Yeah. Portfolio killers are losses from which I cannot recover. Volatility which is lower than this is noise, above it, pain. but how much control do I have? my risk level, for sure...but how much portfolio effort is simply the illusion of control? correlations break down. new segments find their shine. dynamic systems change. behaviors and incentives change. Under diversifying, in such a system, strikes me as a mistake.Random Walker wrote:Volatility is a portfolio killer; it takes a 100% return to make up for a 50% portfolio loss.
Search found 836 matches
- Wed Jan 13, 2016 12:05 am
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
- Tue Jan 12, 2016 10:47 am
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
nothing has been proven. It's all theory that may falsify in the future or may hold true.Slick8503 wrote:proven
- Mon Jan 11, 2016 3:42 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
A non-tilted portfolio never performs optimally but it does manage to pick a more comfortable middle ground, with both growth and value, large and small, which presumably offers a smoother ride through market cycles when one segment after another outperforms or underperforms. i completely agree with sentiment expressed in your post, but i have a problem with this line. it hits a nerve because it's a fairly constant sentiment on this board. the snicker-worthy 3 fund portfolio for the simple man. it bothers me. The alternative is to be smart and listen to sales people pitch one market beating, risk mitigating, strategy after another: don't give up on the opportunity to beat the market, or to be safer than the market, using security selection...
- Sun Jan 10, 2016 11:48 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
definitely not, but it should be less than annual, quarterly, intraday, etc. business cycle bookends have an inflectional characteristic to them. A marker that something significant changed about the market and economy. data points in the middle of a cycle have more in common with each other than do data points before/after an inflection (using business cycle as a proxy)lack_ey wrote: Are even business cycles independent?
Using international data seems like a reasonable thing to do with some functional work, like incorporating samples from countries whose markets were least correlated to the US market at the time of sampling.
interesting.
- Sun Jan 10, 2016 10:14 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
1. The excess returns in the past were a statistical fluke I'll explain what i mean by fluke. if past performance is used to predict future returns, this is an example of a predictive model. In most non-trivial domains, building a predictive model is tough work. the sample set is critical if I want my model to perform above random. It's a high bar and gets short tilt by people who haven't been burned by it. For those of us who get burned by this regularly, it even has a name: garbage in, garbage out. practical statistics work is often not about numbers, but about creatively designing the universe/sample space. This almost always involves trying to reduce data dependence to an absolute minimum. If dependence is too high, the predictive capa...
- Sat Jan 09, 2016 3:30 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Joking?
yes. joking. I'm a firm believer in simplicity and total market.Taylor Larimore wrote:Zotty:The alternative is to be smart and listen to sales people pitch one market beating, risk mitigating, strategy after another: don't give up on the opportunity to beat the market, or to be safer than the market, using security selection. The proof is in the backtest.
I hope that you are joking. In my opinion, none of the above is true.
Best wishes.
Taylor
i was just making a somewhat melodramatic point about the alternatives to total market investing. Any strategy that tilts from the market is an attempt to beat the market. it's a matter of degrees on the strategies discussed here. if costs and behaviors are under control, it's likely to be a successful plan.
- Sat Jan 09, 2016 1:45 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
A non-tilted portfolio never performs optimally but it does manage to pick a more comfortable middle ground, with both growth and value, large and small, which presumably offers a smoother ride through market cycles when one segment after another outperforms or underperforms. i completely agree with sentiment expressed in your post, but i have a problem with this line. it hits a nerve because it's a fairly constant sentiment on this board. the snicker-worthy 3 fund portfolio for the simple man. it bothers me. The alternative is to be smart and listen to sales people pitch one market beating, risk mitigating, strategy after another: don't give up on the opportunity to beat the market, or to be safer than the market, using security selection...
- Fri Jan 08, 2016 11:06 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
IMHO it is an extreme opinion to believe that all were flukes. Maybe. There are periods of time where certain risks are rewarded and periods of time when they are not. If the future looks like the past, those same risks will likely be rewarded. If it's different, maybe not. There are many investment ideas/asset classes that will outperform in the future. Finding them is the hard part. It's akin to guessing at the next golden goose. Tilting with stocks is unlikely to be extremely hazardous, but, as we've seen, it doesn't necessarily stop at plain vanilla. AQR is a prime example. A dose of healthy skepticism is in order. When i think about it long enough, i end up in the same spot. simplicity is likely to be the smarter choice. Larry cited a...
