Search found 335 matches

by TJSI
Mon Sep 17, 2018 4:53 pm
Forum: Investing - Theory, News & General
Topic: Discount Cash Flow Analysis (DCF)
Replies: 11
Views: 778

Re: Discount Cash Flow Analysis (DCF)

GuitarXM, I think the difficulty lies in your understanding of terminal value. One method of estimating terminal value is to use an assumed P/E times the earnings after X years. So if you are using a 5 year estimate, you calculate (estmate) the earnings after 5 years and mutiply by an assumed P/E. T...
by TJSI
Thu Sep 06, 2018 10:24 am
Forum: Investing - Theory, News & General
Topic: Good time to do value investing?
Replies: 37
Views: 2491

Re: Good time to do value investing?

Steve321, Value stocks earn their reward when they are oversold. The outperformance is relative to their underlying value not compared to growth stocks. Its quite possible that growth is oversold and value stocks are also oversold but not as much. Maybe they are near their true value. Value stocks e...
by TJSI
Sun Jul 22, 2018 7:28 pm
Forum: Investing - Theory, News & General
Topic: Speculative PE change equation
Replies: 5
Views: 467

Re: Speculative PE change equation

augifm, Because to some degree P/E refelects the "animal spirits" of the market it is the most difficult parameter to estimate in the Bogle model of returns. And 10-year estimates of return can have significant error due to its unpredicability. In the paper "Occam's Razor Redux: Establishing Reasona...
by TJSI
Mon Jul 16, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?
Replies: 17
Views: 990

Re: Is rebalancing an advantage when holding a 3 fund portfolio instead of 2 or 1 fund portfolio?

willthrill81 said" "There is no rebalancing bonus. It is a myth." I think a more balanced statement would be: There might be a rebalancing bonus or perhaps a rebalancing loss. Under the right conditions you can get a bonus. See for instance: "The Rebalancing Bonus" by William Bernstein If there is a...
by TJSI
Mon Jul 02, 2018 6:58 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9218

Re: "homemade dividends" from Total Stock Market fund

IlliniDave, Your suspicions are correct. The stock price of a dividend paying stock does indeed rise before the payment. See: Dividend Capture and the EX-Dividend Price Behavior of Electric Utilities. Unless there is an impairment to the ability of a company to pay future dividends, the intrinsic va...
by TJSI
Mon Jun 11, 2018 8:41 pm
Forum: Personal Consumer Issues
Topic: Chipmunk Repellent?
Replies: 36
Views: 2893

Re: Chipmunk Repellent?

I have had great success with a Havahart trap. Trapped 15 chipmunks last year and three this year. None seen for over a month. However, you need to transport the little creatures to another location. Tried various chemicals-- none were effective. Chipmunks can do a lot of damage. Cats can also be ve...
by TJSI
Fri May 25, 2018 12:12 am
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 10076

Re: Three-fund portfolio returns and variance drain

Random Walker wrote: "I believe there is an error or two in your logic. Firstly, need to account for rebalancing." But that is the point of the thought experiment. Without rebalancing there is no loss. It is only through your investment decision to rebalance at some point does the possibilty of loss...
by TJSI
Sun May 20, 2018 2:01 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 10076

Re: Three-fund portfolio returns and variance drain

Mlretired, You don't need to bother with excel to see why there is no such as thing as volatility drag. A thought experiment will suffice. Assume you have two simple portfolios each consisting of a single stock--stock A is highly volatile while stock B is a dullard-- not much volatility. You buy the...
by TJSI
Sun May 20, 2018 12:13 pm
Forum: Investing - Theory, News & General
Topic: Three-fund portfolio returns and variance drain
Replies: 106
Views: 10076

Re: Three-fund portfolio returns and variance drain

Bah, humbug. There is no such thing as volatility drag. It is just the use of mathematics to obfuscate what is going on. If there is a loss due to volatility, it is due to your investment plan. You are buying high and selling low. As for me, I prefer to get my free lunch at the diversification banqu...
by TJSI
Tue May 15, 2018 4:06 pm
Forum: Local Chapters and Bogleheads Community
Topic: Yes, I'm 89 all right! [Jack Bogle]
Replies: 126
Views: 11276

Re: Yes, I'm 89 all right! [Jack Bogle]

There use to be a commercial that went:

"When EF Hutton talks people listen".

