Search found 4838 matches

by grayfox
Thu May 17, 2018 11:09 am
Forum: Investing - Theory, News & General
Topic: Challenge: guess the effect of rebalancing (by interval or bands) in 2008-2009
Replies: 35
Views: 3559

Re: Challenge: guess the effect of rebalancing (by interval or bands) in 2008-2009

OK, I will play.

1. a) None of the rebalancing regime helped. Not rebalancing gave the highest ending balance.
2 a) $230
3. b)

:idea: I like how investors with 20/20 hindsight would have chosen a rebalancing method that would come out ahead. I'm going to assume they are joking. :D Ya got me!
by grayfox
Wed May 16, 2018 9:21 pm
Forum: Investing - Help with Personal Investments
Topic: Friend says "Stock market will crash, invest in silver" - thoughts?
Replies: 127
Views: 7544

Re: Friend says "Stock market will crash, invest in silver" - thoughts?

according to this chart the price of silver seems to drop everytime there's a recession (and even when there isn't one, like the last several years). How exactly is silver going to help you then? https://s7.postimg.cc/oso518zzf/Capture.jpg source: http://www.macrotrends.net/1470/historical-silver-p...
by grayfox
Wed May 09, 2018 9:48 am
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5968

Re: How does stock buyback benefit investors?

Dividend is a simple arithmetic move and its effect on investors is neutral. An investor does not gain or lose by being paid dividend, before tax. The total return on investment is determined unambiguously and easily, i.e., money in the pocket and the appreciation of the share price. Share buyback ...
by grayfox
Wed May 09, 2018 9:45 am
Forum: Investing - Theory, News & General
Topic: How does stock buyback benefit investors?
Replies: 78
Views: 5968

Re: How does stock buyback benefit investors?

https://i.imgur.com/UN82SOM.jpg Source: Yardeni According to the chart, the divisor started at about 7450 in 1996 and ended at about 8450 in 2018. Overall, it did not decline, it went up over the period shown in the chart. So more new shares were issued than were bought back. Overall, the sharehold...
by grayfox
Mon May 07, 2018 4:38 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6126

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Data: Hedge -- (noun) a fence or boundary formed by closely growing bushes or shrubs; a contract entered into or asset held as a protection against possible financial loss; a word or phrase used to allow for additional possibilities or to avoid commitment, for example, etc., often, usually, or some...
by grayfox
Mon May 07, 2018 1:59 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6126

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

Data: Hedge -- (noun) a fence or boundary formed by closely growing bushes or shrubs; a contract entered into or asset held as a protection against possible financial loss; a word or phrase used to allow for additional possibilities or to avoid commitment, for example, etc., often, usually, or some...
by grayfox
Sun May 06, 2018 7:56 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6126

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

What I learned from one course is that there are two kinds of assets: 1. Pays a certain amount on a certain date 2. Does not pay certain amount on a certain date. 2 are risky assets, e.g. a share of stock. Example of 1 would be a zero-coupon U.S. Treasury. It pays exactly $1,000.000, to the mille, o...
by grayfox
Thu May 03, 2018 10:01 am
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

Can you explain what the column 3 is indicating? The heading is "actual withdrawal" but who are we talking here? Are this grayfox's actual withdrawals? Or some mythical "average" retiree's actual withdrawals? How does that column help anybody else? The context was Change in CPI-U as the spending mo...
by grayfox
Tue May 01, 2018 12:21 pm
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

I think the problem with the CPI-adjusted spending model is that it is static. Yes, if you went to the same number of movies every month at the same theater, bought the same amount of bananas every week at the same supermarket, drove the same miles every month in the same model automobile, took the ...
by grayfox
Tue May 01, 2018 10:16 am
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

Mostly spending and lifestyle choices. When you're retired you can be wherever you want and do whatever you want. Maybe someone living at a subsistence level who can afford only minimum shelter and food would have no choices. Their market basket would change little from one year to the next. The onl...
by grayfox
Tue May 01, 2018 9:26 am
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

:?: Is that a good spending model for someone retired starting in Jan 2001? Is the 2017 amount too low, too high or about right? Also was the change in spending for actual retirees similar to the change in CPIU? 1% to 4% per year? :?: If you have not guessed already I'm going to answer my own quest...
by grayfox
Mon Apr 30, 2018 3:41 pm
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

38% increase over 17 years is not bad at all. Our retirees have been lucky, they’ve been enjoying very low inflation rates and a great market performance. TravelforFun Right. Back in 2001, if I had to predict how much someone who spent 100 in 2001 would spend in 2017, I would have assumed 3% inflat...
by grayfox
Mon Apr 30, 2018 12:22 pm
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

