Search found 2083 matches

by gmaynardkrebs
Thu May 21, 2020 3:20 pm
Forum: Personal Consumer Issues
Topic: Blown Power Amplifier: Repair or Replace? [resolved]
Replies: 39
Views: 1776

Re: Blown Power Amplifier: Repair or Replace?

You were running two sets at high volume...replace the fuses, and don't do what you did last time.
Fuses are protective devices, and they probably were just doing their job.
by gmaynardkrebs
Sat May 02, 2020 7:52 pm
Forum: Investing - Theory, News & General
Topic: What explains the continued rise in equities?
Replies: 167
Views: 12662

Re: What explains the continued rise in equities?

You may be right... but you may be wrong... How come society didn't completely change after the 1918 Spanish Flu? The supply chain for food and every day goods was much more localized. People worked in more commodities-based positions (producing "things") instead of services that can be replaced so...
by gmaynardkrebs
Wed Apr 29, 2020 6:13 pm
Forum: Investing - Theory, News & General
Topic: What explains the continued rise in equities?
Replies: 167
Views: 12662

Re: What explains the continued rise in equities?

Socialization of tail risk by Fed.
by gmaynardkrebs
Mon Apr 27, 2020 5:36 pm
Forum: Investing - Theory, News & General
Topic: Munis getting slaughtered!
Replies: 194
Views: 18409

Re: Munis getting slaughtered!

https://finance.yahoo.com/news/fed-extends-municipal-liquidity-facility-beyond-largest-cities-203008718.html Feds stepping in, deeper into the pool. I consider that to be good news. Yes, there was no reason for the population limitation, and I'm glad they removed it. They have not removed it yet. Y...
by gmaynardkrebs
Mon Apr 27, 2020 4:43 pm
Forum: Investing - Theory, News & General
Topic: Munis getting slaughtered!
Replies: 194
Views: 18409

Re: Munis getting slaughtered!

UpperNwGuy wrote:
Mon Apr 27, 2020 4:32 pm
yoyo6713 wrote:
Mon Apr 27, 2020 4:28 pm
https://finance.yahoo.com/news/fed-exte ... 08718.html

Feds stepping in, deeper into the pool.
I consider that to be good news.
Yes, there was no reason for the population limitation, and I'm glad they removed it.
by gmaynardkrebs
Mon Apr 27, 2020 8:28 am
Forum: Investing - Theory, News & General
Topic: Munis getting slaughtered!
Replies: 194
Views: 18409

Re: Munis getting slaughtered!

Treasuries suffered from the same liquidity issues, and needed Fed intervention. Do you now think of Treasuries as unsafe? Then why did Treasuries go up when stocks, muni bonds, and corporate bonds all went down (albeit to varying degrees)? The latter all had massive liquidity problems in part beca...
by gmaynardkrebs
Mon Apr 27, 2020 7:35 am
Forum: Investing - Theory, News & General
Topic: Munis getting slaughtered!
Replies: 194
Views: 18409

Re: Munis getting slaughtered!

Treasuries suffered from the same liquidity issues, and needed Fed intervention. Do you now think of Treasuries as unsafe? Then why did Treasuries go up when stocks, muni bonds, and corporate bonds all went down (albeit to varying degrees)? The latter all had massive liquidity problems in part beca...
by gmaynardkrebs
Sun Apr 26, 2020 9:40 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

From my understanding of the process: Municipalities go bankrupt- they file for chapter 9 (other maneuvering, debt restructuring etc) For bond holders - work with other creditors (pension fund etc) for the reclaiming the slice of pie. They could then negotiate a settlement which could be x cents (w...
by gmaynardkrebs
Sun Apr 26, 2020 9:25 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

The current price is the same for anyone who purchases or sells at that price. But it does not mean that people MUST buy or sell at the current price. This has nothing to do with the shape of the demand curve. Why in the world would that be flat? That would mean that people were indifferent to the ...
by gmaynardkrebs
Sun Apr 26, 2020 8:07 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

