Search found 1646 matches

by gmaynardkrebs
Mon Oct 14, 2019 11:13 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

CAPE10's "failure," if that's what it is, is fair game, but the question is, what now? I still can't invest on the basis that "valuations don't matter." Is that what you are suggesting? Is there a better tool? Any tool? Yeah, I know that "stay the course" is a mantra here, but seriously, it's not s...
by gmaynardkrebs
Mon Oct 14, 2019 10:28 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

On the CAPE10 issue, I am somewhat in the middle. The metric is telling us something but I am of the opinion that the US Stock Market is not as expensive as perceived. Again, something is happening out there that the accountants are not capturing, value is being created that is not reflected in ear...
by gmaynardkrebs
Mon Oct 14, 2019 6:59 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

I'm loving all the people banging on about chi squared tests and how 'CAPE is unimportant' :-) :-) https://i.ibb.co/XVG4yPh/Screen-Shot-2019-10-10-at-08-18-41.png It looks like a fairly useful correlation to me... Why don't you actually look at the numbers on that chart. Look at 1929 or the entire ...
by gmaynardkrebs
Sat Oct 12, 2019 10:47 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

While I agree about ERP compression as a factor in today's seemingly high valuations, that doesn't rule out a bubble.
by gmaynardkrebs
Fri Oct 11, 2019 1:29 pm
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

Is there reinvestment risk with TIPS if you buy at auction and hold to maturity? I'm simplifying a little, but the only way you can avoid reinvestment risk is to avoid the need to reinvest. That means buying bonds that mature as close as possible to the point in time at which you intend to spend th...
by gmaynardkrebs
Fri Oct 11, 2019 10:27 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

Until someone can tell me why the risk premium is going to collapse, I just don’t buy that the future, in real terms, will be so consistently and dramatically different. Because most investors, including most BHers, now believe that in the long run, stocks are safe investments. Historically, that h...
by gmaynardkrebs
Fri Oct 11, 2019 9:18 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

Until someone can tell me why the risk premium is going to collapse, I just don’t buy that the future, in real terms, will be so consistently and dramatically different. Because most investors, including most BHers, now believe that in the long run, stocks are safe investments. Historically, that h...
by gmaynardkrebs
Fri Oct 11, 2019 8:52 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

Until someone can tell me why the risk premium is going to collapse, I just don’t buy that the future, in real terms, will be so consistently and dramatically different. Because most investors, including most BHers, now believe that in the long run, stocks are safe investments. Historically, that h...
by gmaynardkrebs
Thu Oct 10, 2019 11:01 pm
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

It's pretty clear to me that Ycor is asking whether he should be concerned about future inflation, even though inflation is tame at this tine, The answer is yes.
by gmaynardkrebs
Thu Oct 10, 2019 3:05 pm
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

(Not that CAPE even matters for the formula calculation) As I understand his reasoning, he uses CAPE because he's trying to extrapolate a decade into the future. Extrapolating 10 years using a single previous year's P/E is kind of brave. Hence use the CAPE because it's an average that reveals the t...
by gmaynardkrebs
Thu Oct 10, 2019 3:01 pm
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

Is there reinvestment risk with TIPS if you buy at auction and hold to maturity? I'm simplifying a little, but the only way you can avoid reinvestment risk is to avoid the need to reinvest. That means buying bonds that mature as close as possible to the point in time at which you intend to spend th...
by gmaynardkrebs
Thu Oct 10, 2019 7:50 am
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

(Initial offering) any reason to consider as a hedge against future inflation, which doesn't exist currently? No because 5 years is too short a time . 30 year TIPS are the way to go, as their is much greater risk to protect against . I've often that they should yield less than 5 year TIPS for that ...
by gmaynardkrebs
Thu Oct 10, 2019 7:46 am
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

lazyday wrote:
Thu Oct 10, 2019 6:29 am
So many posts in this thread equate "stocks" with "US stocks".

If you just own the global market then things don't look so bad.
Yeah, but then people here wouldn't be bragging and patting themselves on the back so vigorously about how much much money they've made in "stocks."
by gmaynardkrebs
Thu Oct 10, 2019 7:33 am
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

(Initial offering) any reason to consider as a hedge against future inflation, which doesn't exist currently? No because 5 years is too short a time . 30 year TIPS are the way to go, as their is much greater risk to protect against . I've often that they should yield less than 5 year TIPS for that ...
by gmaynardkrebs
Wed Oct 09, 2019 10:31 pm
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

(Initial offering) any reason to consider as a hedge against future inflation, which doesn't exist currently? No because 5 years is too short a time . 30 year TIPS are the way to go, as their is much greater risk to protect against . I've often that they should yield less than 5 year TIPS for that ...
by gmaynardkrebs
Wed Oct 09, 2019 10:21 pm
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

