Search found 4139 matches

by Random Walker
Sat Nov 16, 2019 3:13 pm
Forum: Investing - Theory, News & General
Topic: Preparing for a down market
Replies: 78
Views: 6349

Re: Preparing for a down market

OP - there are plenty of times throughout the history of the market where it took FAR longer than 25 (or even 49) months to recover. You might want to consider this rather sobering chart if you haven't seen it previously: https://static.seekingalpha.com/uploads/2018/8/18/saupload_SP500-Real-Time-To...
by Random Walker
Sat Nov 16, 2019 3:03 pm
Forum: Investing - Theory, News & General
Topic: Preparing for a down market
Replies: 78
Views: 6349

Re: Preparing for a down market

I think Taylor Larimore often quotes someone (I’m not sure who) who says more money is lost preparing for bear markets than is lost in actual bear markets. I’ve found that to be true for me, so I just stick to my general plan of putting X amount of money in every month automatically so I don’t have...
by Random Walker
Fri Nov 08, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Cliff Asness: It’s Time For A Venial Value-Timing Sin
Replies: 19
Views: 1899

Re: Cliff Asness: It’s Time For A Venial Value-Timing Sin

sailor18 wrote:
Fri Nov 08, 2019 9:22 am
Sorry to bring up an old and tired subject, but I hopped on QSPIX fairly early and am still smarting from my losses. Most every investment strategy has its day in the sun, but I'm not sure that Cliff is particularly good at predicting when that will be.
I think he’d agree with you.

Dave
by Random Walker
Thu Nov 07, 2019 8:11 pm
Forum: Investing - Theory, News & General
Topic: Cliff Asness: It’s Time For A Venial Value-Timing Sin
Replies: 19
Views: 1899

Re: Cliff Asness: It’s Time For A Venial Value-Timing Sin

He says throughout the article that factor timing is very hard! I took the article simply as affirmation to stay the course with my fairly heavy value tilt. We can only invest looking forward. And looking forward, makes most sense to not throw in the towel on Value.

Dave
by Random Walker
Thu Nov 07, 2019 9:39 am
Forum: Investing - Theory, News & General
Topic: Tax Loss Harvesting - Is it worth it?
Replies: 93
Views: 14248

Re: Tax Loss Harvesting - Is it worth it?

From reading the Berkin et al papers on this site, I believe TLH done right can yield 0.5-0.7% per year. TLH needs to be done on an individual lot basis (HIFO I believe) and done throughout the year. FWIW, it was TLH that helped me decide to go the advisor route. I felt that over time TLH would jus...
by Random Walker
Thu Nov 07, 2019 9:28 am
Forum: Investing - Theory, News & General
Topic: Cliff Asness: It’s Time For A Venial Value-Timing Sin
Replies: 19
Views: 1899

Cliff Asness: It’s Time For A Venial Value-Timing Sin

https://images.aqr.com/-/media/AQR/Documents/Perspectives/Its-Time-for-a-Venial-Value-Timing-Sin.pdf?la=en&hash=373EBD94DFE1A29D2DD028748AFFDCB8 In this article from Cliff’s Perspectives, Cliff Asness of AQR looks at the current “value of value”. He looks at the current spread in valuations between ...
by Random Walker
Tue Nov 05, 2019 11:28 am
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 341
Views: 39710

Re: Small Cap Value heads Rejoice !!!

I think some people have questioned whether the value premium exists at all in the most liquid large cap realm. I think it’s fair to say value is stronger as market cap declines.

Dave
by Random Walker
Tue Nov 05, 2019 10:14 am
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 341
Views: 39710

Re: Small Cap Value heads Rejoice !!!

I think it’s potentially very worthwhile to get as big a loading on size as possible, lowest average market cap. The effects of the other factors tend to be most pronounced in the smallest stocks.

Dave
by Random Walker
Tue Nov 05, 2019 10:11 am
Forum: Investing - Theory, News & General
Topic: Two competing investing philosophies: buy and hold vs. move to indexing
Replies: 7
Views: 586

Re: Two competing investing philosophies: buy and hold vs. move to indexing

In general, if you learn something new it makes sense to change to the better game plan. When pondering a change, I think it’s important for the investor to ask himself why he is making the change. If the rationale is sound, then the change should be made. One big caveat is capital gains taxes thoug...
by Random Walker
Tue Nov 05, 2019 10:02 am
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 341
Views: 39710

Re: Small Cap Value heads Rejoice !!!

MotoTrojan wrote:
Mon Nov 04, 2019 7:51 pm
For those true believers, what International SCV funds do you hold?
I have DISVX: DFA International Small Value.
And now using DWUSX: DFA World Ex US Targeted Value.

DWUSX combines Emerging markets into international small value; likely more efficient than owning separate EM fund.

