Search found 842 matches

by jdilla1107
Fri Mar 20, 2020 2:17 pm
Forum: Investing - Theory, News & General
Topic: Why are Utilities Dropping So Fast?
Replies: 35
Views: 6373

Re: Why are Utilities Dropping So Fast?

A slow down in the economy would mean less demand for power/energy.
by jdilla1107
Fri Mar 20, 2020 2:00 pm
Forum: Personal Finance (Not Investing)
Topic: H&R Block 1401K Error or did I over contribute
Replies: 6
Views: 971

Re: H&R Block 1401K Error or did I over contribute

I saw this at one point too. However, the program let me enter 19,000. Then after an update a few weeks ago, the number was corrected in the text to 19,000. So, i believe the error was only limited to what was written in the instructions. (It's also currently fixed in my version, I belive)
by jdilla1107
Fri Mar 20, 2020 12:39 pm
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

Curious if others— who buy savings bonds— have reconsidered between ee and i-bonds lately. The case between them is so different that I think it's hard to compare them objectively. Why not do some of both for diversification? I started buying EE bonds 10 years ago when "everyone knew that interest rates were going up soon". I am somewhat glad that EE bonds have a purchase limit as it has stopped me from really backing up the truck. The key with EE bonds is that you have to make sure you will never be forced into cashing them early. So, they can't be used for rebalanacing or anything else. This means you should likely keep them at around 10% or less of bond allocation. (I have gone to 20% because they have been so fantastic the la...
by jdilla1107
Thu Mar 19, 2020 12:50 pm
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

If high inflation presents itself in the first 5-7 years, long term bonds will be crushed. For EE bonds you would just cash them in early, resulting in an opportunity cost loss of like 1% a year. (A small real loss and no nominal loss) My opportunity cost would be more like 6%, as I'd buy BAC-L/WFC-L rather than VUSUX today. Comparing stocks (preferred or otherwise) and bonds doesn't make any sense to me. The decision for EE bonds comes after you have decided to hold a portion of your allocation in long term treasuries. That is what they most resemble from a risk and duration perspective. From a risk (TBTF) and duration (non-callable) perspective, BAC/WFC-L resemble long-term treasuries. Disagree completely about the risk. TBTF doesn't mea...
by jdilla1107
Thu Mar 19, 2020 11:49 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

james22 wrote: Thu Mar 19, 2020 11:40 am
jdilla1107 wrote: Thu Mar 19, 2020 11:24 amIf high inflation presents itself in the first 5-7 years, long term bonds will be crushed. For EE bonds you would just cash them in early, resulting in an opportunity cost loss of like 1% a year. (A small real loss and no nominal loss)
My opportunity cost would be more like 6%, as I'd buy BAC-L/WFC-L rather than VUSUX today.
Comparing stocks (preferred or otherwise) and bonds doesn't make any sense to me. The decision for EE bonds comes after you have decided to hold a portion of your allocation in long term treasuries. That is what they most resemble from a risk and duration perspective.

Why would you hold BAC-L when you could hold a equity that pays dividends of 25% a year? (MRCC) You are paying a steep opportunity cost there!
by jdilla1107
Thu Mar 19, 2020 11:34 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

james22 wrote: Thu Mar 19, 2020 11:31 am Other legitimate issues: maximum purchase ($10K doesn't move the needle), timing maturity (do I need/want the income then?).
bligh wrote: Thu Mar 19, 2020 10:42 am... it is extremely hard to beat EE Bonds, provided you can be sure you do not need to touch those funds for that duration.
How can anyone be sure of that? I don't want to make a twenty-year bet, period.
Do you hold Total Bond Market? If so, you have already made the 20 year bet as 20% of the holdings are long term bonds. There are some 25+ year bonds in there!!

