Search found 50 matches

by PuddlesTheDuck
Fri Sep 02, 2022 12:49 pm
Forum: Personal Investments
Topic: Exercise employer stock options and sell covered calls or sell outright?
Replies: 2
Views: 387

Re: Exercise employer stock options and sell covered calls or sell outright?

Valuethinker wrote: Fri Sep 02, 2022 3:10 am Isn't this the classic case of "If you wouldn't buy the stock at this price, you shouldn't hold it at this price?"

...

Otherwise, take the $26k net and run? Reinvest it in the Total Stock Market fund (and the Money Market Fund proportionately).
You're not wrong.

If I were actively picking stocks I would actually consider buying this stock around the $7 point (and given where the market is going, that may not be long).

But yeah, you're not wrong.
by PuddlesTheDuck
Thu Sep 01, 2022 11:37 pm
Forum: Personal Investments
Topic: Exercise employer stock options and sell covered calls or sell outright?
Replies: 2
Views: 387

Exercise employer stock options and sell covered calls or sell outright?

Hello all, I left my previous employer (duh) and my employee stock options are about 6 months away from expiration. I've exercised and sold a fair number already, but as prices have come down I've slowed my selling a bit (probably the wrong move, but here we are). I'd like some advice on how to proceed, since I've happy to sell covered calls on any that I exercise and keep. Current (taxable) situation is roughly: * $50k money market * $160k total US market index * $15k previously exercised options that I'm selling covered calls against already * Live in CA, salary around $200k Remaining options is roughly: * Strike price ~$6, current price ~$8 * 29k remaining options The price of exercising everything right now would be around $195k (accord...
by PuddlesTheDuck
Sat Nov 28, 2020 4:38 pm
Forum: Personal Finance (Not Investing)
Topic: Who to talk to about foreign real estate implications
Replies: 7
Views: 786

Re: Who to talk to about foreign real estate implications

Oh wow. That could get very complicated. Are you the only heir? [..] Keep us updated as you learn more. It's an interesting situation. It's complicated and there's some family politics at work, but my grandparents want to include about 10 people in their updated will. They have several properties in the country they (and the rest of that part of the family) live in, but have some properties elsewhere. To keep it simple and remove some politics: It's more convenient for family already in the same country to inherit property in that country. The family in their country is viewed as not particularly financially responsible. The properties outside their country are harder for them to manage. The properties outside their country are just as eas...
by PuddlesTheDuck
Fri Nov 27, 2020 11:19 am
Forum: Personal Finance (Not Investing)
Topic: Who to talk to about foreign real estate implications
Replies: 7
Views: 786

Re: Who to talk to about foreign real estate implications

Appreciate the responses. This sounds like a PITA for sure as the properties are in several countries, but I'll track someone down who can explain. Sounds like I may want an attorney of my own to help.
by PuddlesTheDuck
Fri Nov 27, 2020 12:35 am
Forum: Personal Finance (Not Investing)
Topic: Evaluating possible jobs
Replies: 57
Views: 4394

Re: Evaluating possible jobs

I just scanned the other responses (poorly) and haven't seen this take: Job 1 has the shortest commute, by a lot. You'll come home every day earlier and with more energy than you would from either #2 or #3. There's a lot of compelling evidence that longer commutes are harmful to your health and happiness. Job #1 saves you an hour a day in commuting, so you'll functionally be working an hour less every day. Are Job #2 or #3 paying you enough for those extra 300ish extra hours of work a year? And that's before factoring in the extra hours it sounds like you'd be working at those jobs. Whichever job you choose to take, you should strongly consider moving a little closer to the office (maybe once COVID is under control). Cutting your commute is...
by PuddlesTheDuck
Fri Nov 27, 2020 12:04 am
Forum: Personal Finance (Not Investing)
Topic: Who to talk to about foreign real estate implications
Replies: 7
Views: 786

Who to talk to about foreign real estate implications

My foreign grandparents are reworking their will and are asking how I'd feel about inheriting real estate from them. All their properties are in the Shengen Zone. Some are apartment units with tenants, others are undeveloped land. I'm skeptical I'll make any money on the apartments after paying someone to manage the tenants (I'm not moving across the pond anytime soon), but I figure it's worth sitting down with someone and having them explain what's going on. While they're a very DIY group, they keep pretty detailed records so I can probably get any relevant information on the properties from them. They walked me through some mortgages, property taxes, and current tenant rents but my eyes glazed over. I had just eaten Thanksgiving dinner an...
by PuddlesTheDuck
Sat Nov 14, 2020 1:02 pm
Forum: Investing - Theory, News & General
Topic: Will Palantir ever be profitable?
Replies: 53
Views: 9239

Re: Will Palantir ever be profitable?

