Aug 23, 2016 9:13 am
Forum: Investing - Help with Personal Investments
Topic: Windfall Investing Help
Replies: 10
Views: 1302

Re: Windfall Investing Help

Hi Everyone, Following this board for a bit and now have a situation I need help with. I'm an employed professional, recently part of a business sale that resulted in $1.9M sale proceeds (pre-tax). Proceeds will mostly be taxed at LT capital gains rate of 20%. Small amount may be at ordinary income...
by nedsaid
Mon Aug 22, 2016 1:15 am
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Okay, let's look at actual mutual funds and their 15 year performance and standard deviation measurements. Is Value less volatile than Growth? Is there a Value premium? This is just for fun as I am going back 15 years using Morningstar data. In the ratings & risk tab for each fund, their data go...
by nedsaid
Sun Aug 21, 2016 10:06 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Just look at the diagrams. At every valuation level (there represented as growth estimates), an overpriced stock that moves down is replaced by underpriced stock that moves up. The PE ratios of each of those stocks individually changes, sure, but the movements offset at the aggregate level. Nothing...
by nedsaid
Sun Aug 21, 2016 7:00 pm
Forum: Investing - Help with Personal Investments
Topic: Mom Requests Portfolio Advice - leaving Ed Jones
Replies: 12
Views: 1333

Re: Mom Requests Portfolio Advice - leaving Ed Jones

Meg77, I think the advisor is a good guy as far as commissioned financial advisors go. He has not churned his client, the funds have grown tremendously, and the fees by EJ standards are reasonable. If she paid commissions on those funds, she is does not have an assets under management arrangement fo...
by nedsaid
Sun Aug 21, 2016 4:38 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Another concept that has helped me is the concept of a growth stock. To me, a growth stock is a company that is growing faster than the economy. Let's say that the economy now grows at 2% and inflation is 1%. By my definition, a growth stock would have to grow earnings by more than 3% a year. In mor...
by nedsaid
Sun Aug 21, 2016 3:33 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

nedsaid Yes I agree that it can be more complicated, so in this type discussion you assume all else equal without having to repeat it all the time. With that said, that is why we have some anomalies that get discovered, so there is the well known accrual anomaly, and that is also why people like ca...
by nedsaid
Sun Aug 21, 2016 3:13 pm
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk and Annuities -
Replies: 27
Views: 1812

Re: Sequence of Returns Risk and Annuities -

This is a fertile area of discussion and very complex. Academic research shows that the odds of portfolio exhaustion in retirement are reducing with the annuitization of part of the retirement nest egg. The annuity gives you a higher safe withdrawal rate (SWR) because of mortality credits, that is ...
by nedsaid
Sun Aug 21, 2016 11:01 am
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk and Annuities -
Replies: 27
Views: 1812

Re: Sequence of Returns Risk and Annuities -

Are there any sites available that help calculate if you have a portfolio large enough to not consider annuities? I'm close to retirement (within months) and this is the final piece of the puzzle for me. I hold 2.4mm in total savings and have a pension of $1270.00 per month plus $2700 month SS. 1.7...
by nedsaid
Sun Aug 21, 2016 10:43 am
Forum: Investing - Help with Personal Investments
Topic: Seemingly Too Good To Be True Investment Opportunity: Invest or Don't?
Replies: 85
Views: 6174

Re: Seemingly Too Good To Be True Investment Opportunity: Invest or Don't?

SmokeyJoe, I have a rule not to do business with friends, relatives, or members of my church. I want all of my financial transactions to be arms length and win-win for both sides. Having said that, I violated my own rule twice. First time, a friend of mine went into the Brokerage business. I took my...
by nedsaid
Sun Aug 21, 2016 10:21 am
Forum: Investing - Theory, News & General
Topic: Sequence of Returns Risk and Annuities -
Replies: 27
Views: 1812

Re: Sequence of Returns Risk and Annuities -

This is a fertile area of discussion and very complex. Academic research shows that the odds of portfolio exhaustion in retirement are reducing with the annuitization of part of the retirement nest egg. The annuity gives you a higher safe withdrawal rate because of mortality credits, that is you ben...
by nedsaid
Sun Aug 21, 2016 10:08 am
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

backpacker, sorry but that is wrong. I'll try again for you. If the market changes its forecasts the valuations MUST change. The companies with now lower growth will have lower p/es and the companies with higher growth will have higher P/Es and the spread will narrow. Very simple. What do you think...
by nedsaid
Sat Aug 20, 2016 4:08 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

There really hasn't been any real historical research on why value companies have outperformed growth ones. this statement is without question false. As I have stated there are more than a dozen papers that have looked at this exact issue and provided logical and simple risk based explanations. And...
by nedsaid
Sat Aug 20, 2016 1:29 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

