Search found 4451 matches

by stlutz
Tue Jun 19, 2018 12:48 am
Forum: Personal Finance (Not Investing)
Topic: Shorting Amazon
Replies: 45
Views: 3452

Re: Shorting Amazon

If you want to short something, find a stock you think is going to zero and few others agree with you. Amazon is not going to 0.
by stlutz
Mon Jun 18, 2018 10:30 pm
Forum: Investing - Theory, News & General
Topic: Buying CDs each month for decades
Replies: 22
Views: 5254

Re: Buying CDs each month for decades

May I ask which brokerage account you're using?
Fidelity.
by stlutz
Mon Jun 18, 2018 10:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Battle Of Passive Strategies
Replies: 35
Views: 3713

Re: Larry Swedroe: The Battle Of Passive Strategies

This thread is like old times. It's been a long time since we've had a Vanguard sucks/DFA rules thread. :mrgreen: Of course, a closer look at the data shows that we have two things going on--an excellent market-timing call by Swedroe to dump most stocks and only go SV back in 1998/1999. After the te...
by stlutz
Sun Jun 17, 2018 9:34 pm
Forum: Investing - Theory, News & General
Topic: Indiv. REITs in taxable because of new tax law? Aargh!
Replies: 13
Views: 1604

Re: Indiv. REITs in taxable because of new tax law? Aargh!

A direct holder of a REIT will generally be able to apply the 20% business income deduction What does "generally" mean? I'd run the numbers and figure out what you're talking about in dollar savings before doing anything. I'd also estimate the likelihood that the tax law remains unchanged in a long...
by stlutz
Sun Jun 17, 2018 6:28 pm
Forum: Investing - Theory, News & General
Topic: How much tilt is enough to make a difference?
Replies: 27
Views: 1808

Re: How much tilt is enough to make a difference?

Even after back testing for the full time available Jan 1999 - May 2018, the slice and dice did quite a bit better than 100% US TSM. Is this a long enough period to get a good guage off of this portfolio AA? Or are there some other factors at play with the PV data or unusual events of some kind? I ...
by stlutz
Sun Jun 17, 2018 6:21 pm
Forum: Investing - Theory, News & General
Topic: What do you sell after the emergency fund?
Replies: 25
Views: 1477

Re: What do you sell after the emergency fund?

stlutz, I do not understand your post. A) Do you rebalance after the 50% drop and you are unemployed? B) Subsequently, if you need to sell for your monthly expense, do you sell bond and/or stock to maintain your AA of 60/40? If there was a 50% drop, I probably would have rebalanced a couple of time...
by stlutz
Sun Jun 17, 2018 5:56 pm
Forum: Investing - Theory, News & General
Topic: Should your employment/income source determine your investment choices?
Replies: 13
Views: 916

Re: Should your employment/income source determine your investment choices?

The idea seems to make perfect sense to me. ... That said, considering that -- for the most part -- you can't even get people to take the Social Security & other pensions into account when thinking about portfolio construction, I think it is a bit of a lost cause to think any but the smallest minor...
by stlutz
Sun Jun 17, 2018 5:45 pm
Forum: Investing - Theory, News & General
Topic: What do you sell after the emergency fund?
Replies: 25
Views: 1477

Re: What do you sell after the emergency fund?

If I was 60/40 and needed or wanted to sell, the fact that I just sold something wouldn't change what my desired asset allocation is.
by stlutz
Sun Jun 17, 2018 4:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rediscovering The Size Effect
Replies: 36
Views: 3457

Re: Larry Swedroe: Rediscovering The Size Effect

And if you want to see what, if any, difference there is between large cap and small cap returns, you should probably compare those asset classes. A total stock market is a blend of both. As an explanation, the reason I use the total market is that this is the "base" starting point for most folks h...
by stlutz
Sun Jun 17, 2018 3:56 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rediscovering The Size Effect
Replies: 36
Views: 3457

Re: Larry Swedroe: Rediscovering The Size Effect

Annualized return (%) / Standard Deviation / Sharpe Ratio / Max calendar year loss ..9.8 / 16.6 / 0.46 / -26.0 = 50% Small Caps (Smallest 30%):50% 5-yr T-notes ..9.8 / 19.3 / 0.42 / -43.9 = 100% Large Caps (Largest 30%) Hi Robert: I'm afraid I don't understand how one portfolio with 100% stocks is ...
by stlutz
Sun Jun 17, 2018 3:11 pm
Forum: Investing - Theory, News & General
Topic: You Can Market Time At Valuation Extremes
Replies: 31
Views: 3555