Agree that this may not be a super profitable space for shareholders, but great for company executives. You have no idea how true that is. Palantir was famous for burning money. Like "fly the IT guys back and forth between London and New York to test United's WIFI" kind of burning money. Or "run your team from DC but have everyone live in New York so they have to travel down and stay in a hotel every week" kind of burning money. These probably end up on financials under sales or something, but it's just excessive spending for no reason other than to get people status on airlines. They're products are pretty good from what I've seen, but company culture will likely be the thing keeping them from profitability. They also ...
by PuddlesTheDuck
Sat Nov 14, 2020 12:45 pm
Forum: Investing - Theory, News & General
Topic: RSU Present Value Calculator?
Replies: 38
Views: 5900

Re: RSU Present Value Calculator?

My point is simple, RSU aren't you compensation until you vest and exercise them. RSU are more like a slot machine than anything else. I think you're conflating RSUs and options. I 100% agree on options: I was underwater or treading water on my options for basically all 5 years of vesting at my last job, and most of us were very vocal about valuing them at $0. It's impossible to be underwater on RSUs and you really should assign value to them, but things get funny when you're working with private company stock. ---- More broadly, there are a lot of ways of valuing equity+cash offers companies might offer you, and it can be really hard to figure out when you should take a cash hit for more equity, or vice versa. My valuation flow is basical...
by PuddlesTheDuck
Mon Oct 12, 2020 11:33 am
Forum: Investing - Theory, News & General
Topic: Is 3-4 Fund Portfolio still relevant?
Replies: 11
Views: 1278

Re: Is 3-4 Fund Portfolio still relevant?

Yes. The question you have to ask yourself is: why do you own bonds? If you own them to be a "haven", as you mentioned, why would you care that returns are low? What you care about is the ability to rebalance in and out of a more stable asset class than your stocks, commodities, and/or real estate (and whatever other stuff you invest in for your primary source of return) to reduce the volatility of your portfolio and help you stay on track with your goals. If you do own them for the return, you need to think pretty hard about where you'll get that return from in the future. If you only cared about expected return, you'd be all in on stocks. So there's some level of safety that you like, and you'll substitute for the bonds will hav...
by PuddlesTheDuck
Thu Jan 17, 2019 12:56 am
Forum: Investing - Theory, News & General
Topic: "College Endowments Badly Trail The Market"
Replies: 29
Views: 4051

Re: "College Endowments Badly Trail The Market"

Bogleheads: We often hear how college endowment funds enjoy superior returns. I have never heard this. I've heard many people write that they've heard this, but I've never heard it and no one I've ever talked to about this has heard it. Question for the community: have you heard this? I've only heard that they rake in tons of money from contributions, not that their returns are high. However, this recent study by Georgetown University and NYU's Stern School of Business found: Endowments badly underperform market benchmarks, with median annual returns 5.53 percentage points below a 60-40 mix of U.S. equity and Treasury bond indexes, and statistically significant alphas of -1.01% per year. Lesson learned: Simply own the market. I don't think...
by PuddlesTheDuck
Fri Jan 04, 2019 1:33 pm
Forum: Investing - Theory, News & General
Topic: 2019 Hedge Fund Contest
Replies: 250
Views: 31460

Re: 2019 Hedge Fund Contest

Everybody Poops Fund

Taking on bets you won't make.

Long:
* Hertz Global Holdings HTZ
* Energy Recovery ERII
* Systemax SYX

Short:
* Dillards DDS
* Mack Cali Realty Corporation CLI
by PuddlesTheDuck
Mon Sep 10, 2018 3:58 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: The Three-Fund Portfolio

Something that I haven't seen mentioned much on here (though I visit bogleheads fairly infrequently now) is that you can now get full world stock and bond exposure in just 2 funds! If you want a certain stock:bond ratio and want roughly global weights inside each of those categories, Vanguard has come out with a total world bond fund to go with the total world stock fund (structured as a fund of funds). I know the subject of international bonds has been contentious in this thread before (I've definitely participated in that debate), but for those looking for international bonds this is a great option. I just merged my total international and total US bond funds into one, as they were already close to 50:50, making my new "3 Fund" ...
by PuddlesTheDuck
Tue Jan 23, 2018 12:13 pm
Forum: Investing - Theory, News & General
Topic: Warren Buffett recommends putting 90% in S&P500 index fund, 10% in Bond index
Replies: 80
Views: 23402

Re: Warren Buffett recommends putting 90% in S&P500 index fund, 10% in Bond index

Soundbites like these from "experts" may cause more harm than good. 90:10 is an incredibly aggressive allocation. Investing only in the US is risky. The the most catastrophic stock market crash would leave Warren Buffett with more than enough money to survive. If you're reading this, you're almost certainly not in his league. Retail investors following the advice of an very wealthy investor is like a person who is just learning how to squat following Andrey Melanichev's workouts because he's the best there is. What people do when they're at the top of their profession is not what they did when they started out. You start by building a base, whether it be knowledge, wealth, or strength. Off of that base you can follow more speciali...
by PuddlesTheDuck
Tue Jan 23, 2018 11:54 am
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: The Three-Fund Portfolio vs VBIAX

