Search found 2370 matches

by knpstr
Tue Aug 06, 2019 9:42 am
Forum: Personal Consumer Issues
Topic: Extreme Anxiety with Time/Money
Replies: 95
Views: 8355

Re: Extreme Anxiety with Time/Money

Easy fix, put in a vinyl fence.
by knpstr
Sat Aug 03, 2019 9:22 pm
Forum: Personal Finance (Not Investing)
Topic: Finally considering paying off my mortgage
Replies: 38
Views: 3326

Re: Finally planning to pay off my mortgage

You are ignoring the levered returns on home equity in your calculation, returns that will decrease when you pay off your mortgage. If you are going to include your mortgage in your AA you should also be including home equity as well. Just to be clear, home equity doesn't have a return. A homes mar...
by knpstr
Sat Aug 03, 2019 9:10 pm
Forum: Personal Finance (Not Investing)
Topic: Finally considering paying off my mortgage
Replies: 38
Views: 3326

Re: Finally planning to pay off my mortgage

Anyone who has a large savings rate is likely to pay off their mortgage early. The point of all this (investing) is to get to a comfortable (early) retirement. That's why as people make more and more progress with investing they tend to "change their tune". If your mortgage is $1,000/mo you need a n...
by knpstr
Sat Jul 13, 2019 8:46 pm
Forum: Investing - Theory, News & General
Topic: Why factor investing isn't working
Replies: 484
Views: 23372

Re: Why factor investing isn't working

I think the factor versus cap weight horse has been beaten to death in these 5 pages. Perhaps it's best to call a truce for a while and rest a while before the next round of combat. Garland Whizzer +1 Care to comment on "Nedsaid's" post (bottom page 8) on "Large Growth Trend" going forward? Thanks ...
by knpstr
Wed Jul 03, 2019 10:07 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Every factor investor here understands about periods of underperformance and the need to stay the course. Continued efforts by the OP to shame an investment strategy used by many is not just unnecessary but also goes against the principles I've learned here. This thread and the OP's dozens of simil...
by knpstr
Wed Jul 03, 2019 9:51 pm
Forum: Personal Investments
Topic: Pick one: $135,000 rental property or $110,000 in REITs
Replies: 89
Views: 11042

Re: Pick one: $135,000 rental property or $110,000 in REITs

Jack FFR1846 wrote:
Wed Jul 03, 2019 5:54 pm
To make the comparison more fair, compare that rental to the ETF plus you work at a gas station every Saturday. That'll simulate your time and aggravation dealing with all the landlording duties.
Apparently not everyone uses the same "hassle premium"
by knpstr
Wed Jul 03, 2019 9:15 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

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 knpstr
Wed Jul 03, 2019 9:00 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

You also did that with valuations being 2x as high today as in 2008 yet interest rates are much higher at the risk free rate which was 0!!! So valuations should have collapsed under your hypothesis, yet they doubled. Like I said, facts are stubborn things, and just because you ignore them doesn't c...
by knpstr
Wed Jul 03, 2019 8:36 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

So to say that Small/Value stinks because it trails other stock categories over 5 years is just silly, quite frankly, you ought to know better. The S&P 500 had a few really bad years during the 2000's, should I have concluded that index investing doesn't work? Should I have told people to sell thei...
by knpstr
Wed Jul 03, 2019 8:23 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

I believe Larry that you have given a good explanation for stock prices but I don't believe that valuation boils down to just math. There are intangible factors at work too. ... Thanks for your added comments here Ned. Re-reading larry here he seems to agree with what Buffett was saying in the high...
by knpstr
Wed Jul 03, 2019 5:41 pm
Forum: Personal Investments
Topic: Pick one: $135,000 rental property or $110,000 in REITs
Replies: 89
Views: 11042

Re: Pick one: $135,000 rental property or $110,000 in REITs

Exchange into a higher cap rate property 8-10%.
If you have a large equity position, refinance to increase return on equity to ~20%
Invest the balance into index funds if you want
by knpstr
Wed Jul 03, 2019 5:21 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Buffett speaks in shorthand to simplify things. I think sometimes we take him too literally, particularly in a 6 minute interview where you have to be brief. These are not 2 hour, in depth interviews. Given just a few minutes I might make very similar comments but given a longer time period would e...
by knpstr
Wed Jul 03, 2019 4:05 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

