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by Valuethinker
Fri Jun 22, 2018 11:02 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Valuethinker, Effectively, in this speech ( 25 Years of Inflation Targets: Certainty for Uncertain Times ), the Governor of the Bank of Canada says " It was quite a blow to the economics profession when, in 1982, then-Governor Gerald Bouey famously dropped the bombshell that we would no longer targ...
by Valuethinker
Fri Jun 22, 2018 7:37 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

https://academic.oup.com/oxrep/article/34/1-2/269/4781817 Bit more on DSGE models and Central Banking Throughout the paper I use the perspective of a policy economist at a central bank or treasury serving his or her principals. I think this perspective is fitting, and my only comparative advantage r...
by Valuethinker
Fri Jun 22, 2018 7:31 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Inflation is a monetary phenomenon. Technology has nothing to do with it. Controlling inflation through monetary policy works. See my other posts. What Central Banks do not do is target monetary aggregates. What they do is target inflation itself via a range of tools. And they measure the risk of f...
by Valuethinker
Fri Jun 22, 2018 7:15 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

I didn't go through all the replies in details but technology really has no inherent relationship with inflation. However, it does help lower inflation. First of all, you need to understand what inflation really is. I presume most people would explain inflation as "rising in price". However, that's...
by Valuethinker
Fri Jun 22, 2018 7:05 am
Forum: Investing - Theory, News & General
Topic: Robotics and Space Investing?
Replies: 5
Views: 379

Re: Robotics and Space Investing?

https://www.theglobeandmail.com/investi ... cks/MDA-T/

McDonald Detwiller supports the International Space Station among other activities.
by Valuethinker
Fri Jun 22, 2018 7:04 am
Forum: Investing - Theory, News & General
Topic: Robotics and Space Investing?
Replies: 5
Views: 379

Re: Robotics and Space Investing?

A lot of the key activities will be buried inside large aerospace conglomerates. Also a lot of the really interesting stuff will be in VC backed startups and early stage companies. There's probably no easy way to play this, although doubtless someone will/ has launched an ETF. https://www.marketwatc...
by Valuethinker
Fri Jun 22, 2018 5:42 am
Forum: Investing - Help with Personal Investments
Topic: 28 year old investor [Australia]
Replies: 9
Views: 460

Re: 28 year old investor [Australia]

Greetings all, I am 28 years old, married to a woman my age with a young baby. I recently started doing some reading on this site and thought it might be able to offer me some guidance. My portfolio is not as simple as some people here recommend, but I like the idea of tilting towards small cap and...
by Valuethinker
Fri Jun 22, 2018 5:31 am
Forum: Investing - Help with Personal Investments
Topic: 28 year old investor [Australia]
Replies: 9
Views: 460

Re: 28 year old investor [Australia]

Forget about the inheritance. Wipe it from your brain if you can. My unsolicited advice, outright refusal of the inheritance ahead of time is likely to be better for your character as a man and future successes, more likely than not. Thanks for your advice. This is what I'm going to do. I want to b...
by Valuethinker
Fri Jun 22, 2018 5:16 am
Forum: Investing - Help with Personal Investments
Topic: [100% stock, uncomfortable with international]
Replies: 34
Views: 2418

Re: [100% stock, uncomfortable with international]

I have an underweight international allocation, about 25% of stock, just in case US becomes the next Japan. For what it's worth, international beat US last year. Do you think that 25% will save you when the US goes the way of Japan? :P Btw, I think the fear of the US becoming Japan are way overblow...
by Valuethinker
Fri Jun 22, 2018 4:02 am
Forum: Investing - Help with Personal Investments
Topic: Bar Mitzvah Money Investing Ideas
Replies: 21
Views: 1589

Re: Bar Mitzvah Money Investing Ideas

Hello all. My son (now 15) has about 35k in Bar Mitzvah money to invest. I initially opened an account with Fidelity and we picked 6 stocks (Disney, Nike, Apple, GE, etc..) and had a decent run but I've been thinking that this is probably not the smartest way to teach him about investing for the lo...
by Valuethinker
Thu Jun 21, 2018 9:48 am
Forum: Investing - Help with Personal Investments
Topic: How to purchase Swiss Stocks?
Replies: 2
Views: 244

Re: How to purchase Swiss Stocks?