People that hold EE bonds think of it a portion of their fixed income. No one is advocating 100% ee bonds.
by jdilla1107
Thu Mar 19, 2020 11:31 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

protagonist wrote: Thu Mar 19, 2020 11:26 am You are not alone. I don't understand the case for EE bonds either. (Or their popularity in this forum).
If you do not like long term treasuries, then you would not like EE bonds. If you do like long term treasuries, then EE bonds are better in (almost) every way. (except liquidity)

Note that if you hold Total Bond Market then you are holding about 20% long bonds.

I don't need liquidity on the EE portion of my bonds, so I like the superiority of return, tax treatment, and the very valuable put option.
by jdilla1107
Thu Mar 19, 2020 11:24 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

They assume significant inflation risk that cannot be waved away because of today's estimate of inflation. Try to come up with an example that would result in large real losses with EE bonds. Since you can cash them in at any time for their face value, you always have the option of exiting early. - If high inflation presents itself in the first 5-7 years, long term bonds will be crushed. For EE bonds you would just cash them in early, resulting in an opportunity cost loss of like 1% a year. (A small real loss and no nominal loss) - If you make it to year 15 without high inflation, then you have very likely won the game. Inflation would need to be like over 20% each year to result in a real loss. You are now holding a 5 year bond which is n...
by jdilla1107
Thu Mar 19, 2020 9:41 am
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

The myth - for clarification of this discussion - is that paper losses are not also REAL losses. I have no idea what a real loss means. We are now just making up words to try and twist around some idea. I propose that there is no one on this thread who thinks that a decrease in market valuation means that "no change whatsoever has occurred". It's not whether people saying 'it's only a paper loss' think 'no change whatsoever has occurred'. The issue is whether there's any difference *at all*, *at this moment* in how much money you've lost on your stocks whether you decide at the next moment to sell them or not. There is *no* such difference, zero validity to the modifier 'only' in front of 'paper loss', which is what the thread is...
by jdilla1107
Thu Mar 19, 2020 8:53 am
Forum: Investing - Theory, News & General
Topic: I don't understand the case for EE bonds
Replies: 621
Views: 73696

Re: I don't understand the case for EE bonds

I have been maxing my EE bond purchases for the last 10 years and advocating for them along the way. I wrote down that I should stop buying them 2 years ago, but haven't been able to stop due to how attractive they now look.

- Much higher yield than a 20 year treasury (3.53% vs 1.60%)
- Free put option if interest rates spike. (This greatly reduces risk from interest rate increases compared to a 20 year treasury.)
- Tax deferred (allows me to shift income from high working years to lower retirement years)
by jdilla1107
Wed Mar 18, 2020 4:12 pm
Forum: Investing - Theory, News & General
Topic: End of corporate stock buybacks??
Replies: 75
Views: 5614

Re: End of corporate stock buybacks??

Huh? I don't see the logic here. How are stock buybacks bad? How are they particularly favorable to execs, at the expense of others? How are buybacks different in these regards than, say, dividends? It’s all about appearances and public perception. Dividends - good. Buybacks - bad. Perception. I agree, not reality. Take a look at the article I linked above. Buybacks are a great way for insiders (execs/director of a board) to juice their compensation if it depends on the earnings per share going up. It’s self-dealing, a conflict of interest in that scenario. Dividends are not the same as buybacks. Isn't this a problem with the compensation structure? It could just as easily be tied to shareholder return as opposed to "stock price".
by jdilla1107
Wed Mar 18, 2020 11:31 am
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

By my way of thinking, the very use of the phrase ' only a paper loss' implies that it is less real than a realized loss. "Real" isn't a helpful word to use. A paper loss is better than a realized loss for the following reasons: - The holder of a paper loss has not been forced into liquidation resulting in a realized loss. - No taxable event has occurred So, if someone says "it's only a paper loss", that's another way to say "Good news. I have enough liquid resources such that I am not forced into realizing my loss. I can cover my monetary needs in other ways. In addition, I am not an emotional wreck and my conscience has not forced me into taking a loss for emotional reasons". Let's say that someone was 100% ...
by jdilla1107
Wed Mar 18, 2020 11:23 am
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

azanon wrote: Wed Mar 18, 2020 9:55 am
The myth - for clarification of this discussion - is that paper losses are not also REAL losses.
I have no idea what a real loss means. We are now just making up words to try and twist around some idea.