Re: You Can Market Time At Valuation Extremes

What you need to do, if you want to time, is change your asset allocation in response to changes in expected returns. There will have been reasonable timing (dynamic asset allocation) strategies that would have reduced or eliminated exposure to Japanese or US stocks at the peaks of their bubbles. I...
by stlutz
Sun Jun 17, 2018 1:09 pm
Forum: Personal Consumer Issues
Topic: Has Anyone Tried Youtube TV?
Replies: 22
Views: 1561

Re: Has Anyone Tried Youtube TV?

I tried it on a free trial. The main thing I didn't like that is that you can't override the poor decisions their DVR sometimes makes. For example, I recorded a Formula One race. A couple of days later when I went to watch it, the original live version had been overwritten with a later abbreviated r...
by stlutz
Sun Jun 17, 2018 1:02 pm
Forum: Investing - Theory, News & General
Topic: Are Vanguard's actively managed funds better?
Replies: 11
Views: 1537

Re: Are Vanguard's actively managed funds better?

Regardless of the issues lack_ey has pointed out, I don't think the conclusion that VG active funds have neither added nor subtracted value leads to the conclusion that passive is better. I think instead that the conclusion would be that they are equally good.
by stlutz
Sun Jun 17, 2018 12:58 pm
Forum: Investing - Theory, News & General
Topic: how can i determine if Wellington only takes long stock positions?
Replies: 9
Views: 408

Re: how can i determine if Wellington only takes long stock positions?

And by the way, kudos on the "trust but verify" approach that you are taking! Fund prospectuses and annual reports have a lot of useful information and are worth reviewing for every fund you own and are considering owning.
by stlutz
Sun Jun 17, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: how can i determine if Wellington only takes long stock positions?
Replies: 9
Views: 408

Re: how can i determine if Wellington only takes long stock positions?

This would be clearly delineated in the annual report. For example, look at the report for the AQR Long/Short Equity fund: http://hosted.rightprospectus.com/AQRFunds/Fund.aspx?cu=00203H446&dt=AR . In the schedule of investments, they have a section for long positions and a section for short position...
by stlutz
Fri Jun 15, 2018 11:14 pm
Forum: Investing - Theory, News & General
Topic: Flaw in Logic? CD ladder instead of bond funds
Replies: 63
Views: 4426

Re: Flaw in Logic? CD ladder instead of bond funds

BIV is a fine investment, so are CDs. Since nobody else has done it, I'm going to speak up in favor of just sticking with BIV. Unlike with a direct CD, a bond fund will flutuate in price. But, when it drops in price it gets made up for over time by a higher yield. So, BIV has suffered a bit from the...
by stlutz
Fri Jun 15, 2018 11:05 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2462

Re: Factor-based strategy is better (winer), OK. then who are the losers?

But those individual active stock pickers are the one at the margins, setting the prices. If they demand a premium for investing in a small company over a larger company, that premium will carry over to everyone who owns the stock as part of an index. If you own thousands of small companies, you do...
by stlutz
Fri Jun 15, 2018 7:49 pm
Forum: Investing - Theory, News & General
Topic: Schwab's Securities Lending Fully Paid (SLFP) program
Replies: 15
Views: 957

Re: Schwab's Securities Lending Fully Paid (SLFP) program

100% collateral is a bad deal. Institutional players would get overcollateralized at say 102%-105%
I googled this. One PDF said they give you "at least "100% collateral. Another said it was adjusted daily to be 102%.
by stlutz
Fri Jun 15, 2018 7:05 pm
Forum: Investing - Theory, News & General
Topic: Am I "market timing"?
Replies: 37
Views: 1847

Re: Am I "market timing"?

If you had bought VTI at about 10:30 this morning and then sold at 2:30, that would have been good market timing. if you didn't do that, then I wouldn't try to time your purchases and sales around short-term market moves.
by stlutz
Fri Jun 15, 2018 7:00 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 38
Views: 3441

Re: Are Bogleheads smarter than the bond market?