Hey guys. I am interested in purchasing shares from a swiss company. This is a company I actually used to work for and they have a solid history and dividend. The shares however, are only listed on the swiss exchange. I am not sure how to access them directly. IIRC, my old fidelity account gave me ...
by Valuethinker
Thu Jun 21, 2018 9:02 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Technology or more importantly, the applied use of technology is a key factor in lower inflation. Globalization is also a major factor in lower inflation as global competition lowers prices. To the extent that technology increases total factor productivity - producing more output for the same input...
by Valuethinker
Thu Jun 21, 2018 8:25 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Gas is going up, which means oil is more expensive, which means heating my house will cost more this winter. But it went down, a lot, before it went up. $150 in summer 2008. Then $40/bl in March 2009. Rose to over $100/ bl and that became "the new normal". Then it went back down to $40 ish again (2...
by Valuethinker
Thu Jun 21, 2018 5:58 am
Forum: Investing - Help with Personal Investments
Topic: Bar Mitzvah Money Investing Ideas
Replies: 21
Views: 1589

Re: Bar Mitzvah Money Investing Ideas

Then, I would tell him that a low cost stock index fund will likely return about 10 percent per year on average. Source: https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations ries. 10% pa is a very generous assumption. I don't think one would be doing anyone any fav...
by Valuethinker
Thu Jun 21, 2018 5:46 am
Forum: Investing - Help with Personal Investments
Topic: Bar Mitzvah Money Investing Ideas
Replies: 21
Views: 1589

Re: Bar Mitzvah Money Investing Ideas

Hello all. My son (now 15) has about 35k in Bar Mitzvah money to invest. I initially opened an account with Fidelity and we picked 6 stocks (Disney, Nike, Apple, GE, etc..) and had a decent run but I've been thinking that this is probably not the smartest way to teach him about investing for the lo...
by Valuethinker
Thu Jun 21, 2018 4:51 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 68
Views: 3788

Re: Looking for EUR holy grail bond strategy

(my main issue is currency risk - the funds I can access are limited and tend to be GBP sterling funds. DBZB exists as GBP hedged as well. The funds I can access in my corporate pensions are limited. The Barclays ST gilt ETF is actually in a separate account, and that's only a small proportion of m...
by Valuethinker
Thu Jun 21, 2018 4:06 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 68
Views: 3788

Re: Looking for EUR holy grail bond strategy

You've reduced your portfolio's diversification. Again, it's pretty marginal given the low percentages. You're right. It's hard to resist the temptation of more yield. So back to DBZB . I'm wondering if I should shorten the duration (7.89) by adding Eurozone 1-5 or AAA/Germany 1-5 bonds (accepting ...
by Valuethinker
Thu Jun 21, 2018 3:07 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Inflation is always and everywhere a monetary phenomenon might be a better explanation. Real labor productivity gains have been on the order of 1.1% since the Great Recession. Oil prices have always been incredibly volatile. https://www.bls.gov/opub/ted/2017/labor-productivity-growth-since-the-grea...
by Valuethinker
Thu Jun 21, 2018 2:59 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

I don't see how the answer can be anything but a resounding yes. All the fiber-optic cable laid down in the late 1990's that enabled the worldwide scope of the internet also allowed a lot of work to move overseas, with instantaneous communication. Technology also means that companies now require fa...
by Valuethinker
Wed Jun 20, 2018 5:54 pm
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Offshoring has kept prices down for many years. When the second and third world export inflation, we're in trouble. (adjusts tinfoil hat) Government has a vested interest in under reporting inflation. Otherwise, they'd pay more to fund the debt, and for SS/Medicare. Why do you think the tax code sw...
by Valuethinker
Wed Jun 20, 2018 5:46 pm
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Technology allowed us to build bigger faster cars but that does not reduce inflation. It does if the cars require less fuel and less maintenance than the cars they replaced. Not only that, but cars last a lot longer. When I started driving, it was very unusual for a car to reach 100,000 miles. Now ...
by Valuethinker
Wed Jun 20, 2018 5:41 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 47
Views: 5025

