Search found 399 matches

by TJSI
Sat Feb 17, 2024 7:29 pm
Forum: Personal Consumer Issues
Topic: What is your favorite book?
Replies: 187
Views: 20524

Re: What is your favorite book?

Churchill: The Second World War
by TJSI
Wed May 17, 2023 10:41 pm
Forum: Personal Consumer Issues
Topic: Doctor says my mom should be in an assisted living facility but we can't afford it
Replies: 174
Views: 26785

Re: Doctor says my mom should be in an assisted living facility but we can't afford it

Definitely-get-Medicaid-and-you-should-be-able-to-get-a-home-health-aid-worker-to-visit-everyday.--Medicaid-should-pay-for-this-but-you-will-need-the-proper-paperwork.
by TJSI
Sun Nov 06, 2022 10:44 pm
Forum: Investing - Theory, News & General
Topic: Does YTM require that coupons are re-invested?
Replies: 187
Views: 17328

Re: Does YTM require that coupons are re-invested?

Kevin,-yes-SEC-Yield-is-different-than-YTM.--What-I-am-trying-to-tell-you-is-that-the-SEC-specifies-how-YTM-is-to-be-calculated-when-it-is-quoted-by-finacial-institutions.--Otherwise,every-company-will-have-their-own-YTM-rate
by TJSI
Sun Nov 06, 2022 9:09 pm
Forum: Investing - Theory, News & General
Topic: Does YTM require that coupons are re-invested?
Replies: 187
Views: 17328

Re: Does YTM require that coupons are re-invested?

Kevin,--the-YTM-as-specified-by-the-SEC-is-calculated-as-racer986-describes.--I-believe-it-was-in-the-late-1980s-when-they-did-this-to-eliminate-confusion.--All-financial-institutions-which-quote-a-YTM-use-this-method.
by TJSI
Mon Jul 05, 2021 2:42 pm
Forum: Investing - Theory, News & General
Topic: Correlation Between Earnings Growth and Share Price
Replies: 8
Views: 870

Re: Correlation Between Earnings Growth and Share Price

Returns are generated by dividends and price increase. Price increase in turn is driven by increased earnings and increased valuation (P/E). That is pretty much the Bogle model.

Since you are never going to sell your stock, your return will be the dividends you receive. A company that has increasing earnings is likely to increase their dividend payout. So you do profit from increased earnings. But you are forgoing the capital gain return.
by TJSI
Sat Jul 03, 2021 5:28 pm
Forum: Investing - Theory, News & General
Topic: Dividends + Buybacks: Show Me the Money - 1871 to 2020
Replies: 36
Views: 2993

Re: Dividends + Buybacks: Show Me the Money - 1871 to 2020

SimpleGift,

I don't doubt that buybacks are a very significant source of demand and price pressure in the market. The only thing I would question in that statement is the phrase "long-term". I don't think the story ending in yet known.

Are corporations over-paying for their stock? Are buybacks a source of wealth redistribution?
by TJSI
Sat Jul 03, 2021 3:51 pm
Forum: Investing - Theory, News & General
Topic: Dividends + Buybacks: Show Me the Money - 1871 to 2020
Replies: 36
Views: 2993

Re: Dividends + Buybacks: Show Me the Money - 1871 to 2020

DaSId,

You have made a subtle change in the meaning of the word return. I would agree that if a corporation spends 4% of their capital on buybacks, that they have spent 4% of their money and somebody received it. But did stockholders receive a 4% return on their investment or their capital?

Stockholder returns are generated by dividends and price changes. If a buyback results in a negative reaction from the market, then there would be no positive return on investment for stockholders.

