Search found 993 matches

by FredPeterson
Wed Mar 12, 2014 2:37 pm
Forum: Investing - Theory, News & General
Topic: modern financial theory has finally caught up with Buffett
Replies: 48
Views: 8939

Re: modern financial theory has finally caught up with Buffe

You say "if it weren't for the insurance businesses, he wouldn't be NEARLY as successful." That statement makes no sense. The insurance businesses are part and parcel of his successful business model. Berkshire Hathaway would be a different company without it's insurance businesses. Insurance businesses are among the many types of businesses Buffett invests in. You are welcome to respond, but you don't need to, as I have no desire to belabor this particular point. regards Before he even got involved with owning insurance companies for the sole purpose of using its float he was a successful investor - that's what ALLOWED him to get to the point of buying insurance companies outright instead of just their stock. He didn't magically...
by FredPeterson
Tue Mar 11, 2014 4:31 pm
Forum: Investing - Theory, News & General
Topic: modern financial theory has finally caught up with Buffett
Replies: 48
Views: 8939

Re: modern financial theory has finally caught up with Buffe

terrabiped wrote:
FredPeterson wrote:Why does it seem most articles about Buffett being a great investor somehow overlook the fact that if it weren't for the insurance businesses, he wouldn't be NEARLY as successful.

I don't mean the insurance businesses influenced his decisions (although to be fair, they have, immensely, since he knows he has the protection of the float every year) but I mean successful in terms of wealth.
Why overlook the insurance companies? Berkshire Hathaway is the Buffett investment strategy.
Er...what?

Please recollect your thoughts and reply again, as your question/statement make zero sense.

Berkshire Hathaway is a holding company. Its chief money making investments/holdings are the (re)insurance businesses AINEC.
by FredPeterson
Tue Mar 11, 2014 12:31 pm
Forum: Investing - Theory, News & General
Topic: modern financial theory has finally caught up with Buffett
Replies: 48
Views: 8939

Re: modern financial theory has finally caught up with Buffe

Why does it seem most articles about Buffett being a great investor somehow overlook the fact that if it weren't for the insurance businesses, he wouldn't be NEARLY as successful.

I don't mean the insurance businesses influenced his decisions (although to be fair, they have, immensely, since he knows he has the protection of the float every year) but I mean successful in terms of wealth.
by FredPeterson
Tue Jun 25, 2013 10:10 am
Forum: Investing - Theory, News & General
Topic: Why is Morningstar's chart so different from Yahoo's?
Replies: 12
Views: 4362

Re: Why is Morningstar's chart so different from Yahoo's?

The FIS chart on Morningstar does not contain the $16.80 "dividend" that Yahoo shows on July 3rd 2008.

This was a spinoff event of Lender Processing Services

http://www.lpsvcs.com/LPSCorporateInfor ... 80702.aspx

Morningstars graph is "wrong" because it does not take this into account.

But I think what is also happening is it included the spinoff event as an immediate reinvestment rather then a divesture of funds.
by FredPeterson
Mon Jun 03, 2013 11:49 am
Forum: Investing - Theory, News & General
Topic: uh oh...homes becoming bank accounts again
Replies: 25
Views: 3789

Re: uh oh...homes becoming bank accounts again

HardKnocker wrote:Someone I know just borrowed $30k against his house for his daughter's wedding. This guy makes a great income too.

In addition to just being a dumb thing to do period, it indicates to me he doesn't have $30k in savings. Why? He lives beyond his means.
Apple just put out bonds for a few billion. This indicates they do not have this billion in savings? Why?

Oops, no, thats not what it means. It means the capital they have in place is busy making more then the interest payments cost. Therefore the smarter decision is to actually use borrowed money because it ends up costing you less then if you paid it out of pocket.

You may still be right though.
by FredPeterson
Tue Apr 23, 2013 8:59 pm
Forum: Investing - Theory, News & General
Topic: "really bad hour" at about 1:10pm today?
Replies: 34
Views: 4898

Re: "really bad hour" at about 1:10pm today?

