Search found 6487 matches

by market timer
Wed Feb 28, 2024 5:24 am
Forum: Personal Finance (Not Investing)
Topic: Can I make this retirement work?
Replies: 32
Views: 6845

Re: Can I make this retirement work?

lzq wrote: Tue Feb 27, 2024 4:21 pm1. Keep the house, and live modestly with the remaining 2.5k per month.
You can also draw from your portfolio, no? Since you have SS upcoming, you could draw 5-6%, around $40K/year. Seems like you are good to go, if you can live on $70K/year.
by market timer
Wed Feb 28, 2024 4:47 am
Forum: Personal Finance (Not Investing)
Topic: FIRE-ing In, Quitting versus Getting FIRE-d - Talking to Boss Tomorrow
Replies: 148
Views: 22523

Re: FIRE-ing In, Quitting versus Getting FIRE-d - Talking to Boss Tomorrow

You say you would like a 16-week severance. Have you considered resigning with a 16-week notice period? Then negotiate an early last day in office? For example, you could give notice and ask if you can stop coming into the office after spending a couple weeks transferring your accounts. You'll be available by email if they need you after that.

I've given 3-month notice a couple of times and was able to negotiate an exit both times within a week of resigning. No hard feelings. Even had one manager offer me a job several years later.
by market timer
Tue Feb 27, 2024 5:21 am
Forum: Personal Consumer Issues
Topic: What Movie Have You Recently Watched?
Replies: 11037
Views: 2066185

Re: What Movie Have You Recently Watched?

Poor Things (2023)

Perfect Days (2023)

Both recommended.
by market timer
Thu Feb 15, 2024 9:38 am
Forum: Personal Consumer Issues
Topic: What is your favorite book?
Replies: 186
Views: 19917

Re: What is your favorite book?

OpenMinded1 wrote: Wed Feb 14, 2024 8:17 am
market timer wrote: Tue Feb 13, 2024 7:06 am A Confederacy of Dunces, by John Kennedy Toole
I really like this one too. It's enjoyable and hilarious even though the main character is despicable. My wife and I have read it, and I sometimes jokingly tell her, "I fear my valve will be closed forever" after completing some small task for her. :D
It is the only book my wife and I have both read. She read it because she saw me laughing so hard throughout the book. “I mingle with my peers or no one, and since I have no peers, I mingle with no one.”
by market timer
Tue Feb 13, 2024 7:06 am
Forum: Personal Consumer Issues
Topic: What is your favorite book?
Replies: 186
Views: 19917

Re: What is your favorite book?

A Confederacy of Dunces, by John Kennedy Toole
by market timer
Thu Feb 01, 2024 7:29 am
Forum: Investing - Theory, News & General
Topic: Echoes of Dot Com Bubble?
Replies: 230
Views: 23991

Re: Echoes of Dot Com Bubble?

I like to follow the ratio of net worth to disposable income. By this metric, we are coming down from the greatest bubble in history. People are really phenomenally wealthy today.

Image
by market timer
Sat Jan 06, 2024 9:03 pm
Forum: Personal Finance (Not Investing)
Topic: Is financial leverage a good approach at this stage?
Replies: 26
Views: 3196

Re: Is financial leverage a good approach at this stage?

Today is not the best time to use leverage. Interest rates are relatively high, as are asset prices. Maintain your good credit and borrowing capacity for when a compelling opportunity arises. Every few years, we have some dislocations that provide an opportunity for people with dry powder.
by market timer
Sat Jan 06, 2024 2:44 am
Forum: Personal Finance (Not Investing)
Topic: How did you find your dream job?
Replies: 79
Views: 23609

Re: How did you find your dream job?