IBM is the poster child for buybacks not generating stockholder return. The return to shareholders from buybacks is complicated and you can't add money spent and assume it generates a positive return on investment for stockholders.
by TJSI
Sat Jul 03, 2021 1:31 pm
Forum: Investing - Theory, News & General
Topic: Dividends + Buybacks: Show Me the Money - 1871 to 2020
Replies: 36
Views: 2993

Re: Dividends + Buybacks: Show Me the Money - 1871 to 2020

Thank for your analysis. Your use of graphics is always impressive. Buybacks are certainly an important source of return. But there is an error in trying to add "buyback yield" to dividend yield and seemly imply that this is the return to shareholders. Unfortunately that is not correct. A 4% buyback yield does not result in a 4% return to shareholders. The path to return is more complex. Buybacks are very important buying pressure. In some years it is the largest component of buying pressure. If for some reason there is more selling pressure, then their is no return from price increase. Buybacks can also reduce share counts. But so far this is largely nulled out by new issuance--skewed to corporate executives. Buybacks also increa...
by TJSI
Fri Jun 11, 2021 9:06 pm
Forum: Investing - Theory, News & General
Topic: Stock BuyBacks Effectiveness
Replies: 29
Views: 3164

Re: Stock BuyBacks Effectiveness

I need to correct my statement above. New issuance is not 97% of buyback volume; it is more like 40-50%.

What is true is that the reduction in shares does not contribute greatly to EPS growth. According to JPMorgan share reduction for the 20 years 1999-2019 contributed .4% to EPS growth while the total growth rate was 2.5%.

However new shares issued to company employees are often not sold immediately so the buying pressure of buybacks is considerable. Indeed it is often the leading source of equity demand.

How this all plays out is unknown. Since about 2008 buybacks have grown in importance and have been a significant source of increased demand.
Perhaps it results in a secular increase in valuation with some violent corrections.
by TJSI
Thu Jun 10, 2021 7:07 pm
Forum: Investing - Theory, News & General
Topic: Stock BuyBacks Effectiveness
Replies: 29
Views: 3164

Re: Stock BuyBacks Effectiveness

Buybacks provide significant buying pressure which is one of the prime reasons for increased valuations.

The major drawback for buybacks is that they provide cover for new issuance which is largely given to corporate executives. New issuance is something like 97% of share buybacks. That is why corporation executives like them. New shares and buying pressure-- hard to resist.
by TJSI
Sat Jun 05, 2021 12:37 pm
Forum: Investing - Theory, News & General
Topic: John Bogle - Investment Return vs Market Return
Replies: 72
Views: 7174

Re: John Bogle - Investment Return vs Market Return

Maybe a little awkward terminology but it is a restatement of Bogle's formula:

Market return = investment return plus speculation return

Or

Market return = business return + speculation return
by TJSI
Sat Apr 17, 2021 10:48 am
Forum: Investing - Theory, News & General
Topic: S&P 500 Earnings for P/E Calculations
Replies: 9
Views: 886

Re: S&P 500 Earnings for P/E Calculations

I would use the S&P published numbers. From time to time, they update (correct) their numbers. I believe S&P uses the 10K statements to generate their numbers. And from time to time, companies will update(correct) their numbers which results in S&P changing their numbers. Companies which use the S&P numbers probably don't update their numbers in a timely fashion or never they update them.
by TJSI
Sat Apr 10, 2021 12:46 pm
Forum: Investing - Theory, News & General
Topic: Can this be true? [CNBC: Investors put more money into stocks]
Replies: 24
Views: 4097

Re: Can this be true? [CNBC: Investors put more money into stocks]

A bit of additional data from Goldman Sachs (March 2021). They estimate that households will increase their equity holdings in 2021 by $350 billion up from $100 billion in 2020. And corporations will repurchase $300 billion of their own stock.

I believe owners of hedge funds are considered households.
by TJSI
Sat Apr 10, 2021 11:53 am
Forum: Investing - Theory, News & General
Topic: Can this be true? [CNBC: Investors put more money into stocks]
Replies: 24
Views: 4097

Re: Can this be true? [CNBC: Investors put more money into stocks]

I struggle to find the definition of "investors" by BOA. According to Goldman Sachs corporations via buybacks have been the largest source of buying pressure over the last few years. Households have been sellers along with pension funds.

Goldman Sachs periodically presents an analysis of buyers and sellers but I have not seen their 2020 survey.
by TJSI
Thu Apr 08, 2021 6:14 pm
Forum: Investing - Theory, News & General
Topic: Why 1971 has become the starting point for increasing income inequality?
Replies: 24
Views: 2054

Re: Why 1971 has become the starting point for increasing income inequality?