There are some things you cannot control. But here, I think it's a terrific reminder that if you're placing an order to buy an ETF, you'd probably be better served by placing a limit order and avoiding "market price" altogether. Artsdoctor Indeed, these types of events make me no more fearful of using ETFs, though they do make me thankful that I'm past my pre-boglehead days when I used to think that leaving a trailing stop order open might be a good idea. Nowadays I'm tempted to think I could benefit from leaving an open buy limit order at some wildly low price with the slim chance of catching a deal on some market glitch. Your order would be cancelled. You better then hope you don't immediately turn it around and sell when it re...
by FredPeterson
Wed Mar 06, 2013 12:34 pm
Forum: Personal Finance (Not Investing)
Topic: Emergency Fund - Lifestyle fund or living expense fund?
Replies: 16
Views: 2446

Re: Emergency Fund - Lifestyle fund or living expense fund?

902 reads and not even 1/9th votes. Very odd. Anyway. The psychology behind it being a living expense vs lifestyle fund is just that. Psychological. If you really were without income for 8 months and had to drop everything social that kept you sane, personally I would get depressed and withdrawn. It would make life difficult to get back on track. This is *exactly* the trap that poor, un-employed people fall into - they have no money for "the spice of life" and then get stuck (to a degree and no, lets not dive into that I'm merely making a singular point that requires no furthur discussion) If you are "financially independent" then you don't even have a salaried based income and are likely living off dividends. Could thos...
by FredPeterson
Mon Mar 04, 2013 10:38 am
Forum: Personal Finance (Not Investing)
Topic: Emergency Fund - Lifestyle fund or living expense fund?
Replies: 16
Views: 2446

Re: Emergency Fund - Lifestyle fund or living expense fund?

I mean if your source of income is lost - not that you have a sudden unplanned expense. That would be a true 'emergency' and as such is not even possible to quantify how big it should be. 'Emergency' isn't the right term in this case.

So let me clarify: Loss of personal income and assuming no unplanned expenses during the period of no income. Some would call that an emergency I suppose. But saying "loss of job fund" doesn't sound as catchy heh.
by FredPeterson
Mon Mar 04, 2013 10:11 am
Forum: Personal Finance (Not Investing)
Topic: Emergency Fund - Lifestyle fund or living expense fund?
Replies: 16
Views: 2446

Emergency Fund - Lifestyle fund or living expense fund?

Just a curiosity poll to see where people are at. I'm going to guess it will weigh heavily in favor of lifestyle in one of the categories. This is also of course geared towards people who have a normally taxable income (you're not retired). Okay so what do I mean? Your emergency fund, how would you define yours? Lifestyle Emergency Fund: Don't have to change a single thing about your daily/monthly expenses. Gym membership? Keep going. Venti Starbucks every day - keep going. NetFlix? Keep watching. Movie every weekend? Keep going. Nothing changes except you can get up at 10am and go to bed at 1am. Living Expense Emergency Fund: Enough cash to cover shelther, food and "mobility" expenses (gas money, cab fare etc, to find a new job)....
by FredPeterson
Mon Feb 18, 2013 11:02 pm
Forum: Investing - Theory, News & General
Topic: does the SEC publish a list of securities approved for short
Replies: 3
Views: 379

Re: does the SEC publish a lsit of securities approved for s

pinnerman12 wrote:by the way when i short am i selling security that nobody owns?

also, if i establish a position in a stock am i shorting if i sell the security for my account
Please don't consider short selling unless you really know what you're doing.

With that said....

All stock that exists is owned by someone. It might be owned by your broker, but it is still owned by someone.

Long positions and short positions are kept 100% separate. The two have no connection whatsoever. You don't even have to own any stock at all to short sell.
by FredPeterson
Mon Jan 28, 2013 11:34 am
Forum: Investing - Theory, News & General
Topic: Market "melt up" and the Airplane Game
Replies: 71
Views: 8935

Re: Market "melt up" and the Airplane Game

Tom_T wrote:Some people are getting excited/nervous over the fact that the Dow is approaching the all-time high it reached six years ago?
Yes excited because its safe to invest, gotta get in on those gains! The same missing out as the dotcom, albeit not the same level.