Some ways I've found dream jobs:
  • Primary motivation for taking the job was to learn something
  • Had a great mentor/manager
  • Had autonomy
  • Self-employment followed from a hobby
  • Was doing work that I thought few other people on earth could do
I think it's unlikely that my dream job exists somewhere, just waiting for me. I've had to create my dream jobs and convince others to pay me to do them. In those times when I've found myself in dream jobs, it was typically by randomness. I hadn't aimed for them, just followed my passion. It helps to know what you really want from the job.
by market timer
Fri Jan 05, 2024 6:31 pm
Forum: Personal Investments
Topic: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice
Replies: 21
Views: 3782

Re: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice

I wouldn't make any major changes to your asset allocation for a one-year sabbatical. Your spending is low. I'd keep enough in cash to last a couple years. Personally, I'd like some fixed income and international exposure. Maybe consider moving to something closer to 70/30 stocks/bonds, with the bonds in long term Treasuries and diversifying some of the stocks into international. I recently sold all my I bonds. They were no longer competitive with returns I could earn on other fixed income investments. Consider whether it makes sense in your case. Seems like you could actually retire now if you don't end up having kids. Use the low income years to convert your IRA and 401K to Roth. Retire at 35 with just 1.075 million in hard assets, much ...
by market timer
Fri Jan 05, 2024 9:40 am
Forum: Personal Investments
Topic: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice
Replies: 21
Views: 3782

Re: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice

1. On the fixed income side, I have been hesitant to switch to LTT (a la Vineviz's "first 20% of bonds in long-term treasuries) because I don't know what my maturity date should be, in other words knowing exactly when I may need the money. I felt it compelling if you are more sure that in 20 years you will need the money, and so you build your fixed income to fit. In my case, I've always been a little unsure when my time will come. And now with this break it's coming much sooner than expected. Would you recommend to still diversify into something like LTTs/bond index fund in my case? You are looking at it the way I do--trying to match fixed income duration to duration of liabilities. From a duration of liabilities standpoint, the shor...
by market timer
Fri Jan 05, 2024 1:36 am
Forum: Personal Investments
Topic: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice
Replies: 21
Views: 3782

Re: Taking a "Sabbatical" of sorts - living off $1M - asset allocation advice

I wouldn't make any major changes to your asset allocation for a one-year sabbatical. Your spending is low. I'd keep enough in cash to last a couple years. Personally, I'd like some fixed income and international exposure. Maybe consider moving to something closer to 70/30 stocks/bonds, with the bonds in long term Treasuries and diversifying some of the stocks into international.

I recently sold all my I bonds. They were no longer competitive with returns I could earn on other fixed income investments. Consider whether it makes sense in your case.

Seems like you could actually retire now if you don't end up having kids. Use the low income years to convert your IRA and 401K to Roth.
by market timer
Thu Jan 04, 2024 6:17 am
Forum: Personal Finance (Not Investing)
Topic: What is the Worst Financial Decision/Mistake You Have Made?
Replies: 657
Views: 133000

Re: What is the Worst Financial Decision/Mistake You Have Made?

In thinking of my mistakes, I'm reminded of the parable of the Taoist farmer: https://www.youtube.com/watch?v=sWd6fNVZ20o
by market timer
Wed Jan 03, 2024 7:43 am
Forum: Personal Finance (Not Investing)
Topic: Rate of return on primary residence
Replies: 56
Views: 6781

Re: Rate of return on primary residence

I went through this exercise in deciding whether to buy a condo (in cash) or rent a similar unit. For planning purposes, I assumed the condo would appreciate at the rate of inflation. In addition, I save on rent, paying only the condo maintenance fee instead of the gross monthly rent. My estimate was that I'd earn a 3% return above inflation, tax free, over the long run. Apologize in advance if this is an ignorant question - but does your calculation include the "cost" of what you would no longer be earning on the cash used to buy the condo, assuming the earnings would be a rate higher than inflation rate? I am looking at the same thing and want to give up paying rent, but consider that paying for a property is taking from my ove...
by market timer
Sun Dec 31, 2023 8:12 pm
Forum: Personal Finance (Not Investing)
Topic: Max money to reasonably spend on vacations per year?
Replies: 29
Views: 3395

Re: Max money to reasonably spend on vacations per year?