I propose that there is no one on this thread who thinks that a decrease in market valuation means that "no change whatsoever has occurred".
by jdilla1107
Wed Mar 18, 2020 11:18 am
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

For all the posters who enjoy trying to twist the definitions of words: Does inflation result in a loss of money? (Please don't actually answer this question, I intend it to be illustrative.)

The problem with this entire discussion is that the precise words matter. For example, the reason that the term "paper loss" exists is for a balance sheet.

Day 1 Balance Sheet:
$500
100 shares of Company A stock

Day 2 Balance Sheet:
$500
100 shares of Company A stock

Both of these are correct statements:

- There has been no change to the balance sheet
- The mark-to-market valuation of the balance sheet has decreased by 5%
by jdilla1107
Tue Mar 17, 2020 9:28 pm
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

Years ago I inherited a file folder full of stock certificates. They were worthless when I inherited them and they are worthless now. Though nothing was ever sold or realized, the losses are real. Period. Excellent example. I've used one very similar myself in trying to dispel the myth of 'paper losses'. Please look up the definition of paper loss. It does not mean what you think it means. The discussion of this thread is literally BY DEFINITION a paper loss. Paper Loss: A loss on an investment that has not yet been realized. That is, a paper loss occurs when the current price of a security which is still owned by the holder is lower than the price the holder paid for it. The above example, is one of bankruptcy, which involves realizing th...
by jdilla1107
Tue Mar 17, 2020 7:27 pm
Forum: Investing - Theory, News & General
Topic: BIV fell 2.4% today. Why?
Replies: 9
Views: 1201

Re: BIV fell 2.4% today. Why?

It's an ETF. When the going gets rough, ETF prices get flaky. This happens whenever there are sharp moves in the market and is one reason why I am willing to pay a few basis points more to be in a mutual fund. This is not the reason at all. Intermediate bonds were just down today. Also, mutual funds have also have a liquidity issue; it's just hidden from you. If enough people sell the mutual fund, the fund needs to sell securities into a possibly illiquid market, affecting all share holders. With an ETF, only the seller of the ETF is affected. Sorry, but you are wrong here. The spread on ETFs can get very out of synch with the price of the underlying securities when the underlying securities are not illiquid, just because there are not as ...
by jdilla1107
Tue Mar 17, 2020 4:25 pm
Forum: Investing - Theory, News & General
Topic: BIV fell 2.4% today. Why?
Replies: 9
Views: 1201

Re: BIV fell 2.4% today. Why?

Scooter57 wrote: Tue Mar 17, 2020 3:22 pm It's an ETF. When the going gets rough, ETF prices get flaky. This happens whenever there are sharp moves in the market and is one reason why I am willing to pay a few basis points more to be in a mutual fund.
This is not the reason at all. Intermediate bonds were just down today.

Also, mutual funds have also have a liquidity issue; it's just hidden from you. If enough people sell the mutual fund, the fund needs to sell securities into a possibly illiquid market, affecting all share holders. With an ETF, only the seller of the ETF is affected.
by jdilla1107
Mon Mar 16, 2020 11:12 pm
Forum: Investing - Theory, News & General
Topic: Why do people say "its only on paper, its not a real loss"
Replies: 142
Views: 9815

Re: Why do people say "its only on paper, its not a real loss"

Even if you're 100% certain you will recover your losses, you have technically lost money. Technically, you have not lost money. No money has left the account. It's more correct to say that the market valuation has decreased. I've grown to the point where I don't care what the daily market valuation is. It's irrelevant to me because I hold stocks for the long term earnings growth. If someone knocks on your door and offers you a weak price for your house, have you lost money? But, what if you had to liquidate your house RIGHT NOW!? Then you have lost money is your argument. We have probably all lost 30%+ on our houses this week with this methodology. I say "who cares, I'm not selling my house this week." The emotional attachment t...
by jdilla1107
Mon Mar 16, 2020 10:19 am
Forum: Investing - Theory, News & General
Topic: Why all these timing threads?
Replies: 67
Views: 4286

Re: Why all these timing threads?

