Search found 18 matches

by richrf
Tue Sep 11, 2007 7:31 pm
Forum: Personal Investments
Topic: Lump sum or dollar cost averaging right now??
Replies: 52
Views: 16097

epilnk wrote: But don't worry about what is best - nobody knows, so whatever you'll stick with is probably the right choice.

Linda
I agree. I think any investor should always ask themselves one questions: "What's the rush"? If they can answer that question, then by all means lump sum. But since no one knows what is going to happen tomorrow, then "what's the rush"? The Tortoise and the Rabbit is fable that exists in all cultures and for good reason.

Rich
by richrf
Tue Sep 11, 2007 9:58 am
Forum: Investing - Theory, News & General
Topic: [poll] Will the Fed Cut Interest Rates and Should they?
Replies: 12
Views: 2678

One could argue that having rates excessively high to begin with while having little in the way of inflation to fret over isn't a great precedent either. Not only is the current wealth-destroying bursting real estate bubble counterinflationary, so are high oil costs. IMHO. 25 basis point cut, and they should. One could also argue that rates were excessively low. So low, that it encouraged the creation of hundreds of billions of dollars worth of housing that no one wants. As a result, homeowners are now witnessing a deflation of their hard assets while at the same time they are laden with historical highs in debt. This not only includes individuals but also corporations who have been leveraged to the hilt - many selling bonds in order to bu...
by richrf
Mon Sep 10, 2007 7:13 pm
Forum: Investing - Theory, News & General
Topic: [poll] Will the Fed Cut Interest Rates and Should they?
Replies: 12
Views: 2678

A really tough call. The Libor rates, which are often used for mortgages, have shot up. Probably because of inflation concerns, should the Fed start printing money again in abundance (there is plenty sloshing around the world as it is). The Yen carry trade is also in danger as the dollar falls. The possibility of further weakness will threaten this fragile environment. There is nothing that the Feds can do the help the mortgage climate. Congress can begin bailing out people, but that would also create inflation fears, since the already dismal budget deficit will only get worse. So in other words, the recession is baked into a contorted economy, and there is nothing anyone can do about it. So, my guess is that the Feds will cut one-quarter s...
by richrf
Mon Sep 10, 2007 10:45 am
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

For lots of reasons I don't think the US is anywhere near that bad (but I wouldn't, would I?): - PE ratios of stocks are a fraction of the Japanese 1990 level - US companies (ex financials, which are nearly 30% of the market) don't make their money purely by financial speculation (I hope) which Japanese companies were doing - there isn't the absence of transparency in the US economy and corporates that there was in Japan - US commercial property is not anything as inflated as US residential nor as was Japan (when the land under the Imperial Palace was valued at the same value as all the real estate in California) - US economy is disparate, there are places (Texas) where houses never looked overvalued - Fed will be much quicker than the Ban...
by richrf
Mon Sep 10, 2007 10:28 am
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

No they are going to be hounded into personal bankruptcy despite it being more difficult and painful post the 2005 Bankruptcy Act. The debt is not just cancelled, if it exceeds the value of the house (which it will do, as forced sales of housing contribute to a downward pricing spiral). And it will accumulate unpaid interest. Note I believe the situation is different in Colorado and a few other states, which had precisely this position in the Great Depression, and therefore passed 'walk away' laws. If you give the bank your keys, then AFAIK the debt is cancelled. Whilst these people are going through this, they will be consuming less and contributing less to the US economy (not to mention the additional health and stress costs, diminished ...
by richrf
Mon Sep 10, 2007 10:18 am
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

Valuethinker wrote:
Hardly merely a social concern. Anyone here heard of the Great Depression?

Lots of homeless people will:

1. sharply raise local tax burdens due to higher law enforcement and other costs. Homeless families are expensive, ask any school district.

2. depress economic activity generally, and most importantly perhaps economic sentiment, reducing business investment and personal consumption.
Yes, it can be pretty bad. Gold's breakout along with the weakening dollar are rather foreboding. I have been studying past historic scenarios where asset inflated economies went bust, and the closest I have come to is Japan. Seems very similar, but I am not sure. If anyone has further insight, I would welcome it.

