Search found 307 matches

by TJSI
Mon Dec 11, 2017 9:40 pm
Forum: Investing - Help with Personal Investments
Topic: Does a tilt toward consumer staples make sense?
Replies: 15
Views: 730

Re: Does a tilt toward consumer staples make sense?

Like one of several tilts, consumer staples has out-performed the market over very long periods. It quite often underperforms--like many tilts. A 2014 paper : Defense Wins Championships: The Defensive Sector Anomaly by PensionPartners reviews the performance of sectors from 10/89 through 6/14. This ...
by TJSI
Mon Nov 27, 2017 10:41 pm
Forum: Investing - Help with Personal Investments
Topic: Divs and Cap Gains are killing me
Replies: 96
Views: 7614

Re: Divs and Cap Gains are killing me

Losses hurt worse.

Try to arrange your investments to minimize taxes as best you can. Unfortunately, taxes are a fact of life.
by TJSI
Sun Nov 26, 2017 9:19 pm
Forum: Investing - Theory, News & General
Topic: Common Sense on Mutual Funds
Replies: 20
Views: 2060

Re: Common Sense on Mutual Funds

Mr. Whoopee I don't think diversification is synonymous with reducing risk. There are risks with international investments which are probably harder to understand and evaluate than US based investments. There are great international companies and countries with a long history of stability but just a...
by TJSI
Mon Nov 20, 2017 11:18 am
Forum: Investing - Theory, News & General
Topic: Is holding bonds now dangerous?
Replies: 155
Views: 13782

Re: Is holding bonds now dangerous?

One aspect of bond risk not commented upon is the liquidity risk. There has been discussion of this in the press including by El-Erian. it seems to difficult to judge. But apparently it does exist.

TJSI
by TJSI
Sat Nov 18, 2017 11:36 am
Forum: Investing - Help with Personal Investments
Topic: Confused about cash and retirement - isn't this really about market timing?
Replies: 38
Views: 3141

Re: Confused about cash and retirement - isn't this really about market timing?

cyclist, You have raised an interesting question but I think it would be better to frame it in terms of insurance rather than market timing. Does you need for having a sufficient cash reserve change with retirement? For most individuals the answer is going to be yes. Retirement is a significant even...
by TJSI
Thu Nov 09, 2017 11:13 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

avalpert, Todd said this is the yield of holding stockholders. They receive nothing directly. Anything value they receive is the result of a correct investment by management. The cash spent goes to selling shareholders. You can't use the cash outlays to compute the return (yield) of holding stockhol...
by TJSI
Thu Nov 09, 2017 11:00 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

avalpert, Let me explain it this way: If a company in which I owned stock announced they were doing a buyback, I would like it to be for my benefit and give me a positive yield on the money spent. That is the correct meaning for a stockholder of a buyback yield. Just calculating the percent of money...
by TJSI
Thu Nov 09, 2017 10:08 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

avalpert asked: "Do you also think we should adjust dividend yields for the people who reinvest their dividends in stock when the price is more than 'intrinsic value'?" The answer is yes. Buying a stock (or any investment) at the wrong price is the wrong decision. I don't think people who have been ...
by TJSI
Thu Nov 09, 2017 7:40 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

Todd said: "What other netting is at issue?" Holding stockholders receive no cash. For holding stockholders, the buyback price must be less than the intrinsic value of the stock which some attempt should be made at netting out of the return calculation. If the company is overpaying for the stock, ho...
by TJSI
Thu Nov 09, 2017 5:55 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

Todd, What I am trying to do is clarify the meaning of your equation. And the first thing to clarify is the question of what you mean by stockholders? Is it the selling stockholders, the non-selling stockholders, or perhaps all stockholders? I gather from your comments that the item in your equation...
by TJSI
Thu Nov 09, 2017 4:26 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

Todd, When companies do a buyback they are taking something of value from stockholders. It is not a gift of cash. The value of a stock may be difficult to calculate but it does have some tangible value. Avalpert, I believe, thinks the number in your equation is a net number. I don't think so. I beli...
by TJSI
Thu Nov 09, 2017 4:04 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

Todd,

Let me be more specific: Is there a value of the stocks purchased netted out from the purchase price?