- Fri Jan 08, 2016 10:05 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
Maybe. There are periods of time where certain risks are rewarded and periods of time when they are not. If the future looks like the past, those same risks will likely be rewarded. If it's different, maybe not.lack_ey wrote: IMHO it is an extreme opinion to believe that all were flukes.
There are many investment ideas/asset classes that will outperform in the future. Finding them is the hard part. It's akin to guessing at the next golden goose. Tilting with stocks is unlikely to be extremely hazardous, but, as we've seen, it doesn't necessarily stop at plain vanilla. AQR is a prime example. A dose of healthy skepticism is in order.
When i think about it long enough, i end up in the same spot. simplicity is likely to be the smarter choice.
- Fri Jan 08, 2016 7:08 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
11 return anomalies that are violations of the Fama-French three-factor (market beta, size and value) model: 1. Net Stock Issues: Net stock issuance and stock returns are negatively correlated. It’s been shown that smart managers issue shares when sentiment-driven traders push prices to overvalued levels. 2. Composite Equity Issues: Issuers underperform non-issuers with composite equity issuance defined as the growth in the firm’s total market value of equity minus the stock’s rate of return. It’s computed by subtracting the 12-month cumulative stock return from the 12-month growth in equity market capitalization. 3. Accruals: Firms with high accruals earn abnormally lower average returns than firms with low accruals — investors overestima...
- Fri Jan 08, 2016 1:56 pm
- Forum: Investing - Theory, News & General
- Topic: Small value underperformance, DFA
- Replies: 106
- Views: 16221
Re: Small value underperformance, DFA
smart people use mathematics to justify performance chasing. The future is unknown and the past doesn't provide meaningful clues.danieljquirk wrote: I imagine many investors did not become fans of small value tilting until about 2003.
- Thu Jan 07, 2016 3:52 pm
- Forum: Investing - Theory, News & General
- Topic: [Market] Correction...Corection...Correction
- Replies: 103
- Views: 15086
Re: [Market] Correction...Corection...Correction
RBW. I just saw an article about this being the "worst week"livesoft wrote: Wait for it. It is close for some things, but not for most things. I'll throw you a bone: VTI would have to be down about 2.9% for VTI to be having an RBD today.
Maybe we should do a RBD5 - cyclically adjusted RBDs.
Then again, i've got no money to invest anyway.
- Tue Jan 05, 2016 11:29 pm
- Forum: Personal Finance (Not Investing)
- Topic: what to do about estimated taxes if 4th quarter income is high
- Replies: 10
- Views: 2780
Re: what to do about estimated taxes if 4th quarter income is high
agreed. make a good faith estimate of your tax liability and write a check. I've been paying uneven ES for years. income is uneven. no problems unless the payment is late or way short the actual tax liability.Katietsu wrote:You are incorrectly applying the concept of four equal installments. The answer to your question is to send the correct amount with your next estimated payment.
- Mon Jan 04, 2016 3:34 pm
- Forum: Investing - Theory, News & General
- Topic: 2016 hedge fund contest
- Replies: 250
- Views: 50420
Re: 2016 hedge fund contest
Two and Twenty Squeeze Fund
long:
VGT
short:
ASHR
long:
VGT
short:
ASHR
- Sat Jan 02, 2016 5:58 pm
- Forum: Personal Finance (Not Investing)
- Topic: 1/2/16 Deal - H&R Block 2015 @ Amazon
- Replies: 30
- Views: 3974
Re: 1/2/16 Deal - H&R Block 2015 @ Amazon
That's got to be worthy of another thread. No matter what i do, i can't deduct foreign taxes (from Total International, for example) using tax programs. They want a source country and complain bitterly when you don't provide one.Pam01 wrote: I am going to go without a tax product and try PDF electronic fill-in-forms this year since I have to handhold Form 1116 data entry with any tax product anyway.
- Sat Jan 02, 2016 5:56 pm
- Forum: Personal Finance (Not Investing)
- Topic: 1/2/16 Deal - H&R Block 2015 @ Amazon
- Replies: 30
- Views: 3974
Re: 1/2/16 Deal - H&R Block 2015 @ Amazon
Thank you. I"ve used H&R Block for years. I just got home + business for 39 bucks. it's installed/everything. I've never spent under 80 for them.BoxOfUpticks wrote:Amazon has H&R Block 2015 tax software as the deal of the day.