Vacations take a larger share of our budget as our wealth has increased. We hit our FI number years ago, and now I view discretionary luxuries like vacations as an incentive to continue working. We try to keep our fixed, everyday expenses below a 4% withdrawal rate, then spend pretty freely from our income, a.k.a. CoastFIRE.
by market timer
Sat Dec 30, 2023 10:39 pm
Forum: Personal Finance (Not Investing)
Topic: Rate of return on primary residence
Replies: 56
Views: 6781

Re: Rate of return on primary residence

I went through this exercise in deciding whether to buy a condo (in cash) or rent a similar unit. For planning purposes, I assumed the condo would appreciate at the rate of inflation. In addition, I save on rent, paying only the condo maintenance fee instead of the gross monthly rent. My estimate was that I'd earn a 3% return above inflation, tax free, over the long run.
by market timer
Tue Dec 05, 2023 7:17 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 14343
Views: 1970369

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Also, on my search for the above, I found quite a gem from @Market Timer: My prediction for the next year is that most of you will become disgusted with this strategy--the drawdowns, the active rebalancing, its intrusion into your daily life. As the leverage is unwound, bond yields rise, and equities return to reasonable valuations, It is precisely then that someone might want to start another excellent adventure. -x- He was on point!! Altough he thought this would happen in 2021, and ended up happening in 2022. - Couldn't have felt more identified in retrospective. Also believe it has been a good period to start another EA. Looking ahead to the next several years, I'm happy that a 2.2% real return is more than enough for my needs, and I c...
by market timer
Tue Dec 05, 2023 4:58 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 14343
Views: 1970369

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Also, on my search for the above, I found quite a gem from @Market Timer: My prediction for the next year is that most of you will become disgusted with this strategy--the drawdowns, the active rebalancing, its intrusion into your daily life. As the leverage is unwound, bond yields rise, and equities return to reasonable valuations, It is precisely then that someone might want to start another excellent adventure. -x- He was on point!! Altough he thought this would happen in 2021, and ended up happening in 2022. - Couldn't have felt more identified in retrospective. Also believe it has been a good period to start another EA. Looking ahead to the next several years, I'm happy that a 2.2% real return is more than enough for my needs, and I c...
by market timer
Mon Nov 06, 2023 3:45 am
Forum: Investing - Theory, News & General
Topic: Bond Income as Tax Efficient Capital Gains
Replies: 5
Views: 1483

Re: Bond Income as Tax Efficient Capital Gains

CletusCaddy wrote: Sat Nov 04, 2023 6:31 pm Have you looked at the BOXX ETF?

It pays short term rates but in the form of NAV increases rather than distributions
This is really cool. I hadn't seen it before.

There you go, matto. You can go long BOXX and bond futures, and have something that performs like owning bonds, but with better tax treatment for your situation.
by market timer
Thu Oct 12, 2023 8:34 am
Forum: Personal Investments
Topic: What duration is an iBond?
Replies: 24
Views: 3090

Re: What duration is an iBond?

Duration ≠ Maturity Duration measures the change in value consequent to a change in interest rates for the same residual maturity. The value of Savings Bonds does not depend on interest rates => Their duration is zero. QED There are various ways to measure duration. The simplest is the weighted average term to maturity of the cash flows: https://www.investopedia.com/terms/m/macaulayduration.asp What you're describing above is modified duration. So since EE and I bonds are both 0 coupon, the Macaulay duration is equal to maturity? Or would it depend on whether or not it is likely to make sense to redeem early as you implied above? I have some EE bonds with that are about 9-10 from doubling and being cashed in (so duration = 9-10 years :?: )...
by market timer
Thu Oct 12, 2023 2:38 am
Forum: Personal Investments
Topic: What duration is an iBond?
Replies: 24
Views: 3090

Re: What duration is an iBond?