Dave
by Random Walker
Tue Nov 05, 2019 9:50 am
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 341
Views: 39710

Re: Small Cap Value heads Rejoice !!!

For those true believers, what International SCV funds do you hold? I really like FNDC. I just looked up VFVA, VG Value Factor ETF, on Portfolio Visualizer: it has some serious exposure to size and value, and an expense ratio of 0.13%! https://www.portfoliovisualizer.com/factor-analysis?s=y®ress...
by Random Walker
Mon Nov 04, 2019 7:46 pm
Forum: Investing - Theory, News & General
Topic: Small Cap Value heads Rejoice !!!
Replies: 341
Views: 39710

Re: Small Cap Value heads Rejoice !!!

I just looked up VFVA, VG Value Factor ETF, on Portfolio Visualizer: it has some serious exposure to size and value, and an expense ratio of 0.13%! https://www.portfoliovisualizer.com/factor-analysis?s=y®ressionType=1&symbols=VFVA%2C+DFMVX%2C+DTMVX&sharedTimePeriod=true&factorDataSet=0&marketArea...
by Random Walker
Mon Nov 04, 2019 10:32 am
Forum: Investing - Theory, News & General
Topic: How do you reconcile these two opposing views
Replies: 42
Views: 3677

Re: How do you reconcile these two opposing views

We can’t time markets, but each individual can put the odds in his own favor. Past returns result from increased valuations, which in turn result in lower future expected returns. Not only is the mean expected return shifted left, the whole potential distribution of future returns shifts left. Good ...
by Random Walker
Sun Oct 27, 2019 3:15 pm
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

I believe making the equity part riskier via value and size is more efficient than with just more beta because of the lower correlations between the factors. I'm just not sure that the correlations are such that it will become more efficient than the market portfolio itself. Well, no one can predic...
by Random Walker
Sun Oct 27, 2019 2:12 pm
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

I believe making the equity part riskier via value and size is more efficient than with just more beta because of the lower correlations between the factors. I'm just not sure that the correlations are such that it will become more efficient than the market portfolio itself. Well, no one can predic...
by Random Walker
Sun Oct 27, 2019 11:33 am
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

Elysian I totally get that. It just makes it hard to make good decisions based on incomplete and incongruous past data. Yes my goal is to understand this for the long term. I would say don’t make the decision at all based on past performance. Make the decision based on current factor loadings, cost...
by Random Walker
Sat Oct 26, 2019 4:43 pm
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

Many SCV funds hold REITs. BOSVX does not and I believe IJS and many other SCV funds do. When REITs do well, as they have done recently, that can contribute to better performance of the SCV funds that hold REITs.

Dave
by Random Walker
Sat Oct 26, 2019 8:17 am
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

With regard to BOSVX versus IJS, I think a minor but significant point for tillers is the following. When one uses a fund with deeper exposures to size and value, that means he needs to take on less market beta risk (the risk he is trying to diversify away from in the first place) to get his desire...
by Random Walker
Fri Oct 25, 2019 9:46 am
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

With regard to BOSVX versus IJS, I think a minor but significant point for tillers is the following. When one uses a fund with deeper exposures to size and value, that means he needs to take on less market beta risk (the risk he is trying to diversify away from in the first place) to get his desired...
by Random Walker
Fri Oct 25, 2019 9:41 am
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 1939

Re: BOSVX vs IJS for SCV Loading?

Ignore the other guy he's on the 100% efficient market bandwagon. Hard to go wrong being on the 100% efficient market bandwagon. Markets almost certainly not perfectly efficient, but an investor will never be very far off the mark if he behaves as though they are. Personally, I’ve always thought of...
by Random Walker
Wed Oct 23, 2019 3:38 pm
Forum: Investing - Theory, News & General
Topic: "Steelmanning" the case for owning individual stocks
Replies: 137
Views: 15948

Re: "Steelmanning" the case for owning individual stocks

The market compensates undiversifiable risks, but not ones that can be diversified away. To experience the gains of an asset class, the investor needs to be diversified within the asset class. Most all of an asset class’ performance is explained by a few winners, and we can’t predict which stocks th...
by Random Walker
Sun Oct 20, 2019 3:02 pm
Forum: Investing - Theory, News & General
Topic: Late Starters
Replies: 66
Views: 9770

Re: Late Starters

Can I revive this thread? Starting now at 41. Was in a bad marriage with a spendthrift husband that just spent and spent all my money. Would get into huge fights with me anytime I brought up a budget and saving. And to top it off, refused to work. Wanted to be his own boss and not “work for the man...
by Random Walker
Wed Oct 16, 2019 8:05 am
Forum: Investing - Theory, News & General
Topic: Fixed Income In Retirement
Replies: 17
Views: 1905

