Search found 7637 matches

by grok87
Sat Feb 17, 2018 10:04 pm
Forum: Investing - Theory, News & General
Topic: Yields Spreads and the Economy
Replies: 3
Views: 293

Re: Yields Spreads and the Economy

Anyone follow this trend? Like the yield curve inversion, the "spread" (difference in yield) between US treasuries and non-Investment grade corporations can be an indicator (leading?) of the economy. I am not sure how well this works globally; I am only familiar with the U.S. in this regard. In cas...
by grok87
Sat Feb 17, 2018 12:04 pm
Forum: Investing - Theory, News & General
Topic: Bberg: bond bulls say they'll have the last laugh
Replies: 16
Views: 1974

Re: Bberg: bond bulls say they'll have the last laugh

So, in my world, in my scale of things, what would "bond bulls having the last laugh" look like? Something like this? I am not a bond expert but the above illlustrates my problem with Total Bond market; what's the upside? If interest rates increase quickly Total Bond will lose principle. Conversely...
by grok87
Sat Feb 17, 2018 11:05 am
Forum: Investing - Theory, News & General
Topic: Bberg: bond bulls say they'll have the last laugh
Replies: 16
Views: 1974

Re: Bberg: bond bulls say they'll have the last laugh

Savio wrote:
Sat Feb 17, 2018 1:23 am
I worry about inflation eventually because that is 1 way to get rid of debt (especially national debt): inflate it away.
Yep
by grok87
Sat Feb 17, 2018 10:32 am
Forum: Investing - Theory, News & General
Topic: Bberg: bond bulls say they'll have the last laugh
Replies: 16
Views: 1974

Re: Bberg: bond bulls say they'll have the last laugh

My own take is slightly different. I think we are headed for stagflation. Higher inflation but weak economic growth. grok87....Not being a wise guy (I had a more colorful term in mind), but could you more fully explain why you see stagflation in the future? I have read a number of your posts, and t...
by grok87
Sat Feb 17, 2018 8:06 am
Forum: Investing - Theory, News & General
Topic: Bberg: bond bulls say they'll have the last laugh
Replies: 16
Views: 1974

Re: Bberg: bond bulls say they'll have the last laugh

My own take is slightly different. I think we are headed for stagflation. Higher inflation but weak economic growth. All this tax stuff is just a head fake. The retail consumer, who drive like 70% of the U.S. economy is still dead-in-the-water... Ah. The one environment where we all lose. TIPS don'...
by grok87
Fri Feb 16, 2018 11:44 pm
Forum: Investing - Theory, News & General
Topic: Bberg: bond bulls say they'll have the last laugh
Replies: 16
Views: 1974

Bberg: bond bulls say they'll have the last laugh

So i'm curious what Bogleheads make of this article: https://www.bloomberg.com/news/articles/2018-01-29/these-bond-bulls-say-they-ll-have-last-laugh-as-u-s-yields-soar After all, nothing in their long-term outlook has changed: Inflation is still subdued, consumers have limited capacity to propel eco...
by grok87
Thu Feb 15, 2018 4:35 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

So I logged into Vanguard's brokerage account today and it looked like the auction wasn't available. But a few days ago it did show that I could have purchased..... could have sworn it said auction was open thru 2.15. So, I assume it's because the brokerage account doesn't have instantaneous purcha...
by grok87
Thu Feb 15, 2018 1:19 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

Auction yield was 1.003%
by grok87
Wed Feb 14, 2018 11:51 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

I believe where we differ is your statement here: " I believe the cost of the annuity is insensitive to interest rates, so if interest rates rise in case (a) I may not be able to buy as large of an annuity." I believe the cost of a fixed payout annuity (i.e. immediate annuity) is highly sensitive t...
by grok87
Wed Feb 14, 2018 6:41 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

personally i'm planning to ladder out my tips to age 95. if you take this approach you could buy today a ladder of 11 tips of maturity 20 years out to 30 years. so say $1k of tips maturity in each of the years 2028, 2029, 2030...2038. then in 20 years you will have a ladder of tips maturing in 0,1,...
by grok87
Tue Feb 13, 2018 7:31 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

If you are planning to participate in the auction this Thursday you may want a sense of how much each $1000 tips bond could cost. For example if you are cutting it close with the amount of cash you have. My belief is that the max cost per $1,000 bond at This auction would be $1,000.36. How did I ge...
by grok87
Tue Feb 13, 2018 7:29 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

So here's another thing to think about. If one's eventual goal is to at least partly annuitize the tips ladder, then duration matching is useful. in other words you want the average maturity of your tips ladder to somewhat closely match that of the annuity you are hoping to buy. This helps it be a ...
by grok87
Tue Feb 13, 2018 4:10 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

