Search found 385 matches

by DaufuskieNate
Fri Nov 29, 2019 11:29 am
Forum: Investing - Theory, News & General
Topic: Erosion of credit quality in Total Bond
Replies: 32
Views: 2709

Re: Erosion of credit quality in Total Bond

It seems to me that it's not good that the composition will change over time with the supply of bonds. If the government runs high deficits, the government portion could go up. If corporations start to lever up, that portion may increase. Whichever sector is growing debt the fastest gets a higher sh...
by DaufuskieNate
Thu Nov 28, 2019 3:36 pm
Forum: Investing - Theory, News & General
Topic: To tilt or not to tilt, for amateurs?
Replies: 26
Views: 1453

Re: To tilt or not to tilt, for amateurs?

Should you invest in factors? Probably not in my opinion. I think most people don't have the temperament for it, or they don't understand it sufficiently to benefit from the research. Agreed. Successful tilters need the temperament to accept that their returns may not match common market benchmarks...
by DaufuskieNate
Thu Nov 21, 2019 5:01 pm
Forum: Investing - Theory, News & General
Topic: Where does the money come from?
Replies: 52
Views: 6404

Re: Where does the money come from?

Tigermoose wrote:
Thu Nov 21, 2019 2:18 pm
.In order to drive up the price of all these financial and real estate assets, where is the money coming from?
The Fed.
by DaufuskieNate
Sat Oct 26, 2019 10:23 am
Forum: Investing - Theory, News & General
Topic: BOSVX vs IJS for SCV Loading?
Replies: 55
Views: 2114

Re: BOSVX vs IJS for SCV Loading?

The trouble with taxable investing before you have a plan you can really stick with is that you get tax-trapped (via cap gains) into funds you wish you didn't have. I bet it's really common for BHer's to have a handful of zombies in their taxable accts. Very true. You should also love whatever fund...
by DaufuskieNate
Sun Oct 20, 2019 1:19 pm
Forum: Investing - Theory, News & General
Topic: Safe Withdrawal Rate in today’s low yield environment
Replies: 44
Views: 4132

Re: Safe Withdrawal Rate in today’s low yield environment

TheNightsToCome wrote:
Sun Oct 20, 2019 1:07 pm

If the PE10 was 6.6 and bonds paid 15% or so (i.e., early 80s conditions), then I'd feel very comfortable retiring now. Not sure if I'd actually do it, but financial concerns wouldn't affect the decision.
When inflation is running 12-14%, it changes everything. Especially for retirees.
by DaufuskieNate
Sat Oct 12, 2019 9:28 am
Forum: Investing - Theory, News & General
Topic: Vanguard: the case for global equity investing
Replies: 160
Views: 12660

Re: Vanguard: the case for global equity investing

David Althaus wrote:
Sat Oct 12, 2019 9:18 am
No value in making a 100 year wager but mine would be the US will outperform the rest of the world.
I wouldn’t bet against China.
by DaufuskieNate
Mon Sep 30, 2019 8:02 am
Forum: Investing - Theory, News & General
Topic: When Value Is More Valuable
Replies: 76
Views: 5556

Re: When Value Is More Valuable

rkhusky wrote:
Mon Sep 30, 2019 6:22 am

So, there is really no good measure for value that doesn't include price?
If you think about it, this is true of anything we pay money for.
by DaufuskieNate
Fri Sep 13, 2019 12:39 pm
Forum: Investing - Theory, News & General
Topic: Explaining the Demise of Value Investing
Replies: 318
Views: 18404

Re: Explaining the Demise of Value Investing

Even then, the definition of efficiency depends on a lot of assumptions and investors will no doubt have differing viewpoints on those assumptions. An efficient portfolio means that there is no other portfolio that achieves a higher return for a given level of risk over a given period of time. Retu...
by DaufuskieNate
Fri Sep 13, 2019 11:51 am
Forum: Investing - Theory, News & General
Topic: Explaining the Demise of Value Investing
Replies: 318
Views: 18404

Re: Explaining the Demise of Value Investing

I’ve been pondering this more. Assume the market prices only risk that is nondiversifiable. That certainly will occur for individual assets. Will the market price the assumption that we all create diversified portfolios? Maybe the answer is yes. But that means that practically by definition a Bogle...
by DaufuskieNate
Sun Sep 08, 2019 9:28 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: 3% is the new 4%
Replies: 662
Views: 50757

