Search found 114 matches

by firebirdparts
Tue Aug 20, 2019 5:12 pm
Forum: Investing - Theory, News & General
Topic: Total index funds are “crowded”
Replies: 23
Views: 2331

Re: Total index funds are “crowded”

All I will say is that TSM can’t be crowded in the usual sense. By definition, passive TSM investors can’t affect the relative price of any stock
by firebirdparts
Tue Aug 20, 2019 11:15 am
Forum: Investing - Theory, News & General
Topic: Investing with ballooning us debt levels?
Replies: 21
Views: 1691

Re: Investing with ballooning us debt levels?

Paying down debt means taking money out of the hands of taxpayers. That reduces the amount of money they have to spend on stuff. Whoa, hoss. Paying down debt means moving money from one taxpayer to another. The lenders are also taxpayers. Going into debt also means moving money from one taxpayer to...
by firebirdparts
Tue Aug 20, 2019 11:06 am
Forum: Investing - Theory, News & General
Topic: Investing with ballooning us debt levels?
Replies: 21
Views: 1691

Re: Investing with ballooning us debt levels?

To amplify that a bit. It is almost a universal delusion that there was once some Golden Age, when everything was "normal." Inflation was under control, the national debt was under control, the economic hummed along needing only "fine tuning," there was no war or fear of looming war, cars were bett...
by firebirdparts
Mon Aug 19, 2019 3:55 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 408
Views: 13304

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Momentum is the one factor that (as far as I know) doesn't get canceled out through discovery and participation. The more people that do it, the better you would expect it to work. It relies totally on a herd. I hope that is obvious enough.
by firebirdparts
Mon Aug 19, 2019 8:35 am
Forum: Investing - Theory, News & General
Topic: Confused, bummed, and concerned
Replies: 74
Views: 10256

Re: Confused, bummed, and concerned

Recently, I have been seeing & hearing, including Episode 012 of Bogleheads on investing podcast with Larry Swedroe, that they (and others) "expect" around 4.5%-5%. it has me feeling very discouraged. Should I be? You shouldn't believe any prediction, but if you did, then you should be happy. Low r...
by firebirdparts
Mon Aug 19, 2019 6:21 am
Forum: Investing - Theory, News & General
Topic: Simple-minded inspection of actual low-vol fund
Replies: 31
Views: 3427

Re: Simple-minded inspection of actual low-vol fund

Is there any reason to think low/min vol funds wouldn't have fared better in 08/09 ? We've had a couple of sizeable corrections recently and these products held up well. Low vol proponents say one should expect the same or slightly better broad equity returns + two thirds of the volatility and the ...
by firebirdparts
Sun Aug 18, 2019 11:25 am
Forum: Investing - Theory, News & General
Topic: How about an 856-year bond?
Replies: 24
Views: 3160

Re: How about an 856-year bond?

Consols were a thing! https://en.wikipedia.org/wiki/Consol_(bond) They make more sense in an environment with no expected inflation/deflation. I like how they issued perpetual debt and then lowered the coupon rate. It’s good to be the king. It’s surprising just how early and how much the “pound” wa...
by firebirdparts
Sun Aug 18, 2019 8:14 am
Forum: Investing - Theory, News & General
Topic: How about an 856-year bond?
Replies: 24
Views: 3160

Re: How about an 856-year bond?

That's pretty remarkable. A perpetual bond paying 5% would not be all that dumb for either party. In fact that's kind of what stocks are like. The money lent during an IPO is forever. However, a perpetual bond paying 1% is pretty weak. Maybe we are to assume that everything is re-negotiable down the...
by firebirdparts
Wed Aug 14, 2019 11:26 pm
Forum: Investing - Theory, News & General
Topic: Confused, bummed, and concerned
Replies: 74
Views: 10256

Re: Confused, bummed, and concerned

Nobody knows nothing. You should be concerned, but we always are. Even in the biggest bull market times there was plenty of concern.
by firebirdparts
Wed Aug 14, 2019 8:21 am
Forum: Investing - Theory, News & General
Topic: Domestic returns next 10 years
Replies: 45
Views: 2944