(Not that CAPE even matters for the formula calculation) As I understand his reasoning, he uses CAPE because he's trying to extrapolate a decade into the future. Extrapolating 10 years using a single previous year's P/E is kind of brave. Hence use the CAPE because it's an average that reveals the t...
by gmaynardkrebs
Wed Oct 09, 2019 9:57 pm
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

(Not that CAPE even matters for the formula calculation) As I understand his reasoning, he uses CAPE because he's trying to extrapolate a decade into the future. Extrapolating 10 years using a single previous year's P/E is kind of brave. Hence use the CAPE because it's an average that reveals the t...
by gmaynardkrebs
Wed Oct 09, 2019 9:55 pm
Forum: Investing - Theory, News & General
Topic: Treasury auction of 5 year TIPS coming up....
Replies: 31
Views: 2200

Re: Treasury auction of 5 year TIPS coming up....

(Initial offering) any reason to consider as a hedge against future inflation, which doesn't exist currently? No because 5 years is too short a time. 30 year TIPS are the way to go, as their is much greater risk to protect against. I've often that they should yield less than 5 year TIPS for that re...
by gmaynardkrebs
Wed Oct 09, 2019 8:55 pm
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

What you are describing is a rational reaction to a zombie market (a term I just read today). I think that we are really discussing a sideways decade, not a sideways lifetime. To a certain extent, I can believe that the long slide of interest rates will cast a longer pall on things. For those that ...
by gmaynardkrebs
Wed Oct 09, 2019 6:28 pm
Forum: Investing - Theory, News & General
Topic: John Bogle’s formula says 1% real stock returns likely over next decade
Replies: 156
Views: 12691

Re: John Bogle’s formula says 1% real stock returns likely over next decade

My guess is that the returns will be a little better than 1%, but the downside is greater than the upside. I'm not selling stocks, but I'm not "buying the dips" either. Too much risk for too little reward.
by gmaynardkrebs
Wed Sep 18, 2019 10:06 am
Forum: Investing - Theory, News & General
Topic: Spike in Repo Rates [Fed Overnight Repurchase agreement]
Replies: 88
Views: 7173

Re: Spike in Repo Rates [Fed Overnight Repurchase agreement]

Could this mean a freeze-up in my Vanguard MM funds could happen?
by gmaynardkrebs
Wed Sep 18, 2019 10:03 am
Forum: Investing - Theory, News & General
Topic: Potential usefulness of TIPS to conservative retirees: How to beat a 3% SWR
Replies: 46
Views: 2504

Re: Potential usefulness of TIPS to conservative retirees: How to beat a 3% SWR

Would an alternative to a TIPs ladder such as investing in a TIPs fund (e.g. Vanguard Inflation-Protected Securities Fund, VAIPX) work similarly? No. Holding a TIPS fund does not eliminate the interest rate and reinvestment risk in the same sense holding a spend down TIPS ladder does. The practical...
by gmaynardkrebs
Mon Sep 16, 2019 6:41 pm
Forum: Investing - Theory, News & General
Topic: Central banks drive income seeking investors to equities
Replies: 34
Views: 1848

Re: Central banks drive income seeking investors to equities

"Central banks drive income seeking investors to equities" That certainly seems intuitive. When fixed income is expected to give low to negative real returns many would seek to invest elsewhere. Here is an issue I do not have a strong opinion on: does this causes investors to miss price the risk of...
by gmaynardkrebs
Sat Sep 14, 2019 1:16 pm
Forum: Investing - Theory, News & General
Topic: Central banks drive income seeking investors to equities
Replies: 34
Views: 1848

Re: Central banks drive income seeking investors to equities

The article feels awfully long-winded and breathless to make an obvious point: of course rate cuts are intended to drive people out of bonds and into stocks. That is explicitly their goal, not some accidental side effect nobody foresaw. Ancillary question: What’s the logic behind stocks being cheap...
by gmaynardkrebs
Sat Sep 14, 2019 10:33 am
Forum: Investing - Theory, News & General
Topic: Central banks drive income seeking investors to equities
Replies: 34
Views: 1848

Re: Central banks drive income seeking investors to equities

JoMoney wrote:
Fri Sep 13, 2019 12:40 am
Yes, pushing savers to "invest" in something productive rather than sit on their money is what they're trying to do.
Unfortunately, a major impact has been to increase buybacks. It's not clear that it is actually driving as much new investment as hoped for.
by gmaynardkrebs
Sat Sep 14, 2019 9:38 am
Forum: Investing - Theory, News & General
Topic: Central banks drive income seeking investors to equities
Replies: 34
Views: 1848