There is an approach that the best predictor of the future shape of the yield curve is today's yield curve. Not that it's a good prediction, but it's better one than looking at what the market itself is forecasting. This theory concludes that the market is pretty dumb about the future direction of i...
by stlutz
Fri Jun 15, 2018 6:35 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2462

Re: Factor-based strategy is better (winer), OK. then who are the losers?

What percentage of small cap stocks are actually held in non-diversified portfolios? How many people have millions in a single or a few small cap stocks? If all or nearly all small caps are held in diversified accounts such as mutual funds, etfs, pension funds, etc. then the individual stock risk h...
by stlutz
Fri Jun 15, 2018 6:23 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rediscovering The Size Effect
Replies: 36
Views: 3457

Re: Larry Swedroe: Rediscovering The Size Effect

nisiprius: Back in this thread Small-cap tilt, 1925-2004: good enough to make you switch? , you concluded that the the small cap effect is there but that it is small. (That is my favorite BH thread ever, BTW). I'm curious if that is still your view or if you have evolved a bit and concluded the that...
by stlutz
Fri Jun 15, 2018 6:11 pm
Forum: Investing - Theory, News & General
Topic: Should your employment/income source determine your investment choices?
Replies: 13
Views: 916

Should your employment/income source determine your investment choices?

It has been suggested in another thread that whether one value tilts should be determined based on where one is employed (or where there pension comes from etc.). So, if your employer happens to be a "value" company at the moment, then your portfolio should be tilted to growth stocks. Conversely, if...
by stlutz
Fri Jun 15, 2018 5:59 pm
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 125
Views: 15864

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

...owners of distressed businesses, employees and top-level managers of value companies, as well as retirees who receive (or in the future will receive) pension benefits from a value company. For this type of investor, a neutral exposure to value or even a growth tilt (compared to the market) is mo...
by stlutz
Fri Jun 15, 2018 11:46 am
Forum: Investing - Theory, News & General
Topic: PUTW to diversify sequence of returns
Replies: 13
Views: 771

Re: PUTW to diversify sequence of returns

If you've wondered why the PutWrite index (sell puts backed by cash) seems to have done better than BuyWrite (own stocks and sell calls against them), this is quick and informative: https://www.aqr.com/~/media/files/persp ... ritevf.pdf Short story: a difference in market exposure on option expiry ...
by stlutz
Fri Jun 15, 2018 12:41 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3414

Re: Larry Swedroe: What Makes Factors Endure

I don't know, computers and algorithms seem to amplify human emotion. I doubt that AI will be any different. Somehow, greed and fear are still in fashion. I suppose someone will try baffling AI by doing seemingly really irrational trades. Do weird things in the markets to try to get AI machines to ...
by stlutz
Fri Jun 15, 2018 12:38 am
Forum: Investing - Theory, News & General
Topic: PUTW to diversify sequence of returns
Replies: 13
Views: 771

Re: PUTW to diversify sequence of returns

It is probably more efficient to write naked puts yourself backed by margin, assuming you have plenty of liquidity. I don't think your broker will even allow that without plenty of liquidity. If you're going to do it yourself, you almost have to do it this way. The CBOE backtest assumes you invest ...
by stlutz
Fri Jun 15, 2018 12:32 am
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 125
Views: 15864

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

By the way, did you see the posted essay and references regarding SV premia from Larry in the recent factor thread? Dave: You mean the same list of papers that Mr. Swedroe has posted about 500 times in this forum over the years? :) None of those addressed the simple question I had: In order for a r...
by stlutz
Fri Jun 15, 2018 12:00 am
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 125
Views: 15864

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

stlutz,

Then, don't bet 75%. There is no reason why you must put 75% of your portfolio into SCV.
It was the post prior to mine that suggested that a 100% concentration in 2% of the market was sensible. That's not some straw man I manufactured. :happy
by stlutz
Thu Jun 14, 2018 10:56 pm
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 125
Views: 15864

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

I would contend that the LP is applicable at any stage of investing. I think it’s not a single specific stock bond split. Rather I think it’s a concept that can be tailored to any risk level. The concept is target an expected return and choose an equity / bond split that targets that return. The La...
by stlutz
Thu Jun 14, 2018 10:47 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2462

Re: Factor-based strategy is better (winer), OK. then who are the losers?