Thesaints wrote: Thu Oct 12, 2023 12:32 am Duration ≠ Maturity
Duration measures the change in value consequent to a change in interest rates for the same residual maturity.
The value of Savings Bonds does not depend on interest rates => Their duration is zero.
QED
There are various ways to measure duration. The simplest is the weighted average term to maturity of the cash flows: https://www.investopedia.com/terms/m/ma ... ration.asp

What you're describing above is modified duration.
by market timer
Wed Oct 11, 2023 9:41 pm
Forum: Personal Investments
Topic: What duration is an iBond?
Replies: 24
Views: 3090

Re: What duration is an iBond?

I believe strongly, pigheadedly, obstinately that the duration of a series I savings bond is zero, because, once purchased, changes in interest rate do not have any effect on redemption values. I had some strange arguments with people in the forum about this, though. To me it seems obvious that "the value" of a series I savings bond is the number of dollars I can get for it. The only place I can get money for it is the Treasury, and once purchased and the first year is up, the redemption value of a bond is unaffected by interest rates. Other argued that the only value that matters is the value that an I bond would have in a competitive market if you could buy and sell them in a market-- which you can't . (Nor can you legally use ...
by market timer
Wed Sep 06, 2023 9:39 am
Forum: Personal Finance (Not Investing)
Topic: If you have a high income ($500K+), how did you do it?
Replies: 190
Views: 23873

Re: If you have a high income ($500K+), how did you do it?

My advice would be to find good mentors. At every key step in my professional development, I've been lifted up by my mentors. These are people who saw something in me (good or bad) that I didn't know I needed to leverage or fix--or they shared opportunities with me--usually both.

The details of my specific path are not worth trying to replicate. This is also worth noting, as I tried to copy successful people (without having success doing so) in my earlier years. Opportunities are always fleeting.
by market timer
Sun Aug 06, 2023 9:21 am
Forum: Personal Investments
Topic: Took dream job and essentially in Retirement (withdrawing) while working (accumulating)
Replies: 93
Views: 12065

Re: Took dream job and essentially in Retirement (withdrawing) while working (accumulating)

In my view, this is the ideal form of early retirement. Find a dream job that you are happy to do into old age. It makes sense to draw down the portfolio at a rate of 2%/year, so your plan seems fine to me. Keep in mind, you'll also have Social Security and home equity to bolster your retirement finances.
by market timer
Thu Aug 03, 2023 6:22 pm
Forum: Investing - Theory, News & General
Topic: Who's stocking up on 20Y treasuries?
Replies: 43
Views: 7989

Re: Who's stocking up on 20Y treasuries?

Walobolo wrote: Thu Aug 03, 2023 6:11 pm Where account are you buying these in?

I don't think I would want this in taxable where I would lose 1/3 of the interest a year to Federal and NIIT. Roth and HSA are almost all stock. Bonds are in my 401k but are limited to short term and intermediate term funds.

Not saying it is a bad idea just curious what account would you hold these in for the next 20 years?
This is the concern I've had recently as well. Would like to own long term bonds at these yields, but where to put them to reduce the tax burden? At the moment, I'm thinking of buying a deferred fixed annuity that starts payments in 25 years and makes payments for 10 years guaranteed. This avoids taxation during my high income years.
by market timer
Sun Jul 09, 2023 9:43 am
Forum: Personal Finance (Not Investing)
Topic: Millionaire by 40 and How you Did it?
Replies: 352
Views: 74762

Re: Millionaire by 40 and How you Did it?