I wouldn't say the interest rates vs. P/E ratios model is false, it is woefully incomplete. Sort of like comparing Capital Asset Pricing Model to French/Fama 3 Factor Model. The French/Fama model had better explanatory power than CAPM. Sort of like how Einstein's Theory of Relatively superceded New...
by knpstr
Wed Jul 03, 2019 3:20 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

knpstr seems stuck on the effects of interest rates on stock valuations and doesn't seem to be able to move beyond that. Lots of things that affect stock prices. Quite the contrary. Obviously lots of things can affect earnings which affects stock prices. Misjudgment and irrational behavior alone ca...
by knpstr
Wed Jul 03, 2019 3:09 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Do you think Buffett would really buy a company discounting at the same Treasury rate. If he did that he would have earned Treasury returns. The fact is he has bought companies at much higher discount rates, whatever he said. He buys value companies with much higher costs of capital. Watch what peo...
by knpstr
Wed Jul 03, 2019 12:41 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

What you keep missing is that the discount rate is made up of two parts not one. One is the RP and the other RFR. You ADD the two to get the denominator. The RFR can move and valuations might not change at all as I explained numerous times, but you ignore. This is really the most basic finance stuf...
by knpstr
Wed Jul 03, 2019 9:48 am
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Knpstr In your example about the crisis ending it was the ERP that fell, not the fall in rates that drove most of valuation change Just answer the very simple questions I posed to you. Why are international valuations so much lower when their rates are so much lower. And if inflation rises (fall) b...
by knpstr
Wed Jul 03, 2019 8:56 am
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

No I did not say that. That's math and is right given your assumptions. The question is now simply change the RF rate by 1% due to 1% lower inflation and nothing changes, then the valuations should not go higher simply because rates went down, because you only change the denominator but not the num...
by knpstr
Tue Jul 02, 2019 10:04 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Yes, really. They then adjust the number for what is effectively a different discount rate. To be fair, he has been on the record saying in very low rate environment they may use a higher rate --- Buffett: "We basically think in terms of the long-term government rate. And there may be times, when i...
by knpstr
Tue Jul 02, 2019 10:00 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

The virtue of Buffett is that he takes more complex ideas and breaks them down so that ordinary people can understand them. Buffett also projects a humble, mid-western, "aw shucks" image to the press but that obscures that what he is doing is actually pretty difficult. The difficulty with Buffett i...
by knpstr
Tue Jul 02, 2019 9:52 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Of course, one must consider the notion that the "saviour" (doing it for the sake of protecting novices [me] from blatantly poor advice[Buffett's]) could be unknowingly wrong. Buffett is saying interest rates are the yardstick (for comparative valuation), they are the discount rate. (he says the S&...
by knpstr
Tue Jul 02, 2019 9:15 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

It's not that I find discourse to be objectionable at all. Many here know that I'll jump into the fray about as fast as anyone else. But two or more parties attempting to persuade one another of opposing points of view when neither side is willing to entertain the possibility of being wrong seems l...
by knpstr
Tue Jul 02, 2019 8:50 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

If you believe that to be the case, then his is the only advice you should listen to, and there's no point in disputing his claims with those of others. Thank you for your suggestion, I politely decline. I don't find discourse to be as objectionable as you do. It is nonsense to think that the only ...
by knpstr
Tue Jul 02, 2019 8:26 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

willthrill81 wrote:
Tue Jul 02, 2019 8:22 pm
I think you're coming at this from the presupposition that Buffett is entirely right about everything pertaining to investing that he discusses.
It is true, I think he [Buffett] (and for that fact Munger) knows what he is talking about in the non-theoretical field of investing and valuation.
by knpstr
Tue Jul 02, 2019 8:17 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Thank you for patiently answering my questions and for saying you think how Warren Buffett (one of the greatest investors of all time) values securities and thinks about values in general is wrong. Ironically enough, Paul Samuelson (one of the greatest economists as you mentioned) became wealthy inv...
by knpstr
Tue Jul 02, 2019 7:31 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

larryswedroe wrote:
Tue Jul 02, 2019 7:05 pm
knpster
Let's see if this helps
https://www.youtube.com/watch?v=W4AIul7_9o8

A clip of Buffett talking about interest rates and the effect on value. This is utter nonsense? The way (or part of the way) Buffett values securities is wrong?
by knpstr
Tue Jul 02, 2019 6:39 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Thanks for the link to the paper. 1. Perhaps to simplify my question - if earnings and outlook are the same in each instance for company A and in one case interest rates are 10% and in another case interest rates are 2%, you are saying in both cases Company A in both instances should have the same a...
by knpstr
Tue Jul 02, 2019 4:29 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