Rich
by richrf
Mon Sep 10, 2007 9:16 am
Forum: Personal Investments
Topic: Lump sum or dollar cost averaging right now??
Replies: 52
Views: 16097

Since it is impossible for someone to say that they can tolerated X% risk until they have actually been through it, I believe it is best to test the waters slowly. If someone is really in the market for the long term, the short term doesn't really matter.
by richrf
Sun Sep 09, 2007 10:28 pm
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

Rich, PULEESE, "Landlords are unlikely to rent to someone with no savings, NO INCOME , or no credit. That type of lending belongs to institutions like Countrywide." I sincerely doubt that Countrywide, or anybody else, ever lent a DIME to anybody with NO INCOME. Your bleeding heart is beginning to discolor the floor that someone worked pretty hard to keep clean. Shame on you. Chris Tough to say, since they didn't check. Anyone could borrow as long as they passed the breath test. Heck, they could borrow even more than what they wanted to borrow. You know, to pay for the new car. No problem. Countrywide wasn't going to carry the loan. Some poor person overseas, who actually thought that S&P ratings were worth something, was caug...
by richrf
Sun Sep 09, 2007 10:24 pm
Forum: Personal Investments
Topic: Lump sum or dollar cost averaging right now??
Replies: 52
Views: 16097

I'm in a similar situation. I will probably average in over time, for a couple of reasons:

1) It gives me a chance to learn more about myself and how I react to the market.

2) I don't see any reason to rush to do it faster. I like giving myself wiggle-room. If I am thinking long term, 360 days from now is as good as today, since everything is unpredictable.

The only ones who would surely gain by me investing today are the fund managers who make management fees no matter when I invest.

Rich
by richrf
Sun Sep 09, 2007 9:22 pm
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

Hey, Rich, Those who lose their houses ain't gonna be out on the streets homeless, they are just going to have to live in rental housing like I did for the first 38 years of my life. And if they had a zero down mortgage, they should be thanking their lucky stars for their fortune. Chris This would be a soft landing. But there are many (how many it is tough to say), who basically have no money (no money down!) and certainly not enough income to give a landlord the warm fuzzies. Unlike the mortgage companies, landlords are unlikely to rent to someone with no savings, no income, no credit. That type of lending belongs to institutions like Countrywide and Citibank, since they didn't care who they lent the money to. Someone in Asia was going to...
by richrf
Sun Sep 09, 2007 8:27 pm
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

bobcat2 wrote:Trust me on this Rich. If you don't make your mortgage payments someone will contact you, and it won't be some shop owner in some northern suburb of Shanghai. 8)

Bob K
Yes, there are companies that are servicing the loans, and they will try to collect. To what extent they can actually renegotiate the loans, I am not sure. My guess is there are already rigorous steps to follow, to protect the holder of the mortgage, and those steps are probably 1) foreclose, 2) sell. But who knows what the documents really say.

Rich
by richrf
Sun Sep 09, 2007 8:06 pm
Forum: Investing - Theory, News & General
Topic: VG to reopen Healthcare, PM & Mining, PrimeCap, Explorer
Replies: 26
Views: 8117

You will not find nicer reps on the phone than with Schwab, that's for sure. If you are willing to pay 12.95 per month to buy the VIPERs, it's not a bad idea. For higher net worth investors who don't make the cut for institutional shares, the .02 difference in ER between .09% admiral and .07% VIPERs is actually worth it despite paying 12.95 a month to dollar cost average their paychecks into it. Actually, I know someone who is doing just that and they are very happy with it. Thanks for the analysis. I have actually found Schwab quite helpful and much more flexible than Vanguard. A few more good comments like this about Schwab and I will probably move my assets over to them. I just feel more comfortable putting $2MM with a company that can ...
by richrf
Sun Sep 09, 2007 8:03 pm
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

Re: TFB

bobcat2 wrote:It seems to me that the lender has an option in this situation. The lender can foreclose the mortgage and take-on all the equity risk. Or, the lender can do a workout with the borrower and renegotiate a lower interest rate in exchange for a shared appreciation mortgage and take-on some of the equity risk.

