Most educational.
Hopefully more bogleheads will buy gold.
Search found 225 matches
- Fri Mar 04, 2022 10:11 pm
- Forum: Investing - Theory, News & General
- Topic: Ray Dalio: The Changing World Order
- Replies: 45
- Views: 6456
- Thu Jun 17, 2021 3:35 am
- Forum: Investing - Theory, News & General
- Topic: Which version of The Intelligent Investor is best?
- Replies: 8
- Views: 4767
Re: Which version of The Intelligent Investor is best?
I consider myself to be something of an amateur historian when it comes to the different versions of The Intelligent Investor. First things first. There are 6 different versions of the book. The first 5 versions have been labeled in a confusing way that has made people over the years think there is one fewer than there really is. Why? Because you'll notice that the second edition is referred to as the "first revised edition" and the third edition is referred to as the "second revised edition" and so on. This has made people think that "second revised edition" means second edition when that actually makes it the third edition. It is much easier to refer to the 6 different versions by original publishing date - 1...
- Wed Jun 16, 2021 6:20 pm
- Forum: Investing - Theory, News & General
- Topic: Anyone here have a golden butterfly portfolio?
- Replies: 73
- Views: 21640
Re: Anyone here have a golden butterfly portfolio?
The GB is pretty much the best all-around portfolio (to the extent to which there is such a thing) that has ever been proposed on this forum.
- Wed Jun 16, 2021 5:28 pm
- Forum: Investing - Theory, News & General
- Topic: I'll never regret not having international funds in my portfolio
- Replies: 282
- Views: 27992
Re: I'll never regret not having international funds in my portfolio
You'll probably regret it when we see a protracted period of low returns in U.S. markets.
- Wed Jun 09, 2021 1:33 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
Best I can tell, the general consensus for prudent gold storage is diversification.
So, having maybe some coins in a safe, some in a safe deposit box, some held via certificates at the Perth Mint, and some in ETF form.
Mike Maloney has some great resources on his website regarding gold/silver storage. Take this article as an example: https://goldsilver.com/blog/why-mike-ma ... d-storage/
You can even wear some of your wealth in jewelry form. Mene for instance sells so-called "investment grade" jewelry so that your gold doesn't just have to sit in a vault all the time. https://mene.com/
So, having maybe some coins in a safe, some in a safe deposit box, some held via certificates at the Perth Mint, and some in ETF form.
Mike Maloney has some great resources on his website regarding gold/silver storage. Take this article as an example: https://goldsilver.com/blog/why-mike-ma ... d-storage/
You can even wear some of your wealth in jewelry form. Mene for instance sells so-called "investment grade" jewelry so that your gold doesn't just have to sit in a vault all the time. https://mene.com/
- Tue Jun 08, 2021 7:29 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
The undeniable reality of gold providing inflation protection.
- Tue Jun 08, 2021 3:50 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
Quite right. And hyperinflation has already happened in the US economy before so there’s no reason to suspect that there’s something special about America now that guarantees it won’t happen again. And why would TIPS help at all in such a scenario? They won’t. And beyond that, America is doing way more money printing than anyone in the world right now, which is what causes these hyperinflationary episodes. So the macroeconomic risks are obvious and the utility of gold is further obvious
- Tue Jun 08, 2021 3:07 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
It's funny how some people claim that others hand wave away documented monetary history when that is exactly what they are doing. It's also equally ridiculous that they accuse others of moving the goalposts when that is also what they are doing. This has been repeated time and time again and it doesn't sink in. Gold has been "money good" for quite literally thousands of years, predating the bible. It has continued to survive, exhibiting a "golden constant" while thousands of fiat currencies around the world have been and created and collapsed. This makes it defacto money, defacto inflation protection, and defacto disaster protection. But no, suddenly it's all about how you should have a place to flee as if that's mutual...
- Tue Jun 08, 2021 3:06 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
More hand waving and more cherry picking. More intentional blindness to obvious facts. More accusing others of what he is doing himself. That’s why his posts need to keep getting longer and longer as a form of obfuscation. Don’t feed the trolls.