I'm curious: How do you define "high valuations" today? As Buffett says, if these low rates continue on, looking back stocks will be seen as incredibly cheap right now. This would be a direct refutation to your "high valuations" opinion -- which you stated as a fact. I suspect the answer you are lo...
by knpstr
Tue Jul 02, 2019 4:01 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

KNpstr You seem to have a knack of reading what you want, rather than what is there. Thanks for that observation at the beginning. I was actually just trying to read what you said closely. You first said: "[the market is micro efficient, macro inefficient because]...there is enough arb money to cor...
by knpstr
Tue Jul 02, 2019 8:38 am
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

KNSPTR The problem that those few stocks are so big that there isn't enough money to arb them back to fair value, and there is also the cost of margin, and fear of shorting and its unlimited losses, and institutional constraints on shorting. That's how bubbles can happen even in "single" stocks. Th...
by knpstr
Mon Jul 01, 2019 6:39 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

Lastrun Pretty simple, with TSM you not only have a concentrated bet (allocation) to a single factor (market beta) that factor is also the most subject to bubble risk being market cap weighted and much of its assets in top holdings. Remember Samuelson's dictum, market is micro efficient but not mac...
by knpstr
Fri Jun 28, 2019 7:10 pm
Forum: Investing - Theory, News & General
Topic: "Alice's Adventures in Factorland"
Replies: 209
Views: 10965

Re: "Alice's Adventures in Factorland"

As I have shown there are three 13 years or longer periods when S&P underperformed totally riskless tbills and even inflation. And don't believe that is the case for value stocks. And note they all came after high valuations (which we have today). I'm curious: How do you define "high valuations" to...
by knpstr
Sun Jun 02, 2019 11:07 am
Forum: Investing - Theory, News & General
Topic: 2% withdrawal rate
Replies: 182
Views: 13595

Re: 2% withdrawal rate

skime wrote:
Wed May 29, 2019 3:18 pm
I'm of the opinion that a 2% withdrawal rate or less is the only prudent way to draw on one's portfolio for retirement before the age of 50.

Does anyone disagree with this opinion? If so, why?
1% would be safer.
by knpstr
Wed May 29, 2019 8:20 pm
Forum: Personal Consumer Issues
Topic: Best Pool Vacuum for the $$
Replies: 12
Views: 881

Re: Best Pool Vacuum for the $$

I use a kreepy krauly. it works well.
by knpstr
Sat May 18, 2019 8:39 pm
Forum: Personal Investments
Topic: Income Streams
Replies: 5
Views: 1491

Re: Income Streams

Expenses: $75,000 Income from pensions/S.S. at age 67: $102,000 Savings: $1,200,000 Retire at 60 and get $28,000 so only need $47,000 to bridge gap for 2 years. After 2 years you need $8,000 per year for 5 more years, then savings is superfluous. $1,200,000 can give you $47,000 per year for 25 years...
by knpstr
Sat May 18, 2019 8:21 pm
Forum: Investing - Theory, News & General
Topic: Why Are U.S. Asset Prices So High Today?
Replies: 34
Views: 3187

Re: Why Are U.S. Asset Prices So High Today?

Are asset prices high?

Warren Buffett says if interest rates stay this low in the long term, that asset prices are "ridiculously cheap" right now.
by knpstr
Thu May 09, 2019 9:24 pm
Forum: Personal Finance (Not Investing)
Topic: Pre-existing condition + insurance in retirement
Replies: 13
Views: 1476

Re: Pre-existing condition + insurance in retirement

Long time stalker, first time BH poster! I'm an employee in the beginning of my career and am fortunate to be given very good group health insurance. We've talked about one day perhaps retiring in our 50's, given our aggressive saving habits and travel interests. I do have a pre-existing health con...
by knpstr
Sat Apr 20, 2019 2:20 pm
Forum: Personal Investments
Topic: Net Worth where it should be?
Replies: 49
Views: 7147

Re: Net Worth where it should be?

Personal finance is personal. Comparison to others is useless (and "the thief of joy") I calculate progress as follows: Current retirement withdrawal rate = (12 x Monthly expenses) / Current retirement assets Progress = (Desired retirement withdrawal rate / Current retirement withdrawal rate) -----...
by knpstr
Wed Apr 17, 2019 7:55 pm
Forum: Personal Finance (Not Investing)
Topic: Social Security - How Secure?
Replies: 28
Views: 1679

Re: Social Security - How Secure?