Nervous because many still see the economy as having not improved enough to warrant the "high" prices of things.
by FredPeterson
Mon Jan 21, 2013 2:13 pm
Forum: Investing - Theory, News & General
Topic: Brokers are dead men walking, they just don't know it
Replies: 60
Views: 8207

Re: Brokers are dead men walking, they just don't know it

With 84% of the money still in non-index fund investments, it looks like the broker model of investing still has a few more miles to go before it falls over. Rather amazing when you think about it. Keep plugging along and spreading the word, Mr. Swedroe. You're doing good work. I think an appropriate measure of the decline is of that 84% of money, how much of it is older then 10 years? In other words, its only been in the last 5-10 years that passive investing has begun to take off. If inflows to indexing are out pacing active, its only a matter time, albeit perhaps a very long time, that indexing will win over. But there will always be "old money" that will forever be in active and that "old money" is the really big mo...
by FredPeterson
Sat Jan 12, 2013 5:18 pm
Forum: Investing - Theory, News & General
Topic: 1,812% Gain in the next 219 Days
Replies: 18
Views: 3816

Re: 1,812% Gain in the next 219 Days

What was the ticker so we can follow it, or did you have to ship mobnies first?
by FredPeterson
Wed Jan 02, 2013 8:33 am
Forum: Investing - Theory, News & General
Topic: Bogleheads 2013 Hedgefund Contest
Replies: 151
Views: 23995

Re: Bogleheads 2013 Hedgefund Contest

No Idea What I'm Doing

Long
BAC
LNG

Short
HLF
JCP
by FredPeterson
Mon Dec 17, 2012 12:17 pm
Forum: Investing - Theory, News & General
Topic: Gold continues to fall
Replies: 178
Views: 20280

Re: Gold continues to fall

heyyou wrote:Having witnessed the silver boom and bust in the early 1980s, I just can't see buying gold.

Know how to make a small fortune in silver? Start with a large fortune. The Hunt brothers of Dallas lost 90% or more of their wealth due to their greed.

"If a Texan thinks that there's a chance, chances will be taken." David Allen Coe
You do realize that what happened with silver has nothing to do with what is happening to gold right now, right? Silver went parabolic because of the Hunt Brothers and nothing more.
by FredPeterson
Wed Dec 05, 2012 8:20 am
Forum: Investing - Theory, News & General
Topic: It's not enough to be right
Replies: 12
Views: 1399

Re: It's not enough to be right

nisiprius wrote:He wasn't right. William Miller and his followers bet their worldly possessions on the proposition that the Second Coming would occur on October 22, 1844. They were wrong. They would still have been wrong if the world had ended on May 21, 2011. They will still be wrong if the world ends on December 21, 2012. Someday the world will end. And they will still have been wrong.

And Meredith Whitney.
I hate to bring up this due to his poor performance in the last two years, but John Paulson was "wrong" for something like 2 years and lost hundreds of millions of dollars before things finally imploded as some suspected would occur.

Was he right?

Well per your logic above it didn't matter, he was wrong. But ended up being right.
by FredPeterson
Wed Dec 05, 2012 8:11 am
Forum: Investing - Theory, News & General
Topic: Is gold finally stalling out?
Replies: 105
Views: 7637

Re: Is gold finally stalling out?

zhiwiller wrote:Is AAPL finally stalling out? I couldn't help but notice it peaked in September at 705. It dipped to about 527 and has been limping along ever since.

Stay the course.
This is not getting near the love it should.


The people who start gold threads are almost always going to be bashing it either directly or in some round about trying-to-sound-smart way.
by FredPeterson
Mon Dec 03, 2012 8:54 am
Forum: Investing - Theory, News & General
Topic: Automatic DRIP effectiveness
Replies: 4
Views: 560

Re: Automatic DRIP effectiveness

Havn't other studies shown that doing an actual DRIP vs a lump sum of the dividend every year makes little difference in the long run unless the reinvestment occurs at a high?

In other words, I think you're better off just letting it do its thing rather then fiddle with it yourself every month.
by FredPeterson
Thu Nov 29, 2012 12:50 pm
Forum: Investing - Theory, News & General
Topic: Lottery fever: cash or annuity?
Replies: 45
Views: 4819

Re: Lottery fever: cash or annuity?

richard wrote:
FredPeterson wrote:The lump sum after taxes was $220,176,500. If you wanted to give yourself an annuity after taking the lump sum that would be $7.3m tax free every year for 30 years.
Why would annuity payments be tax free?
I highlighted why.