During the most recent Boglehead convention where JB took questions from the attendees (on video), he was asked by one person if having all his assets in the Balanced Index Fund (VBIAX) would in JB's opinion work for a person already retired. Mr. Bogle replied with a "yes". If you believe that you only need US exposure, and you believe that a 60:40 stock:bond ratio is in line with your goals, then VBIAX is 100% sufficient for anyone, not just a retiree. Running your own 2-fund portfolio of VTSAX and VBTLX cuts down a tiny bit on the already tiny expense ratio, but with VBIAX you can set it and forget it, so for people who don't want to bother tracking their fund values and rebalancing, VBIAX is perfectly suitable. The question, o...
by PuddlesTheDuck
Fri Jan 05, 2018 12:34 am
Forum: Investing - Theory, News & General
Topic: 2018 Hedge Fund contest
Replies: 176
Views: 26734

Re: 2018 Hedge Fund contest

Many Puddles Fund

Long:
Advanced Micro Devices (AMD)
CostCo (COST)
First Solar (FSLR)

Short:
GameStop (GME)
by PuddlesTheDuck
Tue Dec 05, 2017 1:46 pm
Forum: Investing - Theory, News & General
Topic: Everyone, Even a Passive Vanguard Investor, is a Factor Investor (Alpha Architect/Jack Vogel, 11-30-17)
Replies: 39
Views: 3144

Re: All Investors are Factor Investors

I think a TSM investor needs to recognize this point of view and realize that this is hooey. It's the same argument that "you take a risk every time you cross the street therefore you are a gambler and should bet it all on red". TSM is a representation of the equity premium. No one will give you grief over investing in that. From the article you didn't read: Vanguard is moving into “factors,” but they have always been a factor investing shop–their main factor is the market factor. And to be clear, the market factor is a reasonable factor if one has the capacity to bear (and hold onto) risk. If anything, I read that as trying to calm people down on factors. You've already been investing in a factor, are you sure you need 10 more f...
by PuddlesTheDuck
Thu Nov 30, 2017 7:01 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Finding The Source Of Value
Replies: 19
Views: 3129

Re: Larry Swedroe: Finding The Source Of Value

1) The really salient point is how little difference there was between any of these portfolios. 2) The correlation between large-cap value and the U.S. market was 0.97, which is... um... basically 1. 3) Not that it matters, but the large-cap blend fund had (very) slightly higher return, (very) slightly lower standard deviation, and thus (very) slightly higher Sharpe ratio than the others. 4) Another interesting point is that every single number for the 50/50 mix is in between the numbers for large-cap blend and large-cap value, and very close to midway in-between . There's no evidence any MPT synergy, no whole-is-better-than-the-weighted-average-of-its-parts effect. You're totally correct: large value and large blend are going to always pr...
by PuddlesTheDuck
Thu Nov 30, 2017 3:15 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: The Three-Fund Portfolio

But I think that if I had one-third of my investments in international investments that I might not sleep as well as I do now. Why? What's so scary about international allocations? There are reasons to not invest internationally, but you take on international stocks or bonds for diversification benefits, which should only help you sleep. From my perspective of being satisfied with a near-certain good return, I would further simplify my portfolio to a two fund strategy of S & P 500 index (or total stock market index) and a US total bond fund index. If your target allocation is 60/40, you could just pick up VBIAX (or the investor shares version VBINX) and have it all in 1 fund. And why are you convinced the US will continue to produce &q...
by PuddlesTheDuck
Thu Oct 26, 2017 1:28 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: Adding international bonds?

I answered your question in page 11 of this thread. It includes a statement by Mr. Bogle that he would not buy an international bond fund. You certainly did and I hadn't read that post before, so thank you for that. For those who don't want to go back in time, here's the link to the post: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=88005&start=500#p1837043 But it still fails to answer the most fundamental questions about investing in international bonds: if we're ok with investing in international stocks, why are international bonds different? International bonds represent a large asset class which Vanguard added to their Target and Life-Strategy funds so their new Total International Bond Fund deserves a look. One thing ...
by PuddlesTheDuck
Wed Oct 25, 2017 1:49 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: The Three-Fund Portfolio

Thanks for the info TD2626. Some comments on what you said. This is a three-fund portfolio, but it is not The Three Fund Portfolio as discussed in this thread. I do feel like your three-fund proposal would be reasonable for an investor tolerant of the currency and political risk that comes with a high international allocation, though. I have one big issue with the strict adherence to the Three Fund Portfolio as presented at the start of this thread in 2012, and maybe I didn't explain myself well enough. If you're following the Three Fund Portfolio, you have international stock. You have already admitted by doing this that there is something different worth owning internationally that won't come from US stocks alone, otherwise this would be ...
by PuddlesTheDuck
Tue Oct 24, 2017 1:01 pm
Forum: Personal Consumer Issues
Topic: what is your weekly workout routine?
Replies: 123
Views: 16476

Re: what is your weekly workout routine?