Re: Central banks drive income seeking investors to equities

Remember the days of savings accounts yielding 5.00% plus? yes, but what I did not realize was that the real rates (i.e. adjusted for inflation) were often negative. In many periods, especially the late 1970s early 1980s, real returns were far more negative than they've been in recent years. Also, ...
by gmaynardkrebs
Mon Aug 12, 2019 8:24 am
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 21699

Re: Negative Interest Rates in U.S.

if rates go to zero, then stocks are very cheap. A few months ago on CNBC Warren Buffet described a prolonged zero interest rate scenario as meaning stocks were "ridiculously cheap" This could be perma-bull Warren. I'd be interested in his explanation for why rates are low. If he thinks it's becaus...
by gmaynardkrebs
Sun Aug 11, 2019 10:11 pm
Forum: Investing - Theory, News & General
Topic: Negative Interest Rates in U.S.
Replies: 249
Views: 21699

Re: Negative Interest Rates in U.S.

No one knows what the natural rate of interest is, which means there is no way to assess the analysis in the Pimco article.
by gmaynardkrebs
Tue Aug 06, 2019 6:27 pm
Forum: Investing - Theory, News & General
Topic: New and Improved CAPE is Higher!
Replies: 33
Views: 3065

Re: New and Improved CAPE is Higher!

But the historical CAPE becomes higher too. And it looks like there is a greater difference in the older data, which would effectively mean the current CAPE is lower than we think: Though many CAPE users seem to think it's a good idea, I don't compare CAPE with it's history, as then you are implici...
by gmaynardkrebs
Mon Aug 05, 2019 4:19 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks in free fall
Replies: 12294
Views: 2099134

Re: U.S. stocks in free fall

I wouldn't cross the street for a "3% off sale," which is why I don't react to days like this. Long term is the only term.
by gmaynardkrebs
Mon Jun 10, 2019 7:10 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Re-Death of Value, or Deja Vu All Over
Replies: 61
Views: 6268

Re: Larry Swedroe: The Re-Death of Value, or Deja Vu All Over

I am deliberately underweighting the FAANG stocks. I'm with you, but don't how. How would one do that (basically, a broad large-cap less FANG) using Vanguard or ETFs available through Vanguard? S&P 500 EX-TECHNOLOGY ETF https://www.proshares.com/funds/spxt_index.html Well!!! There is an ETF for eve...
by gmaynardkrebs
Sun Jun 09, 2019 6:22 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Re-Death of Value, or Deja Vu All Over
Replies: 61
Views: 6268

Re: Larry Swedroe: The Re-Death of Value, or Deja Vu All Over

nedsaid wrote:
Thu Jun 06, 2019 3:28 pm
I am deliberately underweighting the FAANG stocks.
I'm with you, but don't how. How would one do that (basically, a broad large-cap less FANG) using Vanguard or ETFs available through Vanguard?
by gmaynardkrebs
Sat Jun 01, 2019 7:10 am
Forum: Investing - Theory, News & General
Topic: That's enough for me in 2019
Replies: 814
Views: 95400

Re: That's enough for me in 2019

Is this what they mean by “dumb money”. Why does dumb money always have to justify itself with long drawn out conversations that pretend to be logical/evidenced but instead are purely speculative/opinion based? I wish I could be as "dumb" as Market Timer. I invest passively (for the most part) beca...
by gmaynardkrebs
Mon May 27, 2019 6:52 pm
Forum: Investing - Theory, News & General
Topic: What goes wrong after index enlightenment
Replies: 41
Views: 5527

Re: What goes wrong after index enlightenment

Rick Ferri wrote:
Mon May 27, 2019 9:48 am
The most common error I see among index investors is under-committing.
No, the most common error is thinking that just because you beat active investors, you are going to do well in the stock market.
by gmaynardkrebs
Mon May 27, 2019 2:16 pm
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 212
Views: 27219

Re: Is Cash Trash? The Purpose of Cash

You should ask W Buffett for this question. In his 2018 letter to share holders, he explained this and I totally agree with him. Bingo. Cash is like oxygen. It’s taken for granted until you don’t have it. It is most certainly an investment. It allows a margin of safety in your portfolio, hedges inf...
by gmaynardkrebs
Mon May 27, 2019 10:42 am
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 212
Views: 27219

Re: Is Cash Trash? The Purpose of Cash

My portfolio uses a barbell approach with stocks (S&P 500 index fund) at one end and cash (100% T-bills) at the other end. I follow Warren Buffett’s investing thought process in this way. I do not liability match with a bonds duration. I view my investing horizon and needs as a repeated series of s...
by gmaynardkrebs
Sun May 26, 2019 5:58 pm
Forum: Investing - Theory, News & General
Topic: Is Cash Trash? The Purpose of Cash
Replies: 212
Views: 27219