The lump sum was ~$350 before taxes and its $220 after taxes. The use of the term annuity in this case is wrong, sort of. I generically used the term to mean an annual payment being drawn from the already taxed lump sum.
by FredPeterson
Thu Nov 29, 2012 10:08 am
Forum: Investing - Theory, News & General
Topic: Lottery fever: cash or annuity?
Replies: 45
Views: 4819

Re: Lottery fever: cash or annuity?

I've always been a lump sum'er, but when the numbers for the annuity are SO big - it comes down to trusting whether the annuity would actually be able to pay out all 30 years.

The powerball website had it all laid out for each state.

For Wisconsin the annuity was $5,995,371 the first year, increasing 4% per year for 30 years for $336m total with the final payout being $18.6m

The lump sum after taxes was $220,176,500. If you wanted to give yourself an annuity after taking the lump sum that would be $7.3m tax free every year for 30 years.

Or you could just conservatively invest the $220m and earn 2% / year and have $4.4m (before taxes) for life...with of course the option for reinvestment.
by FredPeterson
Tue Nov 27, 2012 10:15 am
Forum: Investing - Theory, News & General
Topic: Bogleheads are Highly Skilled Investors
Replies: 54
Views: 9827

Re: Bogleheads are Highly Skilled Investors

I know how to play football. I know how to play every position. But theres just no way I could compete at high High School or college or professional levels, therefore I do the sensible thing and play Madden NFL on my favorite console game system. I pretend like I'm making a lot of decisions and putting my back into it, but really a lot of the time it comes down to picking the right plays with the right team and just letting the computer play it out**. In the context of this site, the analogy is like picking indexing with Vanguard and letting the market play it out.

Is that skill? Sure...But to attempt to compare the skill of doing nothing* with the skill of actually participating, thats ridiculous.
by FredPeterson
Thu Nov 15, 2012 11:52 am
Forum: Investing - Theory, News & General
Topic: GLD gold etf is doomed to fail?
Replies: 47
Views: 6599

Re: GLD gold etf is doomed to fail?

Why do I feel like your logic implies the share price goes nowhere or down and doesn't even consider up?
by FredPeterson
Mon Nov 12, 2012 11:33 am
Forum: Investing - Theory, News & General
Topic: Is asking about individual stocks frowned upon?
Replies: 37
Views: 3854

Re: Is asking about individual stocks frowned upon?

pkcrafter wrote:Eighty percent of all trades are done by professionals and this is all they do. When you buy, you are buying from someone who is selling, so chances are you will be trading with a professional. Why is he selling?
*grunch*

I think the rise of HFT makes this not a valid argument.

HFT is about providing liquidity and someone getting paid for it. Yes, the bots try to make money, but they don't care one way or the other about why they are buying or selling other then looking at the momentum and shaving pennies/sub-pennies of profit.
by FredPeterson
Fri Oct 26, 2012 4:32 pm
Forum: Investing - Theory, News & General
Topic: CPI inflation rate vs. personal inflation rate??
Replies: 20
Views: 1478

Re: CPI inflation rate vs. personal inflation rate??

They should come out with a couple calculations - one that is useful to people who need to survive and another for the people who have money to spend.
by FredPeterson
Mon Oct 22, 2012 9:32 am
Forum: Investing - Theory, News & General
Topic: Boglehead way to take on more risk than 100% equities?
Replies: 25
Views: 2626

Re: Boglehead way to take on more risk than 100% equities?

If "the Boglehead way" allows for the use of leverage, theres your answer.
by FredPeterson
Sun Oct 14, 2012 7:42 pm
Forum: Investing - Theory, News & General
Topic: I got sideswiped today by co-workers on this subject
Replies: 58
Views: 7696

Re: I got sideswiped today by co-workers on this subject

Please share where you can guarantee me 15% stock market returns for the next X years, the years I have left on my mortgage.

Both you and your co-workers are using extreme recency bias in your decision to believe you are more right then the other.
by FredPeterson
Tue Sep 18, 2012 9:24 pm
Forum: Investing - Theory, News & General
Topic: Baby Boomer Sell Off???
Replies: 16
Views: 2261

Re: Baby Boomer Sell Off???