If you are planning to participate in the auction this Thursday you may want a sense of how much each $1000 tips bond could cost. For example if you are cutting it close with the amount of cash you have. My belief is that the max cost per $1,000 bond at This auction would be $1,000.36. How did I get...
by grok87
Mon Feb 12, 2018 8:17 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

I'm not 100% in agreement here. To me, the problem with this ^ is that "problem" needs to be plural. Can any of our new posters identify another one? Similar to what Yukon points out there is no guarantee that future TIPS will be linked to CPI-U. Yes, thank you triceratop! That's a bird in the hand...
by grok87
Mon Feb 12, 2018 8:38 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

i think a lot of the LMP discussions that we have on this board- pro, anti, etc.- could be helped by talking about "framing". https://en.wikipedia.org/wiki/Framing_effect_(psychology) The 3 legged-stool approach above is one common way people USED to think about retirement planning. It's faded away...
by grok87
Sun Feb 11, 2018 12:56 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

Garland/Grok: At the end of the day I'm not seeing where you guys are that much different. Grok laid out having about a 50/50 stock/bond split. Garland argued for using "balanced" portfolio. Seems like at the end of the day that the main differences are a) Whether to rebalance between stocks and bo...
by grok87
Sat Feb 10, 2018 10:02 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

Garland/Grok: At the end of the day I'm not seeing where you guys at that much different. Grok laid out having about a 50/50 stock/bond split. Garland argued for using "balanced" portfolio. Seems like at the end of the day that the main differences are a) Whether to rebalance between stocks and bon...
by grok87
Sat Feb 10, 2018 9:49 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1246
Views: 185776

Re: QSPIX - thoughts on interesting fund

matjen wrote:
Sat Feb 10, 2018 9:36 am


To repeat, comparing QSPIX to SEQUX is rather silly but here it is. VMNFX is the reasonable comparison (thanks Grok). I know which I would rather own...

Image
thanks for the chart.
by grok87
Sat Feb 10, 2018 9:36 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

Still can't fathom purchasing a 30-year bond unless I was confident both the return and cash flow offered by the bond is all I would need. Looking back 30 years and seeing where rates were, and looking back 30 years before that, I just think it's crazy for individuals to do it otherwise. Perhaps if...
by grok87
Sat Feb 10, 2018 9:29 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

I have no interest in a LMP because I don't think I can accurately define what my cost of living is going to be 30 years from now. A lot of unexpected things can happen to one's circumstances in 30 years. There are simply too many unforeseen variables that can over such a long time span seriously i...
by grok87
Sat Feb 10, 2018 7:48 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1246
Views: 185776

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 grok87
Fri Feb 09, 2018 8:57 pm
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1246
Views: 185776

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 grok87
Fri Feb 09, 2018 8:23 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

Re: 30 yr tips auction 2/15: 1.0% yield?

So, even if you cannot imagine yourself thinking like this about your own needs, are you at least able to put yourself into a mindset where it might actually make a little sense to you? Or do you still think I'm just ("We're just", I'm not alone here after all!) nothing but "crazy"? :wink: I'm behi...
by grok87
Thu Feb 08, 2018 7:17 am
Forum: Investing - Theory, News & General
Topic: 30 yr tips auction 2/15: 1.0% yield?
Replies: 68
Views: 5328

30 yr tips auction 2/15: 1.0% yield?

On thursday february 15th the treasury will auction 30 year tips. Given that 29 year tips are currently trading on the secondary market at a real yield of 0.96% i'm hopeful that we might get to a 1.0% real yield at this auction. I am planning to participate and for a somewhat larger amount than usua...
by grok87
Wed Feb 07, 2018 5:33 am
Forum: Investing - Theory, News & General
Topic: QSPIX - thoughts on interesting fund
Replies: 1246
Views: 185776

Re: QSPIX - thoughts on interesting fund

It looks like QSPIX acted like bonds, which is okay. If I was a QSPIX investor, I would expect higher than the 2-3% return that you will get out of bonds over the next decade. If you do all the fancy stuff and still have the return of bonds, you may as well just be in bonds. If I owned this fund, I...
by grok87
Sat Feb 03, 2018 5:20 pm
Forum: Investing - Theory, News & General
Topic: Bond funds: Separating Credit Quality and Duration Effects?
Replies: 11
Views: 707

Re: Bond funds: Separating Credit Quality and Duration Effects?

