Search found 63 matches

by m_j_paquette
Sat Dec 31, 2011 2:04 pm
Forum: Investing - Theory, News & General
Topic: 2011 Returns Thread
Replies: 137
Views: 15482

Re: 2011 Returns Thread

My portfolio is 55% stocks (with modest SCV tilt), 45% bonds (split between TIPS and intermediate term). I'm in withdrawal phase, so there's that drain.

IRR for the year is 0.60%, sixty whole basis points. The good news was that interest, dividends and distributions almost covered the withdrawals for the year.
by m_j_paquette
Sun Oct 02, 2011 3:28 pm
Forum: Investing - Theory, News & General
Topic: Is Bank of America going to survive?
Replies: 159
Views: 37838

Perhaps, but they'll do it without me. I don't own the stock, and I'm in the process of terminating my fee paying, er, banking relationship with them.

After last week's fee preannouncements, some of the regional banks have put banners on their front pages indicating that they won't charge fees for debit cards. Ah, competition!
by m_j_paquette
Wed Sep 28, 2011 1:46 pm
Forum: Investing - Theory, News & General
Topic: No alarm by Bogleheads over Grecian debt crisis?
Replies: 62
Views: 7745

I'm alarmed that I might have to do tax loss harvesting, AND rebalance my portfolio, all in the same year. I'm just not used to that sort of intense activity.
by m_j_paquette
Wed Sep 21, 2011 7:12 pm
Forum: Investing - Theory, News & General
Topic: [short trading] IMF: World economy in 'dangerous new phase'
Replies: 7
Views: 1227

Re: "IMF: World economy enters 'dangerous new phase'&am

BigD53 wrote:
plnelson wrote:But my trading portfolio which I started just before 2000 with $25K has done great - $275K as of today.
That's it? :lol:

Child's play my man... Child's play. I'm up to $430K on a $10,000 investment made in 2000. When you're ready to step up to the Big Leagues, give me a call.
Heh. AAPL has been very good to me... And I'm one of those silly people that just held for years. :D
by m_j_paquette
Wed Sep 07, 2011 3:10 pm
Forum: Investing - Theory, News & General
Topic: Securities transaction fee
Replies: 6
Views: 1856

Section 31 Transaction Fee

That's the SEC Section 31 transaction fee. The SEC levies this on exchanges and major self-regulatory organizations (FINRA)

More here: http://www.sec.gov/answers/sec31.htm

It's part of the cost of a stock transaction, so yes, it goes in as part of the commission in Quicken.
by m_j_paquette
Mon Feb 14, 2011 4:29 pm
Forum: Investing - Theory, News & General
Topic: Shiller P/E above 24
Replies: 190
Views: 28573

I checked to see if I should rebalance my portfolio. Nope, nothing outside the bands today. I can hardy wait til I check again next year.
by m_j_paquette
Thu Jun 24, 2010 1:03 pm
Forum: Investing - Theory, News & General
Topic: New Vanguard ETF's
Replies: 62
Views: 10981

SSSS wrote:So there's going to be a:

Vanguard S&P Sm-Cap 600 Val ETF

But there's already a:

Vanguard Small-Cap Value ETF

.... help? :?
Just think of it as a handy new feature for tax loss harvesting. Similar enough, but not 'substantially identical.' :idea:
by m_j_paquette
Mon May 17, 2010 12:46 pm
Forum: Investing - Theory, News & General
Topic: Vanguard's fraud policy
Replies: 89
Views: 16743

This hacking technique won't work cos the financial institution would just invalidate the security code the moment you execute a login. The security code can be made to only be used once. While you are correct that the security code can only be used once, you might have misunderstood the attack mechanism. The Trojan code infecting your computer sends your password and one-time security code to the Bad Guys software, whose automation then logs into your account, either from your own infected computer or from their server. Their software then sends the response that they want you to see to your web browser. Typically you will get a panel indicating failure, or that your balance can't be seen right now, suggesting you try again in a few hours...
by m_j_paquette
Thu Mar 04, 2010 6:17 pm
Forum: Personal Investments
Topic: Got Employee Stock Options? Grok's rule for when to exercise
Replies: 78
Views: 15017