Re: Domestic returns next 10 years

columbia wrote:
Tue Aug 13, 2019 2:35 pm
10 year projections are always rooted in the idea that there won’t be a market downturn. That’s a poor assumption.
I always assume the opposite. Am I nuts? I assume that 10 years of predicted bad returns would look like 1999 to 2009.
by firebirdparts
Tue Aug 13, 2019 3:51 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 408
Views: 13304

Re: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]

columbia wrote:
Tue Aug 13, 2019 3:58 am
Now that I own it, it’s interesting to watch PSLDX on days like yesterday: price change was 0.00% (per PIMCO website).
yeah, that felt good.
by firebirdparts
Tue Aug 13, 2019 2:26 pm
Forum: Investing - Theory, News & General
Topic: Domestic returns next 10 years
Replies: 45
Views: 2944

Re: Domestic returns next 10 years

Remember too, like backtesting, this is all about start and end points. The market is high today. Starting from here, many predictions are actually likely to be proved right depending on what the other boundary condition is.
by firebirdparts
Tue Aug 13, 2019 11:49 am
Forum: Investing - Theory, News & General
Topic: this time it's different
Replies: 70
Views: 6538

Re: this time it's different

It's a guess for Larry too. He predicted 4.5% real going forward in 2011. Instead we've gotten around 12% real. Right. It may well be true that the worst case scenario going forward is not exactly going to match up with 4%. FWIW. The good news is that you don't necessarily have to live through the ...
by firebirdparts
Sat Aug 10, 2019 1:35 pm
Forum: Investing - Theory, News & General
Topic: What do you think about this global 10 fund portfolio?
Replies: 14
Views: 1342

Re: What do you think about this global 10 fund portfolio?

That is a fine portfolio. Nobody knows the future. We can guess how to improve it, and we can backtest our guesses, but we just have to live through the actual future. I bet if you stick with that it will do fine. I have for a very long time taken an interest in the small premium and value. Small is...
by firebirdparts
Sat Aug 10, 2019 8:44 am
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 185
Views: 9803

Re: Why do dividends still exist?

If no companies pay dividend ever, it will be a giant Ponzi game: a stock has a value only as long as there is another greater fool to sell to. It is like a piece of non-producing desert land the price of which is appreciating. "Dividend is an evil" is a myopic, me-only, immature view. Of course, o...
by firebirdparts
Sat Aug 10, 2019 8:18 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 3353
Views: 261695

Re: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]

HEDGEFUNDIE wrote:
Fri Aug 09, 2019 5:44 pm
.

At that point the risk-reward just isn't worth it.
I Guess that would eliminate a lot of people. I can’t buy ETFs in a 401k. I don’t have a lot of IRA funds. What sort of account do have this in?
by firebirdparts
Fri Aug 09, 2019 9:47 pm
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

Bonds pay interest, and so therefore are quite different from stocks. You can call a bond fund payout a dividend, but the underlying bonds don't pay dividends they pay interest. Since stocks pay dividends based on who owned the stock just 4 days a year, the stock price has to be affected 4 time a ye...
by firebirdparts
Fri Aug 09, 2019 9:32 pm
Forum: Investing - Theory, News & General
Topic: Why do dividends still exist?
Replies: 185
Views: 9803

Re: Why do dividends still exist?

All I know about this I learned from this important historical documentary:

https://www.dailymotion.com/video/x6l2yq5
by firebirdparts
Fri Aug 09, 2019 4:24 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 3353
Views: 261695

Re: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]

You do have to guard against that level of fanaticism where tax avoidance becomes earnings avoidance. It’s very common.
by firebirdparts
Fri Aug 09, 2019 9:07 am
Forum: Personal Investments
Topic: Retirement Planning 401k Traditional /401 Roth
Replies: 42
Views: 1396

Re: Retirement Planning 401k Traditional /401 Roth

No brainer, sort of? Because of your current tax bracket. Roth and Traditional 401k, you pay tax once either way, and if it was the same fraction either time, it would work out the same. If people argue with you about this, please don't listen to them. There are two things to think about: 1. If your...
by firebirdparts
Fri Aug 09, 2019 8:38 am
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