Re: Is Cash Trash? The Purpose of Cash

The greatest value of cash is its tremendous optionality. No other investment can compare in this regard, Warren Buffet appreciates cash in a way that few other investors do, and has benefited immensely. I hear many investors brag that they are "fully invested" as if that is courage, instead of igno...
by gmaynardkrebs
Tue May 21, 2019 1:18 pm
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

I will only invest in Index Funds, so long as they continue to include my desired asset classes. However, how often have we been told the story that active loses to Indexing, only to find that the author uses the best performing broad indices (i.e. S&P, or even Nasdaq), or that they only look at US...
by gmaynardkrebs
Tue May 21, 2019 10:57 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

I don't find this parabolic rise of SPX argument to be convincing at all. Stocks have risen for 100 years, interest rates have fallen from 9% to 3% over the past 20-30 years, and other forces, like corporate buybacks, have also increased. I do not see why you would single out 401k contributions as ...
by gmaynardkrebs
Tue May 21, 2019 10:44 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

but only if I thought the active folks were starting to beat the indexes consistently. Not possible. Active investing is a zero sum game... in order for an active fund to beat the market, another active fund must trail the market. The active funds, on average, will trail the market by their higher ...
by gmaynardkrebs
Tue May 21, 2019 9:56 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

The two most indexed markets are S&P 500 and NASDAQ. They attract a huge amount of 401k monthly inflows, and both are arguably at or near in bubble territory. Indexing is not the problem, it’s indexing in these two markets combined with literally thoughtless 401k contributions that are creating a v...
by gmaynardkrebs
Tue May 21, 2019 9:50 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

I don't find this parabolic rise of SPX argument to be convincing at all. Stocks have risen for 100 years, interest rates have fallen from 9% to 3% over the past 20-30 years, and other forces, like corporate buybacks, have also increased. I do not see why you would single out 401k contributions as ...
by gmaynardkrebs
Tue May 21, 2019 8:40 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

The two most indexed markets are S&P 500 and NASDAQ. They attract a huge amount of 401k monthly inflows, and both are arguably at or near in bubble territory. Indexing is not the problem, it’s indexing in these two markets combined with literally thoughtless 401k contributions that are creating a v...
by gmaynardkrebs
Tue May 21, 2019 12:20 am
Forum: Investing - Theory, News & General
Topic: Lies, Damned Lies, And Index Funds
Replies: 43
Views: 5951

Re: Lies, Damned Lies, And Index Funds

The two most indexed markets are S&P 500 and NASDAQ. They attract a huge amount of 401k monthly inflows, and both are arguably at or near in bubble territory. Indexing is not the problem, it’s indexing in these two markets combined with literally thoughtless 401k contributions that are creating a ve...
by gmaynardkrebs
Thu May 16, 2019 10:13 am
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

On a related note, many are quick to dismiss something like the Great Depression ever occurring again. While I tend to be an optimistic person, and I'm certainly an aggressive investor, I cannot see how people are so quick to dismiss the mere possibility of such an event. Depending on one's age, th...
by gmaynardkrebs
Thu May 16, 2019 7:57 am
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

On a related note, many are quick to dismiss something like the Great Depression ever occurring again. While I tend to be an optimistic person, and I'm certainly an aggressive investor, I cannot see how people are so quick to dismiss the mere possibility of such an event. Depending on one's age, th...
by gmaynardkrebs
Wed May 15, 2019 8:51 pm
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

I'm guessing the market has gone down lately? I don't bother checking, but I can always get a good idea based on the most recent threads (for example, "100% stocks" threads when the market is doing really well). Anyway, which is the greater risk?: The risk that a 60 year old, entering retirement, e...
by gmaynardkrebs
Wed May 15, 2019 10:19 am
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

this can't happen without some serious societal mayhem.. for example government pensions would go bankrupt and it would even mean total economic collapse, no productive output in the economy for decades?... I don't plan for it since to me it's too miniscule of a possibility to even consider. Not at...
by gmaynardkrebs
Wed May 15, 2019 9:57 am
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

this can't happen without some serious societal mayhem.. for example government pensions would go bankrupt and it would even mean total economic collapse, no productive output in the economy for decades?... I don't plan for it since to me it's too miniscule of a possibility to even consider. Not at...
by gmaynardkrebs
Wed May 15, 2019 8:54 am
Forum: Personal Investments
Topic: Does your retirement plan work if stocks are flat or in decline for decades?
Replies: 180
Views: 11281

Re: Does your retirement plan work if stocks are flat or in decline for decades?

this can't happen without some serious societal mayhem.. for example government pensions would go bankrupt and it would even mean total economic collapse, no productive output in the economy for decades?... I don't plan for it since to me it's too miniscule of a possibility to even consider. Not at...