The 70's also saw the large scale introduction of computers into industry automating many functions and eliminating middle-class jobs. This automation has continued until today with computing power building robots and robotic machines eliminating factory jobs.
by TJSI
Mon Dec 07, 2020 6:45 pm
Forum: Investing - Theory, News & General
Topic: Burton Malkiel Interview
Replies: 14
Views: 2496

Re: Burton Malkiel Interview

John Bogle said pretty much the same thing as Malkiel. Investing in high quality dividend paying stocks was not about avoiding volatility but rather about not having to liquidate your portfolio because of the need for income (cash) for those at or near retirement. If you need income from your portfolio, you should try to avoid selling in a long-term downturn. With bond yields at extreme low values tilting to some secure dividend paying companies makes sense.

There was no recommendation to chase yield or buy high income funds,
by TJSI
Sun Oct 25, 2020 10:38 pm
Forum: Personal Investments
Topic: Is it too late to buy Gold?
Replies: 67
Views: 6226

Re: Is it too late to buy Gold?

As others have pointed out gold pays no interest or dividends. So unless you sell it at a profit, it has no return. And if you never plan to sell, then it has no place in your portfolio.

If you can execute a rebalance program, it can produce a return. Of course it is best to buy low when the world is at ease. Gold has had a run up, hopefully things get better and gold drops in price and you can buy. But you must be prepared to sell when the next storm hits to generate a return,
by TJSI
Sat Oct 17, 2020 8:40 pm
Forum: Personal Consumer Issues
Topic: Favorite Science Fiction Movies
Replies: 179
Views: 12687

Re: Favorite Science Fiction Movies

Invasion of the Body Snatchers. Both and a rare case where the second version is as good as or even better than the original.

I'll throw it out there, King Kong-- the original. I don't know if it is science fiction but it was a great movie.
by TJSI
Wed Oct 07, 2020 2:04 pm
Forum: Personal Consumer Issues
Topic: Florida snowbirds and covid-19
Replies: 38
Views: 4660

Re: Florida snowbirds and covid-19

In a period of watchful waiting.
by TJSI
Sat Sep 19, 2020 3:56 pm
Forum: Investing - Theory, News & General
Topic: Are retail investors driving the market? But I thought 10 percent richest own 90% of market?
Replies: 36
Views: 4715

Re: Are retail investors driving the market? But I thought 10 percent richest own 90% of market?

Goldman Sachs (Global Market Research) periodically publishes a breakdown of who is buying and selling stocks. Their report for the first quarter of 2020 showed that foreign investors were the largest buyers of US equities buying $187 billion. Households bought $7 billion . Corporations via buybacks bought $129 billion of their stocks. The largest sellers were mutual funds selling $66 billion and pension funds selling $119 billion. Corporation have for the last several years been the largest buyers of stocks via buybacks. So for the first quarter 2020, retail investors did not drive the market. However, Goldman Sachs projected for the full year that foreign investors would be the largest buyer at $300 billion while households would come in ...
by TJSI
Wed Aug 26, 2020 12:21 pm
Forum: Investing - Theory, News & General
Topic: "Bank of XOM versus 'risk-free treasuries'" since 2009
Replies: 64
Views: 7274

Re: "Bank of XOM versus 'risk-free treasuries'" since 2009

000, said:

"Murphy's law says whatever decisions you make, the market will go the other way."

Let's give credit where credit is due. This is more accurately know as the "Nedsaid Effect".

TJSI
by TJSI
Thu Aug 20, 2020 1:22 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security Jitters Anyone ??
Replies: 87
Views: 8890

Re: Social Security Jitters Anyone ??

Senior citizens vote --big time. SS won't be cut. Worry about something else and do more exercise.
by TJSI
Wed May 27, 2020 6:25 pm
Forum: Investing - Theory, News & General
Topic: I don't understand stock buybacks
Replies: 169
Views: 11427

Re: I don't understand stock buybacks

Alex,

Stick to investing. Friction is a force. Newton"s law works quite well until you get to relativistic speeds. It got us to the moon and back.
by TJSI
Sun May 24, 2020 12:03 am
Forum: Investing - Theory, News & General
Topic: Questions based on Graham's book
Replies: 11
Views: 1090

Re: Questions based on Graham's book

I would recommend you also read the book: John Neff On Investing. He was a legendary value investor with an amazing record of success. Also was a good friend of John Bogle.