- Sun Jun 06, 2021 2:35 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
I have nothing to add to this thread, other than to thank NiceUnparticularMan for his incredibly valuable (and patient) posts. I genuinely learned a lot from reading through all 161 posts above. :sharebeer Indeed. The words of ideologues tend to be very comforting because they are overly simplistic and have an authoritarian resonance to them. It’s a dangerous form of non-thinking when someone comes out and just hand waves away the nuances of a topic and simply declares “false” when it’s convenient. It makes people feel safe when a figure does this though, because it allows those people to feel like there’s always someone to turn to who seems confident in themselves. Does that remind you of someone that used that strategy in 2015 and 2016? ...
- Thu Jun 03, 2021 8:57 pm
- Forum: Investing - Theory, News & General
- Topic: Should I Add Gold ETF to My Portfolio?
- Replies: 36
- Views: 4288
Re: Should I Add Gold ETF to My Portfolio?
This stuff happens regularly throughout economic history, and it pays to be prepared. This is especially true if you're creating multi-generational portfolios for your heirs (which I am doing). It's just unfortunate that it doesn't happen so frequently that it shows up on armchair economist's myopic portfolio visualizer results. While I'm not a fan of Bernstein's, I agree with him that to the extent that history is any indicator of what's likely to happen in the future, there's at least a 20% probability of some type of major societal 'failure' in the next 40 years (e.g., hyperinflation, political failure, global war). This isn't related to any specific events happening right now, just an optimistic extrapolation from the past. Some argue ...
- Thu Jun 03, 2021 7:11 pm
- Forum: Investing - Theory, News & General
- Topic: Should I Add Gold ETF to My Portfolio?
- Replies: 36
- Views: 4288
Re: Should I Add Gold ETF to My Portfolio?
The question of what % you should allocate to an asset like gold is a tricky one. I think that investing in general isn't as amenable to mathematics as some people make it out to be. You can calculate standard deviations out the nth degree, but that doesn't mean it's a valuable exercise. Some will even go as far as to "weaponize" mathematics in truly pathological ways to win arguments in this field. It's truly a terrible thing to see. Trying to be intellectually honest here: I think the best we can really make of the situation is to make rough guesstimates. The idea seems unsophisticated and anathema to some, but I do believe it's the correct idea. Ben Graham wrote about this too: that anything beyond basic arithmetic in investin...
- Thu Jun 03, 2021 1:31 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold
Yup. Very, very cool technology. I pretty much insist on it when I buy coins these days.GRP wrote: ↑Thu Jun 03, 2021 7:06 am I just looked up the Bullion DNA thing you mentioned. That's some seriously cool technology. It looks like that extra validation allows the DNA coins to command a small premium over traditional mints.
Getting back on topic. I am currently sitting at 12% gold and ~3.5% silver. I've found that as my net worth has grown over the years my ownership of silver has decreased on a relative basis due to the storage space constraints. I suspect this will only continue. But man, gold allows insane amounts of wealth to be stored in an incredibly tiny volume. A fortune fits in the palm of your hand.
- Thu Jun 03, 2021 1:29 pm
- Forum: Investing - Theory, News & General
- Topic: Should I Add Gold ETF to My Portfolio?
- Replies: 36
- Views: 4288
Re: Should I Add Gold ETF to My Portfolio?
I am a Golden Butterfly investor, so 20% of my portfolio is in gold bullion. I'd say my split between physical, certificates, and funds is about equal, though i'm not super militant about it. As long as it's equal-ish that's good enough for me.
- Wed Jun 02, 2021 5:01 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold
seajay, do you mind sharing what your gold holding approach is? You mention geographic diversification here. Are you using a platform like the Perth Mint for overseas holdings? I'd be interested in hearing what other people's approaches are. +1 on the Perth Mint. I've been with them for years, and have had nothing but good experiences. In terms of my local holdings I really like the Canadian Maple Leafs. The "Bullion DNA" feature is really useful as an added layer of security. Additionally, they are five 9s pure, which is nice. The only downside is that since they aren't mixed with any alloys they can be more subject to physical damage or deformation. American Gold Eagles are alloyed with copper and silver which improves physical...
- Wed Jun 02, 2021 4:55 pm
- Forum: Investing - Theory, News & General
- Topic: Should I Add Gold ETF to My Portfolio?
- Replies: 36
- Views: 4288
Re: Should I Add Gold ETF to My Portfolio?