They didn't have a plan they believed in. Now they run around full of emotion convincing themselves they can see the future.

I invest in equities for the gains than come from 30-40 years of earnings growth. This is a blip to shake out the weak ones. If it goes to 50%, it will shake out more weak ones.

Stay the course.
by jdilla1107
Mon Mar 16, 2020 9:56 am
Forum: Investing - Theory, News & General
Topic: Funny- the difference of 30 days
Replies: 6
Views: 1210

Re: Funny- the difference of 30 days

DonIce wrote: Mon Mar 16, 2020 9:52 am I am somewhat surprised by the reactions on these forums. So many posters that are usually all about "stay the course" seem to have gone from placid to panic in just a few days. We haven't even hit a 30% drop from the all time high of the S&P500 yet.
It's different posters. The stay-the-course people show up every once in awhile and then go back to their lives. The chicken little types post all day long on updates to the emotional roller coaster they have put themselves on. It looks exhausting.
by jdilla1107
Sun Mar 15, 2020 4:49 pm
Forum: Personal Investments
Topic: Buying the dip: What will you (have you) pick(ed) up?
Replies: 32
Views: 2911

Re: Buying the dip: What will you (have you) pick(ed) up?

You should do whatever your plan said to do 6 months ago. Successful investing is not emotional or spontaneous.
by jdilla1107
Sun Mar 15, 2020 4:37 pm
Forum: Investing - Theory, News & General
Topic: Deploying your emergency fund to buy stocks? Think again.
Replies: 187
Views: 33736

Re: Deploying your emergency fund to buy stocks? Think again.

Completely agree with the title. However, what is the advice for people who may have a pile of cash this is intended for emergencies but they refuse to call it an emergency fund? Can they invest that now? Semantics but the most senior person on here just stated in another thread that he doesn’t have a separate emergency fund but first line of defense was a checking account (which very well may be more money than I have in my EF). I’m 49 with a 10 year emergency fund, and only 14% of net worth in stocks. I’d like to at least do something with it. This does not match the generally accepted definition of an emergency fund, defined here: https://www.bogleheads.org/wiki/Emergency_fund You just have a lot of cash. I could say I'm 70/30 stocks/bo...
by jdilla1107
Sun Mar 15, 2020 4:36 pm
Forum: Investing - Theory, News & General
Topic: Fed Slashes Rates to Fight Coronavirus Slowdown WSJ 3/15/20
Replies: 396
Views: 25934

Re: Federal Reserve just cuts rates to zero. Do you think the worst is over?

KlangFool wrote: Sun Mar 15, 2020 4:20 pm Folks,

If the interest rate goes down to negative, does that mean we have deflation? If that is true, won't CASH be earning a good return?

KlangFool
Deflation really has nothing to do with interest rates. Deflation means that prices in the economy and demand for products are decreasing.

You can have negative interest rates with inflation. To an investor, these are pretty similar if you set aside the money illusion.

Interest Rates at: 2%
Inflation at: 4%

and

Interest Rates at: -1%
Inflation at: 1%
by jdilla1107
Sun Mar 15, 2020 3:03 pm
Forum: Investing - Theory, News & General
Topic: Deploying your emergency fund to buy stocks? Think again.
Replies: 187
Views: 33736

Re: Deploying your emergency fund to buy stocks? Think again.

