Bogleheads.org

I'm on team Swedroe.

Taylor is a good guy whose intentions are well meaning for sure.

Bogle is a hero, but I don't agree with him on everything.

Buffett talks out of both sides of his mouth. As others have mentioned, watch what he does not what he says. He talks about about the disparity between the taxes he pays vs his secretary. Declare a dividend. Problem solved. He claims he's for an estate tax. First of all, I do not believe him. [OT comments removed by admin LadyGeek]

international001 wrote: ↑Thu Jun 06, 2019 10:13 am One think I cannot figure out. If the inflation goes to -2.00%, what is the nominal yield a TIP would give you? 0%? Do you have to pay money for it?

The principal is adjusted downward.

If you believe in efficient markets, the small-value segment of the market must outperform TSM over the long run. Otherwise, there would be nobody investing in these mostly junky companies compared to the larger well-known blue-chip companies. I understand if someone has reservations on the actual product (fund) that can deliver the performance, but the literature supports the small-value premium which is consistent with efficient markets.

If you do not believe in efficient markets like Jack, you should just do what he recommends and focus on cost and the US-centric total market fund.

I'm in the efficient market camp (yes, there are anomalies but very difficult to exploit).

TSM is factor neutral. It is not debatable.

Rick Ferri wrote: ↑Tue May 28, 2019 1:26 pm ...and the past always predicts the future.

No. Looking backward has never helped investors predict if premiums will occur or when they will occur. We can only pay the rent and hope they show up in enough quantity to a least cover that rent.

This includes market beta as well.

Perhaps you could have Larry on the BH podcast and hash some of this out.

Really solid podcast. I'm glad that you, Rick l, did not get into an argument over the merits of factor investing (me being one of them) because I know you are a promoter of straight market cap weighted index funds, period.

I never enjoyed the arguments that you and Larry would get into because I admire both of you. It gives me hope that Bogleheads are not all extremely dogmatic as some posts clearly suggest.

Thanks again and keep up the good work.

But if risk based factors are truly risk based, then they would logically have to have increased expected return in an efficient market. The expected return may take a haircut or maybe even should take a haircut, but not be eradicated. The behavioral factors are another story, but even for those, there are good reasons to expect haircut but persistence. Dave Dave, I would argue that the most of these risk factors are not truly risk based. IMO, the only factors that will have persistent long term outperformance are those that have a large behavioral component. Part of the issue I have with factor investing is that most of these strategies weren't easily implemented or even available until the last decade or so. Ease of availability will eli...

Bogleheads: I have difficulty being convinced (by the financial industry) to minimize the largest and most successful companies in the world. Best wishes. Taylor Taylor, You make this argument all too often. The statement is not consistent with your advocacy of owning the total stock market index. Clearly, there are many struggling publicly traded companies. With that mentality, the logical conclusion would be to only own a mega-cap growth index or at least a mega-cap blended index. Here is a quote from William Bernstein: “The More Comfortable You Are Buying Something, in General, the Worse the Investment It’s Going to Be” He also mentions in his fantastic book, The Four Pillars of Investing , something along the lines that the best compan...

How much more complex should I make my portfolio to chase theoretical small-value/Fama-French return premiums? I'm thinking tilting to one factor (small value) is too simple. The only way to get multi-factor tilts is to use the general indexes anyway. Large, mid-cap, and small. In other words we can't ignore stats but factors take turns every decade dominating the total return column. Size, value, or should we use price/sales or return/equity. The general indexes still dominate over most active funds and it doesn't matter what they claim to tilt. So I'd use mid and small cap indexes for a tilt from a large cap or total stock general index. A small value fund focuses on two factors (and maybe more if it screens for negative momentum). Your ...

Discredited on this forum, but I prefer a small allocation to gold (~5%). Unlike a commodities fund using futures, you don't have to deal with rolling contracts, backwardation, contango, all while having a near zero correlation to stocks and bonds. I know that there are no cash flows, it's a rock that you can't eat (add all of the other arguments, " if the SHTF, I'd rather own lead and canned goods"). There doesn't have to be a zombie apocalypse to benefit from the reduction in the standard deviation of your portfolio. Since it can go through long periods of time where it does nothing or drifts lower along with periods of extreme outperformance (70s, 00s), setting up wide rebalancing bands seems appropriate. I'll pass on the activ...