Re: There is no law that prohibits hedging

Perhaps there is no such law. But my employer prohibits any employee from using any hedging strategy that profits from a fall in the company's stock price. I doubt this is only for "some rare companies". Yup. This seemed pretty common in Silicon Valley. My last employer referred explicitly to this as part of their ethical standards internal web page, where such activity was considered grounds for termination. Since I had acquired approximately a metric grunch of stock options in the late 1990s, I worried about crashes, hedging, and what I could do. It turned that the QQQs had a pretty tight correlation with movements in my employers stock, so I bought out of the money long term put options on the QQQs as a hedge. Through sheer du...
by m_j_paquette
Tue Mar 02, 2010 12:30 pm
Forum: Investing - Theory, News & General
Topic: Wall street is set to take you for another 20%
Replies: 40
Views: 6669

Re: Wall street is set to take you for another 20%

I bet he turns out to be right. Article here I don't know about that. The article wraps up with a fairly bizarre conclusion in the last two paragraphs. In fact, it's highly doubtful that you, your portfolio, your family or your America will make it past 2012, let alone into that comfortable retirement you may be planning for 2020. Hold it. I, my portfolio, and my family won't make it past 2012? Perhaps I should raise my withdrawal rate significantly for our last two years of existence? :shock: Do you really believe that stocks, mutual funds, ETFs, commodities and bonds will make a profit in the next decade after Wall Street's miserable performance the past decade? Trust them, you lose. Hmm... What asset classes are left that could show a p...
by m_j_paquette
Tue Feb 02, 2010 12:51 pm
Forum: Investing - Theory, News & General
Topic: Farrell: 20 debt bombs that will sink your retirement
Replies: 30
Views: 6799

Re: Farrell: 20 debt bombs that will sink your retirement

Lbill wrote:Remove all sharp objects from your reach before reading this commentary.
Heh. And that's before allowing for asteroid strikes, the Mayan apocalypse, Doomsday, and cats and dogs living together.

What's really funny is that this is the same guy who tracks and regularly writes about the fairly Bogleheadish Lazy Portfolios.
by m_j_paquette
Thu Jan 21, 2010 12:58 pm
Forum: Personal Investments
Topic: Entire portfolio is taxable - How best to handle long-term?
Replies: 56
Views: 8419

walt0903 wrote:
avalpert wrote:Did your BAC stop-loss execute today as planned?
Hi Avalpert,

Yes it went through about an hour ago. I also made the decision to sell Ford at 11.20 shortly after the stop loss on Bank of America occurred. Deleted my middle and best case scenario's out of spreadsheet just now.

My options investing book from amazon hasn't arrived yet. Funny!

Walt
Congratulations! No, really. You've done a heck of a job, and for now you're safe in cash and have a great portfolio lined up going forward.

I'd say the next step is for you and your wife to get a couple of nights of sound, worry-free sleep while the trade settles and the market fluctuates without you.
by m_j_paquette
Mon Jan 11, 2010 4:41 pm
Forum: Investing - Theory, News & General
Topic: Last close, VBR up 93.8%?
Replies: 17
Views: 2952

Back in the Bad Old Days when I played with individual stocks, I followed Apple Inc (AAPL) closely. This is a large cap, high volume stock.

Now, it turns out that there is a defunct oil company called Appell Pete, with a ticker APPL. Some wise guy with shares of this company kept a limit sell order open near Apple Inc's share price for a number of years. Every once in a great while, he'd get a bite, and someone would find themselves the proud owner of a chunk of worthless Appell Pete.

Of course, having big publishers like Forbes occasionally misprint Apple's ticker as APPL didn't exactly help...
by m_j_paquette
Thu Dec 17, 2009 1:01 pm
Forum: Investing - Theory, News & General
Topic: Can you pick losing stocks?
Replies: 16
Views: 2438

Can I pick losing stocks? Oh, yeah! Boy, can I pick them!