I've been in and out of the gym for a while as I try to balance my climbing habit with strength and endurance training. What's kept me in the gym regularly for the last 5 weeks:
  • Monday/Wednesday
    • 3x20 squats
    • 5x5 some type of press
    • 3x8 some type of bench press
    • 5xMax pullups
    • If I don't feel like puking from the squats, deadlifts of some sort
    • Stretch
  • Tuesday/Thursday
    • Bouldering
  • Friday
    • Drink heavily
  • Weekends
    • Some type of light cardio
I'm definitely off my peak (played sports through college then hit the sedentary lifestyle pretty hard), but working my way back up.
by PuddlesTheDuck
Wed Oct 18, 2017 10:48 am
Forum: Investing - Theory, News & General
Topic: Odds against Renaissance Medallion Fund if Efficient Markets Hypothesis is valid?
Replies: 18
Views: 2694

Re: Odds against Renaissance Medallion Fund if Efficient Markets Hypothesis is valid?

Challenge to statisticians: If markets are 100%, or 95%, or 90% "efficient", can you compute the odds against Renaissance Medallion Fund posting these annual returns since 1988? https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-s-medallion-fund-became-finance-s-blackest-box From a purely frequentist perspective, you need to know all the possible investments Renaissance could have made. They're a hedge fund so can go massively short, lever up considerably, or invest in arbitrary non-stock vehicles like watches or physical drums of oil. Then you have to figure out how many of those investment choices would have led to the returns that we see reported. And this says nothing about things they would never consider inv...
by PuddlesTheDuck
Tue Oct 17, 2017 4:42 pm
Forum: Investing - Theory, News & General
Topic: The overselling of international diversification
Replies: 56
Views: 8451

Re: The overselling of international diversification

What about international bonds? Is there a correlation with US bonds? DMW The correlation appears to be the same as the correlation between US stocks and Non-US stocks I didn't spend too much time, but this is an alright table I found (though having no dates on it makes it not super useful): https://admainnew.morningstar.com/webhelp/Practice/Plans/Correlation_Matrix_of_the_14_Asset_Classes.htm Basically: US Stocks to Foreign Stocks (Developed and Emerging) has a correlation between 0.5 and 0.6 US Investment Grade Bonds to Non-US Bonds has a correlation between 0.4 and 0.5 US Stocks to US Investment Grade Bonds has a correlation between 0.1 and 0.2 US Stocks to Non-US Bonds has a correlation right around 0 Foreign Develop Country Stocks to ...
by PuddlesTheDuck
Tue Oct 17, 2017 2:10 pm
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434696

Re: The Three-Fund Portfolio

I’ve read through a good part of this thread and some other ones and it seems Boglegeads have a serious aversion to international bonds, especially in this thread. If we believe in the value of diversification (which I hope we do) and believe in dicersification via international exposure (which I know some people don’t), why don’t we as a community believe in international bonds? Historically they have been both very stable (giving us the security that people seek in bonds) and very cheap (we have a vanguard index fund for them now). It seems that the 3 fund portfolio for people who believe the above would be: Total World Stock Index Fund (VTWSX) Total US Bond Index Fund (VBTLX) Total International Bond Index Fund (VTABX) The only downside ...
by PuddlesTheDuck
Thu Oct 12, 2017 4:01 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 82
Views: 13248

Re: Larry Swedroe: Non-US Valuations Look Attractive

Slippery slope switching asset classes. If you time your AA between US vs non-US and Developed vs Emerging, why not Growth vs Value? Consumer Staples vs Discretionary? Healthcare vs Biotech? Financials vs Technology? Small-cap vs Value vs Small-cap Value? Whether you call it timing or tilt, it all sounds similar to me. Maybe the difference is how long you switch back and forth vs permanent strategy. The active management types call this Tactical Asset Allocation. I agree, which is why I said what I did was market timing, but there's also a slippery slope calling everything market timing. If I'm getting older and want to make my allocation less risky, I'll time the market and switch some stocks into bonds, because I feel that bonds will be ...
by PuddlesTheDuck
Thu Oct 12, 2017 3:54 pm
Forum: Investing - Theory, News & General
Topic: Understanding What Makes Vanguard So Successful
Replies: 12
Views: 2759