If a company has a book value of $1B and they distribute a 1% dividend, then $10M of cash flows out of the company, lowering its book value to $990M. The only way the price can stay the same is if the market simultaneously decides that a higher price:book ratio is fair value for the company. If tha...
by firebirdparts
Fri Aug 09, 2019 7:37 am
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Leveraging when young
Replies: 411
Views: 26965

Re: Lifecycle Investing - Leveraging when young

I don't know if anybody will read this little short post, but reading the paper, you'll see that they tuned this to avoid the obvious problems of using a lot of leverage and losing a lot of money. That is how it got to be 2X leverage and not "be an options trader when you're young." So when they say...
by firebirdparts
Thu Aug 08, 2019 10:16 pm
Forum: Investing - Theory, News & General
Topic: threshold for paying debt
Replies: 41
Views: 2687

Re: threshold for paying debt

The main thing, honestly, is to recognize that you are in a fight for your life financially. It's not really a numbers game. If you live on half your income, in other words, it won't matter what these interest rates are.
by firebirdparts
Thu Aug 08, 2019 3:45 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 1431
Views: 139731

Re: U.S. stocks continue to soar!

Dead cats bounce to the heavens! Ah yes, the classic dead cat-that-turns-into-a-hot-air-balloon-before-hitting-the-ground-a-second-time bounce. While less well known than its sister phenomenon, taken together they accurately describe 100% of all rebounds. :D Oh, yes, mistaking one for the other is ...
by firebirdparts
Thu Aug 08, 2019 1:54 pm
Forum: Investing - Theory, News & General
Topic: Need help understanding Dividend and Capital Gains
Replies: 13
Views: 763

Re: Need help understanding Dividend and Capital Gains

Then what is the advantage of receiving the dividend? Why invest in funds that have high dividend yielding companies? One thing might be that qualified dividends are taxed at capital gains rates, but why not just take a capital gain from companies with low or no dividends? Here is the answer: When ...
by firebirdparts
Thu Aug 08, 2019 10:51 am
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Leveraging when young
Replies: 411
Views: 26965

Re: Lifecycle Investing - Leveraging when young

The formal answer is that no one pays you to assume order of returns risk. So diversifying it is a free lunch (I.e. lower risk at the same returns). Are you sure? It seems like to me order-of-returns presents both risk and opportunity. If the future order of returns is good, and I am leveraged earl...
by firebirdparts
Thu Aug 08, 2019 9:51 am
Forum: Investing - Theory, News & General
Topic: Lifecycle Investing - Leveraging when young
Replies: 411
Views: 26965

Re: Lifecycle Investing - Leveraging when young

I have but one comment on this, and since this thread is still alive I will make it. I see this as a scheme to protect accumulators from the effect of order-of-returns. Personally it never occurred to me that I should take that seriously. I think it makes some sense, but I would have to do a lot of ...
by firebirdparts
Thu Aug 08, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

I'm a "total return" person, but to those that advocate "living off dividends" I'm curious why you all don't just ladder CDs and US Treasuries, Bonds, etc, get your 2% and call it a day. Isn't that the same thing as building a portfolio of dividend paying stocks but with less risk? Maybe I'm missin...
by firebirdparts
Thu Aug 08, 2019 9:26 am
Forum: Investing - Theory, News & General
Topic: Bogleheads have higher IQs!
Replies: 21
Views: 1369

Re: Bogleheads have higher IQs!

J. G., what does that chart in your avatar mean? I started looking around for it, and I did not find exactly the same shaped results.
by firebirdparts
Thu Aug 08, 2019 9:06 am
Forum: Investing - Theory, News & General
Topic: Does this sort of investing "game" have a name?
Replies: 14
Views: 1318

Re: Does this sort of investing "game" have a name?

Kenkat wrote:
Thu Aug 08, 2019 8:31 am
Actually the strategy I was discussing involved moving back and forth between a money market fund and an international fund based on whether the S&P 500 was up or down that day as international markets tended to follow the S&P 500 lead.
Wow! :shock:
by firebirdparts
Thu Aug 08, 2019 8:59 am
Forum: Investing - Theory, News & General
Topic: Does this sort of investing "game" have a name?
Replies: 14
Views: 1318

Re: Does this sort of investing "game" have a name?