What about a gold ETF serving as a backstop to Treasuries in a "flight to safety" situation, especially if the dollar continues to be devalued due to all of this money printing, etc.? With Treasuries having such low yields, would this make gold more attractive to potential investors going forward? Would a 10% portfolio allocation to gold be sufficient to "move the needle"? Definitely a good move. I agree with the notion that 10% is really what you want at a minimum to, as you put it, "move the needle." There's a school of thought that says that investing internationally is sufficient to protect oneself against the threats you've mentioned. I disagree personally, especially since that easy access to internation...
- Wed Jun 02, 2021 1:11 pm
- Forum: Investing - Theory, News & General
- Topic: Gold [buying/storing]
- Replies: 208
- Views: 21431
Re: Gold [buying/storing]
Yup, Canadian here. Funny coincidence, as I was just looking at Wealthsimple's platform and noted that too. I think it's a step in the right direction, but I think the amount of gold is insufficient, and the fees are still a tad too high. 50 bps fee on top of the underlying ETF fees, and only 3% gold. For someone who really doesn't want to get into the weeds of finance and wants to set it and forget it, there are worse options though. Overall, I still prefer the direct holding of gold above all other options. I mean, the ETFs are great for cheap rebalancing, but the real robustness of gold comes from its lack of counterparty and infrastructure risk. Bitcoin has been intriguing to me as a complement to precious metals. However, Bitcoin also...
- Tue Feb 09, 2021 1:34 am
- Forum: US Chapters
- Topic: Why A Good Boglehead Must Leave The Bogleheads Forum
- Replies: 184
- Views: 31832
Why A Good Boglehead Must Leave The Bogleheads Forum
I am leaving the Bogleheads forum -- a departure likely to be permanent. However, before I leave I wanted to share why I am doing so with my fellow Bogleheads. To keep this actionable , I'd like you to consider the following passages as food for thought as to whether or not you should leave this forum. I have been enlightened, enthralled, educated, and occasionally miffed at the discussions here. It has been a wild ride, and I have enjoyed my times perusing the many topics. I have had the pleasant experience of familiarizing myself with the thinking of men whose intellect exceeds my own including Larry Swedroe, Taylor Larimore, John Bogle, Rick Ferri, and many others. Enjoyable as it has been, browsing this forum has done nothing but cause ...
- Sat Feb 06, 2021 9:28 pm
- Forum: Personal Consumer Issues
- Topic: Can you get a job from taking a "Coding Bootcamp"?
- Replies: 63
- Views: 7996
Re: Can you get a job from taking a "Coding Bootcamp"?
Yes, yes, and yes!
I'm active in the bootcamp community and have seen hundreds of bootcamp graduates land promising tech careers over the past several years. You've specified that the person in question has a physics degree; that background will make acclimating to coding that much easier.
The thing about coding bootcamps is that you get out what you put into them. Someone keen enough to get a physics degree will flourish, I'm sure.
I'm active in the bootcamp community and have seen hundreds of bootcamp graduates land promising tech careers over the past several years. You've specified that the person in question has a physics degree; that background will make acclimating to coding that much easier.
The thing about coding bootcamps is that you get out what you put into them. Someone keen enough to get a physics degree will flourish, I'm sure.
- Thu Feb 04, 2021 8:34 pm
- Forum: Investing - Theory, News & General
- Topic: "The Case For Low-Cost Index Fund Investing"
- Replies: 9
- Views: 1747
Re: "The Case For Low-Cost Index Fund Investing"
Thanks for the great share, Taylor.
- Wed Feb 03, 2021 3:52 pm
- Forum: Investing - Theory, News & General
- Topic: What is the core and satellite investment approach?
- Replies: 7
- Views: 788
Re: What is the core and satellite investment approach?
I think it's a great investment approach. It keeps the investor tied to the basics but also allows for some latitude as it pertains to factors or personal inclinations.
I prefer the phrase "core and explore" due to the rhyming though!
I prefer the phrase "core and explore" due to the rhyming though!
- Mon Feb 01, 2021 11:57 pm
- Forum: Personal Investments
- Topic: Undervalued Stock Picks
- Replies: 33
- Views: 4869
Re: Undervalued Stock Picks
WOOSH.typical.investor wrote: ↑Mon Feb 01, 2021 11:47 pm
Not sure what measures you use, but price/book is now over 40.
Compare that to a few months ago when is was a value stock with a price/book of around two.