Re: General Electric booted from Dow Jones Industrial Average

I thought Jack Welch was a genious. What happened? DMW It might have all been luck. Or rather, what he did worked when he did it, but other companies caught up. The world moved on. Everybody learned 6 sigma quality control, everyone delayered management and cut costs. It's also clear the company be...
by Valuethinker
Wed Jun 20, 2018 5:36 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 47
Views: 5025

Re: General Electric booted from Dow Jones Industrial Average

General Electric is just another example of a company in decline, often the result of poor management decisions, misdirection, and inattentiveness. A great example of specific company risk that is mitigated in index funds through broad diversification. Or lazy, disengaged employees. Culture flows f...
by Valuethinker
Wed Jun 20, 2018 5:33 pm
Forum: Investing - Theory, News & General
Topic: General Electric booted from Dow Jones Industrial Average
Replies: 47
Views: 5025

Re: General Electric booted from Dow Jones Industrial Average

It's a bit difficult to consider GE as a strictly U.S. company anymore, and thus a reflection of the U.S. economy. 62% of sales, 50% of assets, and 66% of employees were outside of the United States in 2017, according to a recent United Nations report . But also true of Google, Pfizer, JP Morgan, D...
by Valuethinker
Wed Jun 20, 2018 11:07 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

I don't believe that true inflation is low. While majority of 'goods' can be seen as much cheaper, which can probably attribute that to technology. 'Services' are not. That in itself deserves at study but in my eyes policy seems to be the driving factor. And you will find that the Bureau of Labor S...
by Valuethinker
Wed Jun 20, 2018 10:35 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

And airline deregulation has made importing cheap labor from anywhere economical. Inflation was also called the wage/price spiral. Low wages = low prices = low inflation. Since relatively few people who fly are going to do work in another country for significant periods of time, I don't follow that...
by Valuethinker
Wed Jun 20, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

I have given a lot of thought to why we have been in a period of low inflation for some time and I came to the conclusion that it is primarily because technology has advanced so rapidly in recent years and has made some industries obsolete while greatly reducing the profits in others thereby passin...
by Valuethinker
Wed Jun 20, 2018 10:27 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

Technology allowed us to build bigger faster cars but that does not reduce inflation. It does if the cars require less fuel and less maintenance than the cars they replaced. Maybe. When fuel prices drop - either directly by lower prices or indirectly by better mileage, people drive more. And the ca...
by Valuethinker
Wed Jun 20, 2018 10:20 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2761

Re: Is technology the reason for low inflation?

I don't believe that true inflation is low. While majority of 'goods' can be seen as much cheaper, which can probably attribute that to technology. 'Services' are not. That in itself deserves at study but in my eyes policy seems to be the driving factor. And you will find that the Bureau of Labor S...
by Valuethinker
Wed Jun 20, 2018 8:07 am
Forum: Personal Consumer Issues
Topic: To take or not to take delivery of Tesla 3
Replies: 1108
Views: 86719

Re: To take or not to take delivery of Tesla 3

I would disagree that some mega company would need to come over Tesla like a wave to usurp them. Many electric and hybrid cars currently exist within model lineups that nobody seems to ever talk about. Golf e, Honda Clarity, going into the hybrid line, cmax, camry..... It's just that everyone seems...
by Valuethinker
Wed Jun 20, 2018 7:57 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 68
Views: 3788

Re: Looking for EUR holy grail bond strategy

At this point, it will make almost no difference to your final returns. 12.5% in bond fund has a very small impact on the total portfolio. Agreed, the benefit is mainly psychological (e.g. both of them may be green, or one if e.g. treasury has a problem). Also if X-Trackers would mess up somehow, I...
by Valuethinker
Wed Jun 20, 2018 5:36 am
Forum: Personal Consumer Issues
Topic: To take or not to take delivery of Tesla 3
Replies: 1108
Views: 86719

Re: To take or not to take delivery of Tesla 3

It appears to me Tesla has gotten over the hump. They are here for the long haul. The cash flow profile still looks horrendous. This is a company that is based on hope value. They have to keep moving that end-of-road forward as they catch up to it (burn through cash)-- they are extending the road e...
by Valuethinker
Wed Jun 20, 2018 5:29 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 68
Views: 3788