Re: Larry Swedroe: 3% is the new 4%

What's his rationale? Not interested in listening. A post declaring one’s non-interest in listening to a shared podcast is novel, or perhaps odd, particularly since the respondent’s interest was piqued enough to ask a question about said podcast. Doesn't seem novel or odd to me. I much prefer readi...
by DaufuskieNate
Fri Aug 30, 2019 10:35 am
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29223

Re: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]

Larry has an article on MarketWatch which says that we shouldn't throw in the towel on Warren Buffett just because his recent performance has lagged the S&P 500. He reminds us that Buffett believes that temperament is more important than intelligence in investing. Yes, value has lagged for 10 years....
by DaufuskieNate
Thu Aug 29, 2019 1:06 pm
Forum: Investing - Theory, News & General
Topic: Dr. Bill Bernstein: Next "Bogleheads on Investing" podcast guest
Replies: 56
Views: 6065

Re: Dr. Bill Bernstein: Next "Bogleheads on Investing" podcast guest

Both Dr. Bernstein and Mr. Ferri have issued expected return forecasts in the past. What does the current environment hold for expected returns going forward and how should investors use, or not use, this information?
by DaufuskieNate
Wed Aug 28, 2019 9:32 pm
Forum: Investing - Theory, News & General
Topic: "The Importance of Simplicity"
Replies: 29
Views: 3788

Re: "The Importance of Simplicity"

“For the simplicity on this side of complexity, I wouldn't give you a fig. But for the simplicity on the other side of complexity, for that I would give you anything I have.”


― Oliver Wendell Holmes
by DaufuskieNate
Sat Aug 24, 2019 3:31 pm
Forum: Investing - Theory, News & General
Topic: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]
Replies: 673
Views: 29223

Re: [Larry Swedroe: Small Value Stocks are Cheap, Factor Investing Works]

Well, we've been mixing "exposure to SCV" with "exposure to the SCV factor." As part of this, some have argued that exposure to the SCV factor is over exposure to SCV. I don't know why this could become confusing. I'll just leave it at that..... :twisted: This post is very clear and understandable....
by DaufuskieNate
Sun Aug 18, 2019 12:51 pm
Forum: Investing - Theory, News & General
Topic: Past Performance
Replies: 74
Views: 4217

Re: Past Performance

That's a valid point, but you can also say that DFA is not exactly a traditional index fund. You can argue it being passive or not, but for comparison it would be better to find a different "index." In my mind, Vanguard TSM is a "best-in-class" total U.S. stock market index fund. You could make the...
by DaufuskieNate
Sun Aug 18, 2019 12:24 pm
Forum: Investing - Theory, News & General
Topic: Past Performance
Replies: 74
Views: 4217

Re: Past Performance

I learned long-ago (the hard way) the danger of using past performance to project future returns . Sadly, small cap funds have underperformed simple and cheap total U.S. stock market index fund for the past 10 years. Morningstar reports that during the last 5-years, total market index funds returne...
by DaufuskieNate
Mon Aug 12, 2019 11:45 am
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 23127

Re: Negative Interest Rates in U.S.

If one believes that an era of low and more predictable inflation is in our future — due to aging populations, slower economic growth and improved inflation targeting by central banks around the world — then it's not hard to imagine that low or negative interest rates may also be a persistent globa...
by DaufuskieNate
Sun Aug 11, 2019 1:10 pm
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 23127

Re: Negative Interest Rates in U.S.

If the Fed cuts rates all the way back down to zero and restarts quantitative easing, negative yields on U.S. Treasuries could swiftly change from theory to reality. LOL! If a frog had wings, he wouldn't bump his booty. The current issue of The Economist lists the following 10-year government bonds...
by DaufuskieNate
Sun Aug 11, 2019 10:30 am
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 23127

Re: Negative Interest Rates in U.S.

There can be value in considering alternative futures that cause one to move off of a "stay the course" path. Of course, staying the course may be the best response to negative interest rates. I just wonder how many would have the mental fortitude to reinvest at negative rates. Negative rates could ...
by DaufuskieNate
Sun Aug 11, 2019 7:55 am
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 23127

Negative Interest Rates in U.S.