The S&P500 is around 4.1.
I’m sure p/e will show a similar story...it’s not a value stock at this price even if it is a distressed company with little expected growth. The price is simply too high.
- Mon Feb 01, 2021 10:39 pm
- Forum: Personal Investments
- Topic: Undervalued Stock Picks
- Replies: 33
- Views: 4869
Re: Undervalued Stock Picks
Nah.typical.investor wrote: ↑Fri Jan 29, 2021 3:56 amNo it’s not. It’s a momentum play.
At some point perhaps it was a value stock, but definately no longer.
It's deep. Deep you-know-what Value.
- Mon Feb 01, 2021 10:10 pm
- Forum: Investing - Theory, News & General
- Topic: Why isn't every indexer investing in small cap value index funds?
- Replies: 372
- Views: 46005
Re: Why isn't every indexer investing in small cap value index funds?
I held a "slice and dice" portfolio for about 10 years that included heavy tilts to emerging markets, small-cap value, and international small-caps. I was convinced by the academic literature and felt confident I could stay the course long enough with this approach to reap the promised rewards. And yet...I found myself constantly agonizing over my portfolio allocations. Was 25% of my portfolio in SCV too high or too low? Shouldn't I just go all-in if I truly believed in the long-term out-performance of certain asset classes? I'd read threads on BH with full-throated defenses of SCV tilts, momentum strategies, 3-fund simplicity, and every other portfolio under the sun. Everyone seemed so smart and educated, and had so much evidenc...
- Fri Jan 29, 2021 12:15 am
- Forum: Personal Investments
- Topic: Undervalued Stock Picks
- Replies: 33
- Views: 4869
Re: Undervalued Stock Picks
GME is a deep value play.
- Wed Jan 27, 2021 4:34 pm
- Forum: Investing - Theory, News & General
- Topic: What Do You Consider a "Really Bad Day"?
- Replies: 88
- Views: 12636
Re: What Do You Consider a "Really Bad Day"?
An RBD is what just happened to Melvin Capital and Citron lol.
- Wed Jan 27, 2021 11:07 am
- Forum: Investing - Theory, News & General
- Topic: Inflation-Protected Portfolio ?
- Replies: 58
- Views: 6402
Re: Inflation-Protected Portfolio ?
Buy gold and sleep well at night.
- Mon Jan 25, 2021 11:20 pm
- Forum: US Chapters
- Topic: Happy 97th Birthday, Taylor Larimore
- Replies: 146
- Views: 12468
Re: Happy 97th Birthday, Taylor Larimore
Happy birthday to the great Taylor Larimore!
- Sun Jan 24, 2021 10:56 pm
- Forum: Investing - Theory, News & General
- Topic: Why isn't every indexer investing in small cap value index funds?
- Replies: 372
- Views: 46005
Re: Why isn't every indexer investing in small cap value index funds?
Data collected over wide swaths of time and markets has shown the factor model of returns to be superior to one that only consists of market beta, which is all TSM is exposed to (and only what it is exposed to). That is, returns are driven by market beta, the value factor, the size factor, etc. Saying that an investment that is only exposed to one of those factors is 'value' is just plain wrong unless you're using completely different definitions of the term. If you want to use your own private definitions of widely used investing terms, that's fine for you, but it should be called out as such in a public forum. I am fully aware of the factor literature and I used to be a massive factor advocate. And there is no need to "call out"...
- Sun Jan 24, 2021 11:14 am
- Forum: Personal Investments
- Topic: Any boring investors left?
- Replies: 222
- Views: 18189
Re: Any boring investors left?
8/10
Risk parity and gold.
Risk parity and gold.
- Sat Jan 23, 2021 2:23 pm
- Forum: Investing - Theory, News & General
- Topic: Why isn't every indexer investing in small cap value index funds?
- Replies: 372
- Views: 46005
Re: Why isn't every indexer investing in small cap value index funds?
The consensus within the factor literature is not as unanimous as many people seem to be implying in this thread. For one thing, if you branch out beyond the Fama/French literature and read some of the material written by critics you start to encounter many problems. Really, consider the following: - Stocks that have fallen precipitously in price tend to enter the value regime, predicting a premium. - However, stocks that have risen precipitously in price tend to enter the positive momentum regime, predicting a premium. - Value stocks are proxies for distress risk, whose increased riskiness predicts a premium. - However, high-quality stocks with good profitability enter the quality regime, predicting a premium. - High beta stocks have great...