Completely agree with the title. However, what is the advice for people who may have a pile of cash this is intended for emergencies but they refuse to call it an emergency fund? Can they invest that now? Semantics but the most senior person on here just stated in another thread that he doesn’t have a separate emergency fund but first line of defense was a checking account (which very well may be more money than I have in my EF). I’m 49 with a 10 year emergency fund, and only 14% of net worth in stocks. I’d like to at least do something with it. This does not match the generally accepted definition of an emergency fund, defined here: https://www.bogleheads.org/wiki/Emergency_fund You just have a lot of cash. I could say I'm 70/30 stocks/bo...
by jdilla1107
Sun Mar 15, 2020 9:44 am
Forum: Investing - Theory, News & General
Topic: Windfall investment
Replies: 4
Views: 542

Re: Windfall investment

I would repost your question here: (in Personal Investments)

viewforum.php?f=1

following these guidelines:

viewtopic.php?f=1&t=6212

Essentially, you need to provide a lot more information to get a recomendation.
by jdilla1107
Sat Mar 14, 2020 5:15 pm
Forum: Investing - Theory, News & General
Topic: Windfall investment
Replies: 4
Views: 542

Re: Windfall investment

This is a big question with not a lot of detail. I would recommend to start reading the wiki here:

https://www.bogleheads.org/wiki/Main_Page

To answer part of your question, 10 years is a little on the short side for an aggressive equity portfolio. I would do something very balanced with bonds if I only had a 10 year duration. However, is it really only 10 years? What is happening in 10 years?
by jdilla1107
Sat Mar 14, 2020 10:42 am
Forum: Investing - Theory, News & General
Topic: So.... is this really "it"? Is this what we needed to mentally prepare for?
Replies: 158
Views: 17067

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

Shallowpockets wrote: Sat Mar 14, 2020 10:04 am A frequent refrain here is, “I have 20-30 years”. So I don’t care.

Well, you just lost two of those years. Market is more or less back to start of 2018. You now have 18-28 years. Oh, wait, 2018 was a down year too.So subtract another year.
This isn't how it works at all. Go look at an annual returns chart for the sp500. The long term averages already include big draw downs.

I hold stocks so that I have a legal ownership right over earnings in the best companies in the world.
by jdilla1107
Sat Mar 14, 2020 8:39 am
Forum: Investing - Theory, News & General
Topic: Why are bonds falling?
Replies: 236
Views: 9516

Re: Why are bonds falling?

Look at this page, which shows historical treasury yields: (interest rates)

https://www.treasury.gov/resource-cente ... data=yield

Do you see that interest rates have been both falling and rising at various times over the last 2 weeks? The bond market is also very volatile right now (relative to normal times in the bond market). Bonds went up a lot starting around Feb 21th and then went down starting around March 6th.

It's simply not true to say that "interest rates are falling". Interest rates are volatile right now.
by jdilla1107
Fri Mar 13, 2020 10:33 pm
Forum: Investing - Theory, News & General
Topic: So.... is this really "it"? Is this what we needed to mentally prepare for?
Replies: 158
Views: 17067

Re: So.... is this really "it"? Is this what we needed to mentally prepare for?

I'm with you. My portfolio is down 500k+ and I could not care any less. Went up 180k today and it meant nothing to me. No emotion whatsoever. My perspective is for 20-30 years. What difference does it make if we go: down, down, up, up, up, down, down, up or up, down, up, up, up, down, up, up, down The daily prices just literally don't matter. For example, if you had to sell your house this week, you would probably be forced to take a 30%+ loss. But, who would do that? (by choice at least) Do people check their home prices every day and feel emotion on the swings? The liquidity that stocks provide are almost a hinderance to the long term investor. Who cares what stock prices are if you are not planning to buy/sell in large quantities? I focu...
by jdilla1107
Fri Mar 13, 2020 8:56 am
Forum: Investing - Theory, News & General
Topic: Qualified Dividends and Tax Loss Harvesting
Replies: 8
Views: 566