Why are you taking Social Security at 62? That is a lifetime of reduced benefits. Yes, but also 8 years of extra benefits. This is brand new member and I have no idea whether or not they have taken the time to get fully educated on their options and the pros and cons based upon their full financial...
by knpstr
Tue Apr 16, 2019 10:07 am
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 11526

Re: $1.1 million rental portfolio, but tired of being a landlord

Work 40 hours a week for $45,000/yr --- or work 7.5 hours per week for $45,000/yr... hmmm which is better? Not to mention, if their property appreciates at 2.5%/yr that is another $27,500+/yr so ~$72,500+/yr for 7.5 hours of work a week when you include that. I feel like there is some misunderstand...
by knpstr
Mon Apr 15, 2019 9:23 pm
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 11526

Re: $1.1 million rental portfolio, but tired of being a landlord

I wouldn't hire a property manager -- I would sell the properties and try to find a good 9-5 job. Owning property can be a 24/7 job. According to this poster, it is more like ~7.5 hour per week job, not 168 hour per week job. Work 40 hours a week for $45,000/yr --- or work 7.5 hours per week for $4...
by knpstr
Mon Apr 15, 2019 9:13 pm
Forum: Personal Investments
Topic: $1.1 million rental portfolio, but tired of being a landlord
Replies: 87
Views: 11526

Re: $1.1 million rental portfolio, but tired of being a landlord

$900,000 will give you $45,000/yr for 20 years. When do you plan on dying?
by knpstr
Tue Apr 02, 2019 2:04 pm
Forum: Non-US Investing
Topic: Your opinion on debt?
Replies: 111
Views: 7434

Re: Your opinion on debt?

If Chick-Fil-A ever calls, I'd borrow money to open one. It costs $10,000 to start a Chick-fil-A. You don't have $10,000 to invest? I would put the cost of starting a Chick-Fil-A at well over 2 million for a stand alone. Probably more like 250K in a mall. I think you need to own a stand alone befor...
by knpstr
Mon Apr 01, 2019 8:31 pm
Forum: Non-US Investing
Topic: Your opinion on debt?
Replies: 111
Views: 7434

Re: Your opinion on debt?

djpeteski wrote:
Mon Apr 01, 2019 6:47 am
If Chick-Fil-A ever calls, I'd borrow money to open one.
It costs $10,000 to start a Chick-fil-A.
You don't have $10,000 to invest?
by knpstr
Sat Mar 30, 2019 7:54 pm
Forum: Investing - Theory, News & General
Topic: Indexing beats Wellington and Wellesley right?
Replies: 103
Views: 18669

Re: Indexing beats Wellington and Wellesley right?

"Indexing beats Wellington and Wellesley right?"

In theory.
by knpstr
Fri Mar 29, 2019 12:33 pm
Forum: Investing - Theory, News & General
Topic: Dave Ramsey's Advice - Evaluated with Actual Returns from His Company's 401K
Replies: 101
Views: 13901

Re: Dave Ramsey's Advice - Evaluated with Actual Returns from His Company's 401K

I'm confused. Dave Ramsey directly says "I beat the S&P by 1% a year on average, and you should too." He clarifies that he means each of his 4 groups of funds should independently beat the S&P. Why is evaluating his personal funds vs the S&P not "appropriate"? Academics told them they can't compare...
by knpstr
Thu Mar 28, 2019 8:14 am
Forum: Investing - Theory, News & General
Topic: How much $$ would it take for you walk away from investing?
Replies: 45
Views: 4455

Re: How much $$ would it take for you walk away from investing?

JustinR wrote:
Wed Mar 27, 2019 8:15 pm
You've "won the game" and have amassed a large net worth. You don't want to take any more risk, so you go 100% cash and walk away from investing completely.
Going to 100% cash would be very risky.
by knpstr
Thu Mar 28, 2019 7:47 am
Forum: Personal Consumer Issues
Topic: I would like a boat. I also know nothing about boats
Replies: 147
Views: 9609

Re: I would like a boat. I also know nothing about boats

AirTimeMD wrote:
Sun Mar 24, 2019 11:23 pm

Here is what I am looking for:
Something that is powerful enough to tow the kids for wake boarding/water fun but also that can seat 5-8 people for lake cruising and relaxing.
These are pretty popular around my area. Hurricane deck boats:
https://www.hurricaneboats.com/
by knpstr
Thu Mar 21, 2019 9:09 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Why The Size Premium Should Persist
Replies: 62
Views: 4208

Re: Larry Swedroe: Why The Size Premium Should Persist

Larry is a very kind man and he spends quite a bit of his time gratis trying to help people. He did this with me ... so your hope is fulfilled. He didn't try to get me to be a client and knew full well that my portfolio was not in the range of the clients his firm deals with. To do that and to then...