Search found 3469 matches

by alex_686
Fri Jun 22, 2018 3:04 pm
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 32
Views: 2344

Re: Ex-dividend days: Is there typically anything out of the ordinary?

Wait, if you sell after the exdiv day you should get the dividend right? I don't understand why that person donating theirs wouldn't get the dividend. The record day is when it settles but the exdiv day determines who gets the dividend. Isn't that its entire purpose? Triceratop, thanks for the corr...
by alex_686
Fri Jun 22, 2018 7:56 am
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 32
Views: 2344

Re: Ex-dividend days: Is there typically anything out of the ordinary?

See, that's the data I was asking for. Can you point me to a dataset which shows this? I will see what I can find. The study I read is fairly old. I really don't expect anything to have changed much since the state of the art and computerized trading have advanced. Yes, I see this and the logic. Bu...
by alex_686
Fri Jun 22, 2018 7:43 am
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 32
Views: 2344

Re: Ex-dividend days: Is there typically anything out of the ordinary?

What happens if the ex-dividend day is on a Saturday? The price drops on Monday? Ex-div is not set by the company issuing the dividend, it is sort of set up by the exchange. For stocks, which settle T+3 or Trade plus 3 days, ex-div is 3 trading days before "Record Date". Record date is what really ...
by alex_686
Thu Jun 21, 2018 6:54 pm
Forum: Investing - Theory, News & General
Topic: Are mutual funds safer than ETFs?
Replies: 11
Views: 903

Re: Are mutual funds safer than ETFs?

Mutual funds and ETFs are equally safe. They are both RICs, they are both covered by the same laws and regulations, they both have the same audit requirements. Both tend to hold the underlying assets. Either can be synthetic, and gain their returns via futures and swaps. You tend to find this more o...
by alex_686
Thu Jun 21, 2018 9:30 am
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 32
Views: 2344

Re: Ex-dividend days: Is there typically anything out of the ordinary?

I have it my head that prices are being continuously set by people who want to buy and want to sell. How that works, I don't really know, but I am finding it hard to accept (meaning I can't imagine it, not that it's not true, so I really need some help here) that it's done by "one guy" that can do ...
by alex_686
Wed Jun 20, 2018 10:31 pm
Forum: Investing - Help with Personal Investments
Topic: Stock Investments questions and advice?
Replies: 7
Views: 491

Re: Stock Investments questions and advice?

Welcome! 3 points. First, write up a Investment Policy Statment. It will be your roadmap. What are your goals, how much risk can you take, what is your time horizon. Etc. Good place to start. https://www.bogleheads.org/wiki/Investment_policy_statement Second, Bogleheads is about passive investing. W...
by alex_686
Wed Jun 20, 2018 10:08 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2683

Re: Is technology the reason for low inflation?

Technology allowed us to build bigger faster cars but that does not reduce inflation. It does if the cars require less fuel and less maintenance than the cars they replaced. Maybe. When fuel prices drop - either directly by lower prices or indirectly by better mileage, people drive more. And the ca...
by alex_686
Wed Jun 20, 2018 9:51 am
Forum: Investing - Theory, News & General
Topic: Is technology the reason for low inflation?
Replies: 57
Views: 2683

Re: Is technology the reason for low inflation?

I will point out that it is more about structure than technology, or Total Factor Productivity. If you want to increase GNP you can either throw more labor or capital inputs, or you can increase productivity. Technology allowed us to build bigger faster cars but that does not reduce inflation. The "...
by alex_686
Wed Jun 20, 2018 9:32 am
Forum: Investing - Theory, News & General
Topic: Ex-dividend days: Is there typically anything out of the ordinary?
Replies: 32
Views: 2344

Re: Ex-dividend days: Is there typically anything out of the ordinary?

2. Say a given stock trades at a P/B of 2. It has a book value of $1b and a market cap of $2b - 100m shares outstanding at $20 each. Book value is $900m in productive assets and $100m in cash. The company announces and pays a dividend of $1 per share. There are now 100m shares trading at (in the ab...
by alex_686
Tue Jun 19, 2018 9:35 pm
Forum: Investing - Help with Personal Investments
Topic: Safe Growth Strategy
Replies: 11
Views: 1012

Re: Safe Growth Strategy

Welcome! The first step is to write up a Investment Policy Statement (IPS). This will state your goals, risk tolerance, etc. After you do that come on back. We really can't talk about what to invest in until you got those steps out of the way. https://www.bogleheads.org/wiki/Investment_policy_statem...
by alex_686
Tue Jun 19, 2018 4:54 pm
Forum: Investing - Help with Personal Investments
Topic: new investor at 57
Replies: 8
Views: 1103

Re: new investor at 57

Next step is to write up a Investment Policy Statement (IPS). What are your goals and risk tolerance? I suspect you have a low risk tolerance. New investors, low income, few assets - all of these skew towards low risk. I suspect low risk assets are where you want to be. Bank CDs and bond funds. Roth...
by alex_686
Tue Jun 19, 2018 3:32 pm
Forum: Investing - Theory, News & General
Topic: International Market Volatility? (Foreign stocks in freefall?)
Replies: 12
Views: 1521

Re: International Market Volatility?