But don't underestimate the difficulty of picking individual value stocks. It requires high intelligence and a special skill set. Some enjoy doing research and security analysis. For them it is more like a hobby which they enjoy. It is not easy.
by TJSI
Wed May 06, 2020 10:01 pm
Forum: Personal Investments
Topic: Deluded by dividends, bond interest, & cap gains
Replies: 29
Views: 2640

Re: Deluded by dividends, bond interest, & cap gains

Find another expert ASAP. They are plentiful.
by TJSI
Wed Apr 15, 2020 4:21 pm
Forum: Investing - Theory, News & General
Topic: whos' just about had it w/ SCV ?
Replies: 277
Views: 24188

Re: whos' just about had it w/ SCV ?

White Coat Investor gave one of the best summaries of SCV tilt investing when he wrote:

" But the bottom line is that SCV tilt is a life long commitment."

That is a great summary of the decision to invest in SCV. The other factor difficult to comprehend is life itself. If you live long enough you will see and experience things you never expected. There will be birth, death, marriage, divorce, children, illness, great jobs, and layoffs. Many things will effect your life often out of your control.

So staying the course with SCV over a lifetime will be for many be too difficult.

TJSI
by TJSI
Sun Mar 29, 2020 3:35 pm
Forum: Investing - Theory, News & General
Topic: Dividends and Earnings during Recent Bear Markets
Replies: 49
Views: 4783

Re: Dividends and Earnings during Recent Bear Markets

Thanks SimpleGift. Good data and excellent presentation.
by TJSI
Fri Mar 27, 2020 10:17 pm
Forum: Personal Consumer Issues
Topic: Ticks/Lyme/Prevention?
Replies: 19
Views: 1304

Re: Ticks/Lyme/Prevention?

As above permethrin is excellent. Does not work as well for Lone Star ticks because of their body construction.

Maybe because of the money now being spent on the coronavirus some of the knowledge/ treatments will have applicability to the multiple diseases ticks spread.
by TJSI
Thu Mar 19, 2020 5:22 am
Forum: Investing - Theory, News & General
Topic: Gold [why is it dropping?]
Replies: 72
Views: 4189

Re: Gold [why is it dropping?]

I think gold has been replaced by toilet paper. People use to buy gold when there was fear running wild. Now they buy toilet paper.
I am trying to think of a good name for a portfolio that has 25% toilet paper. Suggestions?
by TJSI
Thu Mar 12, 2020 10:29 pm
Forum: Personal Consumer Issues
Topic: Are you still going to the gym ...
Replies: 210
Views: 16138

Re: Are you still going to the gym ...

Yes. Probably about 20% less crowed. Wash your hands with soap and avoid anyone coughing. You will be OK.
by TJSI
Sun Mar 01, 2020 3:00 am
Forum: Investing - Theory, News & General
Topic: Coronavirus and the market
Replies: 4089
Views: 397313

Re: Coronavirus and the market

Teriyaki,

You have made an implicit assumption in your analysis. Namely that the market was perfectly priced before the down turn last week.
The sudden decline might be a combination of a return to a fair value and fear that earnings may drop due to disruptions in normal business activity.

With fear running high, the market might well plunge past the fair value based on DCF.

TJSI
by TJSI
Fri Feb 28, 2020 6:27 pm
Forum: Investing - Theory, News & General
Topic: Minimum volatility fund this week
Replies: 54
Views: 4572

Re: Minimum volatility fund this week

Way too soon to make any judgements. If the decline continues, I would expect that investors start to buy as dividend yields become attractive. In panic mode everything is thrown overboard. The good, the bad, and the average are abandoned. This presents opportunity for those who keep calm to pick up some oversold securities.
by TJSI
Wed Feb 26, 2020 7:14 pm
Forum: Investing - Theory, News & General
Topic: Where is the left tail risk reduction from factors
Replies: 28
Views: 2011

Re: Where is the left tail risk reduction from factors

The fundamental problem with the concept of tail risk reduction is the unstated assumption that the return statistics are stationary.
So a return is calculated over a long time period and declared to be the "expected return". Over a short time period when a crisis hits those statistics are worthless.