The above link was navigated via the bogleheads sidebar (look in the left margin). I hope it still carries attribution (and the incentive) back to bogleheads.org.
Appreciate the tip!!!
- Sat Jan 02, 2016 12:31 pm
- Forum: Investing - Theory, News & General
- Topic: REGISTRATION FOR THE 2016 BOGLEHEAD CONTEST
- Replies: 667
- Views: 60438
- Fri Jan 01, 2016 10:47 pm
- Forum: Investing - Theory, News & General
- Topic: Rick Ferri looking to internationalize his portfolio
- Replies: 507
- Views: 148204
Re: Rick Ferri looking to internationalize his portfolio
Any update on the change in strategy? Only the update on the change in his blogging strategy: he apparently deleted his blog post on the strategy. If you look at his blog, there are plenty of entries before and after that one. That particular one is gone. Have you ever seen anyone post a strategy like that and then give a series of serious updates until the strategy has played out one way or the other? I have not. The most likely outcome is that the whole thing dies with a whimper, the would-be strategist just hopes we forget about it. In his defense, he was right, it's about +6% outperformance in domestics? Of course, the would-be dip buyers dilemma is in the timing. 6 is better than 4, but 25 is better than 6. Not my cup of tea. I just k...
- Thu Dec 31, 2015 6:07 pm
- Forum: Personal Investments
- Topic: Why buy Corporate Bonds?
- Replies: 34
- Views: 3654
Re: Why buy Corporate Bonds?
incrementally better yields.
I use TBM. It has some corporates and held up very well during the financial panic of 2008-9. That's good enough for me. I wouldn't argue with a strategy that holds treasuries exclusively. there will be times they outperform Investment grade, and times that they underperform, but like you said, the times that they outperform are usually when you need the ballast (and rebalancing money).
That said, there will eventually be a time when treasuries are leading the way down. (bond vigilante thing. the market someday will balk a treasuries too).
It's hard to know anything.
I use TBM. It has some corporates and held up very well during the financial panic of 2008-9. That's good enough for me. I wouldn't argue with a strategy that holds treasuries exclusively. there will be times they outperform Investment grade, and times that they underperform, but like you said, the times that they outperform are usually when you need the ballast (and rebalancing money).
That said, there will eventually be a time when treasuries are leading the way down. (bond vigilante thing. the market someday will balk a treasuries too).
It's hard to know anything.
- Thu Dec 31, 2015 3:24 pm
- Forum: Personal Consumer Issues
- Topic: Taylor vs Martin Guitar
- Replies: 19
- Views: 5720
Re: Taylor vs Martin Guitar
Opinions: Martins have a richer sound but are harder to play. Tougher action. I have a martin and it's a lovely sound, but i also need a couple of beaters that i noodle on when i don't want the punishment, or simply can't play it on the martin. It also depends on style. If you want to bluegrass, you've gotta martin. If you want to play texas swing, or stuff with a bluesy feel, gibson is the accepted standard. in my humble and non-omniscient opinion, Taylors do sound pretty thin compared to either. buying used is smart, as long as you play it first. The one disadvantage of buying used... you can't A/B the instrument. Each guitar has it's own sound and it's hard (for me) to compare sounds without actually playing them both side by side in a r...
- Wed Dec 30, 2015 4:06 pm
- Forum: Personal Finance (Not Investing)
- Topic: Do I need new EIN?
- Replies: 8
- Views: 1468
Re: Do I need new EIN?
Just get another one. it takes about 5 minutes. why not?
- Wed Dec 30, 2015 9:11 am
- Forum: Investing - Theory, News & General
- Topic: Another look at High Yield Bonds in a Portfolio
- Replies: 69
- Views: 6777
Re: Another look at High Yield Bonds in a Portfolio
Thanks for the reminder and the long standing advice. I listened as well. Glad i did.larryswedroe wrote:http://www.etf.com/sections/index-inves ... nopaging=1
A reminder of the issues of liquidity and how adding high yield to a portfolio impacts the risk and return of a portfolio
Hope you find it helpful
Larry
- Tue Dec 29, 2015 9:07 pm
- Forum: Personal Investments
- Topic: What would you do with windfall? Version: #8229
- Replies: 19
- Views: 2702
Re: What would you do with windfall? Version: #8229
Hopefully, i'll be joining you soon. <fingers crossed>
if fortune shines on us, I'm lowering my AA because my need to take risks will be greatly diminished. I'm 60/40 now. I'll go 50/50. I would also invest your large emergency fund, unless you've got your eye on a near term use (or it's parked in CDs already) Your taxable nest egg is plenty for emergencies.