In the stock and bond world, someone has to own it. In other words, no thing such as "supply" in the stock world. Its a 1:1 ratio. You can't sell stock and it just "sits" in the void. Where'd the money come from that you got for it? it doesn't "sit in the void", but the market maker can buy it (and then sell to others.) If there are too many sellers, he will have to drop the price in order to entice new buyers. Otherwise, by your logic, stocks would never go up or down in value, since every buyer is matched by a seller. durr Every buyer is matched thats why stocks change in price. The B/A is irrelevant to the point. When every buyer and seller isn't matched the security goes nowhere until someone gives in to t...
by FredPeterson
Tue Sep 18, 2012 1:38 pm
Forum: Investing - Theory, News & General
Topic: Baby Boomer Sell Off???
Replies: 16
Views: 2261

Re: Baby Boomer Sell Off???

In the stock and bond world, someone has to own it. In other words, no thing such as "supply" in the stock world. Its a 1:1 ratio. You can't sell stock and it just "sits" in the void. Where'd the money come from that you got for it?

Unless there is another major panic in the next 5-10 years that results in baby boomers selling AND the younger generation selling, the potential drop will be muted.
by FredPeterson
Tue Aug 21, 2012 1:29 pm
Forum: Investing - Theory, News & General
Topic: Buffett May Be Turning Bearish on Munis.
Replies: 6
Views: 2776

Re: Buffett May Be Turning Bearish on Munis.

When a perma-bull who built his conglomerate off the back of insurance, sells the insurance he sold...its likely because he believes he'll have to pay up sometime in the near future.

Since Buffett doesn't short, thats about as bearish a sentinment as you can get from someone like him.
by FredPeterson
Fri Aug 17, 2012 8:45 am
Forum: Investing - Theory, News & General
Topic: how often do you check your portfolio?
Replies: 94
Views: 10876

Re: how often do you check your portfolio?

I check mine daily. But unlike the masses that check daily, I don't feel the need to fiddle. I'm 100% comfortable with everything I own as it sits right now. The only thing I'm considering moving on recently is SIRI - but those 1000 shares bought at 6.5c are still sitting on free money right now, so other then the $2500 its turned into now (I should have held the 50k shares originally *sigh* it would have made up for all the mistakes) I have no incentive really other then to 'capture' that profit. Even if it fell 50% from here I don't think I'd sell. I have 3 Yahoo! portfolios setup - one is my Ameritrade portfolio of just the stocks held, 1 share each. The other is my Vanguard portfolio of ETF's and the other is a portfolio of the TDA and ...
by FredPeterson
Fri Aug 17, 2012 8:37 am
Forum: Investing - Theory, News & General
Topic: facebook's first lock up expires today,
Replies: 63
Views: 13700

Re: facebook's first lock up expires today,

This is indeed true and I use the infinity term a lot. I am unaware though of a stock that has gone to infinity. Basically a short can determine when he/she would close the position if the stock goes up just like a long would decide when the close a position if the stock goes down. I suspect the short sellers are more sophisticated and will not tolerate the same degree of loss as a long who might hold until they get even, which could be forever. But infinity is so much more fun to say! Plus, how do you say the opposite of "it can only go to zero"? :) Shorts have less of a degree of tolerable loss for the same reason a long holds forever. There is no limit to the loss. Plus the unsophisticated and small shorter is likely to not ha...
by FredPeterson
Thu Aug 16, 2012 1:01 pm
Forum: Investing - Theory, News & General
Topic: facebook's first lock up expires today,
Replies: 63
Views: 13700

Re: facebook's first lock up expires today,

harikaried wrote:
FredPeterson wrote:As expected, it has dropped pretty good.
Why didn't everyone just short then? Could have been 5-6% richer in a day! ;)

(Edit: Actually kinda serious because I'm not familiar with how selling short actually works. Or is it as simple as putting in a short sell order.. and putting in a buy later?)
Because even expectations can have the nasty habit of being wrong.

I'm sure plenty of prop traders and active retail traders DID short over the last couple of days in preparation for this day.

But short selling is also so negatively viewed that you just don't hear about it. Plus your upside on a short is always limited to the short value itself instead of infinite with a long position, so its not nearly as glorious.
by FredPeterson
Thu Aug 16, 2012 9:32 am
Forum: Investing - Theory, News & General
Topic: facebook's first lock up expires today,
Replies: 63
Views: 13700

Re: facebook's first lock up expires today,

As expected, it has dropped pretty good.
by FredPeterson
Tue Aug 14, 2012 11:16 am
Forum: Investing - Theory, News & General
Topic: Cramer At It Again
Replies: 37
Views: 5281

Re: Cramer At It Again

mschmitt wrote:After Cramer called Lenny Dykstra (now bankrupt and in jail) one of the great ones in the business, I don't know why anybody would listen to what he says. Let alone invest money on it.
Because he gets a good reputation for calling his guests idiotic slow brained morons who are luck-boxing because the market is doing nothing but going up.