[Thread merged into here, see below. --admin LadyGeek] Ran across this article today: https://seekingalpha.com/article/4284521-interest-rates-naturally-negative Here is the summary: "Summary It is no longer absurd to think that the nominal yield on U.S. Treasury securities could go negative. Along ...
by DaufuskieNate
Wed Jul 10, 2019 12:58 pm
Forum: Investing - Theory, News & General
Topic: Why factor investing isn't working
Replies: 484
Views: 27098

Re: Why factor investing isn't working

Schooner - not trying to be a smart Alek here, but I don’t think I could have a strong opposing view on a topic where I considered myself a novice without answers to basic questions of logic. I'm a novice relative to Larry Swedroe. He is an investment profession with decades of experience. I have r...
by DaufuskieNate
Wed Jul 10, 2019 12:36 pm
Forum: Investing - Theory, News & General
Topic: Why factor investing isn't working
Replies: 484
Views: 27098

Re: Why factor investing isn't working

Schooner - not trying to be a smart Alek here, but I don’t think I could have a strong opposing view on a topic where I considered myself a novice without answers to basic questions of logic.
by DaufuskieNate
Sat Jul 06, 2019 9:52 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle was right: smart beta ETFs are closet trackers (including Vanguard’s)
Replies: 21
Views: 2810

Re: Jack Bogle was right: smart beta ETFs are closet trackers (including Vanguard’s)

Are these the same value and small cap value funds that have taken so much abuse lately for under-performing TSM? So which is it? Are these funds guilty of deviating from TSM and inflicting the dreaded "tracking error" on unsuspecting investors, or are they really just closet indexes? It would actua...
by DaufuskieNate
Sat Jul 06, 2019 9:27 am
Forum: Investing - Theory, News & General
Topic: Relative Importance Of Factor Investing
Replies: 15
Views: 1091

Re: Relative Importance Of Factor Investing

Surely you don't actually believe you can't diversify among different economic growth or demographic risks or political risks? That's practically the essence of the argument for international diversification. This is an important point. To build off of it, the effects of macro factors express thems...
by DaufuskieNate
Wed Jul 03, 2019 8:55 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11655

Re: "Alice's Adventures in Factorland"

Disclaimer: I didn't read all of the posts in that exchange but I believe Taylor is probably trying to make the point of the importance of "staying the course" on TSM or 3-fund. Yah, you should probably read the posts. OP is announcing the superiority of 3-fund and telling everyone on the factor si...
by DaufuskieNate
Mon Jul 01, 2019 12:37 pm
Forum: Investing - Theory, News & General
Topic: Why isn't the distribution yield a valuable number? (for VWIUX)
Replies: 37
Views: 2804

Re: Why isn't the distribution yield a valuable number? (for VWIUX)

Here is a simplified example that may illuminate the issue. Suppose you are comparing 2 investments that mature in one year. The coupon and principal on both are paid at maturity. Investment A: Issued at par with a coupon of 3%. Investment B: Issued at 104 with a coupon of 6%. You put $104 into eac...
by DaufuskieNate
Mon Jul 01, 2019 10:58 am
Forum: Investing - Theory, News & General
Topic: Why isn't the distribution yield a valuable number? (for VWIUX)
Replies: 37
Views: 2804

Re: Why isn't the distribution yield a valuable number? (for VWIUX)

Here is a simplified example that may illuminate the issue. Suppose you are comparing 2 investments that mature in one year. The coupon and principal on both are paid at maturity. Investment A: Issued at par with a coupon of 3%. Investment B: Issued at 104 with a coupon of 6%. You put $104 into each...
by DaufuskieNate
Mon Jul 01, 2019 9:59 am
Forum: Investing - Theory, News & General
Topic: Why isn't the distribution yield a valuable number? (for VWIUX)
Replies: 37
Views: 2804

Re: Why isn't the distribution yield a valuable number? (for VWIUX)

Just to be perfectly clear. Comparing the payout, or distribution yield, of muni bonds that are typically issued at a premium directly to the yield of a CD, or other fixed income investment, issued at par is comparing apples to oranges. It will lead to faulty logic in decision making.
by DaufuskieNate
Sat Jun 29, 2019 11:06 am
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11655

Re: Past Performance?

