Search found 948 matches

by packer16
Fri Jun 22, 2018 6:29 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 109
Views: 6358

Re: Factor Investing Makes Someone Money, But Maybe Not You

As to stock pickers using factors, it is not true. The processes of selecting stocks is fundamentally different. Factors do not take into account fundamentals they just use what has driven stock prices in the past for selection versus understanding businesses (which is what most stock pickers do) a...
by packer16
Fri Jun 22, 2018 4:40 pm
Forum: Investing - Theory, News & General
Topic: Howard Marks Letter - Investing without people
Replies: 1
Views: 477

Howard Marks Letter - Investing without people

Below is a link to an interesting letter by Marks about passive/quant investing:

https://www.oaktreecapital.com/docs/def ... ff74a256e4

Packer
by packer16
Fri Jun 22, 2018 3:14 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 109
Views: 6358

Re: Factor Investing Makes Someone Money, But Maybe Not You

How do you know value is not expensive? Typically it is by comparing the P/BV or P/Earnings metric of groups of stocks (value vs. growth for instance). The only problem with this it assumes the quality (including expected growth) of each group remains constant over time. I am not sure this is true &...
by packer16
Fri Jun 22, 2018 1:22 pm
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 109
Views: 6358

Re: Factor Investing Makes Someone Money, But Maybe Not You

One key point here & why the controversies exists is the differences between past and expected returns. Everyone can agree that factors explain 90%+ of past returns but not necessarily expected or future returns. The same is true for correlation. Factors have not been correlated with stocks in the p...
by packer16
Thu Jun 21, 2018 8:48 am
Forum: Investing - Theory, News & General
Topic: Factor Investing Makes Someone Money, But Maybe Not You
Replies: 109
Views: 6358

Re: Factor Investing Makes Someone Money, But Maybe Not You

To give those how think they may be missing some returns I ran a back of the envelope comparison of an equivalent 75% equity/25% bond Vanguard Life Strategy (75% LS growth/25% LS moderate growth), a 60%/15%/25% Taylor 3-Fund Portfolio (Vanguard TSM, Vangaurd TIS & Vanguard Total Bond) & RobertT's Fa...
by packer16
Sat Jun 16, 2018 6:46 am
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2490

Re: Factor-based strategy is better (winer), OK. then who are the losers?

The issue with the risk based argument is that is based upon empirical observation of the firms that come out of the value screen. It is not based upon screening for the operational and financially risky firms. It would be interesting to see if the performance of SCV is more from the financially & o...
by packer16
Thu Jun 14, 2018 3:21 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2490

Re: Factor-based strategy is better (winer), OK. then who are the losers?

IMO the loser are supposedly the non-factor investors. I think factor investing, like any other active strategy (based upon other than market derived weights or values), is subject to the same factors that eroded active investing, more people doing it.

Packer
by packer16
Thu Jun 14, 2018 3:11 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3449

Re: Larry Swedroe: What Makes Factors Endure

What about all the things that are included in factors the influence value, like future growth, moatiness of the business, the governance of the business and the governance of the country and security specific factors, like voting/non-voting stocks, holding company discounts and the implied cost of ...
by packer16
Thu Jun 14, 2018 1:12 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3449

Re: Larry Swedroe: What Makes Factors Endure

What active investors are doing is valuing companies & securities. They are understanding businesses and what drives value. I did this a business for the past 20 years primarily for private business. It much more involved that running factor screens and developing portfolios with the output of these...
by packer16
Thu Jun 14, 2018 10:05 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3449

Re: Larry Swedroe: What Makes Factors Endure

IMO your narrative includes a myth that factor investing is the same as the investing value investors have been following for years. This is not true. Value investing is not factor investing. Value investing is based upon having a deep understanding of businesses & valuation of those businesses. Fac...
by packer16
Thu Jun 14, 2018 5:49 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Makes Factors Endure
Replies: 55
Views: 3449