Part of the small/value premium is a risk premium. There is a larger chance of your investment in a small and/or value company going to zero than there is with a large/growth company. Buying an index of many small value companies will eliminate single stock risk, but it also greatly increases the o...
by stlutz
Thu Jun 14, 2018 10:41 pm
Forum: Investing - Theory, News & General
Topic: Factor Diversification = Beta?
Replies: 7
Views: 613

Re: Factor Diversification = Beta?

One thing to keep in mind is that factor loads measure concentration of risk, not diversification of it. So, if you bet on multiple factors, you'll have a number of factor loads that are positive, but rather small. That's what a diversified portfolio looks like. If the factor thing collectively work...
by stlutz
Thu Jun 14, 2018 10:31 pm
Forum: Investing - Theory, News & General
Topic: PUTW to diversify sequence of returns
Replies: 13
Views: 771

Re: PUTW to diversify sequence of returns

Is it worth paying the 0.38% expense ratio to have this added diversification? It is worth keeping in mind that the backtests do not include any expenses, and this fund tends to trail the benchmark by a little more than it's expense ratio. So, you lose about .5% per year. I'd also keep in mind that...
by stlutz
Thu Jun 14, 2018 6:25 pm
Forum: Investing - Theory, News & General
Topic: PUTW to diversify sequence of returns
Replies: 13
Views: 771

Re: PUTW to diversify sequence of returns

Because it has the income from writing the put options, PUTW will do better in a down market that the S&P 500 and will give up return in an up market. Its backtested index went down signficantly less than the 500 during the 2008 crash. I would put this fund in the same general bucket a low volatilit...
by stlutz
Wed Jun 13, 2018 11:07 pm
Forum: Investing - Theory, News & General
Topic: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed
Replies: 27
Views: 2414

Re: 1 Year Rule - Not allowed to execute new investment strategy until 1 year has passed

First, I try to wait a month (just a month!) between deciding to do something and actually doing it.
I've done this too. The fact that nisiprius is doing it makes me feel really smart!
by stlutz
Tue Jun 12, 2018 11:05 pm
Forum: Investing - Theory, News & General
Topic: Why does CAPM make sense?
Replies: 23
Views: 1028

Re: Why does CAPM make sense?

My concern is with extrapolating long term returns from short term volatility. I agree with you. One of the unusual things about CAPM vs. other models that get promoted in the world of finance is that with CAPM, they started with the hypothesis first, which allowed for it to be tested with actual d...
by stlutz
Tue Jun 12, 2018 10:27 pm
Forum: Investing - Theory, News & General
Topic: Why does CAPM make sense?
Replies: 23
Views: 1028

Re: Why does CAPM make sense?

Views about CAPM tend to be highly nuanced amongst folks who like to talk investing theory around here. Because there is actually a lot to the model (even though it is mathematically very simple), it might be helpful if you identified your main concerns? I haven't read the thread that you took your ...
by stlutz
Tue Jun 12, 2018 9:54 pm
Forum: Investing - Theory, News & General
Topic: Do Small Caps Outperform?
Replies: 61
Views: 3857

Re: Do Small Caps Outperform?

Yum, I love me some IJR!
IJR began trading basically at the very top of the tech bubble in 2000. So, what you in fact love is a good market timing call to switch from the S&P 500 to smallcaps at the very top of the bubble back then.

IJR is a fine fund (I own some). But it's not *that* good.
by stlutz
Tue Jun 12, 2018 8:32 pm
Forum: Investing - Theory, News & General
Topic: Do Small Caps Outperform?
Replies: 61
Views: 3857

Re: Do Small Caps Outperform?

but the existence of a small-cap premium has been challenged by some authorities. It isn't crazy talk to doubt its existence. Aswath Damodaran:The Small Cap Premium: Where is the beef?
Interesting. I hadn't seen that writeup before. Thanks for sharing, nisi.
by stlutz
Tue Jun 12, 2018 7:36 pm
Forum: Investing - Theory, News & General
Topic: Why is long bonds yielding less than short bonds?
Replies: 7
Views: 1078

Re: Why is long bonds yielding less than short bonds?

Funds like BND or BIV are making substantial investments in corporate bonds. With those bonds, there is a lot more risk that you won't get all of your interest payments or all of your principal back because the company goes bankrupt. As such, such bonds have a yield premium over treasuries. If you j...
by stlutz
Tue Jun 12, 2018 7:33 pm
Forum: Investing - Theory, News & General
Topic: The Deep History of Stock & Bond Returns
Replies: 75
Views: 4933

Re: The Deep History of Stock & Bond Returns

It's perhaps interesting (and illustrative) to also look at the history of what a corporation is.