Re: Fixed Income In Retirement

I always consider what my situation would be like if stocks dropped 50% in the next year and didn't rebound for several years. That's why I keep bonds in my portfolio. That mind experiment is a big contributor to my overall asset allocation decision too. Overall stocks and bonds tend to be uncorrel...
by Random Walker
Mon Oct 07, 2019 7:54 pm
Forum: Investing - Theory, News & General
Topic: Fama French: momentum lacks theoretical motivation
Replies: 27
Views: 1990

Re: Fama French: momentum lacks theoretical motivation

I think you’re reading it correctly. I couldn’t open the link. Nonetheless, the original FF 3 Factor model is based on 3 risk factors. The next improvement to the model’s explanatory power was momentum. Momentum is entirely behavioral, so taking the next step to momentum is actually a leap. But the ...
by Random Walker
Sun Oct 06, 2019 3:16 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's "Rules of Prudent Investing"
Replies: 32
Views: 4532

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

My own view is that Larry has been highly consistent and his recommendations have not really changed. The philosophy has been consistent, but as new vehicles have become available, the implementation has changed. I believe the unifying themes behind Larry’s recommendations are portfolio efficiency, ...
by Random Walker
Sun Oct 06, 2019 3:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's "Rules of Prudent Investing"
Replies: 32
Views: 4532

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

I'm starting to think that diversification is silly. Just pile into the S&p 500, and when the day of reckoning comes even a 50% loss will still leave one with a bigger pile than a diversified portfolio that returned a third less over 20 years. I'm kidding. I think. A lot of truth in that. Real dive...
by Random Walker
Sat Oct 05, 2019 9:52 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe's "Rules of Prudent Investing"
Replies: 32
Views: 4532

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

Are you sure there are Larry's rules? How do you square the following: The more complex the investment, the faster investors should run. Complex products are designed to be sold, not bought. Investors can be sure the complexity is designed to favor the issuer, not the investor. Investment firms do ...
by Random Walker
Wed Oct 02, 2019 9:26 am
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

You can't be well diversified in both market space and factor space at the same time. I don’t understand the physics and statistics, but going to disagree anyways. For practical purposes, I think your “market space” diversification refers to elimination of single stock (idiosyncratic) risk. One can...
by Random Walker
Tue Oct 01, 2019 9:30 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

This has been bugging me for a while. Is it possible that value metrics are a good way to help evaluate individual stocks but are not useful for investing at the index level when we have to sort things into arbitrary buckets and make rules based decisions using just a couple metrics? I would think ...
by Random Walker
Tue Oct 01, 2019 4:08 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

Finance researchers thus have a problem in that there is just one historical sample. It grows over time, but out-of-sample testing is not especially credible when you have one large sample and subsets of the sample are typically not independent of each other. There are ways to perform out of sample...
by Random Walker
Tue Oct 01, 2019 4:00 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

There are other reasons to avoid tilting towards value heavily, and perhaps one of the most overlooked ones is that Value tends to perform well in short bursts after lagging for long periods. This doesn't bode well for someone investing for retirement if that short performance comes at the beginnin...
by Random Walker
Tue Oct 01, 2019 3:50 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

And Value has outperformed internationally over this past decade as well. The concentrated bet is on market beta alone with TSM. The longer the period, the more likely value is to outperform. Dave This is a falsehood repeated over and over on this forum even though it has been debunked multiple tim...
by Random Walker
Tue Oct 01, 2019 2:48 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

There are other reasons to avoid tilting towards value heavily, and perhaps one of the most overlooked ones is that Value tends to perform well in short bursts after lagging for long periods. This doesn't bode well for someone investing for retirement if that short performance comes at the beginnin...
by Random Walker
Tue Oct 01, 2019 2:45 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

There are other reasons to avoid tilting towards value heavily, and perhaps one of the most overlooked ones is that Value tends to perform well in short bursts after lagging for long periods. This doesn't bode well for someone investing for retirement if that short performance comes at the beginnin...
by Random Walker
Tue Oct 01, 2019 9:44 am
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

Fama French initially chose P/B because it is most stable. It has its weaknesses and now many funds use multiple value metrics.

Dave
by Random Walker
Sun Sep 29, 2019 2:01 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

And Value has outperformed internationally over this past decade as well. The concentrated bet is on market beta alone with TSM. The longer the period, the more likely value is to outperform.

Dave
by Random Walker
Sat Sep 28, 2019 9:00 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

Taylor, Maybe so. I think it depends on individual preference. I think Fama has said much the same. A person could rationally accept more risk by tilting to value, be neutral risk with TSM, or perhaps assume less risk by overweighting large growth. One big point of the Fama French work though is tha...
by Random Walker
Sat Sep 28, 2019 6:26 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

Several logical risk explanations for the value premium: increased leverage, more volatile earnings, companies do worse in bad economic times, more irreversible capital that results in non productive capacity in bad times, and simply value stocks show higher SD than growth stocks.