Re: Larry Swedroe: What Makes Factors Endure

IMO factors have only been put to the test since the mid 2000s with real money when they were first invested in any real scale. To think that with more money invested this way that they will not go the way of active investing due to the same factors that reduced the value of active investing is naiv...
by packer16
Wed Jun 13, 2018 4:35 pm
Forum: Investing - Theory, News & General
Topic: Buy LEAPS vs stocks
Replies: 7
Views: 777

Re: Buy LEAPS vs stocks

LEAPs appear to be easier than they are. You need to get 2 thing right the mispricing & the timing when the market will correct this. If you are good you may be able to get the mispricing right more than 50% or 55% of the time but in my experience the timing aspect of LEAPs lowers the odds of succes...
by packer16
Mon Jun 04, 2018 10:48 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

Dave,

Do you know if there has been any issues with repurchases not being filled since SRRIX started? I know they limit redemptions to 5% of total shares per quarter but if they have patient capital then this should not be a material issue. Thanks.

Packer
by packer16
Mon Jun 04, 2018 10:44 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Two Articles On Reinsurance
Replies: 41
Views: 3297

Re: Larry Swedroe: Two Articles On Reinsurance

Just to correct a few misconceptions First, there have been claims that Stone Ridge is a bunch of people who have only derivatives experience not "real" experience working with real reinsurers. Amazing to me that there are people on this site who often make claims as facts when they have no clue wh...
by packer16
Mon Jun 04, 2018 6:40 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

Thanks nedsaid. In response, to Larry's last comment, this critic does understand that to get re-insurance and credit exposure you have to buy it as a part of a larger business. But the real question is it worth the cost to get pure exposure to these risks. The alternative for re-insurance is to get...
by packer16
Sat Jun 02, 2018 7:31 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

For your information, Larry did respond to some of the questions. Here is his response: "You also I believe are incorrect in your understanding of SRRIX. Since they basically only buy quota shares, meaning entire slices of the books of the reinsurers, no cherry picking, they are getting the same und...
by packer16
Fri Jun 01, 2018 7:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Two Articles On Reinsurance
Replies: 41
Views: 3297

Re: Larry Swedroe: Two Articles On Reinsurance

The problem with the products recommended is they do not time when to get & out when premiums are expensive or cheap they are in re-insurance all the time. The guys running the portfolios are not underwriters & do not have underwriting backgrounds, only insurance derivative backgrounds. They worked ...
by packer16
Sun Apr 01, 2018 9:23 am
Forum: Investing - Theory, News & General
Topic: What are the specific "risks not reflected in volatility" of factor investing?
Replies: 10
Views: 699

Re: What are the specific "risks not reflected in volatility" of factor investing?

What is interesting about SCV since 2000, is in big stock market down years, 2000 to 2002 & 2008, SCV outperformed the S&P 500. So while the logic of SCV being more risky in a downturn may be correct, the data says something else. One risk is liquidity. Long-term investors are uniquely positioned to...
by packer16
Sun Apr 01, 2018 9:08 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Active Can’t Crack Inefficient Markets
Replies: 22
Views: 2920

Re: Larry Swedroe: Active Can’t Crack Inefficient Markets

Larry, Thanks for the background here. Since the portfolio was started at an earlier time with real funds not back tested data then I stand corrected. If we use 1998 as starting point (about the low point since 1995 in relative SCV/S&P 500 relative performance) the outperformance of SCV is about 4.6...
by packer16
Sat Mar 31, 2018 4:08 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Active Can’t Crack Inefficient Markets
Replies: 22
Views: 2920

Re: Larry Swedroe: Active Can’t Crack Inefficient Markets

Some speak of a free lunch but I have yet to see it play out in real better returns in the future for a given set of pre-defined allocations. Larry when he laid out his LP with a SCV portfolio in 2011, set up a testable hypothesis with various levels of bond & SCV versus bonds & S&P 500 & it failed ...
by packer16
Sat Mar 31, 2018 11:15 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Active Can’t Crack Inefficient Markets
Replies: 22
Views: 2920