From my understanding of the process: Municipalities go bankrupt- they file for chapter 9 (other maneuvering, debt restructuring etc) For bond holders - work with other creditors (pension fund etc) for the reclaiming the slice of pie. They could then negotiate a settlement which could be x cents (w...
by gmaynardkrebs
Sat Apr 25, 2020 10:07 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

The current price is the same for anyone who purchases or sells at that price. But it does not mean that people MUST buy or sell at the current price. This has nothing to do with the shape of the demand curve. Why in the world would that be flat? That would mean that people were indifferent to the ...
by gmaynardkrebs
Sat Apr 25, 2020 6:43 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: The Market Portfolio

It is simply the price that results from the activity of all participants, including those who decline to trade. Afan: Please explain the part underlined in your quote. Thank you and best wishes. Taylor Jack Bogle's Words of wisdom : "Never think you know more than the market. Nobody does. " Sure. ...
by gmaynardkrebs
Sat Apr 25, 2020 4:59 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: munis seem exceptionally attractive

am wrote:
Sat Apr 25, 2020 4:38 pm
. Do bondholders have priority over paying basic services?
Since states cannot declare bankruptcy, the general answer is yes. But, in a total economic collapse, anything can happen. Same with stocks and corporate bonds
by gmaynardkrebs
Sat Apr 25, 2020 4:20 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: munis seem exceptionally attractive

Munis “seem”exceptionally attractive although I’d rather get my principal back for the “safe” part of my taxable allocation then have a tax advantage and lose money. I don’t think the rewards of investing in munis pay for the risk. I think it depends on how much fed support there will be and for ho...
by gmaynardkrebs
Sat Apr 25, 2020 3:45 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: munis seem exceptionally attractive

Munis “seem”exceptionally attractive although I’d rather get my principal back for the “safe” part of my taxable allocation then have a tax advantage and lose money. I don’t think the rewards of investing in munis pay for the risk. I think it depends on how much fed support there will be and for ho...
by gmaynardkrebs
Sat Apr 25, 2020 11:06 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

The risk of default for munis depends heavily on what Congress and the Fed do. If they use any of a number of ways to prop up municipalities, then the risk is lower. If they take a free market approach and let them fail, then the risk is high. One can only speculate about what will happen. The risk...
by gmaynardkrebs
Sat Apr 25, 2020 9:56 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

"Default levels in municipal bonds have been low, and we see no reason for those rates to rise substantially, because a large part of the municipal market is essential services such as state governments, mass transit, and hospitals." "States are not permitted to file for bankruptcy under federal la...
by gmaynardkrebs
Sat Apr 25, 2020 9:47 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

"Default levels in municipal bonds have been low, and we see no reason for those rates to rise substantially, because a large part of the municipal market is essential services such as state governments, mass transit, and hospitals." "States are not permitted to file for bankruptcy under federal la...
by gmaynardkrebs
Thu Apr 23, 2020 4:15 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 14880

Re: Deflation is everywhere. Get used to it.

While everybody is scared by deflation, it is inflation that is the largest threat to a consumer. If prices go down 1% per year - are we going to buy less food? Drive fewer miles to work? Maybe buy a smaller house? The answer is likely no. It just might be that deflation is an indicator of problems...
by gmaynardkrebs
Thu Apr 23, 2020 1:02 pm
Forum: Investing - Theory, News & General
Topic: The Fed may have fundamentally altered the nature of risk in the stock market
Replies: 51
Views: 6175

Re: The Fed may have fundamentally altered the nature of risk in the stock market

If the economy continued to fall into a depression with deflation, the Gov would issue bonds (the Fed would buy them at zero interest) and the money would be given to people until deflation is stopped. So there is a backstop to prices falling (including indirectly stock prices). But the risk remain...
by gmaynardkrebs
Thu Apr 23, 2020 12:21 pm
Forum: Personal Investments
Topic: I'd like to buy 30-year treasury bonds
Replies: 34
Views: 1826