As kenkat pointed out, the fund itself either had to do nothing or buy a day late, so the holders were getting hosed.
by firebirdparts
Thu Aug 08, 2019 8:56 am
Forum: Investing - Theory, News & General
Topic: Does this sort of investing "game" have a name?
Replies: 14
Views: 1318

Re: Does this sort of investing "game" have a name?

J G Bankerton wrote:
Thu Aug 08, 2019 8:20 am
Where does the money come from to buy the dips?
30 years ago, fixed income fund we had paid probably 7%. So that was where it went when you were "out". Even if fixed income paid zero, you can see where you might still be interested.
by firebirdparts
Thu Aug 08, 2019 8:54 am
Forum: Investing - Theory, News & General
Topic: Does this sort of investing "game" have a name?
Replies: 14
Views: 1318

Re: Does this sort of investing "game" have a name?

I see the similarity to martingale, and in fact that's why I asked.
by firebirdparts
Thu Aug 08, 2019 8:14 am
Forum: Investing - Theory, News & General
Topic: Does this sort of investing "game" have a name?
Replies: 14
Views: 1318

Does this sort of investing "game" have a name?

In a 401k, you can trade at company expense (but only at 4pm ha ha), and I have seen this sort of short-term trading on pure volatility. In fact, I assume this is why they outlawed frequent trading in our 401k. If X goes down 1% on a given day, you buy. When it recovers, you sell (insert your own ru...
by firebirdparts
Thu Aug 08, 2019 8:04 am
Forum: Investing - Theory, News & General
Topic: Is volatility good or bad?
Replies: 45
Views: 2443

Re: Is volatility good or bad?

Thesaints Is good when one accumulates, but only insofar new contributions are not negligible compared to total holdings. It is bad when decumulating. It is indifferent in between. BHs, help me here....beyond the "negligible compared to total holdings" (which I don't grok either), there is a logica...
by firebirdparts
Thu Aug 08, 2019 7:39 am
Forum: Investing - Theory, News & General
Topic: Is volatility good or bad?
Replies: 45
Views: 2443

Re: Is volatility good or bad?

Is risk good or bad? Is day-old bread at a reduced price good or bad? Is dynamite good or bad? Are pointy objects good or bad? Volatility is bad for you if you are expecting and counting on stability. Volatility is bad for you if you told your new advisor that you do not want anything risky, and yo...
by firebirdparts
Thu Aug 08, 2019 6:14 am
Forum: Investing - Theory, News & General
Topic: Is volatility good or bad?
Replies: 45
Views: 2443

Re: Is volatility good or bad?

Is volatility good or bad? I ask because I think of it as providing opportunity to buy stocks that have been irrationally discounted at lower levels but I don't get the sense this is common view. I wonder about this too. I have only ever been an accumulator. It seems to me that viewing volatility a...
by firebirdparts
Thu Aug 08, 2019 6:01 am
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

JustinR wrote:
Wed Aug 07, 2019 11:02 pm
Is it still not clear that receiving a dividend is exactly the same thing as selling shares?

Let me make it clear then in underlined/bolded font:

Receiving a dividend is exactly the same as selling shares.
Repeating things doesn’t make them any smarter or more useful. This is not useful.
by firebirdparts
Thu Aug 08, 2019 5:52 am
Forum: Investing - Theory, News & General
Topic: Roth > Taxable > tIRA
Replies: 199
Views: 13064

Re: Roth > Taxable > tIRA

I would have lost a lot of money betting on how long this thread would stay active. You guys are arguing with somebody who doesn’t have any interest in the zero tax bracket. He’s not interested. You’re not going to get him interested.
by firebirdparts
Wed Aug 07, 2019 3:09 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]
Replies: 3353
Views: 261695

Re: HEDGEFUNDIE's excellent adventure [risk parity strategy using 3x leveraged ETFs]

Meaty wrote:
Wed Aug 07, 2019 2:58 pm
What’s the impact to this strategy if T rates go negative?
Oh my.
by firebirdparts
Wed Aug 07, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Investing for negative interest rates
Replies: 31
Views: 1649