- Fri Jan 22, 2021 12:16 pm
- Forum: Investing - Theory, News & General
- Topic: Why isn't every indexer investing in small cap value index funds?
- Replies: 372
- Views: 46005
Re: Small Cap Value according to Paul Merriman has outperformed 100% of 20 year historical periods, what's the catch?
http://www.efficientfrontier.com/ef/900/15st.htm#:~:text=The%2015%2DStock%20Diversification%20Myth&text=One%20of%20the%20most%20dangerous,number%20usually%20being%20about%2015. For those of you mulling over whether to tilt or not, the famous "The 15-Stock Diversification Myth" paper is very much worth reading. It will likely dissuade you from tilting. a grossly disproportionate fraction of the total return came from a very few "superstocks" like Dell Computer, which increased in value over 550 times. If you didn’t have one of the half-dozen or so of these in your portfolio, then you badly lagged the market. (The odds of owing one of the 10 superstocks are approximately one in six.) ... So, yes, Virginia, you can elim...
- Mon Jan 11, 2021 1:09 am
- Forum: Investing - Theory, News & General
- Topic: Did anybody try Mr. Bogle's "new" idea for a fund that never changes
- Replies: 20
- Views: 3293
Re: Did anybody try Mr. Bogle's "new" idea for a fund that never changes
Interesting idea!
Ben Felix did a video on this topic recently. It turns out that an unrebalanced and unreconstituted s&p 500 index actually outperforms the vanilla index. The tax advantage makes the idea even more enticing.
Ben Felix did a video on this topic recently. It turns out that an unrebalanced and unreconstituted s&p 500 index actually outperforms the vanilla index. The tax advantage makes the idea even more enticing.
- Fri Jan 08, 2021 7:35 pm
- Forum: Investing - Theory, News & General
- Topic: Which are best recommended Boglehead small-cap value indices? Is it worth to tilt to small cap value?
- Replies: 80
- Views: 12010
Re: Which are best recommended Boglehead small-cap value indices? Is it worth to tilt to small cap value?
Past performance matters when it supports your argument. Past performance doesn't matter if it goes against your argument.
That pretty much sums up most of the investment discussion around here.
That pretty much sums up most of the investment discussion around here.
- Fri Jan 08, 2021 6:04 pm
- Forum: Investing - Theory, News & General
- Topic: Which are best recommended Boglehead small-cap value indices? Is it worth to tilt to small cap value?
- Replies: 80
- Views: 12010
Re: Which are best recommended Boglehead small-cap value indices? Is it worth to tilt to small cap value?
Everyone in the investment world is saying how much scv stinks and that value is dead.
When I hear that something is “dead” I perk up my ears. You should too.
When I hear that something is “dead” I perk up my ears. You should too.
- Mon Dec 28, 2020 1:17 pm
- Forum: Personal Investments
- Topic: Your thoughts on a <= 10% allocation to PHYS - Sprott Physical Gold Trust
- Replies: 25
- Views: 3840
Re: Your thoughts on a <= 10% allocation to PHYS - Sprott Physical Gold Trust
A 10% allocation to gold is the one asset that all investors should hold.
Ideally that 10% should be some mix of physical and digital. A 10% allocation can improve the performance of a traditional stock/bond portfolio even if economic disaster should not strike. And if it does, it may allow you to protect some of your wealth.
Ideally that 10% should be some mix of physical and digital. A 10% allocation can improve the performance of a traditional stock/bond portfolio even if economic disaster should not strike. And if it does, it may allow you to protect some of your wealth.
- Mon Dec 28, 2020 1:04 pm
- Forum: Investing - Theory, News & General
- Topic: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
- Replies: 304
- Views: 23708
Re: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
It's not a good analogy. Really? By my reading your post just bolstered the point I was making. Look at your own chart. More return with the junk but at a higher tilt towards credit risk. Exactly what I was saying. And the vast majority of investors only hold investment grade bonds, thus the tilt away from such a factor. Some advisors even recommend only holding Treasury bonds which is perfectly prudent and only drives the lesson home further. I will say it again. It's exactly the same thing as tilting away from value and towards growth in stocks. (i.e. tilting away from distress risk.) My overall point is that you can't be a little bit pregnant. If you're not buying the total market for all assets then you've opened up a logical door you ...