Everyone is different, How much growth do you need/desire to meet your retirement goals? That's the most important thing to sort out.
if fortune shines on us, I'm lowering my AA because my need to take risks will be greatly diminished. I'm 60/40 now. I'll go 50/50. I would also invest your large emergency fund, unless you've got your eye on a near term use (or it's parked in CDs already) Your taxable nest egg is plenty for emergencies.
Everyone is different, How much growth do you need/desire to meet your retirement goals? That's the most important thing to sort out.
- Tue Dec 29, 2015 8:40 pm
- Forum: Investing - Theory, News & General
- Topic: Reversion to Mean vs Gambler's Fallacy
- Replies: 65
- Views: 8063
Re: Reversion to Mean vs Gambler's Fallacy
spectacular observation. The notion that there is a mean, at all, can easily be recast as a gamblers fallacy. Not all is lost, though, as you know... For stocks, we are buying a property/asset with future prospects. There is a fuzzy mean, a fuzzy average, for which investors have historically been willing to pay for future earnings. Reversion to mean, in this context, is a fairly concrete prospect of reverting to this average. There are many examples when markets get so hot that people are willing to pay astronomical amounts for future earnings. Reversion to mean is a theory that such hot times don't last. By the same token, a depressed market may offer great prices for future earnings, those too should revert to the mean. There is still a ...
- Tue Dec 29, 2015 8:52 am
- Forum: Investing - Theory, News & General
- Topic: Some articles by Asness et al.
- Replies: 11
- Views: 1329
Re: Some articles by Asness et al.
Am i the only one who feels like this is just another example of performance chasing? I clearly remember reading pages and pages of debates about the desirability of investing directly in commodity futures. backtested, theoretically sound, terrible investment idea. smart people sold on a terrible idea. we had fewer takers on the gold rush, but some. I'm sure this strategy isn't the new new way to lose a ton of money. Ok, i'm not completely sure about that. One of the worst things that can happen is success. If the new new strategy works out, then it's takes less convincing for the next new new strategy. As we've seen, the rails eventually come off. it only takes one really bad idea to ruin the benefits of all the other great ideas. investor...
- Tue Dec 29, 2015 7:48 am
- Forum: Investing - Theory, News & General
- Topic: Some articles by Asness et al.
- Replies: 11
- Views: 1329
Re: Some articles by Asness et al.
backtested flavor of the month for market beating returns.
that's very cynical, but there is always some new product/approach being sold to investors. It's the real thing, unlike commodity tilts, gold tilts, small value tilts. The new new thing for market beating returns is _____.
Maybe so. probably not.
that's very cynical, but there is always some new product/approach being sold to investors. It's the real thing, unlike commodity tilts, gold tilts, small value tilts. The new new thing for market beating returns is _____.
Maybe so. probably not.
- Wed Dec 23, 2015 12:19 pm
- Forum: Investing - Theory, News & General
- Topic: VWO is now 42% China?
- Replies: 13
- Views: 3377
Re: VWO is now 42% China?
Ticker: ASHRogrehead wrote: Retail foreign investors can't buy A-shares. If I'm wrong, please tell me where they can, I will be shocked.
- Wed Dec 23, 2015 12:05 pm
- Forum: Investing - Theory, News & General
- Topic: Questions about CAPE 10 being above 25
- Replies: 39
- Views: 3743
Re: Questions about CAPE 10 being above 25
The less you pay for future earnings, the higher your return will be. Makes sense to me. We only have a very limited data set. We only have about a dozen independent ten year periods of past returns that may reasonably be relevant, perhaps fewer (are markets from 1900, with different laws, structures, risks, etc. really relevant). Using overlapping periods is extremely common in finance, but is bad statistics (if two data points have nine years in common, the second doesn't provide much new information). I'd say PE1 and PE10 are not very good predictors, but may be the best we have. Whether they're good enough to be useful is unclear. I wouldn't bet a lot on the ability to predict things accurately. Precisely. is it all just statistical ca...