Re: Looking for EUR holy grail bond strategy

I'm changing my mind again, and now plan to end up with 50% DBZB (Xetra) and 50% AGGH (LSE). Adding AGGH lowers my TER and increases my diversification (whilst DBZB reduces my exposure to corporate). Long-term it should provide slightly better return. The Vanguard fund alternative ( IE00BGCZ0933 ) ...
by Valuethinker
Wed Jun 20, 2018 3:46 am
Forum: Investing - Help with Personal Investments
Topic: Looking for EUR holy grail bond strategy
Replies: 68
Views: 3788

Re: Looking for EUR holy grail bond strategy

I have been struggling with choosing a bond ETF recently and this discussion was extremely helpful. Thank you, everyone! As a European citizen, I will likely choose the Euro hedged version of iShares Global Aggregate Bond ETF. According to the iShares UK website, it is listed on the London Stock Ex...
by Valuethinker
Tue Jun 19, 2018 9:25 am
Forum: Personal Finance (Not Investing)
Topic: Accounting for various forms of equity
Replies: 10
Views: 458

Re: Accounting for various forms of equity

Use the Black Scholes formula. There are online calculators. You are going to need to estimate the volatility of the stock. One of the assumptions of Black Scholes is that they are not paying a divined and you can only exercise at expiration. I assume this is a intellectual exercise to give a ball ...
by Valuethinker
Tue Jun 19, 2018 7:35 am
Forum: Investing - Help with Personal Investments
Topic: Shorting Amazon
Replies: 44
Views: 4038

Re: Shorting Amazon

I am getting the itch to short Amazon. I have been watching it for a while and now that it has crossed 1700, I don't really see much upside in that stock. Don't get me wrong - they have done well and are a highly inventive company. However, their valuation and future growth required to be anywhere ...
by Valuethinker
Tue Jun 19, 2018 7:33 am
Forum: Investing - Help with Personal Investments
Topic: Shorting Amazon
Replies: 44
Views: 4038

Re: Shorting Amazon

There’s no stopping Amazon. You may get lucky if there’s a black swan event in which entire market goes down and a mass exodus happens to Amazon. That said I’m hoping for it to fall like there’s no tomorrow so i can get in.... but sadly the wishes don’t always cone true. At the valuation Amazon is ...
by Valuethinker
Tue Jun 19, 2018 7:31 am
Forum: Personal Consumer Issues
Topic: Which Supermarket are you?
Replies: 155
Views: 7489

Re: Which Supermarket are you?

The responses in this thread (when there are enough of them) should likely end up representing the market share of each of the supermarkets in the US. I doubt it. Bogleheads tend to be more frugal. I suspect Whole Foods, Marianos, and the like to be underrepresented. But also tend to be upper middl...
by Valuethinker
Tue Jun 19, 2018 7:24 am
Forum: Investing - Help with Personal Investments
Topic: Shorting Amazon
Replies: 44
Views: 4038

Re: Shorting Amazon

Don't short Amazon. In the tail end of a bull run, people sell their losers and buy the high fliers (usually mega cap tech/internet). Amazon may not deserve a more outrageous PE ratio, but the market is getting out of whack. You are more likely than not to lose shorting Amazon. There's a lot of tru...
by Valuethinker
Mon Jun 18, 2018 11:14 am
Forum: Personal Finance (Not Investing)
Topic: Equity Offer
Replies: 8
Views: 879

Re: Equity Offer

I recently got an equity offer email. it says recieve upto 20% of your home equity value without making any monthly payments. with no interest charges and no added debit and you dont need to pay us back until you decide to sell your home or for upto 30 years. when you sell you give original amount ...
by Valuethinker
Mon Jun 18, 2018 4:46 am
Forum: Personal Finance (Not Investing)
Topic: Timeshare ever worth it? Please share details
Replies: 123
Views: 10084

Re: Timeshare ever worth it? Please share details

We are all persuadable - or at least if there are people who are not, they are very rare indeed. DO NOT assume you are bulletproof (one reason they like people to come with their spouses is they only have to persuade the weaker link-- most of us are more vulnerable to suasion if our spouses are per...
by Valuethinker
Mon Jun 18, 2018 4:42 am
Forum: Personal Finance (Not Investing)
Topic: Timeshare ever worth it? Please share details
Replies: 123
Views: 10084