The problem is that I take long positions when i pick them. Like the cat says, "You're doing it wrong!". :lol:

I'll just stick with the index funds, thanks.
by m_j_paquette
Wed Nov 25, 2009 5:39 pm
Forum: Investing - Theory, News & General
Topic: Fox Business - Bogleheads Guide to Retirement Planning
Replies: 109
Views: 14605

Re: Indexing vs. active

I love the sales process, as an outside observer. "Of course I will not offer any guarantee whatever related to a risk asset, the two concepts mentioned together is just silly. Whomever posed the question is playing with you, don't fall for it. What is vital to determine first is whether you wish to be a mindless sheep following the herd of a market index, or attempt to outperform the index (with no guarantees), up and down, over time. This bit is what I call the testosterone appeal . "Be a mindless sheep following the herd, or roll with me (but no guarantees)" Best to ignore this sort of emotional appeal. We do not believe in investing in things we have no control over but rather believe and have proof that we have been able...
by m_j_paquette
Wed Nov 25, 2009 2:06 pm
Forum: Investing - Theory, News & General
Topic: Fox Business - Bogleheads Guide to Retirement Planning
Replies: 109
Views: 14605

Re: American fund annual report

bartgarcia wrote:Here is a link to an American fund...pg 2 has the disclaimer followed by performance on pg 3

https://www.americanfunds.com/pdf/mfgear-904_icaa.pdf
Yup. That's what I thought.

Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods.
by m_j_paquette
Thu Nov 05, 2009 5:46 pm
Forum: Investing - Theory, News & General
Topic: Robert Prechter and Elliott Wave Theory
Replies: 6
Views: 2222

He's highly entertaining, particularly for fans of the near-future megadisaster novel. Recent forecasts call for new lows that are half of the March 2009 lows, bond market collapse, a Grand Supercycle collapse (100 years of bear market?), cats and dogs living together...

Somebody must have broken a whole bunch of mirrors... :roll:
by m_j_paquette
Tue Oct 20, 2009 12:27 pm
Forum: Investing - Theory, News & General
Topic: From Paul B. Farrell at Marketwatch
Replies: 24
Views: 4520

(It's baaack!) I'm not entirely sure this sort of gloom and doom is worth worrying about. The End of the Financial World has been forecast a few times before. Paul Ferrell himself has done this. 2008: http://www.marketwatch.com/story/story/print?guid=FE3C1E3B-3D53-49C0-9DF3-FD94B0E4B9B3 2004: http://www.marketwatch.com/story/story/print?guid=22FAA4CB-5C51-4009-B53F-8CC626BD269D For those entertained by the tales of Elliot Wave Doomsday, another MarketWatch writer notes that another Elliot Wave Gooroo sees a new supercycle starting: http://www.marketwatch.com/story/story/print?guid=FD3EE9DD-23CE-422F-9B71-0D7F91343703 Same data, opposite conclusion. I'm pretty sure this says something about how robust a predictive mechanism reading chart ent...
by m_j_paquette
Sat Sep 19, 2009 12:22 pm
Forum: Investing - Theory, News & General
Topic: Prepare for Retirement
Replies: 7
Views: 1873

"Health care costs in retirement, like health care costs generally, continue to explode. The numbers are daunting. In a June 2009 report, The Employee Benefit Research Institute in Washington estimated that a 65-year-old couple retiring in 2009 would need $268,000 to $414,000 in savings to pay for out-of-pocket health expenses during retirement." When I was preparing for my early retirement, I ran my numbers through every online retirement planning software in sight. One of these, Fidelity's retirement income planner as I recall, wanted healthcare costs for the current year, and then allocated a 7.5% inflation rate for that cost. It had me paying over $300,000/year in my 90s. :shock: Amazingly, that's also when it had me running ...
by m_j_paquette
Sun Aug 23, 2009 3:48 pm
Forum: Investing - Theory, News & General
Topic: The Decumulation Phase
Replies: 138
Views: 70814

Otar on rebalancing

Did anyone notice the section on rebalancing?

I got a kick out of his spin on the perennial Boglehead discussion. He appears to favor rebalancing in distribution once every four years, at the end of election years!

It works for me. I've always thought that an infrequent rebalance would be better than the monthly or quarterly styles, if only to let momentum in the marketplace do it's thing. My personal Plan has me using broad (+-25% of target) bands, and rebalancing once a year if those bands are exceeded or my cash/money market 'surge tank' is too low for the next year.