If I am not mistaken, the spending model they are are using for retirees is to start with a withdrawal amount for the first year, and then adjust it for change in CPI-U every year after that. E.g. if you start with $100 for the first year and CPI-U changes by +3% over the next 12 months, then you sp...
by grayfox
Sun Apr 29, 2018 2:43 pm
Forum: Investing - Theory, News & General
Topic: Trinity Study updated to 2018
Replies: 156
Views: 15650

Re: Trinity Study updated to 2018

This is from January, but I searched and did not find a post on it: https://www.forbes.com/sites/wadepfau/2018/01/16/the-trinity-study-and-portfolio-success-rates-updated-to-2018/#6665ac7e6860 Wade Pfau updated the Trinity Study to include data thru 2017. He also includes failure rates up to 40 yea...
by grayfox
Sun Apr 29, 2018 1:57 pm
Forum: Investing - Theory, News & General
Topic: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?
Replies: 114
Views: 6126

Re: NAME for the MPT or CAPM-based diagram with the hyperbola and tangent line?

nisiprius wrote:
Sun Apr 29, 2018 6:00 am

But what do you call a diagram of this kind as a whole?
Google efficient frontier diagram and it shows a bunch of graphs like that. That's what Google thinks it is.
by grayfox
Sun Apr 29, 2018 1:38 pm
Forum: Investing - Help with Personal Investments
Topic: What happens when you speak in TICKER language.
Replies: 139
Views: 12372

Re: A Rant about Ticker Speak

I highlighted AGG, right-clicked and "search with Google" AGG = iShares Barclays Aggregate Bond Fund NYSEARCA: AGG 105.81 USD +0.14 (0.13%) :arrow: Total elapsed time < 500 milliseconds 8-) Which is also about how long it would take a poster to copy the fund name and put it in their original post i...
by grayfox
Sun Apr 29, 2018 1:27 pm
Forum: Investing - Theory, News & General
Topic: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017
Replies: 13
Views: 1550

Re: Chart: Skewed Distribution of S&P 500 Returns, 1997-2017

This topic has been discussed previously on the Forum, but I always find it fascinating. S&P recently published the chart below, showing the distribution of S&P 500 stocks' cumulative returns for the 20-year period from 1997-2017. Unlike in Lake Wobegon (where all children are above average), in th...
by grayfox
Thu Apr 26, 2018 11:10 am
Forum: Investing - Help with Personal Investments
Topic: What happens when you speak in TICKER language.
Replies: 139
Views: 12372

Re: A Rant about Ticker Speak

What is AGG? :happy What I suggest for those who have trouble with tickers is to just write down a few hundred of the most common tickers with names and investing target, alphabetize it and have it handy when you read forum posts. Also prepare a list for most common abbreviations. You'll post like ...
by grayfox
Sat Apr 21, 2018 9:37 am
Forum: Investing - Theory, News & General
Topic: Is it time to dump high yield savings for prime money market?
Replies: 128
Views: 19195

Re: Is it time to dump high yield savings for prime money market?

VMMXX is now up to 1.79%. It keeps edging up. We'll be at 2% in no time.
by grayfox
Sat Apr 21, 2018 9:33 am
Forum: Investing - Theory, News & General
Topic: CAPE mean reversion: country specific or to the global average?
Replies: 23
Views: 1796

Re: CAPE mean reversion: country specific or to the global average?

Number 1 says use it to predict nominal, not real, returns. But I only care about real returns. I'd rather have a mediocre quality prediction of real returns than a good quality prediction of nominal returns. In that case, we will have to somehow come up with an inflation forecast as well. Then adj...
by grayfox
Thu Apr 19, 2018 11:10 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Final conclusion: CPI, etc measure price level for some market basket. There are many market baskets.
12 month change is the change in price level of market basket.

:arrow: Change in price level is not the same as the inflation rate.
by grayfox
Thu Apr 19, 2018 10:33 am
Forum: Personal Consumer Issues
Topic: Total Cost of Car Ownership over 10 years
Replies: 40
Views: 3438

Re: Total Cost of Car Ownership over 10 years

In 1998, I bought brand new 1998 Jeep Cherokee for $20,000 + tax and fees. Paid cash. Drove it until 2008. Had 180,120 miles on odometer. In 2008, Carmax bought it for $1500 cash. I kept track of all car expenses: gasoline, insurance, licensing and registration, maintenance, repair, parking, tickets...
by grayfox
Wed Apr 18, 2018 1:31 pm
Forum: Personal Consumer Issues
Topic: Perks of Owning Certain Individual Stocks
Replies: 28
Views: 3316

Re: Perks of Owning Certain Individual Stocks

I went to my first shareholders meeting when I was about 13 or 14. I didn't own any shares, but my friend did and I went with him. The company was a real-estate developer/builder. They built skyscrapers, etc. When we got there, there was only a half dozen executives in a conference room and they wer...
by grayfox
Wed Apr 18, 2018 11:19 am
Forum: Investing - Theory, News & General
Topic: CAPE mean reversion: country specific or to the global average?
Replies: 23
Views: 1796

Re: CAPE mean reversion: country specific or to the global average?