- Wed Dec 23, 2015 11:31 am
- Forum: Investing - Theory, News & General
- Topic: Questions about CAPE 10 being above 25
- Replies: 39
- Views: 3743
Re: Questions about CAPE 10 being above 25
I'm not saying these aren't decent heuristics, but "reliably predict" is pushing the language. The sample size matters. If i were to pick anything, it would be PE1 or some other measurement that makes sense to use a yearly time quantization. The time invariance assumptions are still kaput, but at least you have an order of magnitude larger data set. It doesn't surprise me that PE1 is a less accurate indicator. it's has more time independent samples that falsify the notion of predictive power.larryswedroe wrote: Higher valuations reliably predict lower future returns. Put P/E ratios into deciles, quartiles, etc
- Wed Dec 23, 2015 11:04 am
- Forum: Investing - Theory, News & General
- Topic: Questions about CAPE 10 being above 25
- Replies: 39
- Views: 3743
Re: Questions about CAPE 10 being above 25
My other pet peeve is the use of multiple indicators. PE1, Price To Book, Price To Sales, etc. I find this almost more humorous. It takes about 3 seconds for someone with a background in statistics to drive a truck through these ideas.
Independence assumptions. If your variables are correlated, each variable adds very little new information to the model. Most, if not all of the multi-variable "models" people use are fatally flawed because each new variable adds almost no new information because of cross correlations.
people need to feel in control. fatally flawed predictive models offer such a delusion to the needy.
Nobody knows nothing. It's still true.
Independence assumptions. If your variables are correlated, each variable adds very little new information to the model. Most, if not all of the multi-variable "models" people use are fatally flawed because each new variable adds almost no new information because of cross correlations.
people need to feel in control. fatally flawed predictive models offer such a delusion to the needy.
Nobody knows nothing. It's still true.
- Wed Dec 23, 2015 10:50 am
- Forum: Investing - Theory, News & General
- Topic: Questions about CAPE 10 being above 25
- Replies: 39
- Views: 3743
Re: Questions about CAPE 10 being above 25
there aren't enough data points. It's psuedo-science and complete hocus pocus. the beloved timing indicator which has no legs. I can't understand why ANYONE with a statistics background would claim otherwise with a straight face.HomerJ wrote:
(1) How is there possibly enough data points to draw any meaningful conclusions at all?
Maybe it's a good indicator, but there is absolutely no evidence that this is true. [Edit: there is no statistical basis to make judgements about the indicator, but the 3 examples are "evidence"]
I work in speech science. We need 5000 acoustic samples to build a crappy predictive model for an articulation.
3? seriously? No. not seriously.
- Mon Dec 21, 2015 5:46 pm
- Forum: Investing - Theory, News & General
- Topic: S & P 500 "fair value" (as of 3-04-16 )
- Replies: 168
- Views: 23020
Re: S & P 500 "fair value" (as of 12-18-15 )
Since 1919, the monthly average yield on Moody's Baa bond is 7.00%. https://research.stlouisfed.org/fred2/series/BAA# Since 1919, the monthly average earnings yield on the S & P 500 is 7.29%. http://www.multpl.com/s-p-500-earnings-yield For 95 years, stock investors have enjoyed an average earnings yield "spread" of + 0.29% over Baa investment grade bonds. As of the market's close on 12-18-15, the S & P 500's price was: : $2,013.26 http://www.multpl.com/s-p-500-historical-prices Current 12 months trailing EPS of S & P 500 (reported as of Jun 2015): $ 94.39 http://www.multpl.com/s-p-500-earnings/ Current yield of Moody's Seasoned Baa Corporate Bond Yield© (as of 2015-11) : 5.46% https://research.stlouisfed.org/fred2/se...
- Fri Dec 18, 2015 9:53 pm
- Forum: Investing - Theory, News & General
- Topic: Large Energy stocks - why not?
- Replies: 158
- Views: 18521
Re: Large Energy stocks - why not?
It's always darkest before the dawn. A true investor will put their money where there mouth is, everyone else will sit around the table and speculate; we're awash in oil, there are X number of super-tankers sitting offshore brimming with oil (now that they are filled up with oil, the oil that gets pumped out of the ground - where is that going? storage onshore? not so, most of the storage onshore is being occupied with you guessed it - oil). Funny thing, the very first sign of a drop in crude oil storage, and bam...the price will automatically adjust (want to guess in which direction?). There are 517 rigs drilling, okay, let's say they drill 6 holes a year - are they all gushers, tricklers or dry holes? Let's say 75% of them hit a commerci...