:confused

It matters not that he is uber nice to his guests.
by FredPeterson
Thu Aug 09, 2012 3:45 pm
Forum: Investing - Theory, News & General
Topic: College Bubble Popping
Replies: 72
Views: 8015

Re: College Bubble Popping

Colleges aren't a waste of money and they aren't failing our kids.

Whats happening is a bell curve in the need for a lot of highly educated people. As automation grew, so did the need for newer and higher educated people to build these new things and understand them, there were also a lot of people on the maintenance end as these new machines grew. It was symbiotic.

That "building" is slowing down so there is less of a need for highly educated people to keep it going as well as efficiency and stability so there is less of a need for "grease monkey" type jobs that are nothing but grunts. The grunts have to become more educated as well - but those types of jobs don't require $50k and 4 years.
by FredPeterson
Tue Aug 07, 2012 9:50 pm
Forum: Personal Investments
Topic: Candlestick graphs
Replies: 2
Views: 617

Re: Candlestick graphs

Image

You aren't going to be able to tell whether any kind of pattern is related to a pension fund, an institution or some very large individual mover or just some other activity. The candlestick by itself is meaningless. *volume* speaks more about the meaning and sustainability of a move.
by FredPeterson
Fri Aug 03, 2012 7:37 am
Forum: Investing - Theory, News & General
Topic: Are ETFs turning investors into day traders?
Replies: 20
Views: 2561

Re: Are ETFs turning investors into day traders?

AndroAsc wrote:The argument here is nonsensical. How does ETF turn investor into day traders? It's the person's mentality that turn them into day traders, not the product.
Because while an investor wants to bet on say, solar, they don't trust themselves picking stocks so now they can turn to a sector ETF to get the play they want. It used to only be possible with mutual funds that cost a boat load to buy and sell and some had redemption fees on top.

So yes, those who wanted to day trade before did not because it was definitely prohibitively expensive. Now not so much.
by FredPeterson
Thu Aug 02, 2012 11:28 am
Forum: Investing - Theory, News & General
Topic: Are ETFs turning investors into day traders?
Replies: 20
Views: 2561

Re: Are ETFs turning investors into day traders?

If someone is trying to day trade with a mere $2500 then they deserve to lose out.
by FredPeterson
Mon Jul 30, 2012 8:17 am
Forum: Investing - Theory, News & General
Topic: Are ETFs turning investors into day traders?
Replies: 20
Views: 2561

Re: Are ETFs turning investors into day traders?

What do you consider "very high" leverage?

When I was dinking around in late 2008 and 2009 TDA gave me something like 3.5x assets. More than enough to turn a paltry 1% or even .5% into a decent one days wage.

It ended up being the triple leveraged ETF's FAS and FAZ that convinced me to cut it out. Didn't help I kept betting mostly against the Financials after March 2009...oops
by FredPeterson
Wed Jul 18, 2012 9:29 pm
Forum: Investing - Theory, News & General
Topic: Does Buffett know something you don't?
Replies: 25
Views: 4413

Re: Does Buffett know something you don't?

talzara wrote:
Roy wrote:As of a few weeks ago, BRK.A and VTSMX had similar 10-year returns. I think Buffet's main advantages lie in his ability to structure deals that ordinary guys cannot.
VTSMX is priced at net asset value at the end of every day. BRK isn't. At any point in time, BRK's stock price may be overvalued, fairly-valued, or undervalued.
That is utterly and totally irrelevant.

DUCY?
by FredPeterson
Mon Jul 16, 2012 9:21 pm
Forum: Investing - Theory, News & General
Topic: Vanguard asks, "ETFs: Still the bargain they used to be?"
Replies: 25
Views: 3335

Re: Vanguard asks, "ETFs: Still the bargain they used to be?

Article title is disingenuous and eye-catchy - no different then a headline out of CNBC that goes for clicks.