Re: Understanding What Makes Vanguard So Successful

I'm grumpy today, so maybe this will come off as overly harsh. This reads as an incredibly lazy article to me. Vanguard has a HUGE price advantage because it has no outside shareholders and the author glosses over that as some kind of "company culture" phenomenon. There are no incentives for it to charge high fees. It runs everything at cost, so the company's prices are completely sustainable as well as always dropping. You can always be sure you're getting pretty darn close to the best deal on every fund Vanguard runs. If price were the sole reason for success, then Econ 101 tells us that competitors would have simply cut their fees in order to recapture lost market share. They can't, because they have to make money somehow for t...
by PuddlesTheDuck
Thu Oct 12, 2017 2:57 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Non-US Valuations Look Attractive
Replies: 82
Views: 13248

Re: Larry Swedroe: Non-US Valuations Look Attractive

I can't speak for other posters but I posted here that I had doubled my international equity exposure in late 2016 early 2017, because international equity returns over prior 10 years were so poor when compared to US equity returns. There are no certainties in life but I couldn't ignore such a long term disparity in returns. Something had to give - and it did. Some call it market timing. I prefer the term valuation driven capital redeployment. That's certainly market timing, but it's a very different type of timing than the one people usually think about. You haven't changed your risk profile (kept the same stock:bond ratio, though I guess you could have switch out of consumer staples or something like that) or your expected returns. But y...
by PuddlesTheDuck
Mon Oct 09, 2017 11:32 pm
Forum: Investing - Theory, News & General
Topic: 100% in bond to wait for market crash?
Replies: 128
Views: 22924

Re: 100% in bond to wait for market crash?

Quoting your three responses that include reasoning for exiting equities (if I missed one, I apologize). Your entire reasoning that I've seen is that the current market PE ratio is high. That's not really a reasonable position. Hopefully some people here have calmed you down, but I'll try my hand, as well. Alex, Somewhat in year 2000 , the P/E is 45 right before the market went down, and 1929 when P/E reach almost 35 and it crash due to it's too expensive make a lot of people nervous and sell in panic. I do think it has something to do with high P/E with a market correction. I wish I know how to post the graph. You know what the P/E ratio was before it was 45? 40. And 35. It hit 30 sometime in 1997, a good couple years before it hit 45. Wit...
by PuddlesTheDuck
Fri Oct 06, 2017 12:54 pm
Forum: Investing - Theory, News & General
Topic: Time Value of Money (Young Investors)
Replies: 29
Views: 3640

Re: Time Value of Money (Young Investors)

It’s sad for me when my daughter told me nobody her age expects to live till they retire. Such a bunch of pessimistic people she knows. Maybe that’s why they don’t want to invest and just lives at the moment. I don't know what age your daughter is, but I'm in my mid-20s and I became conscious of money right before the financial crisis. A lot of people my age also became aware of money at the same time and had to deal with losing houses, parents losing jobs, and the immediately thereafter went into crippling debt to go to college. We're now surrounded by places like this forum that chant "experts don't know shit, everyone's corrupt in the industry, don't trust anyone, crashes are coming, but you should still invest in the market" ...
by PuddlesTheDuck
Fri Oct 06, 2017 12:52 pm
Forum: Investing - Theory, News & General
Topic: Time Value of Money (Young Investors)
Replies: 29
Views: 3640

Re: Time Value of Money (Young Investors)

This should be drilled into their head in high school. I think what you've said is important, but statements like this get me riled up. People need to know that compound interest matters, even if it's just a bank account making 1%. They have to know that if they always spend all that they make, they'll never retire. They need to know that it's not how much you make, but what percentage of your pay you save that determines when you can retire. Anything past that isn't helpful. People love to tell other people what to do. We're all experts in our own lives. We all have regrets and missed opportunities and you, yes YOU, can avoid them with steps A, B, and C. We all have had successes and we had the perfect plan that made them happen. The prob...
by PuddlesTheDuck
Tue Sep 26, 2017 5:56 pm
Forum: Investing - Theory, News & General
Topic: Research Affiliated Model Portfolios: ZERO % US stocks
Replies: 53
Views: 7964

Re: Research Affiliated Model Portfolios: ZERO % US stocks

Garland, FYI, in case you haven't seen it, here is an article by Michael Kitces from a few years ago looking at CAEP 10: https://www.kitces.com/blog/shiller-cape-market-valuation-terrible-for-market-timing-but-valuable-for-long-term-retirement-planning/. The correlation between CAEP 10 and real returns was highest (~0.65) around 20 years. Interesting. A correlation of 0.65 is pretty good for real world data, but 20 years is a really long time. Should I really avoid US stocks for 20 years? Should I stay in for now and pull out after 10? What if I get out now but hop in again during some larger downturn? What is the CAPE 10 is lower for US stocks in 5 years? Do I hop back in knowing what the likely outcome in 15 years is? So many questions. ...
by PuddlesTheDuck
Tue Sep 26, 2017 5:48 pm
Forum: Investing - Theory, News & General
Topic: Alternate investment strategies
Replies: 15
Views: 2613