Re: Qualified Dividends and Tax Loss Harvesting

I'm not following what the problem is. Can't you just make sure you hold the new fund for 60 days? From Fidelity: All of the following requirements must be met: The fund must have held the security unhedged for at least 61 days out of the 121-day period that began 60 days before the security’s ex-dividend date. (The ex-dividend date is the date after the dividend has been paid and processed and any new buyers would be eligible for future dividends.) For certain preferred stock, the security must be held for 91 days out of the 181-day period, beginning 90 days before the ex-dividend date. The amount received by the fund from that dividend-generating security must have been subsequently distributed to you. You must have held the applicable s...
by jdilla1107
Fri Mar 13, 2020 7:58 am
Forum: Investing - Theory, News & General
Topic: Qualified Dividends and Tax Loss Harvesting
Replies: 8
Views: 566

Re: Qualified Dividends and Tax Loss Harvesting

I'm not following what the problem is. Can't you just make sure you hold the new fund for 60 days?
by jdilla1107
Mon Mar 09, 2020 3:19 pm
Forum: Investing - Theory, News & General
Topic: Why not exchange all total bond for total market today?
Replies: 35
Views: 3222

Re: Why not exchange all total bond for total market today?

We are back to May of 2019 prices. In May of 2019 everyone here was saying how overvalued the market was. Did you think this in May of 2019?
by jdilla1107
Sun Mar 01, 2020 8:28 am
Forum: Investing - Theory, News & General
Topic: Form of market timing?
Replies: 8
Views: 863

Re: Form of market timing?

willthrill81 wrote: Sat Feb 29, 2020 11:23 pm
jdilla1107 wrote: Sat Feb 29, 2020 11:26 amThe best approach is to develop a plan and then follow it with no emotion whatsoever.
Good luck with that. Most investors aren't like Data, able to turn off their emotions like a switch.
No emotion and time in the market is the ONLY edge that an individual investor has. I have worked in trading for 15 years and seen it first hand of what it means to compete against thousands of Ivy League grads working 100 hour weeks. As an individual, your ONLY edge is:

- You don't have to hit quarterly goals and can invest for 20 years.
- Setting a constant level of risk and accepting it.

Trying to trick yourself into believing that you are controlling risk to satisfy your emotions is a fools errand.
by jdilla1107
Sat Feb 29, 2020 5:43 pm
Forum: Investing - Theory, News & General
Topic: using short-term losses to offset long-term gains?
Replies: 3
Views: 618

Re: using short-term losses to offset long-term gains?

I would just keep the losses and take $3k a year income tax deduction. If you really need to take gains at a future date, then do that. But, there is no reason to realize gains just to offset losses. (The losses can be kept into the future.)
by jdilla1107
Sat Feb 29, 2020 11:26 am
Forum: Investing - Theory, News & General
Topic: Form of market timing?
Replies: 8
Views: 863

Re: Form of market timing?

There are countless mental tricks similar to this to tell yourself. The best approach is to develop a plan and then follow it with no emotion whatsoever.

Your approach seems to involve emotion, causing me not to like it. (Even if the emotion seems to be in the "right direction")

My equity portfolio is down $200k+ in the last week and I have no emotion about it. The market will be higher in 30 years and this is a big part of my investment plan. I thank this board for helping to coach me to get to this point.
by jdilla1107
Sat Feb 29, 2020 11:17 am
Forum: Investing - Theory, News & General
Topic: Why do people still try to time the market?
Replies: 72
Views: 6600

Re: Why do people still try to time the market?

What is your prediction going forward from here? My prediction is that the coronavirus "situation" will calm down. The effects on the stock market will then wither away. I think this is actionable so have changed my allocation from 50/50 to 60/40. I may not have made this change if it could not have been contained within my IRA (no tax hits). I would otherwise have had to think more about it. I believe I am following, in spirit, Baron Rothschild's (apocryphal?) advice to "buy when there's blood in the streets." I take that figuratively in two respects: It's not literally blood, but infectious disease. None-the-less it is scary and the market has taken a real hit. It is mostly scary because of the way and degree to which...
by jdilla1107
Sat Feb 29, 2020 9:14 am
Forum: Investing - Theory, News & General
Topic: Why do people still try to time the market?
Replies: 72
Views: 6600

Re: Why do people still try to time the market?

sambb wrote: Sat Feb 29, 2020 4:47 am wen ttiming works - hghly lucrative. sometimes it is predictable (coronavirus spread)
Everything is predictable, especially in retrospect. What is your prediction going forward from here?