A good majority of those who are convinced that the small and/or value factor premiums do not exist also do not (1) question the equity (beta) premium (see Japan) and most likely tilt to a home country bias or exclude foreign stocks completely which is counterintuitive to their logic of discrediting the value of buying certain parts (i.e. small value) of the U.S. market.

He invests in GDX - Gold Miners ETF. Does he still hold that position and at what percentage of total investable assets?

JBTX wrote: ↑Tue Mar 12, 2019 7:33 pm

Jiu Jitsu Fighter wrote: ↑Tue Mar 12, 2019 5:29 pm Macro was all Keynesian garbage. They removed all of the pages from the Paul Samuelson textbooks that raved over the Soviet Union's economic system.

Keynesianism is not garbage. It is probably more enduring than many recent economic schools of thought.

Now what you and others may not like, and understandably so, is the extension, exaggeration and even distortion of keysnesianism as a means of advocacy for certain policies.

Post Keynesians and New Keynesians bastardized Keynes. Regardless, once you get past supply and demand, it is all political ideology.

Macro was all Keynesian garbage. They removed all of the pages from the Paul Samuelson textbooks that raved over the Soviet Union's economic system.

For anyone interested in the St. Louis, Mo. area - Larry will be speaking about the new retirement book at the St. Charles County Library - Spencer Road Branch @ 7:00 p.m. on Thursday, April 11, 2019. Address: 427 Spencer Road - St. Peters, MO. 63376-2420 Phone: (636) 441-0794 The announcement is kind of buried in the library's calendar - blurb: Achieving the retirement life of your dreams requires planning. To support the steps you’re taking, Buckingham’s Larry Swedroe and Kevin Grogan have co-authored “Your Complete Guide to a Successful & Secure Retirement,” which they will discuss. As an added bonus, one of the book’s contributors, Katie Keary, will address retirement concerns that are specific to women. Bring your questions and be...

Rick Ferri wrote: ↑Wed Feb 20, 2019 10:55 am Commercial real estate is about 13% of GDP but only represents about 3% of the stock market. Investing an extra 10% in property REITs increased the allocation in commercial real estate closer to its weight in the real economy...

Rick Ferri

You could make that same argument for other sectors and countries.

Woah, the New York Times botched an economic concept? No way!

So, that must mean that we should be adding Private Equity to the three-fund portfolio. We wouldn't want to miss out on the profits generated from all of those 40-hour-per-week private company employees.

This is one of the few times that I disagree with Larry. I agree that purely trying to time market factors is likely a losers game. Where I disagree with him is with regard to the RAFI funds. I don't think that constitutes factor timing since the methodology does not change. It's not like, since growth has been outperforming, those funds decide to purposely shift to value. They continue to weight the stocks in the portfolio using the same metrics which will have the fund naturally drift towards either value or growth. This organic nature is why the RAFI funds are a reasonable approach to tilt your portfolio and reduces the negative momentum and alphas associated with traditional value indices. I think this has more to do with Larry siding A...

Still have the confirm: VFINX - $2,000 Roth IRA contribution in May 2000 (sweet timing). That was the Roth limit in 2000 which was also the limit in 1982. I remember mailing a check in.

William Bernstein for sure!

My other hopefuls although not strict Boglehead adherents:

Cliff Asness
Rob Arnott
Larry Swedroe

Thanks,
JJF

More specifically, VOE vs RPV (S&P 500 Pure Value) - any preference? RPV has a higher value load but somewhat offset by more negative momentum as well as a higher expense ratio. When considering alternatives I simply ask the question - will inclusion achieve my factor load targets at lower cost? The answer is no if I were to use RPV instead of VOE. From earlier posts in this thread. The estimated long-term factor load for equity portion = 1.01 / 0.26 / 0.46 for mkt / size / value achieved with MTUM / VOE / FNDA at an expense ratio of 0.18%. If I use RPV instead of VOE then my estimate is that 30% MTUM / 15% RPV / 55% FNDA gives a similar long-term factor load at an expense ratio of 0.24%. So it does not lower the cost of achieving my f...