If you want to reduce tail risk, buy bonds. Or even low volatility, dividend paying stocks for that matter.
by TJSI
Sat Feb 08, 2020 10:37 pm
Forum: Investing - Theory, News & General
Topic: [Professor Jeremy Siegel says 75/25 in retirement]
Replies: 87
Views: 12187

Re: [Professor Jeremy Siegel says 75/25 in retirement]

There is really nothing new or even surprising about Prof Siegel's recommendation. It is the well recommended idea that as one approaches retirement, they should pivot to a "safe income" investment portfolio. And with interest rates so low this means using safe dividend paying stocks to provide some needed income. John Bogle said the same. It does not mean chasing high yield.
by TJSI
Thu Feb 06, 2020 2:02 pm
Forum: Investing - Theory, News & General
Topic: Dividends or Buybacks: Which Is Better?
Replies: 5
Views: 609

Re: Dividends or Buybacks: Which Is Better?

No analysis of buybacks is complete without considering its opposite --issuance. To be sure buybacks provide buying pressure and help hold or increase market prices. But the dilution of ownership due to the issuance of new shares largely nulls out the effect of buybacks on earnings per share growth rate.

Declaring a company as "stockholder friendly" because of their buybacks without discussing their new share issuance is misleading.

TJSI
by TJSI
Fri Jan 24, 2020 1:40 am
Forum: US Chapters
Topic: Sad news: LadyGeek's husband has passed
Replies: 352
Views: 37565

Re: Sad news: LadyGeek's husband has passed

LadyGeek,

Very sorry to learn of your loss. Your husband was blessed to have you there for him,

And thanks for your superb job of keeping the Bogleheads forum sane.

TJSI
by TJSI
Fri Jan 17, 2020 1:38 pm
Forum: Investing - Theory, News & General
Topic: Did John Bogle ever say anything about stock buybacks?
Replies: 8
Views: 849

Re: Did John Bogle ever say anything about stock buybacks?

This question has been asked several times and is caused by the misuse of the term buyback yield, Returns are only generated by an increase in the number of shares owned and increases in their price. The rate at which shares increase is the dividend yield and buybacks don't increase the number of shares held by an investor. Adding "buyback yield" to dividend yield is just plain wrong. Buybacks are important because they are a large fraction of market buying pressure. The data JP Morgan Chase publishes says that the effect on earnings growth per share is small because the shares reduced by buybacks is nulled out by issuance of new shares. Last year seems to be an exception as there was a boost in earnings growth rate due to buyback...
by TJSI
Sat Dec 28, 2019 10:58 am
Forum: Non-US Investing
Topic: Is Gold really as bad as it made out to be?
Replies: 44
Views: 4320

Re: Is Gold really as bad as it made out to be?

Nisiprius,

When you discuss correlations, you must specify the time interval over which you are measuring it. For short periods of time gold has had negative correlation. Long term correlation is slightly positive.

If you have gold in your portfolio and just hold it over multiple years it will do nothing but lower your return. If you have a rebalancing program and execute it, gold can give a positive return. You can get a volatility lift!

TJSI
by TJSI
Wed Nov 20, 2019 6:16 pm
Forum: Investing - Theory, News & General
Topic: What Powered Such a Great Decade For Stocks?
Replies: 36
Views: 4394

Re: What Powered Such a Great Decade For Stocks?

Jeff,

Thanks for the link. A very clear and succinct analysis by Ben Carlson.

I think that in addition to QE and low interest rates we should add buybacks which I believe are keeping PEs afloat.

TJSI
by TJSI
Mon Oct 21, 2019 11:21 am
Forum: Personal Consumer Issues
Topic: Email Compromised On The Dark Web
Replies: 20
Views: 8823

Re: Email Compromised On The Dark Web

Yes you should be concerned because that message itself may be a scam. You can't scan the "dark web". Call the number on your credit card to see if there is any validity to that message.
by TJSI
Fri Oct 04, 2019 4:59 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's "Rules of Prudent Investing"
Replies: 32
Views: 8645

Re: Larry Swedroe's "Rules of Prudent Investing"

Some very good rules by LS. Note the contradiction between 6 & 8.
by TJSI
Thu Oct 03, 2019 3:27 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 cap-weighted beaten by Growth, Momentum, Min Vol, Low Vol & Quality since 2004
Replies: 20
Views: 2332

Re: S&P 500 cap-weighted beaten by Growth, Momentum, Min Vol, Low Vol & Quality since 2004

To answer Nisiprius' question on why small is not included in the paper: The study only looked at S&P 500 Indices. The indices studied are all subsets of the S&P 500.