Re: I'd like to buy 30-year treasury bonds

If long-term treasury yields rise to 5% tomorrow (big increase in inflation expectations), I'm pretty sure gold, stock, and TIPS prices would rise. My portfolio as a whole would almost certainly go up, not down. Why would I panic in such a scenario? I'd be delighted. If the 30Y Bond went to 5% tomo...
by gmaynardkrebs
Thu Apr 23, 2020 10:29 am
Forum: Personal Investments
Topic: I'd like to buy 30-year treasury bonds
Replies: 34
Views: 1826

Re: I'd like to buy 30-year treasury bonds

If long-term treasury yields rise to 5% tomorrow (big increase in inflation expectations), I'm pretty sure gold, stock, and TIPS prices would rise. My portfolio as a whole would almost certainly go up, not down. Why would I panic in such a scenario? I'd be delighted. If the 30Y Bond went to 5% tomo...
by gmaynardkrebs
Thu Apr 23, 2020 9:47 am
Forum: Personal Investments
Topic: I'd like to buy 30-year treasury bonds
Replies: 34
Views: 1826

Re: I'd like to buy 30-year treasury bonds

TIPS actually declined sharply during last month's stock market collapse. TIPS declined for about a week or two, as did Treasuries, and both have recovered. It seems to me that one can pretty easily avoid panicking by just by saying to yourself that you hold bonds with zero default risk, which prot...
by gmaynardkrebs
Thu Apr 23, 2020 8:02 am
Forum: Personal Investments
Topic: I'd like to buy 30-year treasury bonds
Replies: 34
Views: 1826

Re: I'd like to buy 30-year treasury bonds

Are you considering buying 30 yr TIPS as well? Might be worth considering, as you are paying very little for the inflation protection now -- perhaps because inflation seems unlikely now, but it could emerge over 30 years. However, I would definitely keep whatever TIPS you buy in the retirement portf...
by gmaynardkrebs
Tue Apr 21, 2020 6:36 pm
Forum: Investing - Theory, News & General
Topic: The Fed may have fundamentally altered the nature of risk in the stock market
Replies: 51
Views: 6175

Re: The Fed may have fundamentally altered the nature of risk in the stock market

I don't buy it for a second. The last time heard a story about the risk of stock vanishing, it was in 1999 in the book Dow 36,000 by Glassman and Hassett. This wasn't just mistaken optimism, it's important to understand the basis for their prediction. It was that stocks were not any riskier than bo...
by gmaynardkrebs
Tue Apr 21, 2020 6:15 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Munis Increasingly Risky
Replies: 205
Views: 19635

Re: Larry Swedroe: Munis Increasingly Risky

Reminder in revenue essential services which has low rate of default. I think GOs (if competently selected) are safer now. Given that 1/3 of Americans people aren't paying their rent, I doubt that they're going to pay their "essential" service s bills either. No one is going to have their water and...
by gmaynardkrebs
Mon Apr 20, 2020 2:03 pm
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 14880

Re: Deflation is everywhere. Get used to it.

SimpleGift wrote: I believe Mr. Bernanke was talking about expectations for deflation taking hold among consumers and the financial markets. Once deflationary expectations get entrenched in an economy, they are hard to reverse. The Fed's worst fear is of a deflationary spiral, I believe, where fall...
by gmaynardkrebs
Mon Apr 20, 2020 11:13 am
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 14880

Re: Deflation is everywhere. Get used to it.

After the Fed has cut interest rates to zero and pushed new money into the system, they don't have a lot of conventional tools to fight deep, persistent deflation. I recall Chairman Bernanke once writing about deflation risk, saying that "the best way to get out of trouble is not to get into it in ...
by gmaynardkrebs
Mon Apr 20, 2020 9:06 am
Forum: Investing - Theory, News & General
Topic: Deflation is everywhere. Get used to it.
Replies: 151
Views: 14880

Re: Deflation is everywhere. Get used to it.