I'll have to play around with his ideas and see how they'd work for my own situation.
by m_j_paquette
Sun Aug 23, 2009 3:42 pm
Forum: Investing - Theory, News & General
Topic: The Decumulation Phase
Replies: 138
Views: 70814

One of the more interesting bits in the book are the Warning Signs, signs at the start and during distribution that the portfolio (and retiree!) are heading for trouble.

It reminds me of one of the other strategies I've seen discussed, that suggests a portfolio, after experiencing a strong downdraft and at risk of failure, should be augmented by converting some of it to a SPIA.

The Warning Signs that Otar has listed provide a hard threshold for taking such action, as does his Green/Gray/Red Zone model.

(I don't want to reproduce his content. That would be Bad. Just download the PDF and take a look. There is lots of crunchy data and discussion there.)
by m_j_paquette
Fri Aug 21, 2009 12:33 pm
Forum: Investing - Theory, News & General
Topic: NYT: Rise of the Super-Rich Hits a Sobering Wall
Replies: 29
Views: 4861

Re: NYT: Rise of the Super-Rich Hits a Sobering Wall

DualCitizen wrote:http://www.nytimes.com/2009/08/21/busin ... ality.html
John McAfee's worth has fallen to about $4 million from a peak of about $100 million.
This clearly looks like a diversification failure. A lesson to behold for every investor.
Expensive real estate development in remote, fly-in locations.
He bought bonds. Bonds tied to Lehman Bros. :(
He bought a trophy home for 25 million, sold for 5.7 million.
He bought a Cessna jet. Sold.

I'd say he worked hard to become the poster boy for bad investment choices. No broad diversification, just high risk bets here and there in various markets.
by m_j_paquette
Wed Aug 05, 2009 12:33 pm
Forum: Personal Investments
Topic: Annuity vs regular taxable account
Replies: 3
Views: 1370

I went through this drill several years back. The annuity lets investments grow without taxes on the returns while sheltered in the annuity, but all gains are taxed as ordinary income when they come out. [1] The taxable account can produce dividends and capital gains. These are taxed as they occur, currently at lower rates than ordinary income. The annuity has higher expenses than directly investing in mutual funds. That is, the mutual funds are there, with their expenses in 'subaccounts', and the annuity has it's own expenses, possibly along with surrender fees that can be pretty hefty, possibly with setup fees, and so on. Given the higher expenses and higher tax rates, along with consideration that the person encouraging me to buy an annu...
by m_j_paquette
Fri Jul 17, 2009 2:25 pm
Forum: Investing - Theory, News & General
Topic: S&P 500 will hit 1500 in 2011-2012, according to JP Morg
Replies: 31
Views: 6377

JP Morgan?

It will fluctuate.
- J.P Morgan


J.P. Morgan's response when asked for his forecast of the stock market. I'd say it is about as accurate as reasonably possible. :)
by m_j_paquette
Mon Jul 13, 2009 11:50 pm
Forum: Investing - Theory, News & General
Topic: Wells Fargo Bank Sues Itself
Replies: 10
Views: 2622

chaz wrote:"This is just folks cranking out paperwork without conscious thought," said Anthony Sabino, a law professor at St. John's School of Law in New York City."
It's not even unique. Wells Fargo has some internal... difficulties. I'm involved in a dispute between Wells Fargo Bank NA and Wells Fargo Insurance Services, both divisions of Wells Fargo & Company. It's not easy to find law firms without conflicts of interest to carry out this sort of litigation.

Yessir, building real shareholder value, you betcha!
by m_j_paquette
Mon Jul 13, 2009 1:28 pm
Forum: Investing - Theory, News & General
Topic: LMFOTP
Replies: 14
Views: 2708

Kenster1 wrote:GM Stock up 37% right now -- still available at the dollar store.
No, that's GMGMQ, the stock for the defunct shell company. The gooroos finally halted it Friday afternoon. It should have been halted earlier in the week, or at the very least before the Friday open, but I suppose there were still pockets to pick.

The new company known as General Motors doesn't have public stock yet, and realistically can't do an IPO before Q2 2010.

I posted a cautionary not on this earlier in the thread. Don't be fooled. GMGMQ is not the stock you are looking for.
by m_j_paquette
Sat Jul 11, 2009 1:59 pm
Forum: Investing - Theory, News & General
Topic: LMFOTP
Replies: 14
Views: 2708

A cautionary note...