Re: Alternate investment strategies

Ugh, the author doesn't even give a single example of what an alternative investment might be. The point of alternative investments isn't performance (assuming we're talking about precious metals, currencies, and commodities here), it's the fact that they're not correlated (or even negatively correlated) with more conventional investment vehicles, providing more portfolio stability. The table indicates pretty incredible stability of returns, where the "worst" (which could easily just be the most defensive allocated endowments) returned 4% and the "best" return 6% across each of 3, 5, and 10 year timelines. Far less volatility than the other vehicles listed, assuming this chart was put together in a reasonable way. Given ...
by PuddlesTheDuck
Mon Sep 25, 2017 3:34 pm
Forum: Personal Investments
Topic: Help with Colleague's portfolio
Replies: 4
Views: 631

Re: Help with Colleague's portfolio

If you're looking for historical efficient frontiers, https://www.portfoliovisualizer.com/efficient-frontier is probably your best bet. Just remember that efficient frontier calculations almost always show that investing heavily in one thing would have been best.

As for the question about fees, I don't know of a way.
by PuddlesTheDuck
Sun Sep 24, 2017 2:26 pm
Forum: Investing - Theory, News & General
Topic: The real impacts of passive investing
Replies: 8
Views: 2526

Re: The real impacts of passive investing

The majority of all trading is HFT - rapid trading based on math algorithms and executed by computers. Only a tiny percentage of trading is for personal accounts. Citation? If HFT acts as a middleman in most transactions, it would still be less than 50%. There would have to be a quite a bit of trading between HFT algorithms for this to be true, which could be true but I'd be interested to see the numbers. But also, how is this related? Some context would be great. HFT relies on other entities making trades. My understanding is most HFT shops are now barely profitable as just middlemen because of all the competition, so they've switched to longer-term price anticipation (longer term being an hour or maybe a day). This could be totally wrong...
by PuddlesTheDuck
Tue Sep 12, 2017 5:50 pm
Forum: Investing - Theory, News & General
Topic: Ted Seides "Why I lost My Bet With Warren Buffett" - Bloomberg
Replies: 94
Views: 16910

Re: "Warren Buffett wins $1M bet made with hedgie a decade ago"

Reading through longbets page http://longbets.org/362/ , it seems pretty clear that people 10 years ago thought Buffet would win. We also should remember that it took 5 years for the S&P to push ahead, highlighting the risk associated with investing in stocks. I think this bet did a lot of good for people's expectations of investing. Any other occupation, with that poor a relative performance, he'd be out of a job right? Gotta love Wall Street. Instead, they continue to make money off rich people with money who can clearly afford to lose it (and will): The point of a hedge fund is to avoid market returns, so I think you (and Seides; seriously, what a dumb bet) are a little off the mark. It's not about total returns (otherwise why does a...
by PuddlesTheDuck
Mon Sep 11, 2017 10:30 pm
Forum: Investing - Theory, News & General
Topic: 2017 hedge fund contest
Replies: 247
Views: 50328

Re: 2017 hedge fund contest

FYI: In case you haven't been paying attention like me, I just noticed AAPL is up 40% YTD. Not a popular choice amongst the amateur hedge fund managers here. Don't know if this is the same predilection among professionals, but it's well represented in the index funds and popular with the public investors. FB (more similar in popularity) and NFLX are both beating AAPL. I would have loved to pick AAPL, but I don't like to mix fantasy and reality and I already have a bit of my net worth in AAPL. Great for my actual portfolio and real life, not great for being able to wag my internet wang around for years to come. Hopefully I get better at shorting things next year. So while some hedge fund managers that pick winning stocks (i.e. NVDA, short S...
by PuddlesTheDuck
Thu Sep 07, 2017 10:10 pm
Forum: Investing - Theory, News & General
Topic: "The Market" Portfolio
Replies: 26
Views: 9225

Re: "The Market" Portfolio

I am looking at using Vanguard's Total Stock, Total Bond, Total International Stock, and Total International Bond Index funds. I had been thinking of putting 25% in each, but then it occurred to me... The reason we index is that we assume a certain amount of "markets are efficient," and we know that we can't predict the future. So I asked myself "what does the actual market look like?" So, what does it look like? As other people have already brought up, this is not even close to all the things you could invest in. These funds are approximations (in some cases rough) of publicly traded securities. There are private companies out there, too. Do you count real estate as investable? Because a good portion of real estate is ...
by PuddlesTheDuck
Wed Sep 06, 2017 3:49 pm
Forum: Personal Investments
Topic: Help with new employer 401K plans
Replies: 13
Views: 1653