Easy link to scrounge up on the subject: https://en.wikipedia.org/wiki/Corporation
by stlutz
Tue Jun 12, 2018 7:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3414

Re: Larry Swedroe: What Makes Factors Endure

Thanks for the reply, Dave. Yes I do think small stocks are riskier than big stocks. Who would you rather lend money to, a huge multinational company or a smaller local or regional company? Who would you charge the higher interest rate? This isn't really what I asked. Of course investing in a single...
by stlutz
Mon Jun 11, 2018 11:29 pm
Forum: Investing - Theory, News & General
Topic: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]
Replies: 127
Views: 9761

Re: Interesting video from Ramsey today [How Ramsey Outperforms The Stock Market]

I think I recall from a prior thread that he gets the 12% by taking an arithmetic average of a fund that has beaten the market as opposed to a CAGR. I'm curious if anyone has ever called his show and asked something like, "I'm 52 years old and have $500,000 saved up. I think I'm going to retire. Wha...
by stlutz
Mon Jun 11, 2018 11:23 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3414

Re: Larry Swedroe: What Makes Factors Endure

Small stocks are riskier. How so? Do you really think that holding thousands of smallcap stocks is more risky than only owning only AAPL, MSFT, AMZN, and FB? Both portfolios represent 10% of the market. The "risk" from smallcap investing comes from concentrating in one small section of the market, ...
by stlutz
Mon Jun 11, 2018 8:49 pm
Forum: Investing - Theory, News & General
Topic: Is Vanguard Small Cap Index really small cap?
Replies: 32
Views: 1839

Re: Is Vanguard Small Cap Index really small cap?

There is no one true definition of the word "Smallcap". The Vanguard fund defines it as the smallest 15% of the market by market cap (if I'm remembering correctly).
by stlutz
Mon Jun 11, 2018 8:40 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3414

Re: Larry Swedroe: What Makes Factors Endure

Dave, I'm wondering whether you think that a compelling, rational reason for most investors to take the other side of the trade should be such a criteria? e.g. "Everybody knows stocks are highly likely to outpeform bonds. But, most of the money should still prefer bonds because ___________" "Everybo...
by stlutz
Mon Jun 11, 2018 6:15 pm
Forum: Investing - Theory, News & General
Topic: Upping equity exposer instead of adding Factors/Value
Replies: 7
Views: 614

Re: Upping equity exposer instead of adding Factors/Value

What I found was that, yes, there has been a premium for value in the last 25 years (which was not surprising). Hmmmm.... I just backtested 3 combinations on PV: and 80/20 mix of Total Stock and Total Bond, an 80/20 mix of Vanguard Value Index and Total Bond, and an 80/20 mix of Vanguard Smallcap a...
by stlutz
Mon Jun 11, 2018 5:55 pm
Forum: Investing - Help with Personal Investments
Topic: Callable bond- maintain or take loss?
Replies: 32
Views: 1687

Re: Callable bond- maintain or take loss?

Does your statement have the Cusip number for these CDs? One of us might be able to look up more details on them as something sounds very off.
by stlutz
Sun Jun 10, 2018 6:16 pm
Forum: Investing - Theory, News & General
Topic: Harry Browne Permanent Portfolio Discussion (Cont'd)
Replies: 659
Views: 151664

Re: Harry Browne Permanent Portfolio Discussion (Cont'd)

Gold has a relatively fixed supply (growing about 1-2% per year). So, the price can go up over time to the extent that investors value it in the same way they have been. So, I think that makes it a very legitimate savings vehicle. However, I also think the extent to which investors value it highly i...
by stlutz
Sat Jun 09, 2018 12:08 pm
Forum: Investing - Theory, News & General
Topic: Don’t cheat yourself with the 4% rule
Replies: 159
Views: 17915

Re: Don’t cheat yourself with the 4% rule

VPW does adjust nicely to reduce withdrawals when necessary, but IMHO it might go a little too far. Going down to 24k, when initially planning 40k is a huge drop. Not sure there is a better way to know how much to cut back until after the fact. VPW provides certainty, but it likely comes at a cost ...