Please remember that as of July 10, all good assets of the former General Motors (trading as GMGMQ) were sold to a new entity, Vehicle Acquisition Co., which will be renamed General Motors Co. The former General Motors (GMGMQ) is now Motor Liquidation Company. The "New GM" holding all good assets is currently a privately held company, with 60.8% owned by the US government, and the rest held by the Canadian and Ontario government (11.7%), the health-care unit of United Auto Workers (17.5%). The remaining 10% is expected to go to GM's former bondholders. Holders of stock in the former General Motors, GMGMQ, will have no ownership stake in the new company. There has been talk of an IPO as early as next year for the new General Motors...
by m_j_paquette
Sun Jul 05, 2009 12:45 pm
Forum: Investing - Theory, News & General
Topic: Brinker sell signal??
Replies: 32
Views: 7384

Mel Lindauer wrote:Yes, I've heard that he's very Bogleheadish, and that he even has Jack Bogle on his show from time to time. And yet there's the Jekyll/Hyde aspect of his market timing calls. Guess that's how he makes his "real" money!
Well, yes. If you're going to sell a newsletter, you've got to have content that the people think they need. :roll:

That Boglehead Newsletter would be pretty short and very repetitive; perhaps a postcard mailed monthly with "Stay the course" and one of the "12 Pillars of Wisdom" printed on it. :D
by m_j_paquette
Fri Jul 03, 2009 1:41 pm
Forum: Investing - Theory, News & General
Topic: Art Cashin: Why Stocks Will Rally This Week
Replies: 16
Views: 3817

Ariel wrote: NYSE was kept open an extra 15 minutes to address unspecified "system irregularities". Hmmm ...
Hmmm indeed... "System irregularities" Someone have a slight order imbalance they needed to address?
Mortimer Duke wrote: Now, you listen to me! I want trading reopened right now. Get those brokers back in here! Turn those machines back on!

Turn those machines back on!
by m_j_paquette
Mon Jun 22, 2009 4:57 pm
Forum: Investing - Theory, News & General
Topic: Should Vanguard be able to protect its customers from Fraud?
Replies: 22
Views: 4398

Re: Should Vanguard be able to protect its customers from Fr

I got a call today from a guy saying he worked for Vanguard, we're on a recorded line and wanted to discuss some important things about my account. He said he wanted to verify that it was me that answered the phone and wanted to start asking personal questions. I turned it around on him and asked - how can I be sure you are really with Vanguard? I've gotten calls like that from all the major brokerage/mutual funds shops that I've had accounts at. It is, unfortunately, a pretty common practice, and also unfortunately is difficult to differentiate between a well-intentioned call and a dirty rotten scoundrel. The scoundrels probably sound smoother and more reassuring. :P My practice is to just politely say that since I didn't originate the ca...
by m_j_paquette
Wed Jun 17, 2009 9:29 pm
Forum: Investing - Theory, News & General
Topic: Bogle: Investors Getting Killed In ETFs
Replies: 28
Views: 5781

bombcar wrote:I'm tempted to start a mutual fund that simply invests in VTI. Charge an expense ratio of 0.1% and I'll be set for life!
Funny you should mention that. One of the options in my son's 401K is a mutual fund that invests entirely in QQQQ. There's a 1% load and a 0.75% expense for the fund, in addition to the QQQQ's expense.

Oh, in case you hadn't guessed, the 401K plan is run by an insurance company. :roll:
by m_j_paquette
Thu Jun 04, 2009 9:45 pm
Forum: Investing - Theory, News & General
Topic: DOW 1,000,000?
Replies: 24
Views: 3978

Re: DOW 1,000,000?

EyeDee wrote:However, if I am calculating things correctly 8750*1.0535^91=1,004,040.
That looks like a perfectly cromulent calculation to me.

Dow 1,000,000 in 2100. Hmmm...

"Oh, hey, my kid wants me to pick up a Happy Meal for him on the way home. Can anyone spot me a $10,000 bill? I'll buy coffee tomorrow!"
by m_j_paquette
Fri May 22, 2009 1:09 pm
Forum: Investing - Theory, News & General
Topic: Markets are Ready to Fall
Replies: 57
Views: 14023

Uh oh.