Re: Help with new employer 401K plans

I was planning to go really simple and just choose VTSNX (vanguard total international stock index) and VBTIX (vanguard total bond market index) OR VINIX (vanguard institutional index) and VBTIX (vanguard total bond market index) Those funds are very good choices. I was going to make my own post but your points were all the ones I was going to make anyway so I figured I could just quote for emphasis. You could add Primecap or a smaller-cap fund if you wanted something a little different (or core bond, but most bogleheads don't like that), but there's absolutely nothing wrong with the good 'ol 3 fund portfolio. You have a pretty incredible 401k, as everything is at least worth considering as an investment; mine is filled with >1% ER funds. ...
by PuddlesTheDuck
Sat Sep 02, 2017 10:55 pm
Forum: Investing - Theory, News & General
Topic: Hedge Funds with vanilla strategies
Replies: 9
Views: 1886

Re: Hedge Funds with vanilla strategies

To start off, I probably can't name any hedge funds at all. So I couldn't give you any examples if that's what you're looking for.

But just the name means that something called a hedge fund probably won't give you anything simple. They're called "hedge" funds because they are legally allowed to use more leverage than a mutual fund. With this power they often don't care to capture market gains at all (because you could just use a simpler mutual fund for that) but instead strive for "absolute return", meaning positive returns no matter what happened in the markets.

On the other hand, there are many mutual funds companies that strive for simplicity. Just look at Vanguard.
by PuddlesTheDuck
Mon Aug 28, 2017 12:20 pm
Forum: Investing - Theory, News & General
Topic: Riskier Bonds vis a vis AA
Replies: 33
Views: 3492

Re: Riskier Bonds vis a vis AA

"A fitting conclusion is this advice from David Swensen, the highly regarded chief investment officer of the Yale Endowment: 'Well-informed investors avoid the no-win consequences of high-yield fixed-income investing.'" http://www.etf.com/sections/index-investor-corner/swedroe-credit-risk-worth-it?nopaging=1 I was just re-reading Unconventional Success and found his argument rather compelling. That being said, in a tax sheltered environment and with a longer time horizon (or someone who wants a teensy bit more than the risk-free rate but doesn't want to deal with stocks), you could justify exposure to higher yield bonds. I think the bond fund in my company's 401k has some low percentage of bonds down to BB; that kind of thing is ...
by PuddlesTheDuck
Fri Aug 18, 2017 3:48 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: World Isn't Flat-Invest Accordingly
Replies: 71
Views: 10439

Re: Larry Swedroe: World Isn't Flat-Invest Accordingly

Random Walker wrote: Fri Aug 18, 2017 1:40 pm Puddles the duck,
I think smoothing volatilitynis a huge deal. It brings the geometric return of the portfolio closer to the average annual return of the portfolio components. We can only eat geometric returns. Minimizing volatility translates into real money.

Dave
In general I agree. However, early in the accumulation phase one should not be afraid of volatility (hence rather aggressive asset allocations) to try to maximize returns. Especially in periods of consistent deposits (401k, etc.), the effects of negative volatility are offset over time by "buying low" with the regular investment. As one gets older (and has some wealth to protect), the importance of smoothing the returns becomes more important.
by PuddlesTheDuck
Fri Aug 18, 2017 11:27 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: World Isn't Flat-Invest Accordingly
Replies: 71
Views: 10439

Re: "The Three-Fund Portfolio"

Bogleheads: Every once in while I check the returns of 10 "Lazy Portfolios" designed by "experts" with the The Three-Fund Portfolio . More often than not, Allan Roth's Second Grader's Starter (3-fund) Portfolio leads the pack: http://www.marketwatch.com/lazyportfolio Best wishes Taylor Why own the Second Grader's Starter when you can own the S&P500? The S&P500 has beaten the Second Grader's Starter over the past 1-, 3-, 5-, and 10-year periods. Clearly the Second Grader's Starter has been the wrong investment choice so far. Agreed, this is a nonsense portfolio tracker and I'm always surprised when Taylor posts it. There are reasons to own every one of these portfolios: this chart doesn't explain that choice at a...
by PuddlesTheDuck
Fri Aug 18, 2017 11:24 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: World Isn't Flat-Invest Accordingly
Replies: 71
Views: 10439

Re: Larry Swedroe: World Isn't Flat-Invest Accordingly

Bigbonds, I actually do believe I see and understand your point of view. I'm equally sure you don't understand mine. I was an ardent TSM Boglehead proud of ultra low expense ratios for almost a decade. As I learned more, I came to view diversification in a different way: diversification across types of risks and sources of return. I have evolved to view TSM investing as effectively investing in a single factor, market beta. I am the first to acknowledge that one who deviates from the pure TSM approach has a cost hurdle to overcome before experiencing any advantage. The cost is certain, the advantage may or may not be there. Dave This may be a situation where you choose to ignore someone, Dave. He clearly doesn't understand the risks of a 9...
by PuddlesTheDuck
Wed Aug 16, 2017 12:15 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: World Isn't Flat-Invest Accordingly
Replies: 71
Views: 10439