Bob K
Two problems:

1) The owner of the mortgage is no where to be found. Maybe some shop owner in some northern suburb of Shanghai. So who is going to negotiate with whom?

2) There is a political and moral problem with putting tens of thousands of families out of there homes into the streets. It is politically impossible - unless they are all in the lower economic tier, such as the poor people in New Orleans.

Rich
by richrf
Sun Sep 09, 2007 12:18 pm
Forum: Investing - Theory, News & General
Topic: Tune in at 11am to hear Bush's Homeowner Bail-out Plan
Replies: 71
Views: 20112

Re: A Potential Cure for Sympathetic Bias by Credit Agencies

I am less concerned about institutional investors (who are playing in an adults-only game: if they can't see the conflicts of interest inherent in the ratings agencies, then what are they doing as investors?) than I am about the problems of 'work out' for overleveraged homeowners. We now have homeowners, dealing with mortgage service companies, who can't even get to the underlying owners of their mortgages to do a deal/ reschedule. The system could be completely paralysed. These people are going to be out on the streets, literally, if there is not some form of industry-wide rationalisation. The way I look at it is this: If the mortgage companies knew that they could not off-load the over-leveraged loans, they would never have made them in ...
by richrf
Sun Sep 09, 2007 11:44 am
Forum: Investing - Theory, News & General
Topic: VG to reopen Healthcare, PM & Mining, PrimeCap, Explorer
Replies: 26
Views: 8117

So lets get a little closer to Diehards hearts: would folks move other assets to VG to get Flagship status if they made INTL Explorer available to Flagship customers? :twisted: Paul PS Bwahahaha :lol: I do not think this would affect my decision, whether or not to stay with Vanguard. This thread very nicely highlights the Vanguard business model, and in doing so suggests why Vanguard is really not very well tuned to the needs of a smaller investor who has less than $1 million in Vanguard investment vehicles. In my own experiences, there are times when I need somone to talk to and do something that requires immediate attention. I always received this attention from my local bank and it saved me lots of aggravation, time, and money. Vanguard...
by richrf
Sat Sep 08, 2007 1:52 am
Forum: Investing - Theory, News & General
Topic: VG to reopen Healthcare, PM & Mining, PrimeCap, Explorer
Replies: 26
Views: 8117

orchidmil wrote:
I sometimes feel that Vanguard has moved away from smaller old customers like me with less than half a million dollars.

Orchidmil
Don't feel bad. I have over a million at Vanguard and the service is still pretty much non-existent. The only reason I am still at Vanguard is because the service is even worse at their competitors. Service is just not considered an important component of any business nowadays.

Rich
by richrf
Mon Aug 27, 2007 11:40 pm
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1370
Views: 824277

MDIndexer wrote:
richrf wrote:Hi all,

This is my first post.

Can someone briefly explain to me the differences in how Nominal and Real Growth are calculated in this spreadsheet model? Appreciate it.

Rich
Nominal would be the value of your Asset Allocation at the time specified in the spreadsheet.

Real Value specifies the value of the dollar amount in today’s time (accounting for inflation).
Hi,

Thanks for the reply. This is what I thought, but it seems that when I compare a test portfolio with the Coffeehouse portfolio, that there is barely a difference between the Coffeehouse nominal and real returns while there is a significant one with the tested portfolio? Am I misreading something? Thanks again for the help.

Rich
by richrf
Mon Aug 27, 2007 7:37 pm
Forum: Investing - Theory, News & General
Topic: Simba's backtesting spreadsheet [a Bogleheads community project]
Replies: 1370
Views: 824277

Hi all,

This is my first post.

Can someone briefly explain to me the differences in how Nominal and Real Growth are calculated in this spreadsheet model? Appreciate it.

Rich