As I get older, I'm less impressed by "millionaire by 40" types of achievements, and more by people who:
1. Maintain good relationships with family
2. Enjoy their careers
3. Have a life outside the office and home

Money is rarely the limiting factor in happiness.
by market timer
Tue Jun 27, 2023 7:48 am
Forum: Personal Finance (Not Investing)
Topic: FAANG+/CS - Career vs. lifestyle/location/housing
Replies: 121
Views: 8537

Re: FAANG+/CS - Career vs. lifestyle/location/housing

TomatoTomahto wrote: Tue Jun 27, 2023 7:45 amIf OP is “quite wealthy,” which I am taking at face value, I’ll put in a plug for “giving with a warm hand.” Some prefer referring to it as an “early inheritance.” Whatever you call it, if it doesn’t put your later years in jeopardy, it’s a good way to benefit your heirs while they can still make good use of the money (rather than inheriting $$$ when they’re retired themselves).
As an example, my in-laws gave us $500K toward a house, plus a nanny. It was a game-changer in our fertility.
by market timer
Tue Jun 27, 2023 7:28 am
Forum: Personal Finance (Not Investing)
Topic: FAANG+/CS - Career vs. lifestyle/location/housing
Replies: 121
Views: 8537

Re: FAANG+/CS - Career vs. lifestyle/location/housing

This is a financial forum and sometimes we substitute financial arguments in place of our true reasons. Is the issue really that your oldest daughter has moved far away from home and you would still like to be part of her daily life going forward? Maybe you would like grandkids sooner than later? 100% I want all this (though the decision is not mine, I realize). That said, these are not entirely my own thoughts. D was complaining to us yesterday about house prices, the difficulty of raising kids there, etc. A fresh marriage engagement and a visit back home is a natural time to think about future plans. I'm not necessarily thinking any of this will or should play out in the short term. But thinking a bit about possible life directions 2/5/1...
by market timer
Mon Jun 26, 2023 8:51 pm
Forum: Personal Finance (Not Investing)
Topic: FAANG+/CS - Career vs. lifestyle/location/housing
Replies: 121
Views: 8537

Re: FAANG+/CS - Career vs. lifestyle/location/housing

This is a financial forum and sometimes we substitute financial arguments in place of our true reasons. Is the issue really that your oldest daughter has moved far away from home and you would still like to be part of her daily life going forward? Maybe you would like grandkids sooner than later?
by market timer
Mon Jun 26, 2023 8:23 pm
Forum: Personal Finance (Not Investing)
Topic: FAANG+/CS - Career vs. lifestyle/location/housing
Replies: 121
Views: 8537

Re: FAANG+/CS - Career vs. lifestyle/location/housing

A few comments from my side:
1. Having a FAANG employer on your resume pays dividends long after you move to your next job.
2. People are having kids later these days, especially well educated FAANG workers.
3. It's still very early for this couple. There will be many life events that could cause relocation: job-related, graduate school, having children, breaking up, who knows.

That said, they're in a great spot now. No need to worry.
by market timer
Thu Jun 22, 2023 9:05 am
Forum: Personal Consumer Issues
Topic: Family vacation ideas (kids 3, 6yo)?
Replies: 38
Views: 3524

Re: Family vacation ideas (kids 3, 6yo)?

TLC1957 wrote: Thu Jun 22, 2023 7:54 am Perhaps not now but in the future….

Prince Edward Island in Atlantic Canada. PEI is a beautiful place we have been visiting since 1985.
Thanks for the recommendation. We like to fly into the US via NYC. Will make PEI a trip on one of our next visits.
by market timer
Thu Jun 22, 2023 2:48 am
Forum: Personal Finance (Not Investing)
Topic: Downshifting tech career post FI
Replies: 20
Views: 3709

Re: Downshifting tech career post FI

idc wrote: Thu Jun 22, 2023 12:56 am OP, somewhat of a similar situation. Achieved FI, and while the pay was great, the daily grind was just too much for me. Decided to take a sabbatical, but got bored very quickly.