Re: Larry Swedroe: Active Can’t Crack Inefficient Markets

IMO for most BHs & thinking investors this is click bait. The studies conclusion & the articles for that matter is active is less than passive on average. What additional insight does this bring that most BHs do not already know. The question you need to ask about active is where would you expect to...
by packer16
Mon Mar 26, 2018 8:31 am
Forum: Investing - Theory, News & General
Topic: Argument Supporting Strong Future Equity Returns (?)
Replies: 29
Views: 2538

Re: Argument Supporting Strong Future Equity Returns (?)

I think one thing folks need to keep in mind is what mean are folks talking about & what factors effect that mean. If you are talking about world stock market returns, then you are talking about an combination of individual country returns. Each countries returns are going to vary depending upon how...
by packer16
Sun Mar 18, 2018 11:47 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

IMO the insurance risk managers like Buffet, Markel & Watsa know more about re-insurance risk than some relatively inexperienced folks running SRRIX. One clue is the masters focus in area they have an edge versus trying to diworsify into areas to reduce volatility. IMO the market is becoming more e...
by packer16
Sun Mar 18, 2018 7:16 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Count Out Commodities
Replies: 51
Views: 6373

Re: Larry Swedroe: Don’t Count Out Commodities

IMO the quality of Larry's decision is dependent upon the quality of his model. He is treating financial data & processes like scientific data which is an interesting approach but may be wrong if financial markets do not act like natural processes. If he has the correct model of markets then he is c...
by packer16
Sun Mar 18, 2018 6:46 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

IMO the insurance risk managers like Buffet, Markel & Watsa know more about re-insurance risk than some relatively inexperienced folks running SRRIX. One clue is the masters focus in area they have an edge versus trying to diworsify into areas to reduce volatility. IMO the market is becoming more ef...
by packer16
Sat Mar 17, 2018 11:32 pm
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re: Re-insurance risk

The difference between the miners & the commodity is the miners have costs (so there is operational leverage) & financial leverage. So buying miners is buying leveraged exposure to a commodity with all the lenders ahead of you taking most of the return most of the time, similar to shipping companies...
by packer16
Sat Mar 17, 2018 8:22 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Factor Investing Alive & Well
Replies: 11
Views: 1751

Re: Larry Swedroe: Factor Investing Alive & Well

Interesting article but I think he missed an option in the overgrazing narrative. We did see a one-time large gain in value vs. growth stocks from 1999 to 2006 and a flat or oscillating gain and loss since then. You can see this in the differences in returns between DFSVX/VSIIX and VFINX from 1999 t...
by packer16
Tue Mar 13, 2018 9:35 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Don’t Count Out Commodities
Replies: 51
Views: 6373

Re: Larry Swedroe: Don’t Count Out Commodities

Dave, Thanks for your narrative. I am similarly interested in the market but try to use a micro edge (focus on specifically mispriced securities) versus trying to invest where I think I have macro/asset class edge. I read the article & found it defensive & the arguments about CCF weak. If CCF is too...
by packer16
Sun Mar 11, 2018 12:34 pm
Forum: Investing - Theory, News & General
Topic: Cheap & More Liquid Ways to Get Alt Exposures
Replies: 5
Views: 655

Re: Cheap & More Liquid Ways to Get Alt Exposures

I am not sure that the stock market risk would overwhelm the reinsurance, credit card or farm risk (which comes from the same underlying assets) over a longer period of time. I never understood the stock market risk related to these assets. I do not think just because these assets (re-insurance, cre...
by packer16
Sun Mar 11, 2018 8:33 am
Forum: Investing - Theory, News & General
Topic: Cheap & More Liquid Ways to Get Alt Exposures
Replies: 5
Views: 655