I'll borrow a bit of that and say:

"When Jack Bogle talks---Pay Attention!"

Happy Birthday and thanks for all your contributions to investors everywhere,

TJSI
by TJSI
Wed Mar 21, 2018 11:26 am
Forum: Investing - Theory, News & General
Topic: Do "dividend dollars" maintain in a market downturn?
Replies: 13
Views: 1721

Re: Do "dividend dollars" maintain in a market downturn?

Dividends are more stable than earnings and price. Dividends can and have been cut in the past. But a market downturn by itself will not reduce dividends. It takes a significant economic downturn for a dividend reduction. In fact, the generally superior performance of dividend based funds is in part...
by TJSI
Sun Mar 18, 2018 3:06 pm
Forum: Personal Consumer Issues
Topic: Quiet vehicle for two cats
Replies: 15
Views: 1178

Re: Quiet vehicle for two cats

Just tell them they are not going to the Vet. They will relax and sleep the rest of the way.
by TJSI
Sat Mar 17, 2018 11:31 am
Forum: Investing - Theory, News & General
Topic: Gordon Equation Update???
Replies: 13
Views: 1346

Re: Gordon Equation Update???

The Gordon Equation is based on a specific set of assumptions. Mr Bogle's formulation does not assume or depend on those assumptions. The Gordon Equation is of no use for short term estimates of market return. The Bogle Equation is not based on the Gordon Equation. Without trying to speak for him, I...
by TJSI
Sat Mar 17, 2018 10:48 am
Forum: Investing - Theory, News & General
Topic: Gordon Equation Update???
Replies: 13
Views: 1346

Re: Gordon Equation Update???

The Bogle formulation is not based on the Gordon Equation. It does not depend on the assumptions made in the Gordon Equation. It includes the effect of valuation change which is very important in short term market returns.
by TJSI
Sat Mar 17, 2018 10:36 am
Forum: Investing - Theory, News & General
Topic: Gordon Equation Update???
Replies: 13
Views: 1346

Re: Gordon Equation Update???

It looks like the Gordon equation is not getting much love here. If you keep in mind the assumptions behind it, it might get more respect. It assumes a discounted cash flow valuation, constant dividend growth, and an infinite holding period. It is certainly of no use in predicting or analyzing short...
by TJSI
Wed Mar 14, 2018 6:36 pm
Forum: Investing - Theory, News & General
Topic: CAPE in the Context of Real Rates & Inflation, 1880-2018
Replies: 37
Views: 4452

Re: CAPE in the Context of Real Rates & Inflation, 1880-2018

In answer to gmaynarkrebs question, I believe the best candidate for high valuations are buybacks. They are buying pressure for sure and unless they illicit a negative reaction are going to increase price. Interest rates also play an important role. If interest rates continue to rise, bonds will aga...
by TJSI
Sat Mar 03, 2018 3:11 pm
Forum: Investing - Theory, News & General
Topic: Harvard blows $1Billion picking stocks, averaged 4.4% returns over last decade
Replies: 79
Views: 10867

Re: Harvard blows $1Billion picking stocks, averaged 4.4% returns over last decade

James Stewart in a recent NYT article discussed the under performance of endowments (College Endowments Opt for Alternatives, and Less Lucrative, Route https://www.nytimes.com/2018/02/22/business/college-endowments.html ). Avg Ten-Year Returns: Endowments 4.6% 60-40 Index Portfolio 5.3% 70- 30 Index...
by TJSI
Fri Feb 16, 2018 3:17 pm
Forum: Investing - Theory, News & General
Topic: philosophicaleconomics predicts 4% real equity returns
Replies: 152
Views: 11865

Re: philosophicaleconomics predicts 4% real equity returns

HomerJ,


Div yield and EPS have been fairly flat over the last five years. I suspect that buybacks have had a major impact only on valuations. If the music ever stops we could see a collapse of valuations.