Re: Investing for negative interest rates

Well, you'd want a ton of long bonds. The reason we don't already all have those is that we don't actually have the ability to guarantee a 2% drop in a few months. If it happens, yeah, when it's over you'll wish you had 100% 30 year treasuries, I think. There might be something better, and if there ...
by firebirdparts
Wed Aug 07, 2019 9:22 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 11696
Views: 2014754

Re: U.S. stocks in free fall

Perhaps the 100% stock investors are learning something about risk. Perhaps. I took a bunch of money out of equities during the Euro insolvency crisis, brilliantly timed. That mistake cost me, I would guess, $1000 for every nickel I've lost in the last week. That's just a guess. The important thing...
by firebirdparts
Wed Aug 07, 2019 8:55 am
Forum: Investing - Theory, News & General
Topic: Need help understanding Dividend and Capital Gains
Replies: 13
Views: 763

Re: Need help understanding Dividend and Capital Gains

The company pays $X a share. That’s what you would get. The yield is not a fundamental concept. The yield changes every day. The stock price (denominator in the yield calculation) changes moment by moment when the market is open.
by firebirdparts
Tue Aug 06, 2019 8:57 pm
Forum: Investing - Theory, News & General
Topic: New and Improved CAPE is Higher!
Replies: 33
Views: 3006

Re: New and Improved CAPE is Higher!

I suddenly realized that cyclically adjusted numbers are much less useful than plain ol' numbers.

I do wonder whether the current fad of buybacks will continue. That may be a critical bit of information.
by firebirdparts
Tue Aug 06, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: Increase stocks during bear market?
Replies: 14
Views: 1453

Re: Increase stocks during bear market?

I was 100% equities in 2000 and 2008, all the way down. I do see that having something like a 60/40 allocation would have put me way ahead for a long, long 15 years. That's a long time. However, 100% stocks would have taken the lead and stocks are ahead today. FWIW.
by firebirdparts
Tue Aug 06, 2019 2:08 pm
Forum: Investing - Theory, News & General
Topic: Increase stocks during bear market?
Replies: 14
Views: 1453

Re: Increase stocks during bear market?

This is just ordinary market timing. It seems like it should work, but believe me, everybody else has certainly thought of it. Maintaining a constant asset allocation is similar, of course. Rebalancing a quality low cost 2 or 3 fund portfolio works pretty darn well. If you backtest, one thing you'll...
by firebirdparts
Tue Aug 06, 2019 6:38 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 11696
Views: 2014754

Re: U.S. stocks in free fall

Many, if not most posters, seem upbeat and explaining away this drop in the market today. Is this real? What will it take to make them really worried? Well, the accumulators should only be worried about running out of money to buy index funds with. They may not feel that way, but they should. I've ...
by firebirdparts
Mon Aug 05, 2019 10:33 am
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

I was kinda okay with your first paragraph, until you said "Stock 'crashes' are short and growth cycles are long." This came as a surprise to me (and I suspect others) who were alive from the late 60s to early 80s. The market went pretty much nowhere while inflation was high, for a long time. (Too ...
by firebirdparts
Mon Aug 05, 2019 9:40 am
Forum: Investing - Theory, News & General
Topic: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"
Replies: 247
Views: 17903

Re: Is this right? "if you live off dividends, a crash in stocks prices doesn't matter"

So I hope there is some reasonable agreement that it is possible to hold 100% of a big stock index with a low withdrawal rate close to the dividend rate and yes that will work, and you can see why a person might do that. You can also see why people don't always do it. That is because the crowd is tr...
by firebirdparts
Sun Aug 04, 2019 8:01 pm
Forum: Investing - Theory, News & General
Topic: So it’s pointless to invest in tech funds because expectations are already factored into price?
Replies: 17
Views: 1207

Re: So it’s pointless to invest in tech funds because expectations are already factored into price?

For a practical perspective I just randomly compared fidelity select cimputers to the 500. It’s a very old fund of this type. https://www.portfoliovisualizer.com/backtest-portfolio?s=y&timePeriod=4&startYear=1985&firstMonth=1&endYear=2019&lastMonth=12&calendarAligned=true&initialAmount=10000&annualO...