Dave
by Random Walker
Sat Sep 28, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

I find irony in factor investors saying something is "cheap" with the implication that it's being mis-priced (rather than just shoddy merchandise). The methodology for a value index will always be selecting stocks that on some metric have a lower price/x ratio, but that says nothing about the futur...
by Random Walker
Sat Sep 28, 2019 2:22 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

The relevant analysis from the page used top decile P/B compared to bottom decile P/B, then top quintile and bottom quintile. How is this actionable for investors using funds based on a methodology that uses P/B, P/E, and P/S to weight a stock universe into two rough baskets, then buys maybe a half...
by Random Walker
Sat Sep 28, 2019 11:46 am
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

Re: When Value Is More Valuable

I don’t know anything about Verdad Advisors, but the point of the article is very separate from the authors. The thesis stands on its own, independent of who wrote it. Currently value looks quite cheap by historical standards, which implies relatively higher forward looking expected returns.

Dave
by Random Walker
Fri Sep 27, 2019 6:43 pm
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5380

When Value Is More Valuable

https://mailchi.mp/verdadcap/when-value-is-more-valuable Came across this essay looking at growth value spreads and subsequent value performance. The growth / value ratio since 1926 has only been larger twice: in the run up to the depression and in the dot-com bubble. Current valuations strongly aff...
by Random Walker
Thu Sep 26, 2019 12:30 pm
Forum: Investing - Theory, News & General
Topic: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX
Replies: 119
Views: 7922

Re: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX

As Larry said above, “equity like returns” reasonably implies about 4-5% above riskless rate.

Dave
by Random Walker
Wed Sep 25, 2019 11:16 pm
Forum: Investing - Theory, News & General
Topic: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX
Replies: 119
Views: 7922

Re: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX

Larry, big fan. I'm sure there are many of us interested in your opinions. What do you think of LENDX going forward and would this fund be appropriate in taxable? I have always been interested in this fund after reading your book, but was hesitant because of the high fees. Im not Larry, but I’ll ta...
by Random Walker
Tue Sep 24, 2019 3:25 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Getting Paid to Reduce Risk
Replies: 5
Views: 1024

Re: Larry Swedroe: Getting Paid to Reduce Risk

It seems that there is a lot of overlap between this SmR factor and the addition of Investment and Profitability factors to the Fama French 3 factor model. Does SmR add anything to the newer Fama French 5 factor model? Dave My gut feeling is that SmR should be nearly identical to AQR's BaB ("bettin...
by Random Walker
Tue Sep 24, 2019 12:28 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Getting Paid to Reduce Risk
Replies: 5
Views: 1024

Re: Larry Swedroe: Getting Paid to Reduce Risk

It seems that there is a lot of overlap between this SmR factor and the addition of Investment and Profitability factors to the Fama French 3 factor model. Does SmR add anything to the newer Fama French 5 factor model?

Dave
by Random Walker
Tue Sep 24, 2019 9:43 am
Forum: Investing - Theory, News & General
Topic: Don't confuse strategy with outcome:
Replies: 94
Views: 6071

Re: Don't confuse strategy with outcome:

Larry has previously discussed the difference between risk and uncertainty. Risk, like coin flips, is where the odds are known. Uncertainty is way more unpredictable, includes outcomes we can’t forsee, Black Swans, fat tails, stuff we don’t even know that we don’t know. An uncertain investing world ...
by Random Walker
Tue Sep 24, 2019 9:29 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Individual Stock Investing Increases Risk
Replies: 105
Views: 6325

Re: Larry Swedroe: Individual Stock Investing Increases Risk

I thought this was a highly valuable article. I have a friend (I’m sure all of us do) who talks confidently about his individual stock successes. Makes it sound so easy. Impossible not to be influenced by talk like that and second guess the diversified passive investing mutual fund path. Great to ha...
by Random Walker
Sun Sep 22, 2019 11:09 pm
Forum: Investing - Theory, News & General
Topic: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX
Replies: 119
Views: 7922

Re: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX

I believe Larry and BAM simply feel that the returns of REITs are explained by the market, size, value, term factors. That after accounting for underlying factors, there is nothing unique about REITs. I think they feel it is more efficient to access those factors through equities and bonds. Learn ne...
by Random Walker
Sun Sep 22, 2019 11:02 pm
Forum: Investing - Theory, News & General
Topic: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX
Replies: 119
Views: 7922

Re: Swedroe Advocates: LENDX, SRRIX, AVRPX, QRPRX/QSPRX

Just for context, performance of a 25/75 LP vs a simple 60/40 TSM/TBM for as long as we have live data (March 1993, inception of DFSVX DFA's small cap value fund) the results are: Larry Portfolio: 5.76% CAGR with ending value of $44,085 Bogle Portfolio TSM/TBM: 8.15% CAGR with ending of $79,713 Lin...