Ended up stumbling in a contractor/consultant position which is working great for me. This is a combination of options #1 and #3 on your list (consultant fixing poorly performing project at a big tech company) and having a blast. Did not really plan it that way, but here is why it worked fine, might apply to your situation too.
I think much of the reduced stress you describe can be achieved in a full time role with a change of mindset. In fact, almost all stress in a typical white collar role is self-imposed. "Illegitimi non carborundum."
by market timer
Tue Jun 20, 2023 6:57 pm
Forum: Personal Finance (Not Investing)
Topic: RSUs to pay off student loans?
Replies: 11
Views: 1316

Re: RSUs to pay off student loans?

mrgoodnotgood wrote: Tue Jun 20, 2023 12:35 pm
market timer wrote: Tue Jun 20, 2023 8:37 am
I highly recommend increasing your bond exposure to at least 30%. Bond interest rates are very attractive right now.
Do you have any bonds to suggest as I explore things further?
I think it's a good practice to match duration of liabilities and assets, in other words, buy bonds that will mature when you need them. Assuming you plan to retire around 65 and live until 85, that means on average you'll need the money 25 years from now. That suggests owning long term bonds, which you can buy directly from the Treasury or via an ETF like EDV (24-year duration) or TLT (17-year duration). As you get closer to retirement, you can gradually convert these long term bonds to intermediate term bonds.
by market timer
Tue Jun 20, 2023 8:59 am
Forum: Personal Finance (Not Investing)
Topic: RSUs to pay off student loans?
Replies: 11
Views: 1316

Re: RSUs to pay off student loans?

mrgoodnotgood wrote: Tue Jun 20, 2023 8:52 amThanks for this. Question: instead of putting the $200k in a HYSA, would it be wise to put it in my money market fund (VMFXX) which is at 5%?
That's perfect.
by market timer
Tue Jun 20, 2023 8:37 am
Forum: Personal Finance (Not Investing)
Topic: RSUs to pay off student loans?
Replies: 11
Views: 1316

Re: RSUs to pay off student loans?

I'd suggest selling the $562K in company stock. Take $200K and put it in a high yield savings account until September, when student loan interest resumes, then pay off all the loans. Take whatever is left after paying your quarterly estimated taxes and put it in a diversified portfolio of stock and bonds. I highly recommend increasing your bond exposure to at least 30%. Bond interest rates are very attractive right now. For your unvested RSUs, simply treat them as income and sell them when they vest. The only caveat I'd add to the above is if you have high short term capital gains and are nearing a one-year holding period, where you'd qualify for long term capital gains taxes. Then you might want to delay realizing the gains on that portion...
by market timer
Mon Jun 19, 2023 8:13 pm
Forum: Personal Finance (Not Investing)
Topic: Laid off, career advice needed
Replies: 13
Views: 3754

Re: Laid off, career advice needed

You're in a great spot. Why not plan to take a long break, say 6-12 months? You could travel around Asia at a relaxed pace. Try to find where you'd like to based. While there, learn which companies are hiring people with your skill set and aim to make some connections. Personally, I strongly prefer in-person vs. remote work, and have not found many US companies open to hiring remotely from Asia. There are too many complications with the time zone difference and taxation rules.

Keep an open mind about your next role. Consider a pivot to something totally different. It's not about the money anymore, but about finding your next community.
by market timer
Mon Jun 12, 2023 8:14 pm
Forum: Personal Investments
Topic: Borrow money from parents to invest?
Replies: 43
Views: 2601

Re: Borrow money from parents to invest?

I had a similar idea when I was your age, 16 years ago. Didn't go so well for me. You can read about it here: viewtopic.php?t=5934

You're in a great spot financially right now. If you just keep saving $100-200K/year, you'll be able to retire by age 40, if that's the goal. Too many things can go wrong with leverage and borrowing from family. I don't think it is worth it here.
by market timer
Mon Jun 12, 2023 1:58 am
Forum: Personal Finance (Not Investing)
Topic: Corporate America or entrepreneurship?
Replies: 76
Views: 10146

Re: Corporate America or entrepreneurship?