Run a regression on each for credit excess return and term risk excess return factors. Maybe multiple ones to cover different parts of the yield curve and different levels of credit quality, though then those factors will be significantly correlated. As for where to find that data, um... FWIW, cred...
by grok87
Sat Feb 03, 2018 5:01 pm
Forum: Investing - Theory, News & General
Topic: Bond funds: Separating Credit Quality and Duration Effects?
Replies: 11
Views: 707

Re: Bond funds: Separating Credit Quality and Duration Effects?

fibax, fidelity's intermediate treasury bond index has a duration of 6.4 years and a 5 year return for the same period of `1.25% https://fundresearch.fidelity.com/mutua ... /315911834 that's an average annual return difference of 0.08% for basically and extra year of duration. the fund's expense ra...
by grok87
Sat Feb 03, 2018 9:40 am
Forum: Investing - Theory, News & General
Topic: Bond funds: Separating Credit Quality and Duration Effects?
Replies: 11
Views: 707

Re: Bond funds: Separating Credit Quality and Duration Effects?

Question, need help: Both longer duration and lower credit quality increase risk and therefore contribute to a higher expected return. For example Vanguard Intermediate-Term Corporate Bond Index Fund Admiral Shares (VICSX) has a five year return of 3.37%, a duration of 6.4 years and a credit qualit...
by grok87
Sat Jan 20, 2018 5:26 pm
Forum: Investing - Help with Personal Investments
Topic: Income in retirement questions
Replies: 15
Views: 2152

Re: Income in retirement questions

I am nearing retirement and would like some advice. I am 61, my wife 60. No debts. Investing through Vanguard, how would be the best way to withdraw money from my account in retirement. Taking the dividends from my portfolio and my Social Security will leave me around $24,000 short per year. Any su...
by grok87
Tue Jan 16, 2018 4:26 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets equities went sideways for 50 years 1920-70
Replies: 24
Views: 2158

Re: Emerging Markets equities went sideways for 50 years 1920-70

As per the posted chart it is a price only index. So ignores dividends. Also really unclear how they are defining EM. As pointed out above the term was only coined recently. Lot's of hindsight bias here perhaps. Ie pick the economies that were weak over the past 100 years and guess what there stock ...
by grok87
Mon Jan 15, 2018 2:14 pm
Forum: Investing - Theory, News & General
Topic: New TIPS vs Old TIPS
Replies: 4
Views: 552

Re: New TIPS vs Old TIPS

Although one buys TIPS to hedge against unexpected higher inflation, we can never predict whether deflation will ever reappear. It doesn't seem like TIPS pricing accounts for this, else the older TIPS with the higher principal balance would always have a higher YTM to offset for the deflation risk....
by grok87
Sat Jan 13, 2018 8:05 pm
Forum: Investing - Theory, News & General
Topic: VUSXX vs. TreasuryDirect
Replies: 10
Views: 1087

Re: VUSXX vs. TreasuryDirect

you can get some info on VUSXX's risk from vanguard website https://personal.vanguard.com/us/funds/snapshot?FundId=0011&FundIntExt=INT&ps_disable_redirect=true#tab=2 the average maturity of the tbills it holds is 55 days https://personal.vanguard.com/us/funds/snapshot?FundId=0011&FundIntExt=INT&ps_d...
by grok87
Mon Jan 08, 2018 8:43 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 354
Views: 34888

Re: Year 2000 retirees using the '4% rule' - Where are they now?

There is always discussion regarding withdrawal rates and what is safe. Those who retired in the year 2000 have probably had the roughest road of any retirees in terms of market returns since the early 1970s. Let's take a look to see where they would be today, 18 years later, if they had used a 4% ...
by grok87
Mon Jan 08, 2018 8:27 pm
Forum: Investing - Theory, News & General
Topic: Year 2000 retirees using the '4% rule' - Where are they now?
Replies: 354
Views: 34888

Re: Year 2000 retirees using the '4% rule' - Where are they now?

Assuming a retirement age of 65, about 7% of retirees will survive longer than 30 years. If the retirement age is 60 we are talking of survival in excess of 30 years for around 20%. the 7% is for male retirees https://www.ssa.gov/oact/STATS/table4c6.html for women retiring at age 65, 14% are expect...
by grok87
Sat Jan 06, 2018 11:45 am
Forum: Personal Finance (Not Investing)
Topic: PenFed rate reset?
Replies: 9
Views: 2397

Re: PenFed rate reset?

Typical ARM would increase/decrease a max +2 or -2 from the 'your current' rate at the time of rate-change/reset. (be careful when choosing ARM's which have rate-reset upto 5% or 6% upwards, at the time of its "first rate-reset". Stay AWAY from such ARMs, time to do ReFi those now!) Now, if you 'cu...
by grok87
Fri Jan 05, 2018 10:11 pm
Forum: Personal Finance (Not Investing)
Topic: PenFed rate reset?
Replies: 9
Views: 2397

Re: PenFed rate reset?