The three fund portfolio simply works and is effective for many investors who will stick with it in both good and bad markets. This is key. A distinction shared by most any reasonably well-designed portfolio. The very premise of the OP's original post is that one should be persuaded by a 5-year run...
by DaufuskieNate
Fri Jun 28, 2019 9:42 am
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 11655

Re: "Alice's Adventures in Factorland"

Total Stock Market (TSM) indexing is not a strategy for beating the market, it is the market -- the thing all the strategies are trying to beat. Personally, I'm not trying to beat TSM in my portfolio strategy. I'm trying to earn a return that meets my personal long term needs with a risk level that...
by DaufuskieNate
Wed Jun 26, 2019 2:31 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: How Trading Costs Erode Factor Returns
Replies: 43
Views: 4604

Re: Turnover of Factor Funds?

According to Factor Research, this is the average annual turnover of various factor funds: Value 298% Size 156% Momentum 704% Low Volatility 230% Quality 192% Growth 253% Dividend Yield 97% Multi-factor 400% Best wishes. Taylor Not true. I put the words "factor funds" in bold because this is simply...
by DaufuskieNate
Sat Jun 22, 2019 3:23 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Curse Of Popularity
Replies: 29
Views: 3612

Re: Larry Swedroe: The Curse Of Popularity

Dave - Your explanation of long only funds makes a lot of sense. Thanks.

Nate
by DaufuskieNate
Sat Jun 22, 2019 2:27 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Curse Of Popularity
Replies: 29
Views: 3612

Re: Larry Swedroe: The Curse Of Popularity

Are you asking why, if SCV is diversified across 3 factors why isn’t it less volatile than TSM which has no net factor exposure? If that is your question, I think the answer is that size and value represent risk factors which implies higher volatility. But they also represent higher expected return...
by DaufuskieNate
Sat Jun 22, 2019 10:07 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Curse Of Popularity
Replies: 29
Views: 3612

Re: Larry Swedroe: The Curse Of Popularity

Dave,
I can fully appreciate the lack of correlation between these sources of return. One question I have had in this regard is why this does not reduce the volatility of an asset class like SCV. In other examples of diversification, this would be the expected result. What am I missing?
by DaufuskieNate
Fri Jun 21, 2019 1:34 pm
Forum: Investing - Theory, News & General
Topic: Exploring SCV diversification with Morningstar category averages, 1968-2018
Replies: 121
Views: 7959

Re: Exploring SCV diversification with Morningstar category averages, 1968-2018

...by the way, Ken French has removed the back-to-1926 "historical benchmark returns" from his "data library" website. To those in the know, what is the best source of pre-1980s data on SCV now that Ken French disavowed his own data? Do you have any background on this? I couldn't find anything on h...
by DaufuskieNate
Mon Jun 17, 2019 1:25 pm
Forum: Investing - Theory, News & General
Topic: Should I abandon the Total International Stock Index Fund for greener pastures?
Replies: 113
Views: 11884

Re: Should I abandon the Total International Stock Index Fund for greener pastures?

You joined here 8 months ago and had to have seen numerous posts discussing international markets over this time. Your question will probably receive a torrent of replies with opinions all over the map. You don't need to wait to see these...just look at some recent threads on this issue. You clearly...
by DaufuskieNate
Mon Jun 17, 2019 12:21 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Has The Value Trade Become Overcrowded.
Replies: 64
Views: 5225

Re: Larry Swedroe: Has The Value Trade Become Overcrowded.

I had a few hundred dollars in cash in my rollover IRA account so I just purchased 6 shares of IJS, the iShares S&P Small-Cap 600 Value Index ETF, adding to that position. Seeing that I, in jest, put a "buy" recommendation on US Large-Cap Value, US Mid-Cap Value, and US Small-Cap Value; I decided t...
by DaufuskieNate
Mon Jun 17, 2019 12:13 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Has The Value Trade Become Overcrowded.
Replies: 64
Views: 5225

Re: Larry Swedroe: Has The Value Trade Become Overcrowded.