Or is this number just the price paid for the stocks bought in the buyback?

TJSI
by TJSI
Thu Nov 09, 2017 3:31 pm
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

avalpert said: "Subtract it from what? The (net) value of stock purchased from stockholders is the numerator" If that is what the formula uses, then we have a useful metric. However, I don't believe that is what is being calculated. Perhaps the OP can explain exactly what the numerator is and whethe...
by TJSI
Thu Nov 09, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Has “Dividend Yield” Become Globally Obsolete?
Replies: 35
Views: 2264

Re: Has “Dividend Yield” Become Globally Obsolete?

When you compute "buyback Yield", why don't you subtract the value of the stock purchased from stockholders?
by TJSI
Mon Nov 06, 2017 8:37 am
Forum: Investing - Help with Personal Investments
Topic: Should one use REITs
Replies: 48
Views: 3655

Re: Should one use REITs

One respected investor advisor, Rick Ferri, has recommended REITs in the past. He favors them because they provide some correlation protection to a portfolio. Rick's investment advice is pretty solid and he includes REITs in his "core four" portfolio. (Eight percent I believe.)
by TJSI
Thu Nov 02, 2017 11:05 pm
Forum: Investing - Help with Personal Investments
Topic: How consistent will VNQ dividend be?
Replies: 65
Views: 3680

Re: How consistent will VNQ dividend be?

nisiprius said: " whatever is paid out in dividends, for whatever reason, is not retained by the company to produce growth" The paying of dividends by REITs does not constrain growth. They are a unique investment class that is required to payout 90% of retained earnings in dividends. Their growth is...
by TJSI
Tue Oct 17, 2017 2:47 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 16038

Re: Dividends vs. Capital Gains for Spending Needs?

" In considering stock returns, then, what is most important to the truly long-term investor is corporate dividends--their yield when they are purchased and their subsequent growth." John Bogle, Bogle On Mutual Funds, 1994 edition pg 13. He did qualify the book as he said is was for the intelligent ...
by TJSI
Wed Oct 11, 2017 1:28 pm
Forum: Investing - Theory, News & General
Topic: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17
Replies: 87
Views: 12673

Re: The Stock Market Is "Fully Valued," Says Vanguard's Jack Bogle 10/7/17

One thing for sure, that 90 year old man has accumulated a lot of knowledge and wisdom. And I think it is great that he is so willing to share it.

TJSI
by TJSI
Thu Oct 05, 2017 1:02 pm
Forum: Investing - Theory, News & General
Topic: Dividends vs. Capital Gains for Spending Needs?
Replies: 200
Views: 16038

Re: Dividends vs. Capital Gains for Spending Needs?

Taxes are very important and every investor should be aware of their effect on return.

Assumptions are also important in any analysis. So the reader of this paper should make note of the statement "assuming the total return of the two options is equal" and judge for themselves.

TJSI
by TJSI
Wed Sep 27, 2017 8:07 pm
Forum: Personal Finance (Not Investing)
Topic: Merchant Dispute/Chargeback, now sent to collection agency
Replies: 11
Views: 1120

Re: Merchant Dispute/Chargeback, now sent to collection agency

Abonder, It may not help much but it certainly won't hurt to include the statement from your card company. And if the collection company starts to make threats record as much information as possible. Acknowledge in writing the threat and copy the state attorney general. Hopefully none of this happen...
by TJSI
Wed Sep 27, 2017 4:01 pm
Forum: Personal Finance (Not Investing)
Topic: Merchant Dispute/Chargeback, now sent to collection agency
Replies: 11
Views: 1120

Re: Merchant Dispute/Chargeback, now sent to collection agency

Abonder, Your vendor is in violation of their merchant agreement. You should absolutely contact your credit card issuer and inform them that they are trying to collect from you despite having lost their case with the credit card company. Put everything in writing. If for some reason your card compan...
by TJSI
Sun Sep 24, 2017 6:35 am
Forum: Investing - Help with Personal Investments
Topic: Are all investments compound interest?
Replies: 50
Views: 3168

Re: Are all investments compound interest?