So i am now facing the penfed 5/5 arm reset decision myself. my Current rate is 2.75% and the offered reset is 3.3125% for the next 66 months. So the downside is that i would be increasing my interest rate for the next 6 months to get a lower interest rate of 3.3125% (vs. say 4.3%) for the followin...
by grok87
Fri Jan 05, 2018 4:11 pm
Forum: Personal Finance (Not Investing)
Topic: PenFed rate reset?
Replies: 9
Views: 2397

Re: PenFed rate reset?

very helpful thread... So i am now facing the penfed 5/5 arm reset decision myself. my Current rate is 2.75% and the offered reset is 3.3125% for the next 66 months. So the downside is that i would be increasing my interest rate for the next 6 months to get a lower interest rate of 3.3125% (vs. say ...
by grok87
Thu Jan 04, 2018 1:17 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2592

Re: Conceptually: *Why* does the Yield Curve invert?

Here is what the NY Fed makes of the Yield Curve (Updated 03-Jan-2018) https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf Thanks So based on 3mo-10 yr spread their model suggests a 12% chance of recesssion which is basically the same level it reached just before the...
by grok87
Tue Jan 02, 2018 8:13 pm
Forum: Investing - Theory, News & General
Topic: 2018 Hedge Fund contest
Replies: 126
Views: 8765

Re: 2018 Hedge Fund contest

consternatio partners

longs
tnet
cnc
xpo

shorts
CIM
NLY
MFA
by grok87
Mon Jan 01, 2018 2:39 pm
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 25
Views: 2882

Re: An hour with David Swensen at Council of Foreign Relations

He said his bonds were short term, and he favored Treasuries to corporate bonds. Do that mean he does not agree with the Boglehead approach of buying Total Bond Fund? correct he does not. in unconventional success he views bonds not as sources of good long term returns but as diversifiers. i person...
by grok87
Mon Jan 01, 2018 9:47 am
Forum: Investing - Theory, News & General
Topic: An hour with David Swensen at Council of Foreign Relations
Replies: 25
Views: 2882

Re: An hour with David Swensen at Council of Foreign Relations

Stick5vw -- Swensen's book for individual investors is Unconventional Success . The preface says: When I began my work on Unconventional Success , I contemplated writing a diferent book... Pioneering Portfolio Management [his book for institutional investors] describes an equity-oriented, broadly d...
by grok87
Thu Dec 28, 2017 9:54 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2592

Re: Conceptually: *Why* does the Yield Curve invert?

default risk? https://events.barcelonagse.eu/live/files/897-icf15-rancierepdf No. At least not really for the US yield curve or other developed markets with low market-perceived risk of default. Check CDS rates and flows, investor sentiment and opinions, etc. during these times. But more generally,...
by grok87
Thu Dec 28, 2017 9:41 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2592

Re: Conceptually: *Why* does the Yield Curve invert?

default risk? https://events.barcelonagse.eu/live/files/897-icf15-rancierepdf We present novel evidence that, in present value terms, creditors with short maturity securities suffer significantly more than creditors with long maturity securities during recent sovereign debt restructuring episodes. ...
by grok87
Thu Dec 28, 2017 5:22 pm
Forum: Investing - Theory, News & General
Topic: Conceptually: *Why* does the Yield Curve invert?
Replies: 27
Views: 2592

Re: Conceptually: *Why* does the Yield Curve invert?

default risk? https://events.barcelonagse.eu/live/files/897-icf15-rancierepdf We present novel evidence that, in present value terms, creditors with short maturity securities suffer significantly more than creditors with long maturity securities during recent sovereign debt restructuring episodes. W...
by grok87
Thu Dec 28, 2017 4:24 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 66
Views: 8478

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

grok87 wrote: not to be pedantic, but for the benefit of clarity for others who may be reading, you are saying "Duration risk is something that was rewarded for 35 years SINCE 1982..." right? Right, grok87, thanks for the correction. I'm old and sometimes there's a disconnect between when I mean an...
by grok87
Thu Dec 28, 2017 4:23 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 66
Views: 8478

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

if you don't mind my asking what were the bid/ask spreads like on the 3 year tips you sold? About 6 bps for qty 150, 9 bps for qty 25 and 12 bps for qty 1 this morning. Not enough to care about the cost over the auction prices. The hassel with bond premium is another matter if you worry about selli...
by grok87
Wed Dec 27, 2017 7:54 pm
Forum: Investing - Theory, News & General
Topic: 30 yr tips yield: 1% to 0.83% over last 2 weeks!
Replies: 66
Views: 8478

Re: 30 yr tips yield: 1% to 0.83% over last 2 weeks!

grok87 wrote: For the past 5 days: Long tips= ltpz: down 1.3% Long nominal treasuries= edv down 3.3% That 2% differential is modest relative to what is expected if increasing inflation actually becomes a long term secular trend. Few even consider such a situation, but that doesn't rule it out as a ...