- Fri Dec 18, 2015 4:56 pm
- Forum: Investing - Theory, News & General
- Topic: [Third Avenue liquidates its high-yield bond fund]
- Replies: 130
- Views: 14088
Re: [Third Avenue liquidates its high-yield bond fund]
I do have a sense that funds are making promises they can't keep. A lot of funds. . it's hard to see how that can possibly work at all times. markets can and do literally dry up. Any market. For these kinds of really scary situations, or mundane ones (like currently), I'm fine with suspending redemptions when they can't be met via selling, but i'm not ok with loans from safe investments to risk investments under any circumstance. That creates a systemic risk for the sake of honoring a bogus NAV for an asset that can't be sold. Frankly, a fund manager is incentivized to do the "loan" route over the "halt" route. If the bridge works, the fund family survives. So its 3:59 eastern time and a redemption order crosses the inb...
- Fri Dec 18, 2015 4:46 pm
- Forum: Investing - Theory, News & General
- Topic: Large Energy stocks - why not?
- Replies: 158
- Views: 18521
Re: Large Energy stocks - why not?
Will Rogers wrote: Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
- Fri Dec 18, 2015 12:58 pm
- Forum: Investing - Theory, News & General
- Topic: [Third Avenue liquidates its high-yield bond fund]
- Replies: 130
- Views: 14088
Re: [Third Avenue liquidates its high-yield bond fund]
Yeah, my uninformed opinion is that it looks like the SEC was too loose with this particular fund, and should have said "you can't do that, these securities aren't liquid enough for a mutual fund." It's pretty clear that the IMF and the SEC are aware of issues with bond liquidity, and the SEC has posed rules to deal with it--allowing funds to impede redemptions. I hope it's not too little too late and I hope it all works out. Just for clarification, i don't believe there is any cause for immediate concern. none at all, especially those of us with vanguard. This is meh. mundane. swimming naked, kind of event. I do have a sense that funds are making promises they can't keep. A lot of funds. A lot of funds are promising a level of l...
- Fri Dec 18, 2015 10:36 am
- Forum: Investing - Theory, News & General
- Topic: A perfect storm for investors
- Replies: 90
- Views: 15911
Re: A perfect storm for investors
I won't, but I appreciate that attitude. It's a recognition of the reality that we don't have very much control over outcomes. Patience is supreme, but humility is right up there. both are more important than knowledge.Maynard F. Speer wrote:holdings are SVG Capital, Electra Private Equity and Marlborough UK Micro-cap Growth ... So anyone's welcome to quote this when they all crash 90%
We are dangerous when we think we know something. We are more dangerous when we think we know something but the market disagrees with
- Fri Dec 18, 2015 8:24 am
- Forum: Investing - Theory, News & General
- Topic: [Third Avenue liquidates its high-yield bond fund]
- Replies: 130
- Views: 14088
Re: [Third Avenue liquidates its high-yield bond fund]
This bothers me. http://www.bloomberg.com/news/articles/2015-12-14/third-avenue-sought-internal-loan-approval-before-fund-collapsed[quote]Third Avenue’s request, disclosed in an Oct. 14 filing with the U.S. Securities and Exchange Commission, would allow its mutual funds to temporarily borrow money from one another. Investors who are redeeming could get paid with the loans almost immediately, even if it took the firm several days to receive cash from the sale of assets. This is a really bad idea. For a company with safe and unsafe funds, it shifts the liquidity (and solvency!) burden onto every fund in the fund family. If i own a safe bond fund, i'd rather not be acquiring risks from their Double Dog Dare Triple Risk Fund. Fund families ar...
- Thu Dec 17, 2015 1:50 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I Afford an $800k Home on $4K/month Take Home?
- Replies: 146
- Views: 19545
Re: Can I Afford an $800k Home on $4K/month Take Home?
How are you defining a "flat market"? And over what time period? I am just speculating. can't know what other people are thinking... I think it takes practice to think in terms longer than 1 year. When you have a raging good run for 4 years, you build in expectations (or fight the same) then it stagnates, and fails expectations. i think it's natural to get restless. it takes practice to overcome this emotion. it's worse today because we get tick-by-tick, blow by blow net worth updates. Information moves so fast that a year seems like an eternity. You used the phrase "flat market" so I think it was fair to ask you what you meant by that. I think you will find that most Bogleheads think about investing for terms longer th...