I rolled a 30d10. I think my portfolio is likely to be eaten by a grue. :shock:

Maybe I'll just stick it back in the file cabinet until next year...
by m_j_paquette
Wed May 13, 2009 10:21 pm
Forum: Investing - Theory, News & General
Topic: Simplicity
Replies: 61
Views: 10948

Re: Could be perfect

20% Intermediate Term Bonds (VBIIX, VBILX) 20% Inflation Protected Securities (VIPSX, VAIPX) 33.6% Total Stock Market Index (VTSMX, VTSAX, VTI) 8.4% Small Cap Value (VISVX, VBR) 18% FTSE All-World Ex-US (VFWIX, VEU) Hi paquette: I think your proposed portfolio is excellent if you can the bond and small-cap value funds into retirement accounts. No worries! I'm gainfully unemployed, having discovered the fine art of early retirement, and am in a miserably low tax bracket, with lots of booked capital losses. The Intermediate Term Bonds are the least efficient thing in the portfolio (fully taxed as ordinary income) so those fill the IRA account. While the TIPS fund throws off income (eventually...) it's not state taxable, just Federal. In a hi...
by m_j_paquette
Wed May 13, 2009 6:56 pm
Forum: Investing - Theory, News & General
Topic: Simplicity
Replies: 61
Views: 10948

Well, heck, I'm pretty simple-minded, so here's what I came up with. I wanted to hold domestic and foreign equities, and thought a dollop of Small Cap Value might be nice. I read all those papers, lots of posts here, and looked at the charts over at Bob's place, and I figured for my retirement that something like this would work: The target portfolio mix ratios: 60/40 equities/bonds 70/30 domestic/foreign equities 80/20 domestic total market/small cap value 50/50 intermediate term bonds/inflation protected securities The 60/40 equities/bonds was in that broad range that FIRECalc and a number of papers point to as being good for long term survival. The 70/30 domestic/foreign equities figure was in the broad range that looks like it hits the ...
by m_j_paquette
Tue Mar 31, 2009 12:39 am
Forum: Investing - Theory, News & General
Topic: Owner violated law, saved home from bushfire
Replies: 4
Views: 1632

Re: Owner violated law, saved home from bushfire

djw wrote:A family in Australia violated the law by bulldozing a firebreak around their home. After years in court, they get the last laugh. Their home is one of the few to survive a bushfire that leveled their neighborhood.
Ah! So what you're really saying is that our asset allocation is like a firebreak, and only if we really do a good job of setting it correctly will our portfolios be able to survive this and future brushfires.

And, as after many fires, "In the spring there will be new growth."
by m_j_paquette
Thu Dec 11, 2008 12:19 pm
Forum: Investing - Theory, News & General
Topic: Shiller's P/E10? waitaminutewaitaminute....
Replies: 27
Views: 4943

Re: Shiller's P/E10? waitaminutewaitaminute....

From that chart, P/E10=15 doesn't scream BUY to me. You will probably get average returns but only in the long run (30 years). I don't expect another PE bubble for another generation. And, curiously enough, P/E10 = 15 is about the average historical value for this number. P/E10=10 looks like a good number to go in. Where would that be, around 600? The worst case it went below 10 about 1918 and above 10 about 1926, about 8 years. So if your horizon is ten years or longer it looks like a good bet. P/E10=7.5 looks even better. Worst case about 5 years to good returns. P/E10=5 looks like a slamdunk. Good returns in one year. Yes, but if you actually wanted to use P/E10 for market timing, you might have to wait a while to hit that 'Good returns...
by m_j_paquette
Wed Dec 10, 2008 9:39 pm
Forum: Investing - Theory, News & General
Topic: Shiller's P/E10? waitaminutewaitaminute....
Replies: 27
Views: 4943

Re: Shiller's P/E10? waitaminutewaitaminute....