- Sun Dec 27, 2020 6:57 pm
- Forum: Investing - Theory, News & General
- Topic: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
- Replies: 304
- Views: 23708
Re: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
This thread really should be a debate among the Factor advocates. What happens is that all of the 3-fund people come in here and join in. If the 3 funders think they are so right about everything, why do they have to keep joining these debates to keep themselves convinced? Why not allow those of us who are interested in factors indulge ourselves in our own foolishness? Most of us factor advocates really don't have a problem with those who want to invest with a 3 fund portfolio. Why should the 3 funders have a problem with how we choose to invest? nedsaid: At the top of this page it says: " Investing Advice Inspired by Jack Bogle ." Please don't take offense when someone points-out that Mr. Bogle's "Advice" is being igno...
- Sun Dec 27, 2020 5:57 pm
- Forum: Non-US Investing
- Topic: Why is Gold so volatile even though it is claimed as store of value?
- Replies: 61
- Views: 5300
Re: Why is Gold so volatile even though it is claimed as store of value?
Excellent post.tadamsmar wrote: ↑Sun Dec 27, 2020 5:52 pmI has to do with the missing qualifier. A good currency loses a great deal purchasing power in the long term and it is a good short-term store of value. A properly functioning currency must be a pretty good short term-store of value. Not perfect, you don't want to hold it for long. If it was a long-term store of value then it would be hoarded and become a lousy currency that we would have to abandon. Therefore you are questioning why fiat currencies have the very qualities that are required and any good currency!
- Sun Dec 27, 2020 1:38 pm
- Forum: Investing - Theory, News & General
- Topic: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
- Replies: 304
- Views: 23708
Re: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
That is not a fair comparison. Factor investors tilt away from market cap by choice. Market-cap investors tilt away from bond total market cap due to practical constraints, not by choice. Many would happily switch to a more complete bond index than AGG if it were (cheaply) available, just as on the stock side many prefer total US stock market to S&P500 or even Russell 3000. For example, I intentionally invest in high-yield US corporate "junk" bonds (at market cap weight... which is 3%+ of global bonds) in order to fill the gap left by AGG. And, of course, I also invest in international bonds (again, at market weight) for the same reason, and I wish that index was was more total as well. It's a perfectly fair comparison becaus...
- Sun Dec 27, 2020 1:02 pm
- Forum: Investing - Theory, News & General
- Topic: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
- Replies: 304
- Views: 23708
Re: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
To people who naively think that factor investing in equity is just some ill-advised attempt to beat the market, consider the following.
Why do you tilt your bond portfolio then? TBM funds tilt AWAY from the credit risk factor. That's why the expected returns are lower (in exchange for greater safety). TBM funds don't actually hold the total bond market. If it's okay to tilt away from the credit risk factor in bonds there's no logical reason why we shouldn't tilt TOWARDS size and value in equity.
You can't logically say it's okay to tilt bonds but not tilt in stocks without being self-contradictory.
Why do you tilt your bond portfolio then? TBM funds tilt AWAY from the credit risk factor. That's why the expected returns are lower (in exchange for greater safety). TBM funds don't actually hold the total bond market. If it's okay to tilt away from the credit risk factor in bonds there's no logical reason why we shouldn't tilt TOWARDS size and value in equity.
You can't logically say it's okay to tilt bonds but not tilt in stocks without being self-contradictory.
- Sat Dec 26, 2020 11:43 pm
- Forum: Personal Investments
- Topic: All Weather vs 3-fund portfolio
- Replies: 25
- Views: 6407
Re: All Weather vs 3-fund portfolio
OP please join us at www.gyroscopicinvesting.com if you want to chat with a community more in tune with risk parity strategies.
- Fri Dec 25, 2020 12:29 pm
- Forum: Investing - Theory, News & General
- Topic: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
- Replies: 304
- Views: 23708
Re: A Gut Punch (Cliff Asness of AQR on the performance of multifactor equity models)
Because factor portfolios are long-short portfolios.
The market portfolio has no exposure to momentum for instance because all the positive momentum is exactly cancelled out by the negative momentum. The same is true for all the other factors.
The market portfolio has exposure to just one factor: beta.