Not all investments compound. However you can always compute an equivalent compound rate. This causes a lot of confusion. It is useful to compute a compound rate to compare investments. But the fact that you can compute it does not make the underlying investment compound.

TJSI
by TJSI
Mon Jul 31, 2017 3:46 pm
Forum: Investing - Theory, News & General
Topic: Living Off Dividends
Replies: 285
Views: 23665

Re: Living Off Dividends

Generally, corporations are not valued by cash on hand. It is the ability to generate revenue, earnings, and cash that gives a corporation value. Only if the divided payment impairs this ability does it reduce value . If a corporation makes the correct capital budget decisions, dividends don't reduc...
by TJSI
Mon Jul 31, 2017 9:09 am
Forum: Investing - Theory, News & General
Topic: Living Off Dividends
Replies: 285
Views: 23665

Re: Living Off Dividends

nedsaid,

When I read that Larry had convinced you that factors were the underlying cause of returns, the movie Invasion Of The Body Snatchers came to mind.
And I thought: By God they got him.

I guess there is no hope--we are all doomed.

TJSI
by TJSI
Tue Jul 25, 2017 5:10 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Dividend + Buyback Yield
Replies: 14
Views: 1436

Re: S&P 500 Dividend + Buyback Yield

rmelvey, Thank you for your reply. You are correct with one provision. Absent any other effect, a buyback by reducing the number of shares will increase the div per share and also the earnings per share. Certainly this is a good thing. But it is more complicated than just the immediate effect of red...
by TJSI
Tue Jul 25, 2017 2:24 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 Dividend + Buyback Yield
Replies: 14
Views: 1436

Re: S&P 500 Dividend + Buyback Yield

rmelvey,

A basic question:

Which stockholders are getting the 4.5% yield?

Those who sold or those who held onto their shares? Or perhaps it is the average shareholder that sells a fraction of their shares?

TJSI
by TJSI
Thu Jul 06, 2017 5:12 pm
Forum: Investing - Help with Personal Investments
Topic: Accounting for Dividends in Safe Withdrawal Rate
Replies: 42
Views: 2878

Re: Accounting for Dividends in Safe Withdrawal Rate

FractualFan wrote: "Those who use dividends for income (take dividends in cash, rather than reinvesting the dividend in shares) lose both the future dividends from the shares that would have been acquired by reinvesting and potential capital gains from those shares." You are correct! If you have the...
by TJSI
Wed Jul 05, 2017 9:15 pm
Forum: Investing - Help with Personal Investments
Topic: Accounting for Dividends in Safe Withdrawal Rate
Replies: 42
Views: 2878

Re: Accounting for Dividends in Safe Withdrawal Rate

Warning: Although it is repeated often on this blog, it is incorrect to say that using dividend for income is the same as selling shares. When you sell shares you lose both future dividends from those shares and potential capital gains from the shares. When you use dividends for income, you only los...
by TJSI
Fri Jun 16, 2017 6:39 am
Forum: Investing - Theory, News & General
Topic: Is it safer to invest in gold or bond funds?
Replies: 30
Views: 2445

Re: Is it safer to invest in gold or bond funds?

TomCat96 wrote:


"When things get bad, you want to be in bonds.
When things get really bad, you want to be in gold.
When things get really really bad, you want to be in seeds."

An award winning summation!

TJSI
by TJSI
Mon Jun 05, 2017 3:47 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 15790

Re: Do you think about volatility drag on your portfolio?