But I guess thats what it takes....
by FredPeterson
Thu Jul 12, 2012 10:56 pm
Forum: Investing - Theory, News & General
Topic: Explain "New Money" Premiums
Replies: 19
Views: 1730

Re: Explain "New Money" Premiums

The banks want a higher AUM but not have to pay for it.
by FredPeterson
Thu Jul 12, 2012 9:16 pm
Forum: Investing - Theory, News & General
Topic: Dow 6,000 without the Fed
Replies: 16
Views: 3049

Re: Dow 6,000 without the Fed

Jack wrote:
RenoJay wrote:If this effect is real, it is surprising that more traders haven't recognized it and arbitraged it away, but it should quickly disappear now that it is out in the open.
It will only be arbitraged away if the retail lemming investor clues in or goes away. That won't happen anytime soon.
by FredPeterson
Thu Jul 12, 2012 7:30 pm
Forum: Investing - Theory, News & General
Topic: Dow 6,000 without the Fed
Replies: 16
Views: 3049

Re: Dow 6,000 without the Fed

CaliJim wrote:The report is data mining at its best.
Yah because they're sure cherry picking dates out of the total blue

:confused

Also this was already brought up http://www.bogleheads.org/forum/viewtop ... 10&t=99344
by FredPeterson
Thu Jul 12, 2012 8:18 am
Forum: Investing - Theory, News & General
Topic: 80% of equity premium in 24 hours pre FOMC announcements
Replies: 11
Views: 1575

Re: 80% of equity premium in 24 hours pre FOMC announcements

So instead of removing the day that actually has made the biggest difference (the positive days), you want to remove the days that are what is likely the biggest negative response?

The fact the include and exclude graphs are nearly identical otherwise, just shifted down starting in the 90's, should be evidence enough that the pre-FOMC rise heavily outweighs the post-FOMC fall. If you remove the post-FOMC fall, the graph is going to look like the S&P is probably 3000.

Also, the New York Fed graph isn't an average. Its not a + or -. It is literally taking data out of dataset.
by FredPeterson
Wed Jul 11, 2012 6:25 pm
Forum: Investing - Theory, News & General
Topic: 80% of equity premium in 24 hours pre FOMC announcements
Replies: 11
Views: 1575

Re: 80% of equity premium in 24 hours pre FOMC announcements

The data needs to be teased a bit more. I would like to see two 3 day charts; one chart for the days when the market was up at the end of the day after the FOMC report - and one chart for the days when the market was down at the end of the day after the FOMC report. There is no doubt that some investors may correctly guess the general tone of the report, but it is strange that they would wait for the morning of the report to act. On the other hand, recipients of leaks would not have much advanced notice. Now as to the length of women's skirts.... :) Dale So...what are you asking for? A chart of the returns of the ~444 days in the last 18.5 years that match your description? What would that prove? This data set is sufficient to see how cruc...
by FredPeterson
Wed Jul 11, 2012 9:06 am
Forum: Investing - Theory, News & General
Topic: 80% of equity premium in 24 hours pre FOMC announcements
Replies: 11
Views: 1575

Re: 80% of equity premium in 24 hours pre FOMC announcements

Beat me to it! Of course, I was going to provide a link to the http://www.zerohedge.com/news/chart-year-fed-has-doubled-sp-admits-fed article on it as oooo its much more conspiracy ladden. This is quite an interesting "data mine". Take away the consistently known 24 hour period ahead of the Federal Open Market Committee announcements and the gains in the stock market vanish. I didn't read the article closely but this is just the S&P on a price change, right? Not as an investment with reinvested dividends? ---- What would be interesting is doing the same sort of thing with some individual stocks. Take out the 24 hours before earnings etc. But its waaay more interesting, to me, that the "market" as a whole reacts so st...
by FredPeterson
Mon Jul 09, 2012 12:34 pm
Forum: Investing - Theory, News & General
Topic: Does investing in REIT reflect leverage benefits?
Replies: 5
Views: 857

Re: Does investing in REIT reflect leverage benefits?

Unless there is a corresponding or higher increase in wages, inflation isn't going to change anything because people still won't be able to buy a house because it, along with everything else, will simply cost more.

No one is holding off buying because housing prices aren't higher...that makes no sense. Prices will start going up when people start buying because they can actually afford to.