I understand it is hard to be motivated when you spend $50K/year and are worth $4-10M, even if you earn $1M/year. I can totally relate to this. After realizing early retirement wasn't all that great, I bought a $2M house and started spending more, then had motivation to work again. Consider having multiple children as well.
by market timer
Mon Jun 12, 2023 1:51 am
Forum: Personal Consumer Issues
Topic: Planning East Coast Trip (NYC, Boston)
Replies: 61
Views: 4461

Re: Planning East Coast Trip (NYC, Boston)

I'd suggest dropping Yale and Brown from the itinerary and just visit Harvard. If the 14-year-old is admitted to Yale or Brown later, do a campus visit then.

Consider taking Amtrak to Boston instead of driving.
by market timer
Thu Sep 22, 2022 11:08 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 14343
Views: 1970369

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Icarus Theorem: Any popular thread on Bogleheads based on someone's exciting new leveraged investment approach is destined to melt down in time. It is one thing to leverage when borrowing costs are near 0%. It is something entirely different when borrowing costs approach 5%. Will be interesting to see how many people stick with this strategy throughout the upcoming rate cycle. For the record, I have recently started a version of this strategy, leveraging long bonds using futures. It is extremely uncomfortable at the moment. Stick to it, and don't forget to deleverage. Which long bond futures did you buy, and why? I bought the ultra bond futures: https://www.cmegroup.com/trading/interest-rates/ultra-tbond-futures.html The explanation I'm te...
by market timer
Thu Sep 22, 2022 10:42 pm
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 14343
Views: 1970369

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

Icarus Theorem: Any popular thread on Bogleheads based on someone's exciting new leveraged investment approach is destined to melt down in time.

It is one thing to leverage when borrowing costs are near 0%. It is something entirely different when borrowing costs approach 5%. Will be interesting to see how many people stick with this strategy throughout the upcoming rate cycle.

For the record, I have recently started a version of this strategy, leveraging long bonds using futures. It is extremely uncomfortable at the moment.
by market timer
Fri Sep 16, 2022 12:02 am
Forum: Investing - Theory, News & General
Topic: IS it time to buy long term bonds?
Replies: 146
Views: 12932

Re: IS it time to buy long term bonds?

The front end of the yield curve is already yielding more than 30-year Treasuries. For example, the 6-month yields 3.74% and the 30-year yields 3.47%. The market is pricing in Fed Funds to exceed to the 30-year by the end of this year. Well...it's not like 30-year would stay static by the EOY. It will remain higher than the FFR as I do not see an inverted yield curve at 3.5~4%. The market expectation for the 30-year yield in 3 months is essentially just today's 30-year yield. The market expectation for Fed Funds after the December meeting is above 4%: https://www.investing.com/central-banks/fed-rate-monitor So it's very likely we will get Fed Funds above long term bond yields this year. The hikes are already baked in to the yield curve. Ma...
by market timer
Thu Sep 15, 2022 11:20 pm
Forum: Investing - Theory, News & General
Topic: IS it time to buy long term bonds?
Replies: 146
Views: 12932

Re: IS it time to buy long term bonds?

Beensabu wrote: Thu Sep 15, 2022 11:03 pmMy next question would be: that was pulled off a decade after the end of Bretton Woods, less than a decade post-oil shock (and the accompanying you knows) when things were sort of to-be-determined still. You think they can pull it off again, in the todays?
The front end of the yield curve is already yielding more than 30-year Treasuries. For example, the 6-month yields 3.74% and the 30-year yields 3.47%. The market is pricing in Fed Funds to exceed to the 30-year by the end of this year.
by market timer
Thu Sep 15, 2022 10:11 am
Forum: Investing - Theory, News & General
Topic: Gold continues to soar!
Replies: 565
Views: 62712

Re: Gold continues to soar!