If you perfectly timed this particular drop, you simply are even with someone who bought in Oct 2019. That does not seem lucrative at all. This drop is a complete non-event so far.
by jdilla1107
Thu Feb 27, 2020 8:24 am
Forum: Investing - Theory, News & General
Topic: Article by the founder of Intuit and Personal Capital: Bitcoin is a scam
Replies: 23
Views: 2811

Re: Article by the founder of Intuit and Personal Capital: Bitcoin is a scam

Who is the market for buying Bitcoin? As far as I can tell it's just people who think they'll find another sucker willing to pay more for it. For every legitimate use it's suggested for, there's already a more effective, widely used, less risky alternative... and even the illegitimate uses seems like a bad choice, every transaction is logged and able to be traced through a ledger trail going back forever :confused I would never buy bitcoin, but I disagree with this. Bitcoin is a massive innovation in the world of black market transactions. 20 years ago people involved in black market transactions literally had to move suitcases of cash around the world to avoid the banking system. This is now all electronic and instantaneous. The idea that...
by jdilla1107
Mon Feb 10, 2020 7:14 pm
Forum: Investing - Theory, News & General
Topic: Covered Calls Portfolio
Replies: 13
Views: 1924

Re: Covered Calls Portfolio

This has all of the downside of a stock position with none of the upside. If stocks go down, she takes a loss. If stocks go up, she misses the gain. (This trade off is offset by a payment.)

I think all of these option positions are just dumb ways to over complicate things; which is exactly what advisers feel they need to be doing to justify their fees.
by jdilla1107
Sat Feb 01, 2020 7:41 pm
Forum: Investing - Theory, News & General
Topic: Foreign Tax Credit ELI5?
Replies: 11
Views: 1493

Re: Foreign Tax Credit ELI5?

Your Fidelity 1099 will state how much foreign tax you paid through funds that you held. You put this number into tax software and you get a credit for that amount.
by jdilla1107
Mon Jan 27, 2020 2:58 pm
Forum: Investing - Theory, News & General
Topic: Synthetic Roth via leverage?
Replies: 13
Views: 2372

Re: Synthetic Roth via leverage?

Like many academic cases that involve leverage, this ignores two important points:

- The cost of leverage. (None with roth)
- Margin calls. (None with roth)
by jdilla1107
Thu Jan 23, 2020 7:45 pm
Forum: Personal Investments
Topic: Small Company 401k - Extremely High Fees
Replies: 6
Views: 696

Re: Small Company 401k - Extremely High Fees

One possible trick is to take a 401k loan and invest the money in taxable to avoid the fees. This allows you to reserve the space, but not pay the fees. You need to research the details of the plan though.
by jdilla1107
Thu Jan 23, 2020 7:09 pm
Forum: Investing - Theory, News & General
Topic: ETF to Hold for 50 Years
Replies: 118
Views: 13800

Re: ETF to Hold for 50 Years

The people that say "why would you need to think about a multi-decade hold period?", are clearly investing out of a tax shielded account.

For taxable accounts where 20-30 years of capital gains is likely, this is a very valid question. I haven't been investing very long (12 years) and already have positions with 200% gains.

I personally hold Vanguard funds based on their size, durability, and legal structure. I want to hold them for 30 to 40 years. I wouldn't have the same confidence in smaller ETF companies not closing a fund and forcing me to take cap gains.
by jdilla1107
Thu Jan 23, 2020 6:50 pm
Forum: Investing - Theory, News & General
Topic: Are interest rates ever going back up?
Replies: 98
Views: 9416

Re: Are interest rates ever going back up?

watchnerd wrote: Thu Jan 23, 2020 6:14 pm There seem to be a lot of folks on this thread who think rates aren't going up any time soon.

For those that feel that way, are you allocating to long bonds?