Re: Larry Swedroe: World Isn't Flat-Invest Accordingly

I recently increased my emerging markets allocation by quite a bit. I felt they would be more likely to operate in parts of the world I may not be exposed to with my developed world funds. Maybe this was the right move, maybe not. I'll definitely be reading that paper Larry linked on mononational companies. You know, your comment is doggoned interesting. I remember all the talk about the High Tech and Internet bubble of the late 1990's, we talk a lot about the 2000-2002 bear market. The mania and the bear market that followed. Yet 17 years after the end of the 1984-early 2000 bull market, the five largest US companies by market capitalization are Apple, Microsoft, Google, Facebook, and Amazon. Maybe people in the late 1990's weren't so craz...
by PuddlesTheDuck
Wed Aug 16, 2017 12:03 pm
Forum: Investing - Theory, News & General
Topic: Going passive is an active decision
Replies: 32
Views: 4014

Re: Going passive is an active decision

We make active decisions all the time. When we tweak our stock/bond allocation, we're being active. When we pick what our international allocation is going to be, that's an active decision. When I pick Vanguard's Total Bond Index Fund and it includes no junk bonds, that was an active decision in constructing the index. There are tons of indices out there, and picking the one(s) you want to track is active in both your choice and the choice of the index maker. When I have to actively pick an active fund (which I do in my 401k for international exposure) I actually try to avoid performance similar to the index. Why should I pay extra for roughly index performance when I could have fun on The Great Fund Manager's Wild Ride? Active funds have a...
by PuddlesTheDuck
Tue Aug 15, 2017 4:43 pm
Forum: Investing - Theory, News & General
Topic: REITs a disappointment, yet still useful
Replies: 20
Views: 5613

Re: REITs a disappointment, yet still useful

True, but a lot of that can be explained by the "in a crisis, correlations move to 1" truism. If you go further back, you'll see the correlation tends to hover around 0.5 and indeed, since 2012 the correlation has more or less returned to normal. This time, the economic crisis was also a real estate crisis so it's not surprising the two asset classes converged. That didn't happen to nearly the same extent in the previous several bear markets so I'm not convinced we should read too much into it. https://www.portfoliovisualizer.com/asset-correlations?s=y&symbols=VGSIX+VTSMX&endDate=08%2F14%2F2017&timePeriod=1&numTradingDays=60 And even if you look back past 2012, REITs are still some of the least correlated US stock...
by PuddlesTheDuck
Fri Jan 20, 2017 4:29 pm
Forum: Investing - Theory, News & General
Topic: "The Year in Alternative Funds: A Bumpy Road With Some Bright Spots"
Replies: 21
Views: 3320

Re: "The Year in Alternative Funds: A Bumpy Road With Some Bright Spots"

Taylor Larimore wrote:Bogleheads:

We must not forget Mr. Bogle's wisdom:
"An extra percentage point of standard deviation is meaningless, but an extra percentage point of return is priceless."
Best wishes
Taylor
I find this one-liner confusing at best, and obviously false at worst.

Reducing standard deviation (a measurement of risk) is very useful. That's a huge reason people invest in bonds. I like some stability in my investments, don't you?

An extra percentage point of return is obviously great, but it almost certainly comes with higher volatility assets. Is Mr. Bogle telling me to go all in on the investment with the highest expected returns, risk be damned? That doesn't seem right either.

Thanks,
Puddles
by PuddlesTheDuck
Thu Jan 05, 2017 5:15 pm
Forum: Personal Consumer Issues
Topic: Is Iphone/Ipad fingerprint signin reasonably secure?
Replies: 57
Views: 6440

Re: Is Iphone/Ipad fingerprint signin reasonably secure?

It is reasonably secure, yes. Although you could come across someone with the same (or close enough) fingerprints to your own (your natural enemy), using the fingerprint reader on your phone/computer/briefcase/whatever is advantageous for two reasons: [*]You don't have to type your password. This means that people looking over your shoulder don't get a chance to see you type your password. Especially with PINs, your passwords are always at risk of being observed as you type. Fingerprint authentication (or any other kind of autofilling password manager) overcomes this. [*]You don't have to type your password. This means that you can have really, really complicated passwords, making your digital life more secure. Fingerprint authentication (o...
by PuddlesTheDuck
Thu Jan 05, 2017 5:03 pm
Forum: Investing - Theory, News & General
Topic: 2017 hedge fund contest
Replies: 247
Views: 50328

Re: 2017 hedge fund contest

Many Puddles Fund

Long
AMZN
BRK.B
FSLR

Short
GPRO
TWTR
WFC