Any competent central bank can stop deflation dead in its tracks if it wants to. Deflation in the 1930s in the USA and in Japan post-bubble were almost entirely the result of CB incompetence. We've learned a lot since then. While we may experience deflation (or inflation) in the months ahead, in all...
by gmaynardkrebs
Sun Apr 19, 2020 11:08 am
Forum: Investing - Theory, News & General
Topic: Will indexes continue to perform well?
Replies: 35
Views: 1727

Re: Will indexes continue to perform well?

Index funds are giving you the returns of the market. The market is basically every actively managed fund and every individual investor. So before fees index funds will outperform 50% of all actively managed funds. This is a mathematical necessity. Wouldn't that be "after fees"? Before fees, they s...
by gmaynardkrebs
Sun Apr 19, 2020 10:56 am
Forum: Investing - Theory, News & General
Topic: Will indexes continue to perform well?
Replies: 35
Views: 1727

Re: Will indexes continue to perform well?

Index funds are giving you the returns of the market. The market is basically every actively managed fund and every individual investor. So before fees index funds will outperform 50% of all actively managed funds. This is a mathematical necessity. Wouldn't that be "after fees"? Before fees, they s...
by gmaynardkrebs
Sun Apr 19, 2020 10:54 am
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

We already do know that it's accrued principle will decline slightly over the next month and there is probably a pretty good idea how much additional decline in accrued principle will occur in the subsequent couple of months. Any idea how Vanguard will handle a negative CPI on the 1099 for individu...
by gmaynardkrebs
Sun Apr 19, 2020 10:44 am
Forum: Investing - Theory, News & General
Topic: Will indexes continue to perform well?
Replies: 35
Views: 1727

Re: Will indexes continue to perform well?

"the average actively managed dollar must underperform the average passively managed dollar, net of costs. " mathematical proof: https://web.stanford.edu/~wfsharpe/art/active/active.htm True, but I think too much can be made of this. For example, the Sharpe dictum (truism?) is not applicable to a D...
by gmaynardkrebs
Sun Apr 19, 2020 8:32 am
Forum: Investing - Theory, News & General
Topic: Will indexes continue to perform well?
Replies: 35
Views: 1727

Re: Will indexes continue to perform well?

Depends on the index. I'd sure like to avoid indexes holding lots of companies with high debt loads, as I believe a disproportionate number of such companies will be going bye bye once this is over.
by gmaynardkrebs
Sat Apr 18, 2020 6:17 pm
Forum: Investing - Theory, News & General
Topic: What's happening with Muni Money Market fund yields?
Replies: 141
Views: 12827

Re: What's happening with Muni Money Market fund yields?

<snip> I am tempted to move my money from VMSXX to the Short Term Tax Exempt Bond fund which current is yielding over 2% (around TEY of 2.8% for me), but that introduces more risk to principal... I doubt VMSSX is very close to 2% at this point; that's a 30day yield. I don't know what VMSSX is. Shor...
by gmaynardkrebs
Sat Apr 18, 2020 4:32 pm
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

The idea that TIPS will get "more expensive" if inflation heats up always makes me ponder: How would they be more expensive, in the sense that I am buying a new issue TIPS today at an auction? They would become more expensive if the buyers at auction bid up the price higher and/or the buyers on a s...
by gmaynardkrebs
Sat Apr 18, 2020 1:45 pm
Forum: Investing - Theory, News & General
Topic: What's happening with Muni Money Market fund yields?
Replies: 141
Views: 12827

Re: What's happening with Muni Money Market fund yields?

So the party appears to be completely over for the MM funds. Here is my daily yields as of yesterday. At this point at my tax rate, VMMXX and VUSXX are beating the Muni funds. SEC Yield Daily Yield Date VMSXX VMMXX VNJXX VUSXX | VMSXX VMMXX VNJXX VUSXX 4/3/2020 4/6/2020 1.79% 0.97% 1.53% 0.73% | 1....
by gmaynardkrebs
Sat Apr 18, 2020 11:01 am
Forum: Investing - Theory, News & General
Topic: Us government buying their own bonds?
Replies: 27
Views: 1779

Re: Us government buying their own bonds?