- Thu Dec 17, 2015 12:44 pm
- Forum: Personal Finance (Not Investing)
- Topic: Can I Afford an $800k Home on $4K/month Take Home?
- Replies: 146
- Views: 19545
Re: Can I Afford an $800k Home on $4K/month Take Home?
I am just speculating. can't know what other people are thinking...mptfan wrote: How are you defining a "flat market"? And over what time period?
I think it takes practice to think in terms longer than 1 year. When you have a raging good run for 4 years, you build in expectations (or fight the same) then it stagnates, and fails expectations. i think it's natural to get restless. it takes practice to overcome this emotion. it's worse today because we get tick-by-tick, blow by blow net worth updates. Information moves so fast that a year seems like an eternity.
- Thu Dec 17, 2015 11:10 am
- Forum: Personal Finance (Not Investing)
- Topic: Can I Afford an $800k Home on $4K/month Take Home?
- Replies: 146
- Views: 19545
Re: Can I Afford an $800k Home on $4K/month Take Home?
A general statement. It sure seems like folks are getting itchy to spend savings lately. No just OP. cars, can i afford expensive XYZ.
I remember feeling this way in july 2008. At that point, it felt like a decade of flat returns in S&P 500 (that's where i was invested, mainly).
I was to the point of giving up and buying an big house and leaving the stock market behind.
Really glad i didn't. I think the flat market has people rethinking their savings. The longer it goes on, the more we'll see "can i afford XYZ"
My story ended with a market crash about a month later. I wasn't selling at a huge loss, so i was "stuck". Today, i am very happy i stuck it out. Happy i found bogleheads in 2009. i needed a system too.
I remember feeling this way in july 2008. At that point, it felt like a decade of flat returns in S&P 500 (that's where i was invested, mainly).
I was to the point of giving up and buying an big house and leaving the stock market behind.
Really glad i didn't. I think the flat market has people rethinking their savings. The longer it goes on, the more we'll see "can i afford XYZ"
My story ended with a market crash about a month later. I wasn't selling at a huge loss, so i was "stuck". Today, i am very happy i stuck it out. Happy i found bogleheads in 2009. i needed a system too.
- Wed Dec 16, 2015 3:58 pm
- Forum: Investing - Theory, News & General
- Topic: [Third Avenue liquidates its high-yield bond fund]
- Replies: 130
- Views: 14088
Re: [Third Avenue liquidates its high-yield bond fund]
This bothers me. http://www.bloomberg.com/news/articles/2015-12-14/third-avenue-sought-internal-loan-approval-before-fund-collapsed Third Avenue’s request, disclosed in an Oct. 14 filing with the U.S. Securities and Exchange Commission, would allow its mutual funds to temporarily borrow money from one another. Investors who are redeeming could get paid with the loans almost immediately, even if it took the firm several days to receive cash from the sale of assets. This is a really bad idea. For a company with safe and unsafe funds, it shifts the liquidity (and solvency!) burden onto every fund in the fund family. If i own a safe bond fund, i'd rather not be acquiring risks from their Double Dog Dare Triple Risk Fund. Fund families are impor...
- Tue Dec 15, 2015 8:15 am
- Forum: Investing - Theory, News & General
- Topic: Check-In on Emerging Market Sentiment
- Replies: 57
- Views: 7625
Re: Check-In on Emerging Market Sentiment
I generally try to overweight what's cheap, and limit downside when markets are seemingly presenting more risk than opportunity ... This month is one of these times I'm reducing equity exposure and moving into more market neutral investments ... I normally hold Emerging Markets on a 15+ year view, but they could fall another 50%, and I could be tempted to hedge a proportion of that exposure now - even though it's counterintuitive to sell on a 3-odd year low (the rule of when to buy back in is very simple, and it's sort of a case of weighing up losing a potential 5% upside, or limiting a potential 50% downside) To paraphrase, you are saying that you look for the highest risk you can find and tilt to that. boldly picking up beaten down asset...