Random Walker, The example you give is correct but there may be a wrong implication. As you explain, when you add a volatile asset to a portfolio the expected return is just the weighted sum of the assets' returns. The volatility did not reduce the return. There was no drag on return. The volatility...
by TJSI
Wed May 31, 2017 5:22 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 15790

Re: Do you think about volatility drag on your portfolio?

Dave, Yes, I am familiar with the formula showing the appox relationship between arith return and geo return. All it means is that if you use a different algorithm to compute return you get a different number. It does not mean there was a loss of money. If you computed the return using continuous co...
by TJSI
Wed May 31, 2017 1:56 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 15790

Re: Do you think about volatility drag on your portfolio?

Dave, Sorry to disagree. The return of a portfolio only depends on the starting point and ending point. It does not depend on the number of cycles (volatility) it took to get there. If you compound or rebalance along the way, then the geometric return is correct. Up and downs only effect return if s...
by TJSI
Wed May 31, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 211
Views: 15790

Re: Do you think about volatility drag on your portfolio?

I don't think or worry about volatility drag because in general, it does not exist. The example is always given that if the market drops by 30% and then goes up by 30% you end up in a different spot. That is true but it has no applicability to the actual market. Buried in that example is the assumpt...
by TJSI
Mon May 22, 2017 12:04 am
Forum: Investing - Theory, News & General
Topic: The Case for Dividend Stocks in Retirement (article)
Replies: 92
Views: 11154

Re: The Case for Dividend Stocks in Retirement (article)

Nedsaid, I would not worry about what the reclusive "cat" might say. Mr. Bogle would back you up. Much to the annoyance of the anti-dividend crowd he has spoken about the need to focus on secure income in retirement and the desirability of dividends over capital gains. SS, pensions, interest, and di...
by TJSI
Fri May 05, 2017 12:00 pm
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 5349

Re: Increasing correlation between US and international equities

Zeugmite has got it right. When you add an asset with lower expected return to your portfolio, that's what you get-- lower expected return. No additional pizza. Unless you are very clever and can do some great timing or attempt to juice the returns with leverage.
by TJSI
Thu May 04, 2017 9:22 pm
Forum: Investing - Theory, News & General
Topic: Increasing correlation between US and international equities
Replies: 66
Views: 5349

Re: Increasing correlation between US and international equities

Diversification benefit? Can I spend it? Can I buy a slice of pizza with it?

TJSI
by TJSI
Thu Apr 20, 2017 12:27 am
Forum: Personal Consumer Issues
Topic: Return Fraud at Big Box and "The Retail Equation"
Replies: 19
Views: 2862

Re: Return Fraud at Big Box and "The Retail Equation"

Certainly sounds like internal theft. If it is not too troublesome, you could report it to the store manager or store security. With the numerous security cameras in use they may be able to identify who made the false return.

TJSI
by TJSI
Wed Apr 19, 2017 11:57 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe says "Goodbye."
Replies: 336
Views: 44360

Re: Larry Swedroe says "Goodby."

Larry,

Best of luck and thank you for your many contributions and lively debates. You have given much to the forum in time and knowledge.

So thank you again,

TJSI

PS: If I hear of any good dividend paying stocks, I'll PM you.
by TJSI
Mon Mar 27, 2017 4:52 am
Forum: Investing - Theory, News & General
Topic: an in depth look at gold
Replies: 91
Views: 7866

Re: an in depth look at gold

AlohaJoe asked (about gold as a safe haven): "Or does gold only work in the US for some reason? " One study says it works elsewhere. Bauer & McDermott 2009, Is Gold A Safe Haven? International Evidence They say: " Yes for US and major European stock markets but not Australia, Canada, Japan and large...
by TJSI
Mon Mar 20, 2017 8:53 pm
Forum: Investing - Theory, News & General
Topic: an in depth look at gold
Replies: 91
Views: 7866