Hi Robert,

Thanks for the incredible value (pun intended) that you bring to this group. I would like to get your thoughts on Invesco's pure value indices. More specifically, VOE vs RPV (S&P 500 Pure Value) - any preference? RPV has a higher value load but somewhat offset by more negative momentum as well as a higher expense ratio.

Thanks!
JJF

gtwhitegold wrote: ↑Wed Jan 09, 2019 4:31 pm I'm using it in a tax advantaged account, so I'm not too concerned about fund closure. I also agree that it could be cheaper, but it looks more value biased than DGS, so I still use it.

Agreed, and the methodology is much better to capture factor premiums

Finished reading it last night. I would definitely recommend it although it's geared more toward retirees. It is at a level that most people that have somewhat of an interest in personal finance will have no trouble with the concepts. I always had hoped that Larry would write an advanced book on par with Antti Ilmanen's Expected Returns, but I know Larry likes to reach the broadest audience possible.

Five stars like the rest of his books.

Gotcha. Looks like they have a quasi-quality screen in their ranking system in addition to the traditional value metrics. 80 bps is steep for either of the funds, and as I mentioned, the ISV fund's volume/AUM is ridiculously low. I just was trying to determine if I should keep them on my radar if they ever take a hatchet to the ER and if the AUM increases significantly.

Thanks for your input.

Gotcha. Looks like they have a quasi-quality screen in their ranking system in addition to the traditional value metrics. 80 bps is steep for either of the funds, and as I mentioned, the ISV fund's volume/AUM is ridiculously low. I just was trying to determine if I should keep them on my radar if they ever take a hatchet to the ER and if the AUM increases significantly.

Thanks for your input.

They have two international small value ETFs: FDTS - Int Dev Mkts Small-Cap Value and FEMS - Emerging Mkts Small/Mid-Cap Value. Volume/AUM is very low, especially FDTS, and their expense ratios are relatively high. I'm just looking for opinions on their portfolio construction since there are very few pure plays in this space sans DFA.

Thanks,
JJF

VTI Total US Market 30%
IJS S&P 600 Small-Cap Value 30%
VEA Total International Developed Market 15%
DLS International Dev Mkts Small-Cap Dividend15%
VWO Total Emerging Markets 5%
DGS Emerging Markets Small-Cap Dividend 5%

50/50 Large/Small
50/50 Cap-weighted Total Market/Small Value
Small home country bias.
Simple. Just add approriate amount of Fixed Income.

whodidntante wrote: ↑Wed Jan 02, 2019 7:04 pm Ask him why Vanguard created the S&P 600 value index fund VIOV and the new factor funds (VFMF, VFVA, etc.) and then put them in the dungeon of the website and barely marketed them. Were they made to suit a particular institutional investor?

....and more insight on the factor funds. Opinion on why one should own them over traditional cap-weighted funds and how are they scalable since they are incorporating small-cap in their methodology. I'm pretty sure that he'll give a canned response like, "you're fine just in traditional indexes, but some may want to consider active/factor funds", or the unscientific "core and explore" reasoning.

Biosimilarly

Short: ABBV

2,259

blackfish wrote: ↑Thu Dec 13, 2018 12:41 pm Bought Capital in the 21st Century by Thomas Piketty when Audible had it on sale for $4.00. Starting it today, any thoughts on it's merit?

Zero merit from me. If you'd like to read critiques, go to mises.org and search for reviews of his book.

Absolutely read these authors. Keep in mind, going through some of their works is a massive undertaking, especially each one's magnus opus. Mises and Rothbard are my preference. Rothbard is easier to read but is more radicalized (not necessarily in a bad way) than Mises. However, I believe Mises and Eugen Bohm-Bawerk to be the two greatest economists. Alfred Marshall? Schumpeter? I think both made significant contributions to economic thought, but they are just not my two favorite So you are an Austrian? Why not just admit that? I was replying to the OP, and there was no explicit or implicit question posed regarding this. If there was, are you a Marxist? Why not just admit that? You probably want to add Keynes to the list (although you cou...