Cheap & More Liquid Ways to Get Alt Exposures

I agree with the alternatives in concept but the high cost and lack of liquidity in the current fund offerings discussed here create some real issues in attempting to getting the market returns from these funds. First, the cost is high which on a portfolio % basis may be small on an absolute $ basis...
by packer16
Tue Mar 06, 2018 7:28 am
Forum: Investing - Theory, News & General
Topic: Re-insurance risk
Replies: 21
Views: 1920

Re-insurance risk

I like the idea of re-insurance risk as diversifier. Therefore, I think it may make sense to holds a group of good re-insurers as diversification and return enhancing investment. I have heard some talk about SRRIX but IMO this is an expensive option that has had poor historical performance versus sk...
by packer16
Sat Mar 03, 2018 12:51 pm
Forum: Investing - Theory, News & General
Topic: Study: Population Aging and Real Interest Rates, 1960-2060
Replies: 22
Views: 3341

Re: Study: Population Aging and Real Interest Rates, 1960-2060

One way to examine the chart is in regards to capital destroying events (war, famine & epidemics) or capital retarding events (collective/auotcratic economic systems). In the late 19th century to the mid 20th century, all three of the destroyers & retarders were present. However, as the first three ...
by packer16
Sat Mar 03, 2018 8:52 am
Forum: Investing - Theory, News & General
Topic: Excellent Article On Conversion Of Human Capital To Investment Capital And Sequence Of Return Risk
Replies: 4
Views: 875

Re: Excellent Article On Conversion Of Human Capital To Investment Capital And Sequence Of Return Risk

Great article. The CFA paper linked to in the article (https://www.cfapubs.org/doi/pdf/10.2470/rf.v2007.n1.458) has some interesting ideas about quantifying human capital & putting it into an asset allocation and deals with issues such as discount rate to discount human capital dependent upon how ri...
by packer16
Thu Mar 01, 2018 8:04 am
Forum: Investing - Theory, News & General
Topic: Your Paradigm for Long-term Inflation Risk?
Replies: 29
Views: 1898

Re: Your Paradigm for Long-term Inflation Risk?

The best paradigm I have seen is based upon shortages. What causes prolonged inflation is labor shortages. These are typically caused by war, famine or epidemic or in the 20th century not participating in the world economy in a productive way (communist command economies). There is great book called...
by packer16
Tue Feb 27, 2018 8:40 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Investors Should Worry About
Replies: 118
Views: 10955

Re: Larry Swedroe: What Investors Should Worry About

Nedsaid, Thanks for putting the effort into that last post; very interesting read. Jared Kiser from Larry’s firm published a paper showing that REIT returns are really explained by the underlying factors size, value, and I think term. Based on that I’ve elected to access those factors with stocks a...
by packer16
Sun Feb 25, 2018 4:29 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Consumption’s Impact On Returns
Replies: 5
Views: 1049

Re: Larry Swedroe: Consumption’s Impact On Returns

It would be interesting to hear Larry's & others thoughts on Damodaran's forward looking ERP data based upon the 10-year bond rate, as shown on his site. The ERP is the incremental return of holding stocks versus bonds. This data overcomes some of the CAPE weaknesses like lack of normalization to in...
by packer16
Sat Feb 24, 2018 4:59 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Investors Should Worry About
Replies: 118
Views: 10955

Re: Larry Swedroe: What Investors Should Worry About

I agree they are not alternatives to stocks or bonds but the actual returns (as implemented by the recommended funds) are closer to balanced fund returns than equity. In theory they may have equity returns but since these funds have been around & recommended (2014) the average return has been 6.1% w...
by packer16
Sat Feb 24, 2018 2:05 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: What Investors Should Worry About
Replies: 118
Views: 10955

Re: Larry Swedroe: What Investors Should Worry About

IMO the scenario that Larry points out is pretty remote. A few items he left out include the low labor participation rate which will increase the pool of workers vs. history & the fact that wages are not rising across the board but in select sectors (high tech, drug/bio tech). I agree to get inflati...
by packer16
Sun Feb 11, 2018 8:24 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