TJSI
by TJSI
Mon Feb 12, 2018 5:14 pm
Forum: Investing - Help with Personal Investments
Topic: Is it stupid of me to comprise almost all of my portfolio with high dividend funds/etfs?
Replies: 17
Views: 1522

Re: Is it stupid of me to comprise almost all of my portfolio with high dividend funds/etfs?

andrew24p, You are doing ok with your fund selection as each of them has a good record of exceeding the market total return on a long term basis. However, you need to pay attention to the effect of taxes on your return. Try to estimate the effect on your marginal tax rate by investing in another div...
by TJSI
Fri Jan 05, 2018 8:25 pm
Forum: Investing - Theory, News & General
Topic: Evaluation principle for non-dividend paying stock
Replies: 5
Views: 438

Re: Evaluation principle for non-dividend paying stock

One good method is to calculate the "owners cash flow". That being the cash flow you could extract from the company if you were the owner. You also need to discount that hypothetical cash flow. It treats the company as if it were a private company where you the owner get to enjoy the excess cash flo...
by TJSI
Wed Jan 03, 2018 5:25 pm
Forum: Investing - Theory, News & General
Topic: Nice Explanation of Volatility Drag
Replies: 31
Views: 2428

Re: Nice Explanation of Volatility Drag

I think it is an obsession!
by TJSI
Sat Dec 23, 2017 7:48 pm
Forum: Investing - Theory, News & General
Topic: One answer to the Dividend stocks puzzle from behavioral finance
Replies: 184
Views: 15203

Re: One answer to the Dividend stocks puzzle from behavioral finance

Thank you Patrick! That is one of the most interesting studies of the superior performance of dividend paying stocks. For the study period ( 12/99 to 9/17) the classic div aristocrats had a return of 10.1%, the high div-low vol had a return of 11.8% while the S&P had a return of 5.1%. And their retu...
by TJSI
Fri Dec 22, 2017 12:34 am
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 6476

Re: Geometric Average vs. Arithmetic Average

Random Walker,

You are absolutely right--I am not accounting for rebalancing! That is your choice and you may have a rebalancing bonus or loss. There is no automatic drag from volatility. Any loss or gain is the result of an investment decision.

TJSI
by TJSI
Thu Dec 21, 2017 11:27 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 6476

Re: Geometric Average vs. Arithmetic Average

Well I will try again. The movement up, down, or sideways does not cause a gain or loss. It is only the decision to buy or sell at a particular time that results in a loss or gain. Now a sharp move in price may induce an investor to sell only to realize later that it was a mistake. But it was the in...
by TJSI
Thu Dec 21, 2017 10:30 pm
Forum: Investing - Theory, News & General
Topic: Geometric Average vs. Arithmetic Average
Replies: 92
Views: 6476

Re: Geometric Average vs. Arithmetic Average

Random Walker I see why you like this article as it repeats the incorrect notion that volatility causes a drag. Although I know it is close to hopeless, let me repeat: Volatility does not cause a loss-- it your investment decisions which might cause a loss. Why if you are a clever fellow, you can vo...
by TJSI
Mon Dec 18, 2017 7:41 pm
Forum: Investing - Theory, News & General
Topic: Diversification: Is there any way to produce the same returns with less risk?
Replies: 52
Views: 5933

Re: Diversification: Is there any way to produce the same returns with less risk?

Yes, if by risk you mean variance of return. You can invest in a low volatility fund or a consumer staples fund. Just be prepared to hold on for the long run and to suffer periods of underperformance.
by TJSI
Fri Dec 15, 2017 4:44 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 97
Views: 6848

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

lack_ey Thank you for your response to my cryptic comment. This was an attempt at early morning humor--perhaps I needed more sleep. But when all is said and done are not factors just correlations about whch a very elaborate lanuage has developed? So no one says such and such a factor is correlated w...
by TJSI
Fri Dec 15, 2017 3:14 pm
Forum: Investing - Theory, News & General
Topic: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh
Replies: 97
Views: 6848

Re: Factor-Based Investing: The Long-Term Evidence - Dimson & Marsh

Aren't factors just correlations with lipstick applied?

TJSi
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: 1221

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: 123
Views: 14166

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: 2580

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: 162
Views: 21598

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: 3664

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: 2883

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: 2883

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: 2883

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: 2883

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: 2883

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: 2883

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: 2883

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: 2883

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: 2883

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: 54
Views: 10297

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: 66
Views: 6789

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: 212
Views: 21023

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: 13896

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: 212
Views: 21023

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: 2161

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: 2161

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...