Absolutely read these authors. Keep in mind, going through some of their works is a massive undertaking, especially each one's magnus opus. Mises and Rothbard are my preference. Rothbard is easier to read but is more radicalized (not necessarily in a bad way) than Mises. However, I believe Mises and Eugen Bohm-Bawerk to be the two greatest economists. You probably want to add Keynes to the list (although you could add many, many more). His earlier works are much better then his General Theory. Current economic thought is a bizarre mix of adulterated Keynesian ideas mixed with Friedman's moneterist views. For the sake of not getting this thread locked, I'll just leave it at that. Read Hazlitt's Economics in One Lesson and Rothbard's Anatomy ...

Taylor Larimore wrote: ↑Tue Dec 11, 2018 4:20 pm

asset_chaos wrote: ↑Tue Dec 11, 2018 2:39 pm

sunnywindy wrote: ↑Mon Dec 10, 2018 7:27 pm I was disappointed that Vanguard came out with their active quant funds (in the US) as US only. I would much rather spread the tracking risk to a global fund and then it doesn't seem as noticeable.

Yes, global multi-factor would be nice.

asset_chaos:

Jack Bogle, our mentor, does not agree with you.

Best wishes.
Taylor

That doesn't sound like a cult at all.

Interesting: I either recommend or buy Four Pillars for anyone who asks me for investment advice. Expected Returns is my favorite but is definitely geared toward those with advanced knowledge in finance/investing.

I'm a little bit baffled, as are others, that the VG MF funds all have paltry AUM. I specifically want to focus on the Value factor fund (VFVA). Still only ~$37 MM in AUM. Going by Morningstar (I know that's not a great way to determine factor loads), it looks very valuey compared to most US value funds at a minuscule 13 bps. So, I can only speculate why it hasn't accumuated assets: (1) lack of history, (2) value has significantly underperformed, (3) there is no distinct market cap that they are targeting, (4) long-term, if the fund has anywhere near the flows of VG's index funds, it would be difficult to scale without outright buying all of the shares of some of the small-cap names, and (5) virtually no advertising of these funds by VG. I ...

I’m nearly all in on SCV tilting. As Larry Swedroe has written, it requires “looking at diversification from a different point of view”. A TSM portfolio has exposure to a single factor, the market factor. A SCV fund will generally have about the same exposure to the market factor as the TSM fund, but also have exposure to two other distinct factors that drive returns, size and value. Fama French showed that size and value are sources of risk that are unique and independent from the market factor. Thus when “looking at diversification differently”, a SCV investor is more diversified. Size and market have a correlation of about 0.4, value and market have a correlation of about 0.1, and size and value likewise have a correlation of about 0.1....

RobertT and Larry

First of all, I wouldn't recommend the ACWF ETF since it still has less than $100 MM in AUM, and its daily trading volume only around 25k shares. Even though it excludes small-cap stocks, it gets its size exposure from tilting toward smaller companies within the large/mid-cap universe. It's average market cap is ~$17 MM compared to Vanguard's Total World Index Fund (VT/VTWSX) of ~$39 MM. A lot of folks around her use the Portfolio Visualizer to determine factor loads. Unfortunately, this fund does not have a long enough history to make it meaningful. If you are just looking for international multifactor funds as opposed to just one global one, iShares has one for international developed (INTF), international developed small (ISCF) and Emerg...

I must have missed the Larry Portfolio (4 funds).

SV (BOSVX)
ISV (DISVX)
EV (DFEVX)
FI (Intermediate-Term Treasury)

Meb Faber's strategy: publish a book touting a strategy in which his firm just so happens to have a corresponding ETF and price the electronic copy of the book at $0 on Amazon. His methodology usually sounds plausible. Unfortunately, his ETFs have failed miserably in real time. Remember his tactical allocation fund, GTAA, which used trend following? Cambria no longer runs the fund, but when they did, the performance was atrocious. What about the shareholder yield one, SLYD? Again, a bust when benchmarked against the, wait for it... cap-weighted S&P 500. The only one that has had success so far is GVAL which invests cheapest countries (based on valuations) around the world. I suppose you would benchmark it against EM. In that case, it ha...