From "Uncloaking Campbell and Shiller’s CAPE: A Comprehensive Guide to its Construction and Use". I looked up that paper . Thanks. I did not realize that how complex is the subject of CAPE. I've never seen equations 1, 2, 3, 4, 5, 6, 7 before. I always thought expected return was just 1/CAPE, but t...
by grayfox
Tue Apr 17, 2018 2:02 pm
Forum: Investing - Theory, News & General
Topic: Then and Now: 1980 vs 2018
Replies: 12
Views: 1731

Re: Then and Now: 1980 vs 2018

Back in 1980, an average working stiff just 2-1/2 years out of school could buy a house for 2x his annual salary. This was not the exception, but the rule. Everyone I worked with did the same. Two or three years out of school, people were buying their first house. Even with interest rates of 12-3/8%...
by grayfox
Tue Apr 17, 2018 1:36 pm
Forum: Investing - Theory, News & General
Topic: Then and Now: 1980 vs 2018
Replies: 12
Views: 1731

Re: Then and Now: 1980 vs 2018

Where are the housing prices from? Location can skew the data greatly. It seems 'off' to me to say that a median 'rural' house is $318k. $200-250k seems more accurate to me, but maybe my numbers are off. I also question the truck pricing. The 1980 truck is bare bones, no options. A 2018 F150 is far...
by grayfox
Tue Apr 17, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: Then and Now: 1980 vs 2018
Replies: 12
Views: 1731

Then and Now: 1980 vs 2018

Comparing 2018 wages and prices with 1980. This is just anecdotal information, but it was similar for many back then. Man graduated from university in 1977. In 1980, he made $23,000 per year. In January 1980, he bought a house for 47,500, 2x annual income. 25% down payment. Mortgage interest rate wa...
by grayfox
Mon Apr 16, 2018 9:17 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

There sure are a lot of measures of inflation. Two more: 1. Trimmed Mean PCE Inflation Rate from Federal Reserve Bank of Dallas 12-month PCE Inflation = 1.8% for Feb-2018 (CPI-U showed 2.2%) 2. Personal Consumption Expenditures excluding Food and Energy (chain-type price index) Personal consumption ...
by grayfox
Mon Apr 16, 2018 6:36 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

delamer wrote:
Mon Apr 16, 2018 6:20 pm

That is exactly what the CPI measures — changes in prices. The CPI is not a “level.” It is an index that, by definition, measures the rate of change between two time periods.
Do you recall Distance = Rate x Time problems?

CPI-U Index is the Distance and Inflation is the Rate.
by grayfox
Mon Apr 16, 2018 6:31 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

I don’t understand what you are trying to say here:”Sure you can sample prices and get the current prices. But prices are changing all the time.” The example I gave. The supermarket changes the price of strawberries every Wednesday. If you sample the price on Tuesday at 9PM, $2.50 On Wednesday morn...
by grayfox
Mon Apr 16, 2018 6:15 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Just to clarify, I am asking how accurate or precise we know the rate of change in CPI-U. e.g. 21jul2010, BLS reported 12-month change +1.05%. How close is that to true inflation? At the same time BPP reported +2.83%, +1.78% higher than BLS. What do I conclude? That the uncertainty for 12-month chan...
by grayfox
Mon Apr 16, 2018 5:38 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

If you disagree with the BLS's weightings, data, or methodology, all that's fine and it's published. If you live, for example, in Juneau AK, the price of wild-caught Pacific salmon might be, I'm making up unrealistic examples, $1.00 per pound. If in Atlanta GA it costs $2.00 per pound, what are con...
by grayfox
Mon Apr 16, 2018 5:33 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Phineas J. Whoopee wrote:
Mon Apr 16, 2018 5:32 pm

The Bureau of Labor Statistics publishes its weightings, its data, and its methodology. Anybody who wants to can read, calculate, and criticize them.

What do you expect CPI to measure?