In terms of comparisons, you need to reference the dates the comments were made. If you look at performance since 9/30/2015, the story is not a clear as the chart presented implies. Since Sept 2015, QPSIX returned 4.4% per year versus 17.2% for the S&P 500 & 2.2% for SEQUX. Now SEQUX was half way t...
by packer16
Sat Feb 10, 2018 8:39 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

My intent may be coming off too strong. It looks your expectation was not that QSPIX was not going to give you equity-like returns which is fine I just have a problem with characterizing these as equity like returns for less volatility. From a markets perspective, this does not make sense as the mar...
by packer16
Sat Feb 10, 2018 8:09 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

As to efficiency versus alpha your definition of efficiency is what value investors do. They identify pricing descrepancies and other non-correlated factors such as holding company and voting discounts which are event driven versus market driven in terms of increasing in price. The only issue with p...
by packer16
Sat Feb 10, 2018 6:27 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

What is the difference between portfolio efficiency and seeking alpha (both trying to get equity like returns for less risk or more returns for equity like risk). IMO, unless I missed something, we have had 5 years + to evaluate some of these approaches & it has yet to be shown it can be done. All f...
by packer16
Sat Feb 10, 2018 10:49 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

In terms of comparisons, you need to reference the dates the comments were made. If you look at performance since 9/30/2015, the story is not a clear as the chart presented implies. Since Sept 2015, QPSIX returned 4.4% per year versus 17.2% for the S&P 500 & 2.2% for SEQUX. Now SEQUX was half way th...
by packer16
Sat Feb 10, 2018 8:37 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

One interesting alternative to QSPIX is Vanguard Balanced Fund. It has provided about the same return with lower fees & thus if QSPIX's quant algos stop working then you have removed that risk. In the end I really wonder if these alternatives add anything you can get from a balanced fund. The alts ...
by packer16
Sat Feb 10, 2018 8:27 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

Although Larry has some good advice & is a really nice guy, he has some weaknesses. He appears to be in the hunt for alternative assets to generate returns, just like the active managers he rails on. This quest IMO leads him to risky & expensive alternative which IMO have little or no place in a Bog...
by packer16
Sat Feb 10, 2018 8:22 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Rising Rates Increase Worries
Replies: 86
Views: 13911

Re: Larry Swedroe: Rising Rates Increase Worries

Although Larry has some good advice & is a really nice guy, he has some weaknesses. He appears to be in the hunt for alternative assets to generate returns, just like the active managers he rails on. This quest IMO leads him to risky & expensive alternative which IMO have little or no place in a Bog...
by packer16
Thu Feb 08, 2018 8:45 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1255
Views: 191682

Re: QSPIX - thoughts on interesting fund

One interesting alternative to QSPIX is Vanguard Balanced Fund. It has provided about the same return with lower fees & thus if QSPIX's quant algos stop working then you have removed that risk. In the end I really wonder if these alternatives add anything you can get from a balanced fund. The alts d...
by packer16
Sun Jan 21, 2018 9:13 pm
Forum: Investing - Theory, News & General
Topic: "Why You Should Probably Just Give Up Trying To Beat The Stock Market"
Replies: 19
Views: 3379

Re: "Why You Should Probably Just Give Up Trying To Beat The Stock Market"

The one issue with the Larry Portfolio is timing risk. If you put one together after his article you would underperform & have as much volatility as a TSM/bond portfolio. It is good in theory but the shortfalls from the expected premium can be painful if you expect them to show up and they do not. P...
by packer16
Mon Jan 15, 2018 9:06 am
Forum: Investing - Theory, News & General
Topic: Individual investors, possible structural advantages
Replies: 10
Views: 864

Re: Individual investors, possible structural advantages

The structural advantage of individual investors is the long time horizon they have for some of their money. This can provide an advantage in a panic as they can provide liquidity to selling shareholders. This can also be an advantage in small niches of the market where an individual has specialized...