The Fed is buying junk bonds too. Any source from the Fed website to prove this? They have not bought any yet, and may not have to. Perhaps this Bloomberg article will clarify the point: https://www.bloomberg.com/news/articles/2020-04-15/fed-didn-t-actually-have-to-buy-anything-to-rescue-bond-etfs?...
by gmaynardkrebs
Sat Apr 18, 2020 10:05 am
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

I favor long TIPS over shorter TIPS based on this view: 1. There's not a lot of interest in TIPS right now because people aren't worried about inflation -- they haven't seen it for decades. That makes TIPS cheaper than they would otherwise be. ... 5. Real rates will be much lower because the Fed wa...
by gmaynardkrebs
Sat Apr 18, 2020 8:34 am
Forum: Investing - Theory, News & General
Topic: Us government buying their own bonds?
Replies: 27
Views: 1779

Re: Us government buying their own bonds?

The Fed is buying junk bonds too. Any source from the Fed website to prove this? They have not bought any yet, and may not have to. Perhaps this Bloomberg article will clarify the point: https://www.bloomberg.com/news/articles/2020-04-15/fed-didn-t-actually-have-to-buy-anything-to-rescue-bond-etfs?...
by gmaynardkrebs
Sat Apr 18, 2020 8:23 am
Forum: Investing - Theory, News & General
Topic: Mr.Random Walk
Replies: 25
Views: 2717

Re: Mr.Random Walk

Malkiel being "concerned" about bonds is about as significant as Jeremy Siegel being "concerned" about bonds.
by gmaynardkrebs
Sat Apr 18, 2020 8:12 am
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

The idea that TIPS will get "more expensive" if inflation heats up always makes me ponder: How would they be more expensive, in the sense that I am buying a new issue TIPS today at an auction? They would become more expensive if the buyers at auction bid up the price higher and/or the buyers on a s...
by gmaynardkrebs
Sat Apr 18, 2020 6:03 am
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

The idea that TIPS will get "more expensive" if inflation heats up always makes me ponder: How would they be more expensive, in the sense that I am buying a new issue TIPS today at an auction? They would become more expensive if the buyers at auction bid up the price higher and/or the buyers on a s...
by gmaynardkrebs
Fri Apr 17, 2020 12:00 pm
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

Some say, "well, if ten years from inflation breaks out, you can just buy short TIPS." I think that's like saying, "I'll wait and see if a I have a heart attack, and buy life insurance then." You can get it, but it won't be cheap. The problem is that buying (or holding) now is just locking in a ret...
by gmaynardkrebs
Fri Apr 17, 2020 10:33 am
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

I favor long TIPS over shorter TIPS based on this view: 1. There's not a lot of interest in TIPS right now because people aren't worried about inflation -- they haven't seen it for decades. That makes TIPS cheaper than they would otherwise be. 2. People will be very interested in TIPS if and when i...
by gmaynardkrebs
Thu Apr 16, 2020 5:00 pm
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

The idea that TIPS will get "more expensive" if inflation heats up always makes me ponder: How would they be more expensive, in the sense that I am buying a new issue TIPS today at an auction? The 10-year TIPS currently has a real yield of -0.50%, and it will cost me about $10,550 for $10,000 of va...
by gmaynardkrebs
Thu Apr 16, 2020 4:56 pm
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

To me, a new TIPS that costs $1000 and pays 4% real is the bargain of a lifetime, while a new TIPS $1000 paying -.5% is no bargain at all. If TIPS ever got back to 2% real, I'd back up the truck, and not worry about whether someone, somewhere is making a killing with something else. I think you're ...
by gmaynardkrebs
Thu Apr 16, 2020 4:17 pm
Forum: Investing - Theory, News & General
Topic: Short vs long TIPS inflation protection
Replies: 63
Views: 5672

Re: Short vs long TIPS inflation protection

The idea that TIPS will get "more expensive" if inflation heats up always makes me ponder: How would they be more expensive, in the sense that I am buying a new issue TIPS today at an auction? The 10-year TIPS currently has a real yield of -0.50%, and it will cost me about $10,550 for $10,000 of va...