Merry Christmas everyone.
The market portfolio has no exposure to momentum for instance because all the positive momentum is exactly cancelled out by the negative momentum. The same is true for all the other factors.
The market portfolio has exposure to just one factor: beta.
Merry Christmas everyone.
- Wed Dec 23, 2020 1:48 pm
- Forum: Personal Consumer Issues
- Topic: Where do you store gold?
- Replies: 118
- Views: 9871
Re: Where do you store gold?
If it's over 10% of your investment assets I'd sell down to that point.
Keep the 10% in its physical form and take the proceeds of the selloff and put it into your normal AA.
Keep the 10% in its physical form and take the proceeds of the selloff and put it into your normal AA.
- Wed Dec 16, 2020 10:30 pm
- Forum: Investing - Theory, News & General
- Topic: Was Bogle secretly a believer in value stocks?
- Replies: 83
- Views: 7936
Re: Was Bogle secretly a believer in value stocks?
Bogle made it pretty clear that total market funds are where it's at as far as he's concerned.
But putting it another way: if Bogle had to make a binary choice between growth and value? I'm sure he'd pick value. He was, after all, a huge Benjamin Graham fan.
But putting it another way: if Bogle had to make a binary choice between growth and value? I'm sure he'd pick value. He was, after all, a huge Benjamin Graham fan.
- Sat Dec 12, 2020 9:19 pm
- Forum: Personal Investments
- Topic: Considering switching to unhedged international bonds
- Replies: 31
- Views: 3901
Re: Considering switching to unhedged international bonds
Buy the bonds hedged and throw gold into the portfolio to mitigate dollar weakness.
- Thu Dec 10, 2020 12:25 pm
- Forum: Investing - Theory, News & General
- Topic: Emerging Markets Index Fund Role
- Replies: 45
- Views: 3845
Re: Emerging Markets Index Fund Role
Confiscation risk is higher for a foreign investor than a domestic one. The market cannot possibly price both risks in at the same time because they are not the same. Thus, the market prices in the risk for the average investor (in cap-weighted terms), so at least some of the risk of holding stocks with higher asymmetric political risk is indeed not priced in. Your comment about FANG-esque stocks is a non sequitur and strawman as both FANG and non-FANG US stocks have the same domicile. It actually CAN price differentials simultaneously through influences in FX rates. Be that as it may, BJJ_GUY made a decent point about domestic confiscation potentially being more likely than foreign. FX aside, both domestic and foreign risk will impact pri...
- Wed Dec 09, 2020 9:49 pm
- Forum: Investing - Theory, News & General
- Topic: Emerging Markets Index Fund Role
- Replies: 45
- Views: 3845
Re: Emerging Markets Index Fund Role
Political risk is priced in. To the extent one believes that something so obvious and out in the open is not priced in, you once again embark down that slippery slope to justifying individual stock picking.
Why not just buy FANG-esque companies and avoid everything else? It's so obvious those companies have all the growth potential and future productivity of society tied to them. They're also U.S. domiciled which means you avoid all the international and geopolitical risks! Free lunch on top of a free lunch!
- Wed Dec 09, 2020 8:47 pm
- Forum: Investing - Theory, News & General
- Topic: Emerging Markets Index Fund Role
- Replies: 45
- Views: 3845
Re: Emerging Markets Index Fund Role
The risks people have mentioned in emerging markets are priced in with higher expected return.
To the extent you believe in the efficacy of indexing and passive investing you shouldn't believe you can harvest a free lunch by avoiding China. If you believe you can harvest such a free lunch with better risk adjusted return by exercising this kind of judgmental bent you might as well be picking individual stocks.
To the extent you believe in the efficacy of indexing and passive investing you shouldn't believe you can harvest a free lunch by avoiding China. If you believe you can harvest such a free lunch with better risk adjusted return by exercising this kind of judgmental bent you might as well be picking individual stocks.
- Tue Dec 01, 2020 3:10 pm
- Forum: Investing - Theory, News & General
- Topic: CAPE: A much stronger predictor of stock returns than many think
- Replies: 1022
- Views: 81663
Re: CAPE: A much stronger predictor of stock returns than many think
CAPE is obviously predictive of future returns. For the same reason that the value factor is predictive of future returns. They're really manifestations of the same phenomenon. I can't believe we're still debating this.