If not, why not?
20% of Vanguard Total Bond Market is allocated to long term bonds. So, a large number of forum members are invested in long term bonds.

In addition, I have personally been buying EE bonds for the last 10 years as an over allocation to long term fixed income like instruments.
by jdilla1107
Thu Jan 23, 2020 11:46 am
Forum: Investing - Theory, News & General
Topic: Are interest rates ever going back up?
Replies: 98
Views: 9416

Re: Are interest rates ever going back up?

My answer is that "it doesn't matter to my own plan". Trying to take positions based on guesses to macroeconomic questions is a fool's errand, in my opinion. For a passive investor, I think that makes sense. Trying to predict macro economic events is terrible for even an active investor. Successful active investors are focused on niche playbooks that they understand and bring expertise to, in my experience. I am a big believer in index funds and also do private equity sorts of investments. The person who is sitting at home, watching cnbc, and making bets on macroeconomics is not going to be more successful than luck would otherwise dictate. What possible edge could an individual have making a bet that "USA interest rates wil...
by jdilla1107
Thu Jan 23, 2020 11:10 am
Forum: Investing - Theory, News & General
Topic: Are interest rates ever going back up?
Replies: 98
Views: 9416

Re: Are interest rates ever going back up?

My answer is that "it doesn't matter to my own plan". Trying to take positions based on guesses to macroeconomic questions is a fool's errand, in my opinion.
by jdilla1107
Mon Jan 20, 2020 8:11 am
Forum: Personal Finance (Not Investing)
Topic: Engineers - What are you making? ($$$)
Replies: 357
Views: 54072

Re: Engineers - What are you making? ($$$)

I have hired 100s of software engineers over my career. The ones who report "making 600k+" last year, usually break down something like this:

- Salary of $180-220k
- Exercised stock options last year from X years of stock appreciation for $400k

It's a lot like CEOs "who made $30M last year" or sales execs who had a huge run. It's all dynamic compensation. This type of compensation ends up acting like the proverbial golden handcuffs, because very few employers are going to offer an individual contributor a straight $600k salary.

The trick to making a lot of money is to get profit interests in a business that is growing like a weed. If your company is growing at 2% a year, no one is getting rich.
by jdilla1107
Fri Jan 17, 2020 9:56 am
Forum: Investing - Theory, News & General
Topic: Markets closed, but prices change
Replies: 7
Views: 784

Re: Markets closed, but prices change

The simple answer is that the supply/demand changes between closing and opening. But, also realize that stocks (and derivatives) are actually trading 24/7 on generally lower liquidity. Money never sleeps.

Here is some info on after hours nasadq trading

https://www.nasdaq.com/market-activity/ ... ed-trading
by jdilla1107
Thu Jan 16, 2020 5:06 pm
Forum: Investing - Theory, News & General
Topic: How to choose a strike price on a protective put?
Replies: 5
Views: 673

Re: How to choose a strike price on a protective put?

Note that doing this violates many corporate employment agreements and stock plans. Especially if your finance is any sort of executive.
by jdilla1107
Thu Jan 16, 2020 12:30 pm
Forum: Investing - Theory, News & General
Topic: Paul Merriman -SCV- 1930-2019 Evidence - Patience Leads to Better Returns
Replies: 161
Views: 22106

Re: Paul Merriman -SCV- 1930-2019 Evidence - Patience Leads to Better Returns

Paul Merriman discusses asset class performance from 1930s to 2019 in his latest Sound Investing Podcast. Below are the link and accompanying material. Bogleheads: Mr. Merriman is very knowledgeable and very likeable. However, his portfolio recommendations are based almost entirely on " past performance ." The past performance of stocks is a huge reason why so many of us invest in them. Not me. Equities provide return above and beyond the fixed terms of bonds. Equity is also lower in the capital structure, which is where the additional risk comes from. The difference between debt and equity is literally a fundamental tenant of capitalism. Investing in equities "because of past performance" is a good setup to try and cha...