(2) Stop reading Zerohedge. It's the worst sort of investment porn. Why do you qualify it as 'investment porn'? I started following them on Twitter because smart people like Cliff Asness, Nassim Nicholas Taleb or Jim O'Shaughnessy follow Zerohedge on Twitter too. So I concluded that it's probably good stuff, unless these people were just following it for a laugh. Read Taleb's books, not whom he follows on Twitter. Victoria I couldn't agree more. I believe people in general spend way too much time reading articles from links instead of books. Just think how much time someone puts into an article or blog post (usually trying to indirectly sell something) vs. the months it takes to research and write a book. Plus Taleb is incredibly intellige...

bradshaw1965 wrote: ↑Fri Oct 05, 2018 11:11 pm

Rick Ferri wrote: ↑Fri Oct 05, 2018 6:38 pm Future guests who have agreed to be interviewed. Presented in no particular order:

Tim Buckley (CEO Vanguard)
Jonathan Clements (Humble Dollar)
Christine Benz (Morningstar)
Allan Roth (Wealth Logic)
Bill Bernstein (Efficient Frontier)
Gus Sauter (Vanguard - Retired)
Wes Gray (Alpha Architect)
Mel Lindauer ( Bogleheads)
Dan Egan (Betterment)
Joel Dickson (Vanguard)
Jason Zweig (WSJ - TBD)

Great lineup, thanks for this.

It is a great lineup for sure. What about adding Mr. Swedroe? Any chance at a powwow between Asness and Arnott?

If a govt with large gold reserves has trouble meeting debt obligations, it may well choose to sell off gold to raise hard cash rather than printing money to deal with the debt. That’s the whole point and role of having substantial gold reserves to partially back a currency. What would that do to the price of gold in the midst of a crisis? Probably cause it to collapse. The point is that gold is an unreliable hedge against unpredictable events. Similar to when the UK sold their gold in the early 2000s? Oh wait, that was when a spectacular bull market started for gold. The US selling gold to meet obligations would indicate a lack of confidence in US treasuries. If this unlikely scenario played out, it's difficult to believe that the price o...

What a contrarian indicator this has proved out to be so far. GDX (Gold Miners) is up over 6% today and up over 8% over the last two days. I don't even know who this fund is targeted towards. I get precious metal mining stocks. Most are run horribly, but they are uncorrelated to the broad market and the volatility can create a rebalancing opportunity. Both Bill Bernstein and Allan Roth recommend GDX for those who can stomach the long periods of underperformance (as far as myself, I have a 5% allocation to gold bullion, not the miners themselves, approximately half is physical and the other half in an ETF for ease in rebalancing and use wide rebalancing bands. I don't invest in gold because of an end of the world scenario/hyperinflation but ...

Taylor Larimore wrote: ↑Thu Oct 04, 2018 7:40 pm

Rick Ferri wrote: ↑Wed Oct 03, 2018 11:16 am Jack believes in portfolio simplicity.
Larry believes in portfolio complexity.
I believe in Jack.

Rick Ferri

Bogleheads:

I believe in Jack and Rick Ferri.

Best wishes.
Taylor

I believe in evidence-based investing, not people.

I've only read one of Jack's books. I can only read how costs matter so many times. I've read all of Larry's books. The 100% in a total domestic fund (less the allocation to his son's actively managed fund) with age in bonds isn't for me. Or, buy the entire haystack and by haystack, Jack means US stocks only regardless of valuations. He does not believe in any form of the EMH, yet has built an empire around this concept. Larry doesn't believe in active management unless you count quant screens. He continuously writes articles once the SPIVA report is released to hammer home the fact that active management is a loser's game. He uses published research to recommend weighting certain factors in order to increase the allocation to safe assets t...

John Hancock's multifactor funds look like closet index funds. Not much drift from market cap. IMO, just stick with DFA if you have access.