- Mon Dec 14, 2015 9:52 pm
- Forum: Investing - Theory, News & General
- Topic: Check-In on Emerging Market Sentiment
- Replies: 57
- Views: 7625
Re: Check-In on Emerging Market Sentiment
Sure. sell at low 60, 300 day MA, ____ (insert any other stop loss strategy you can name) performs extremely well in a crisis sell off. The reason it's not tempting is because it generates lots of false positives. How about from 2009 until now? not so great. A simple way of saying it: if you are taking less risk, you have less downside. you have less reward. no free lunch.Maynard F. Speer wrote:Hmm ...
Tempting
Also, if you have taxable assets, all the tax selling will chew deeply into your after tax return, which is the only value that matters and is frequently overlooked.
- Wed Dec 09, 2015 1:46 pm
- Forum: Personal Investments
- Topic: Who's buying Oil stocks?
- Replies: 168
- Views: 29972
Re: Who's buying Oil stocks?
I have a 40 year investment window, and I find it hard to believe oil won't spike at some point during that span. Certainly, it will, but the question for an investor isn't whether a not a particular dog will have it's day. it's whether such an investment will outperform other choices to the extent that it's worthwhile to take the idiosyncratic risk. If it gained everything back next year, then it looks really nice. What about 5 or 10 years (or 35 years!) from now? If you sit long enough on a crummy investment, the rest of the market can move significantly away from you. it's obviously better to buy now than at the beginning of the year or at the height of the commodity boom. It's sometimes instructive to read old posts. This thread is a g...
- Tue Dec 08, 2015 8:52 pm
- Forum: Personal Investments
- Topic: Who's buying Oil stocks?
- Replies: 168
- Views: 29972
Re: Who's buying Oil stocks?
Not me. I've loaded up on EM.abuss368 wrote:I am curious how many Bogleheads may have invested in the Vanguard Energy Fund over the last couple of months.
- Tue Dec 08, 2015 8:51 pm
- Forum: Personal Investments
- Topic: Who's buying Oil stocks?
- Replies: 168
- Views: 29972
Re: Who's buying Oil stocks?
deleted: duplicate
- Tue Dec 08, 2015 2:15 pm
- Forum: Personal Investments
- Topic: Who's buying Oil stocks?
- Replies: 168
- Views: 29972
Re: Who's buying Oil stocks?
Those diversified investments in 2009 have definitely been winners. Maybe idiosyncratic selloffs are the same thing. It doesn't feel like the same thing to me.Grt2bOutdoors wrote:
Yes, I'm as crazy as I was in March 2009, buying when everyone else was selling.
- Tue Dec 08, 2015 12:30 pm
- Forum: Personal Investments
- Topic: Who's buying Oil stocks?
- Replies: 168
- Views: 29972
Re: Who's buying Oil stocks?
you guys know the risks. I wouldn't touch oil stocks, now or ever. It's like playing currencies. you are really at the mercy of policy makers as much as any other force. If the saudis want to flood the market for a decade, they'll do it. They've done it before.
just because something has gone down a lot doesn't mean it's cheap. This is true for our big indices, but it is really really true when it comes to slicing and dicing into sectors.
you guys know the risks. are you being greedy when other people are being fearful, or are you being crazy?
i'm going with crazy. you may or may not lose your shirt and tie at these levels, but dead money tends to underperform money that is more wisely allocated.
just because something has gone down a lot doesn't mean it's cheap. This is true for our big indices, but it is really really true when it comes to slicing and dicing into sectors.
you guys know the risks. are you being greedy when other people are being fearful, or are you being crazy?
i'm going with crazy. you may or may not lose your shirt and tie at these levels, but dead money tends to underperform money that is more wisely allocated.
- Fri Dec 04, 2015 2:50 pm
- Forum: Personal Investments
- Topic: 16 y/o daughter with gifted 4K
- Replies: 13
- Views: 1899
Re: 16 y/o daughter with gifted 4K
Thank you for exploring the situation in such detail. I really appreciate it. What are your plans to pay for her college? You have plenty of money/family money to send her anywhere, and she doesn't have to earn a cent until she graduates? Or you can afford to pay most of a state school, but she will need to use some combination of family gifts, loans, and earned income to fill in the gaps? It's impossible to say what to do with this money without a bigger picture. I'm not sure given tuition inflation. This is our only child who can attend college. Her sister has severe intellectual disabilities. We have another 60K that i am comfortable spending on education. It belongs in the 529, but we keep it as part of our taxable assets. On top of tha...