Robert Shiller, learned and respected academic, who notably called the hoIs PE10 7.5 really Shiller's 'safe' buy-in point, and otherwise, he would recommend against all equities? If so, it might be a loooong time waiting to hitch your wagon to the engine of business prosperity, if that's your plan, sez I. So, am I being too hard on him? Well, maybe. A P/E10 of 7.5 might mean there's real value in them there markets, but if you're trying to time the market waiting for that value, be aware that you could go for many, many years without seeing it. Over at Bobs Files http://bobsfiles.home.att.net/OddsAndEnds.html , there's data and this nifty chart of P/E10 from 1881-2005: http://bobsfiles.home.att.net/OddsAndEnds_files/PE10.gif I had P/E10 at...
by m_j_paquette
Wed Dec 10, 2008 11:35 am
Forum: Investing - Theory, News & General
Topic: Why Retirees Don't Need More Than 20% In Stocks
Replies: 53
Views: 10087

Re: Why Retirees Don't Need More Than 20% In Stocks

And of course one can get more than one annuity, using different companies. Same as one can do with FDIC-insured cash deposits. Go up to your state guarantee association limit for each company. Then you spread your risk of any one company going under. Note that the terms of the guarantees vary wildly from state to state. The actual guarantees in each state are paid by an association of insurance sellers operating in that state. In California, for example: (c) The benefits for which the association may become liable for life insurance and annuity policies shall in no event exceed the lesser of the following: (1) Eighty percent of the contractual obligations for each policy or contract as modified pursuant to subparagraph (C) of paragraph (2...
by m_j_paquette
Sat Nov 29, 2008 4:20 pm
Forum: Investing - Theory, News & General
Topic: Nightmares for market timers
Replies: 234
Views: 46014

Accounting for taxes : Here are the results of incorporating taxes on the 17 liquidations of the 200 day moving average portfolio. A 15% tax on gains was used, with the assumption that all assets are held in a taxable account. Growth in $1 from 5/18/1966 to 10/31/2008 ...Buy-hold-rebalance.............................................$48 ...200 day moving average (market timing)............$41 Daily standard deviation ...Buy-hold-rebalance.............................................0.42 ...200 day moving average (market timing)............0.32 Interesting very similar result to the 50:50 portfolio with a 5% band (with no taxes considered). Results seem sensitive to : - Stock:bond allocation - Bands used for entry and exit (e.g. 1% vs. 5%, ...
by m_j_paquette
Sun Nov 23, 2008 4:28 pm
Forum: Investing - Theory, News & General
Topic: NetVest thread
Replies: 3
Views: 1650

Without commenting on the merits of the issue at hand, I would respectfully refer readers to the following complaint filed by the Securities Commissioner for the State of Maryland:

http://www.oag.state.md.us/Securities/ComplaintMel.pdf
by m_j_paquette
Fri Nov 21, 2008 11:52 pm
Forum: Investing - Theory, News & General
Topic: Dividend projections?
Replies: 8
Views: 2085

Welcome to retirement. Equity dividend payments are an important part of our income. The portfolio is about 50-50. The bond/cd side pays about 4.5%, the stock side pays around 2.5%. So the total cash thrown off by the portfolio is around 3.5% which certainly does pay the bills. Since I'm retired, I don't care so much about NAV and share price, as long as the cash generation is reasonably constant. Dizzy: If a company reduces the dividend it pays out, the stock price tends to stay a little higher. The retained cash per share adds to the share price. (In the long term. In a market pricing in a sane manner. :wink: ) You can even see this in day to day pricing. Look at a stock's share price before and after it pays out a dividend. The price wi...
by m_j_paquette
Fri Nov 21, 2008 11:26 pm
Forum: Investing - Theory, News & General
Topic: Apparently we're just not scared eough
Replies: 44
Views: 8014

ken250 wrote:People are still in Stage 1: Denial
I forget. Which stage is it again, where you find yourself curled up in fetal position under your desk, sucking your thumb and whimpering, with the room lit only by the baleful red glow of the Bloomberg terminal?


:shock:
by m_j_paquette
Fri Nov 14, 2008 3:31 pm
Forum: Personal Consumer Issues
Topic: New GM CEO... Steve Jobs!
Replies: 13
Views: 3175

btenny wrote:When and where can I get a computer like the Next Cube (I think) that has no fan? I hate the noise as we use our computers in our family room.
My garage? :lol:

The NeXT Cube had a fairly loud fan, actually. The flat little NeXTStation computers (pizza-box package that fit underneath the monitor) used a special fan and ducting to be almost silent.

The modern flat-screen iMacs are almost completely silent, and can run MacOS or Windows. (Windows sold separately. Use VMWare Fusion or Parallels to run Windows programs at the same time as Mac programs.)