Re: an in depth look at gold

One property of gold as an investment that has not been discussed is its ability to act as a safe haven. Harvey & Erb sort of dismiss this by looking at one- month returns of gold and the S&P. They find that 17% of the time that both gold and the S&P have negative return. They say: "...
by TJSI
Wed Mar 08, 2017 3:42 pm
Forum: Investing - Help with Personal Investments
Topic: Bonds and YTM -- Issue with The Bond Book's Claim
Replies: 14
Views: 1386

Re: Bonds and YTM -- Issue with The Bond Book's Claim

Congratulations enki on your efforts to understand bond yields and YTM. Yes, there is a debate and confusion on this most basic of financial terms. Probably the best analysis of the problem is given in the paper " Yield to Maturity & the Reinvestment of Coupon Payments" (w) by Forbes, ...
by TJSI
Thu Feb 16, 2017 11:13 am
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 4906

Re: Valuation does not matter (may be)

Note on Note: After getting some sleep, I see that my note only adds confusion. I was referring to the to the Michael Kitces analysis not the article first quoted. Mr Kitces found that indeed starting valuations at a 15 year span had a very significant effect on returns. After 30 years, the effect w...
by TJSI
Wed Feb 15, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: Valuation does not matter (may be)
Replies: 55
Views: 4906

Re: Valuation does not matter (may be)

Note on the analysis:

This is not an analysis of the effect of valuation changes but rather the effect on initial valuation on subsequent return.

TJSI
by TJSI
Sun Feb 12, 2017 2:50 pm
Forum: Investing - Theory, News & General
Topic: The Ned Said Effect strikes again
Replies: 52
Views: 4847

Re: The Ned Said Effect strikes again

However it is awesome to have an EFFECT named after you.

TJSI
by TJSI
Wed Feb 08, 2017 8:23 am
Forum: Personal Consumer Issues
Topic: Where to stay in Siesta Key
Replies: 10
Views: 1636

Re: Where to stay in Siesta Key

As a coincidence a relative of mine just visited Siesta Key for a short stay(3 day) with their family. They stayed at the Tropical Breeze and liked it.
Very good location but not on the water. It is adjacent to the village and a short walk to the ocean. Weather was great.
by TJSI
Tue Feb 07, 2017 3:06 pm
Forum: Investing - Theory, News & General
Topic: [Seth Klarman NY Times Article]
Replies: 19
Views: 2041

Re: SETH KLARMAN NY Times ARTICLE

His non-political comments are interesting. Here is part of his comments: "stocks outside the indices may be cast adrift, no longer attached to the valuation grid but increasing off of it. This should give long-term value investors a distinct advantage." His thesis is the fewer people doin...
by TJSI
Sat Feb 04, 2017 12:07 pm
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2247

Re: Bogle advocating bonds=age-15?

Here is the actual quote: On whether he still advises most investors to take on an age-based, bond-heavy portfolio, where Social Security is factored in as if it was a bond: Bogle: The original statement, going way back to my first book in 1993, was to set up a rule of thumb -- not a rule -- that ea...
by TJSI
Sat Feb 04, 2017 11:11 am
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2247

Re: Bogle advocating bonds=age-15?

Mr. Bogle made an interesting comment recently about the "age in bonds rule". He said something like" When I made that rule, yields were much higher." This implied to me that he would suggest a different rule now that reflected the current low bond yields. So it would not surpris...
by TJSI
Sat Feb 04, 2017 11:11 am
Forum: Investing - Theory, News & General
Topic: Bogle advocating bonds=age-15?
Replies: 20
Views: 2247

Re: Bogle advocating bonds=age-15?

Mr. Bogle made an interesting comment recently about the "age in bonds rule". He said something like" When I made that rule, yields were much higher." This implied to me that he would suggest a different rule now that reflected the current low bond yields. So it would not surpris...