Even with today's selloff to $1668, gold is still overvalued based on real interest rates. With the CPI at 295.62 and 30-year real rates at 1.17%, I estimate the fair value of gold at $1407, i.e., 18.5% overvalued.
by market timer
Sun Sep 04, 2022 11:08 am
Forum: Personal Finance (Not Investing)
Topic: What's the favorite thing or most important thing you have learned here? [Personal finance]
Replies: 191
Views: 17121

Re: What's the favorite thing or most important thing you have learned here?

When I joined this forum, I was a student and my net worth was close to zero. My heroes were billionaire hedge fund managers, so I wanted to emulate their success, and ended up aiming way too high and taking too much risk. By participating actively over these past 15 years, I've grown to emulate the typical behaviors of the millionaires next door that frequent this site. My definition of success changed from becoming a billionaire to a much more achievable millionaire next door type. So, of course, by your early 40s, it's expected that you're a multimillionaire here. And that's what happened to me, slowly but surely.
by market timer
Fri Jul 29, 2022 9:08 am
Forum: Investing - Theory, News & General
Topic: Gold continues to soar!
Replies: 565
Views: 62712

Re: Gold continues to soar!

Accrual wrote: Wed Jul 27, 2022 8:15 amWhat does this imply for the future of gold? If the price of gold is inversely related to real yields, and inflation potentially increasing at a faster rate than nominal bonds, will gold increase in value?
My model only suggests what will happen to gold relative to bonds. When gold is overvalued, as it is now, it should underperform long term TIPS.
by market timer
Wed Jul 27, 2022 2:54 am
Forum: Investing - Theory, News & General
Topic: Gold continues to soar!
Replies: 565
Views: 62712

Re: Gold continues to soar!

Gold is now down to $1685, but still above fair value based on where real interest rates are trading. With the CPI at 295.3 and 30-year real rates at 0.97%, I estimate fair value of gold at $1501/oz. Many people seem surprised that gold is performing poorly despite high inflation, but it is explained well by the rise in real interest rates. Hello MT, I always appreciate your posts. Can you please explain, perhaps in layman's terms, the logic behind your gold equation? Why multiply CPI by 7? Why have e^(-33*r)? Where does -33 come from? Best, Here is a good article from PIMCO discussing the relationship between gold and real yields: https://www.advisorperspectives.com/commentaries/2014/01/28/demystifying-gold-prices PIMCO says: Based on our...
by market timer
Thu Jul 21, 2022 3:51 am
Forum: Investing - Theory, News & General
Topic: Gold continues to soar!
Replies: 565
Views: 62712

Re: Gold continues to soar!

Gold is now down to $1685, but still above fair value based on where real interest rates are trading. With the CPI at 295.3 and 30-year real rates at 0.97%, I estimate fair value of gold at $1501/oz. Many people seem surprised that gold is performing poorly despite high inflation, but it is explained well by the rise in real interest rates.
by market timer
Mon Jul 18, 2022 9:31 am
Forum: Personal Finance (Not Investing)
Topic: Separate property and "fairness" in marriage
Replies: 129
Views: 13726

Re: Separate property and "fairness" in marriage

babadi wrote: Sun Jul 17, 2022 11:52 pmOur combined NW is about $1.6M. Most of it is considered separate property in our state (NY), due to being a combination of pre-marital and inherited funds.
IANAL, but one solution might be to intentionally commingle your retirement account by using funds from your joint account to make your annual contribution. Then it is no longer "yours."
by market timer
Sat Jul 16, 2022 10:20 pm
Forum: Personal Investments
Topic: LEAPS Question
Replies: 16
Views: 1800

Re: LEAPS Question

The theory and mechanics of using LEAPS to diversify across time is covered in Lifecycle Investing: https://www.amazon.com/Lifecycle-Invest ... B005X4I7ZI

If you search, you'll find many threads on this forum discussing the use of leverage to diversify across time. Before trading, you should be aware of the pros and cons of LEAPS vs. futures vs. leveraged ETFs vs. margin. You should also be able to calculate an implied interest rate for LEAPS to compare them vs. other financing methods.