And thanks for your questions because it always brings Elvis's "Suspicious Minds" to my mind. It was a good song and I believe his last big hit.

TJSI
by TJSI
Wed Oct 02, 2019 9:32 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 cap-weighted beaten by Growth, Momentum, Min Vol, Low Vol & Quality since 2004
Replies: 20
Views: 2332

Re: S&P 500 cap-weighted beaten by Growth, Momentum, Min Vol, Low Vol & Quality since 2004

Thanks for the link to a very informative paper. It provides further validation to the out-performance of low volatility and dividend paying stocks.
Of course, these results are only valid in a no-tax environment.

TJSI
by TJSI
Mon Sep 16, 2019 10:44 pm
Forum: Investing - Theory, News & General
Topic: Don't confuse strategy with outcome:
Replies: 94
Views: 7545

Re: Don't confuse strategy with outcome:

A good excuse for poor performance.
by TJSI
Thu Aug 15, 2019 6:30 pm
Forum: Personal Investments
Topic: How can I accomplish "Locking in Gains"
Replies: 53
Views: 4962

Re: How can I accomplish "Locking in Gains"

You can lock in your gains by transferring your risky investments to less risky ones. Moving some/all of your investments to treasury bonds for instance.

Same concept as taking winnings off the table.

TJSI
by TJSI
Wed Aug 14, 2019 6:41 pm
Forum: Personal Consumer Issues
Topic: Windows 10 urgent update alert.
Replies: 6
Views: 2115

Re: Windows 10 urgent update alert.

Thanks for the heads up. There were two updates out there an antivirus and a .NET . Update was painless as these things go.
by TJSI
Sun Aug 11, 2019 3:33 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 246
Views: 28507

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

willthrill88,

Nope, I' m referring to the roll of volatility in a portfolio. The possibility of achieving the "rebalancing bonus" exists. There is some fellow on this forum who loves his RBDs.

I would not say it is easy to get a volatility lift but it is possible. And I would certainly recommend that those approaching retirement dampen the volatility of their portfolio.

TJSI
by TJSI
Sun Aug 11, 2019 3:14 pm
Forum: Investing - Theory, News & General
Topic: Do you think about volatility drag on your portfolio?
Replies: 246
Views: 28507

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

Like the Loch Ness Monster and Big Foot, volatility drag will always exist in some minds.

Northern Flicker has seen through the fog of mathematics. If you have some compounding action in your portfolio, the arithmetic mean is an incorrect method of computing return.

Volatility is neither a friend or foe. If you are a clever fellow/girl, you can get a volatility lift. Just buy low and sell high when appropriate.

TJSI
by TJSI
Fri Jun 14, 2019 3:02 pm
Forum: Investing - Theory, News & General
Topic: Correlation vs. Differential of Asset Returns
Replies: 4
Views: 529

Re: Correlation vs. Differential of Asset Returns

SimpleGift,

I agree with you 100%. I just thought your graphs showed very dramatically why it is hard to get a return benefit from diversification.

However, that does not negate, as you point out, the potential reduction in risk by diversifying return sources.

TJSI
by TJSI
Fri Jun 14, 2019 2:03 pm
Forum: Investing - Theory, News & General
Topic: Correlation vs. Differential of Asset Returns
Replies: 4
Views: 529

Re: Correlation vs. Differential of Asset Returns

I don't see how you can get a diversification benefit unless you are really good at foretelling the future. Looks like you should have gone with all UK around 1960 and 35 years later switched to all US and stuck with it.


Those are great plots--thanks. I think it illustrates perfectly the difficulty in achieving a diversification return benefit. You need to know the optimal rebalancing schedule.


TJSI