PJW
Consumer Prices. Your response seems like a non-sequitor.
by grayfox
Mon Apr 16, 2018 4:57 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

I think that measuring inflation is not so simple. You have prices and CPI-U which are levels. We want to know inflation which is a rate of change over time. It means taking differences, a.k.a derivatives, which are noisy. Sure you can sample prices and get the current prices. But prices are changin...
by grayfox
Mon Apr 16, 2018 4:23 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Which of the different inflation rates you mention would you use for i to calculate the real return RR? Should everyone use the same i or a different i? Your personal inflation rate is the only one that matters for your personal income and expenditures. Imagine your only expenditure is food and you...
by grayfox
Mon Apr 16, 2018 1:05 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Money has no intrinsic value, it is worth what you can trade it for. When people put inflation in the context of the changing value of money, they are really talking about the average change in monetary value of the goods and services that you could buy with your money. There are different inflatio...
by grayfox
Mon Apr 16, 2018 11:51 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

How accurately can we define "inflation"? On the Origin and Evolution of the Word Inflation Ron Wow! That opens up a can of worms! I think that the ideas in that article can explain why all these price indexes show different values for inflation. It's because they are just showing the price changes...
by grayfox
Mon Apr 16, 2018 11:07 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

adam1712 wrote: "We all spend dollars so we all have the same inflation rate." Bravo! I am going to take that as an axiom: Axiom 1. For any currency, e.g. dollars, Euros, there is only one inflation rate. All the differences have to do with a one's habits, spending choices, timing of purchases, loca...
by grayfox
Mon Apr 16, 2018 9:45 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

I'm of the opinion we all spend dollars so we all have the same inflation rate. Where you choose to live and what you choose to spend your money on are spending choices. But this all comes down to semantics. I would propose your year to year change in spending depends on three factors: Change in an...
by grayfox
Mon Apr 16, 2018 9:38 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

https://i.imgur.com/UlLErLs.jpg Source: FRED That FRED graph looks wrong. Click through for the original chart and data. It shows CPI-U Change from year ago was 5.745% in March 2018. ?!? BLS reports showed only 2.4%. Did FRED made an error? Somebody explain how they are showing 5.745% change from y...
by grayfox
Mon Apr 16, 2018 9:14 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

However, calculating one's personal rate of inflation is not so easy, as I have come to discover. Alas, I am probably overthinking it. :oops: It is not easy. I have accurate records of my spending for every year. I save all my receipts and enter everything into gnucash and libreoffice. I know how m...
by grayfox
Mon Apr 16, 2018 2:45 am
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

BHs are often interested in "Real" returns. Take the nominal return and adjust for inflation. OK, which measure of inflation? It's always the 12-month change in CPI-U. Is that really the best choice to adjust for inflation? Everyone using the exact same inflation adjustment? Based on some made-up ba...
by grayfox
Sun Apr 15, 2018 6:26 pm
Forum: Investing - Theory, News & General
Topic: We crush stock indexes, Yale claims
Replies: 98
Views: 11625

Re: We crush stock indexes, Yale claims

Much of Yale's holdings are in illiquid assets that rarely trade. The valuation must involve a good deal of estimation. I wonder how reliable their reported returns and performance actually are. That's what I've been saying for years. If there is no market price, then you use a model price. With th...
by grayfox
Sun Apr 15, 2018 5:47 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Here is another inflation measure The Billion Prices Project Looking at the bottom chart, US Online Annual Inflation Rate. Some of the biggest differences I see Date.............Pricestats (blue) ...... BLS (red) ..... Pricestats-BLS 21jul2010....... 2.83 ................ 1.05 ................ +1.78...
by grayfox
Sun Apr 15, 2018 4:59 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

A big issue is how to measure changes in quality. Compare a car from the 1970s to one today. Today's car is more expensive. Part of that is from inflation. Part of that is that today's car are larger, safer, more fuel-efficient, have more features (like GPS), are more durable, etc. From year to yea...
by grayfox
Sun Apr 15, 2018 4:51 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

More inflation measures from BLS: CPI-W. This used to annually adjust social security benefits. CPI-Urban Wage Earners and Clerical Workers (Current Series) U.S. All Items +2.433% Northeast Region +2.043% Midwest Region +1.947% South Region +2.328% West Region +3.336% NY +1.874% DC +1.834% CHI +1.69...
by grayfox
Sun Apr 15, 2018 4:21 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Consumer Price Index Frequently Asked Questions (FAQs) 14. Is the CPI the best measure of inflation? Various indexes have been devised to measure different aspects of inflation. Inflation has been defined as a process of continuously rising prices or, equivalently, of a continuously falling value of...
by grayfox
Sun Apr 15, 2018 3:21 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

OK, I see below Table 7. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category, March 2018, 12-month analysis table Footnote 2 A statistic’s margin of error is often expressed as its point estimate plus or minus two standard errors. For example, if a CPI ca...
by grayfox
Sun Apr 15, 2018 2:49 pm
Forum: Investing - Theory, News & General
Topic: How accurately can we measure INFLATION?
Replies: 89
Views: 4012

Re: How accurately can we measure INFLATION?

Since this is the BHs board, we can neither add not subtract the politics. What I recall from math class, when a number is given to 1 decimal place, without any error bars, that implies some precision. 2.4 would imply that the number lies in the range 2.35 to 2.45. No? My question is: How accurately...