</Hijack>
by m_j_paquette
Fri Nov 14, 2008 3:05 pm
Forum: Personal Consumer Issues
Topic: New GM CEO... Steve Jobs!
Replies: 13
Views: 3175

Well, it's an interesting idea, but Mr. Jobs actually has a bit of a support infrastructure and staff that he'd need to bring along. It might be easier to just ask him if Apple could buy GM out of their cash stash (GM market cap is 1.85B, and 45.16B in debt, Apple has no debt and cash on hand of 24.49B). Perhaps Apple would do it if the Fed did some voodoo on that GM debt... Then Apple's creative and management staff could be aimed at their new GM division. Thinning and flattening GM management, cutting back on the confusing proliferation of models and brand names, and simplifying and modernizing production might do wonders. (This is what happened inside Apple when Mr. Jobs and the NeXT management took over.) Note: I have a bias here, as I ...
by m_j_paquette
Thu Nov 06, 2008 11:19 am
Forum: Investing - Theory, News & General
Topic: Future Equity Rate of Return from Here
Replies: 48
Views: 9124

I'm exaggerating, but either you have to accept that 7% figure or come up with reason for ignoring it... some better reason than "if I accept it, my projections look lousy." Is it questionable to assume that this part of the economy can continue to grow at ~3 times the rate of everything else indefinitely :?: . Well, after I ran that simulation (The Fidelity Retirement Planner) I appreciated the insight into the effect a higher than expected growth in one area of expenses could have, but I rebelled at the thought of writing a yearly check for 320,000 dollars for annual medical coverage in my sunset years. That's what it had the annual premium at after a few decades of 7% annual growth. I suspect that there might be broader social...
by m_j_paquette
Fri Oct 17, 2008 12:41 pm
Forum: Investing - Theory, News & General
Topic: Time to re-think muni's as safety anchor?
Replies: 52
Views: 12463

There is a real possibility that higher than normal muni yields are a signal of higher than normal risk. I wouldn't ignore the danger. There may be some risk there but most of the current high yield appears to be due to asset liquidation into a relatively illiquid market. Unlike corporate bonds, munis are backed by the taxing authority of government. Even when an issuing organization goes bankrupt, the courts give a high priority to paying off the bonds. The default rate as a portion of the total muni market is up slightly this year, but nothing like the levels back in 1991. The ratings on munis are not readily compared to corporate bond ratings. Moody's has been working on a re-rating project recently for munis. http://www.moodys.com/cust...
by m_j_paquette
Thu Oct 16, 2008 12:06 pm
Forum: Investing - Theory, News & General
Topic: Continue buying Muni Fund- Larry?
Replies: 31
Views: 7360

Yes what is happening is massive liquidation forced by margin calls and collateral calls and hedge fund redemptions Do hedgies hold munis? I thought they were mostly a retail brokerage product. No, there are a bunch of hedge funds that arbitrage (play the interest rate differential) between munis and other types of debt such as Treasuries and corporate bonds. Earlier this year, in late February, some of these funds were bitten when they were forced to deleverage and sell off munis. (Margin calls on bum mortgage debt, etc. Check a muni fund NAV for Feb 29.) Blue River Asset Management, 1861 Capital Management, Anchor Capital, and Duration Capital Management were among firms that focus on this strategy. Blue River liquidated their main muni ...
by m_j_paquette
Sun Sep 14, 2008 12:46 pm
Forum: Investing - Theory, News & General
Topic: Your Personal Inflation Rate in Retirement
Replies: 15
Views: 3112

Heh. I used the Fidelity retirement planning tools as one of my 'can I retire yet' checks. The Poor Market 90% confidence model had me running out of cash when I was 98 after I send in my annual $350,000 health insurance premium. What type of inflation assumptions was that model making? If that $350,000 is only $10,000 in today's dollars, it looks a lot more reasonable. That calculator assumed a 2.43% rate of inflation and a 7% medical cost rise annually, which managed to inflate an 11,200 annual premium over 40 years to about 350K. Taking out the inflation number, the annual medical insurance premium was just 167K, such a deal! I'm pretty sure that inflation number is too small. I usually use 3.2% for my own calculations as a baseline for...