I had a few hundred dollars in cash in my rollover IRA account so I just purchased 6 shares of IJS, the iShares S&P Small-Cap 600 Value Index ETF, adding to that position. Seeing that I, in jest, put a "buy" recommendation on US Large-Cap Value, US Mid-Cap Value, and US Small-Cap Value; I decided t...
by DaufuskieNate
Sun Jun 16, 2019 2:11 pm
Forum: Investing - Theory, News & General
Topic: What is wrong with AQR?
Replies: 128
Views: 8428

Re: What is wrong with AQR?

Empirically, yes, SmB seems to matter. But the question is, why has the stock market decided this? Is it mispricing or fair compensation for risk? It's could be some of both. Small growth stocks with high investment and low profitability, the lottery stocks, may have returns driven down for behavio...
by DaufuskieNate
Sun Jun 16, 2019 12:44 pm
Forum: Investing - Theory, News & General
Topic: What is wrong with AQR?
Replies: 128
Views: 8428

Re: What is wrong with AQR?

All of that would be captured in the return structure, which in turn would be captured in the market beta. High default risk of SV firms is not a valid reason for the SV premium, because high default risk should be captured as market beta. In other words, a high default risk of SV firms should show...
by DaufuskieNate
Sun Jun 16, 2019 11:44 am
Forum: Investing - Theory, News & General
Topic: What is wrong with AQR?
Replies: 128
Views: 8428

Re: What is wrong with AQR?

Ben CAPM model simply doesn't do a good enough job of explaining return differences, only about 2/3, but 3 factor model explains above 90%. That is because the stocks have different risk characteristics than AVERAGE of market. My factor book provides the various findings demonstrating unique risks,...
by DaufuskieNate
Sun Jun 16, 2019 11:06 am
Forum: Investing - Theory, News & General
Topic: What is wrong with AQR?
Replies: 128
Views: 8428

Re: What is wrong with AQR?

Ben CAPM model simply doesn't do a good enough job of explaining return differences, only about 2/3, but 3 factor model explains above 90%. That is because the stocks have different risk characteristics than AVERAGE of market. My factor book provides the various findings demonstrating unique risks,...
by DaufuskieNate
Sun Jun 16, 2019 9:49 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 171
Views: 15399

Re: Why do large personal portfolios include bonds?

There's also the competitive way of looking at it. If you are a football coach winning a game 49-0 at the start of the fourth quarter do you keep your best players in the game with the chance they get injured or do you put in some 2nd or 3rd string players? There are some people who want to maximiz...
by DaufuskieNate
Sun Jun 16, 2019 9:44 am
Forum: Investing - Theory, News & General
Topic: How Bad was 2008, really?
Replies: 355
Views: 44483

Re: How Bad was 2008, really?

About the only data I've seen that might be construed as partly supporting such a belief is the workforce participation rate, which peaked in the late 1990s at around 67%. It's currently just under 63%. That doesn't strike me as earth-shattering though. Not earth-shattering at all, especially when ...
by DaufuskieNate
Sun Jun 16, 2019 9:28 am
Forum: Investing - Theory, News & General
Topic: Why do large personal portfolios include bonds?
Replies: 171
Views: 15399

Re: Why do large personal portfolios include bonds?

I am reminded of Benjamin Graham's guideline of no more than 75% stocks. Compared to a 100/0 portfolio, 75/25 gives up very little return in exchange for significantly lower volatility and drawdown risk. Even if one has the ability and willingness to take on risk, having some bonds in the portfolio ...
by DaufuskieNate
Sat Jun 15, 2019 1:51 pm
Forum: Investing - Theory, News & General
Topic: What is wrong with AQR?
Replies: 128
Views: 8428

Re: What is wrong with AQR?

What we are doing is stacking the odds in our favor the best we can, no guarantees of course. See, my position is that we don't really know the odds. It's like watching 93 hands of blackjack, without knowing the rules of the game, and then deriving what we THINK the rules and the odds are from just...
by DaufuskieNate
Sat Jun 15, 2019 12:52 pm
Forum: Investing - Theory, News & General
Topic: Any podcast recommendations about factor investing?
Replies: 3
Views: 438

Re: Any podcast recommendations about factor investing?

Check out AQR’s podcast series called The Curious Investor.