A few things which this thread highlights that I'd like to point out: --From the perspective of stock picking, "risk" vs "behavioral" explanations of historical anomalies are a distinction without a difference. In political economics, the efficient market and behavioral schools ...
by nedsaid
Sat Aug 20, 2016 10:49 am
Forum: Investing - Help with Personal Investments
Topic: Mom Requests Portfolio Advice - leaving Ed Jones
Replies: 12
Views: 1333

Re: Mom Requests Portfolio Advice - leaving Ed Jones

Hi Bogleheads, I asked my mom if I could outline her situation here for ideas and she agreed. She has a portfolio with Edward Jones, and I explained to her that she is probably paying a lot more in fees than she needs to. She's not close to the advisor, he doesn't live near her anymore, and he's re...
by nedsaid
Fri Aug 19, 2016 11:34 pm
Forum: Personal Consumer Issues
Topic: Long wait on Vanguard Phone Lines-What's going on?
Replies: 52
Views: 4959

Re: Long wait on Vanguard Phone Lines-What's going on?

I can see a Fidelity marketing campaign taking shape. A customer calls Fidelity and the call is answered immediately by a courteous representative. Another customer calls Vanguard, gets elevator music, and the message, "Your call is very important to use, please stay on the line, and a represen...
by nedsaid
Fri Aug 19, 2016 7:27 pm
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1271

Re: Growth, Value or Both?

nedsaid wrote: My portfolio pizza is already has a lot of slices and I don't think I want to keep adding more. But I suppose I will give International Small Value some thought. Do you have a fund or ETF that you recommend? I think the best SV INTL funds are run by DFA, but it is against my religion...
by nedsaid
Fri Aug 19, 2016 7:25 pm
Forum: Investing - Help with Personal Investments
Topic: Why did VBR move to various tracking indices
Replies: 18
Views: 1349

Re: Why did VBR move to various tracking indices

what I am discovering is that you need the proper vehicles to capture the premiums for the various factors. I would argue that what you've discovered is that there is a lot more idiosyncratic risk in factor investing than its proponents are willing to admit. If a strategy that has you investing in ...
by nedsaid
Fri Aug 19, 2016 7:15 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

You can also see that the Value premium is smaller for Large Stocks than for Small Stocks. From what I have been reading, it seems that the Value premium for Small Stocks is unchanged. Not really. In the smallcap space, much of the "value premium" is really a "growth penalty", a...
by nedsaid
Fri Aug 19, 2016 5:30 pm
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

Backpacker, looking at this from 40,000 feet it appears that the value premium for Large Stocks is shrinking. You can also see that the Value premium is smaller for Large Stocks than for Small Stocks. From what I have been reading, it seems that the Value premium for Small Stocks is unchanged. What ...
by nedsaid
Fri Aug 19, 2016 12:37 pm
Forum: Investing - Help with Personal Investments
Topic: Is the Vanguard Variable Annuity a Fit?
Replies: 8
Views: 737

Re: Is the Vanguard Variable Annuity a Fit?

What makes it hard giving advice in this situation is your family member's history of spending problems. If that problem isn't conquered, advice on the proper investment vehicles isn't going to help much. An annuity where she takes variable payments based on portfolio performance is something to thi...
by nedsaid
Fri Aug 19, 2016 12:18 pm
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1271

Re: Growth, Value or Both?

nedsaid wrote: I do small/value tilt myself. The key word is tilt. I still have growth investments. Nedsaid, even though I argue for TSM, like you, I tilt to SCV but not with the lions's share of the portfolio in US equities. My tilt to SCV is larger in INTL than in US. Part of the reason for my ti...
by nedsaid
Fri Aug 19, 2016 12:11 pm
Forum: Investing - Theory, News & General
Topic: How will you survive a melt up in stocks?
Replies: 10
Views: 2547

Re: How will you survive a melt up in stocks?

Since July of 2013, I have been in a mild rebalancing campaign from stocks to bonds. In the event of a market melt up, I would just keep harvesting my stock gains and putting the proceeds into bonds. What else would I do?
by nedsaid
Fri Aug 19, 2016 10:14 am
Forum: Investing - Theory, News & General
Topic: Growth, Value or Both?
Replies: 19
Views: 1271

Re: Growth, Value or Both?

Garland, you are making the John Bogle argument which is a good one. For example, one could go back to 1926 and show Small Value beating the pants off of everything else. The thing is, at what point was Small Value really investable for the small investor? At what point were small value funds actual...
by nedsaid
Fri Aug 19, 2016 9:55 am
Forum: Investing - Theory, News & General
Topic: Better growth? Or on how the value premium ends
Replies: 154
Views: 6629

Re: Better growth? Or on how the value premium ends

[ Say that Alpha and Beta have the same past earnings of $10 and same expected future earnings BUT it turns out that Beta is a RISKY company that gets a higher discount rate. So Alpha is worth $200 and Beta $100. Growth stocks are (arbitrarily) stock with PE greater than 15 and value stocks those w...

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