Re: Timeshare ever worth it? Please share details

They buy you lunch to make you feel obligated. You feel like you are held hostage, they call in the supervisor to double team you. They hold any free-bee's until after they convince you to buy. Why would eating a free lunch make you feel obligted to buy anything? As for the double-teaming, it would...
by Valuethinker
Mon Jun 18, 2018 4:39 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 63
Views: 3709

Re: A different theoretical view of SWR

Well - 3.33% is less than 4% so already very conservative. Do you adjust the withdrawal to account for inflation - or does it stay fixed? Do you recalculate every year? Do I get to take 5% 10 years into my 30 year retirement? As far as I know the 4% number was never claimed to be valid for a global...
by Valuethinker
Mon Jun 18, 2018 3:23 am
Forum: Personal Consumer Issues
Topic: “Day to kill” in Venice Italy
Replies: 51
Views: 3149

Re: “Day to kill” in Venice Italy

Hello all We are on our last night in Venice and headed to Florence tomorrow. So far, frankly, it’s been pretty rough. Jet lag is real! We are over that though thank goodness. I knew traveling with heavily Americanized (if there is such a term) teenagers was going to present challenges. That said, ...
by Valuethinker
Mon Jun 18, 2018 3:00 am
Forum: Investing - Theory, News & General
Topic: Bitcoin Price Manipulation
Replies: 45
Views: 5034

Re: Bitcoin Price Manipulation

There is certainly a market for secure, purely digital payment methods, and Bitcoin was developed with that in mind from the beginning. Who can say if Bitcoin ever ends up fulfilling that role. The odds are probably against it, but if it happens, every household in the world is going to need to hav...
by Valuethinker
Mon Jun 18, 2018 2:44 am
Forum: Investing - Theory, News & General
Topic: Illiquid Assets - Volatility
Replies: 4
Views: 471

Re: Illiquid Assets - Volatility

So in illiquid assets, such as direct real estate, alternative lending, and reinsurance, what's the effect of stale pricing on volatility smoothing and correlations? I know AQR made this point about hedge funds in the past: https://www.aqr.com/Insights/Research/Journal-Article/Do-Hedge-Funds-Hedge,...
by Valuethinker
Mon Jun 18, 2018 2:37 am
Forum: Personal Consumer Issues
Topic: New refrigerator issues
Replies: 18
Views: 1621

Re: New refrigerator issues

Great information. It still is too loud though. Has anyone noticed the newer refrigerators running louder than older ones? In 2005 I replaced a refrigerator from the 60's. I was shocked by how loud the new one was. It literally woke me up at night. There was nothing wrong with it and I got used to ...
by Valuethinker
Sun Jun 17, 2018 4:11 pm
Forum: Investing - Theory, News & General
Topic: Basic Inflation Questions
Replies: 21
Views: 1072

Re: Basic Inflation Questions

I'm trying to understand basic inflation. I think I'm on the right track but I want to make sure. I can find the current inflation here: https://tradingeconomics.com/united-states/inflation-cpi I have a hard time understanding what this means. In May it says it was 2.8%. What does this mean for my ...
by Valuethinker
Sun Jun 17, 2018 10:59 am
Forum: Investing - Help with Personal Investments
Topic: Mercantil Bank CD?
Replies: 3
Views: 245

Re: Mercantil Bank

Would you have any concern about buying a brokered CD from Mercantil Bank? I know it would be FDIC insured. OTOH, its parent company is in Venezuela. that, alone, would make me stay away. It's quite possible that I am overly cautious, that any risk to the depositor is covered off by FDIC. Does the ...
by Valuethinker
Sun Jun 17, 2018 9:05 am
Forum: Investing - Theory, News & General
Topic: Mean Reversion in Long-Term Stock Returns?
Replies: 25
Views: 1947

Re: Mean Reversion in Long-Term Stock Returns?

So for me the question remains what is a meaningful "mean" to which global markets might "revert"? Not sure your question is answerable, without false precision. All we can say, based on the historical record, is that global stock returns have been fairly sensitive to the rate of global aggregate G...