Yes, it is, at least from the perspective of USD. The stocks themselves are volatile, and then you have currency volatility on TOP of that. Stocks have a standard deviation of 10% to 14%. Inflation adjusted currency risk for equities is 1%. Equities are a good hedge. What is even better is that the...
by alex_686
Tue Jun 19, 2018 3:29 pm
Forum: Investing - Theory, News & General
Topic: Are large cap stocks more internationally diversified?
Replies: 6
Views: 257

Re: Are large cap stocks more internationally diversified?

I think your question is misframed a bit. Over the past 20 years large cap multinational corporations have been acting more like other large cap multinational corporations and less like whatever country their headquarters is located in. So I don't think the question should be about US companies goin...
by alex_686
Tue Jun 19, 2018 8:41 am
Forum: Personal Finance (Not Investing)
Topic: Accounting for various forms of equity
Replies: 10
Views: 455

Re: Accounting for various forms of equity

Use the Black Scholes formula. There are online calculators. You are going to need to estimate the volatility of the stock. One of the assumptions of Black Scholes is that they are not paying a divined and you can only exercise at expiration. I assume this is a intellectual exercise to give a ball p...
by alex_686
Mon Jun 18, 2018 10:37 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Dividends
Replies: 12
Views: 1024

Re: Mutual Fund Dividends

So you're basically suggesting that the fund liquidates assets right before the dividend payout date, to account for the investors that choose to receive the dividends (perhaps retirees and such)? Yes, but even more general. Each day thhe junior portfolio manager gets a sheet with their cash positi...
by alex_686
Mon Jun 18, 2018 10:22 pm
Forum: Investing - Theory, News & General
Topic: Mutual Fund Dividends
Replies: 12
Views: 1024

Re: Mutual Fund Dividends

I used to work in Mutual Fund accounting. The moment cash came in it was invested. It did not matter if that cash was from new investor cash flow or from dividends. Nothing was every sold until we got a redemention request from the shareholder. Now, some of those cash flows were predicatable, others...
by alex_686
Mon Jun 18, 2018 10:18 pm
Forum: Investing - Help with Personal Investments
Topic: Shorting Amazon
Replies: 44
Views: 4017

Re: Shorting Amazon

I was on the margin desk during the dot.com boom. I saw people short Amazon. And then Amazon went up and up and up. They got wiped out. Only after they got wiped out did the bubble burst. Just remember the saying "The markets can stay irrational longer than you can stay solvent." Long term put optio...
by alex_686
Mon Jun 18, 2018 6:21 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

Don't you think that high CAPE makes a recession more likely than a low CAPE. At all? Did you look at the last 2 recessions? Let me soften and deepen my response to this. Why would a high PE ratio - either backwards, forwards, or CAPE 10 - signal a upcoming recession? What is the casual link. I can...
by alex_686
Mon Jun 18, 2018 4:44 pm
Forum: Investing - Theory, News & General
Topic: Why do we need 529?
Replies: 41
Views: 3485

Re: Why do we need 529?

"More flexible" - maybe. "Better" - it depends on your definition I guess. To me - the amount of Roth IRA space available is small and precious and needed for retirement savings. I need my Roth IRA for retirement - therefore - a 529 plan is "better" for college savings. (To livesoft's point - if yo...
by alex_686
Mon Jun 18, 2018 4:08 pm
Forum: Personal Finance (Not Investing)
Topic: [Flawed?] Paying off mortgage in 5 years
Replies: 39
Views: 3354

Re: Using HELOC to pay off mortgage in 7 years?

I guess I don't follow how this is any better than just occasionally paying an additional $10k towards your mortgage. It is a behavioral trick to trick yourself into saving more. It is a little like that old trick where you pay for everything using dollar bills. Even if you buy a five cent package ...
by alex_686
Mon Jun 18, 2018 3:51 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

Don't you think that high CAPE makes a recession more likely than a low CAPE. At all? Did you look at the last 2 recessions? What about the dozen times when CAPE hit new highs and nothing happened? Also, this does touch on reverse causality. Often the economy dips, then the stock market. It is rare...
by alex_686
Mon Jun 18, 2018 1:43 pm
Forum: Investing - Help with Personal Investments
Topic: Investment help-
Replies: 6
Views: 308

Re: Investment help-

Before we talk asset allocation write up a IPS. Figure out what your goals and the required return to meet those goals, and your risk tolerance. These steps first. You are asking about which is better, a guaranteed 4.25% bond (a mortgage is just a negative bond), a risky higher return asset (stocks)...
by alex_686
Mon Jun 18, 2018 1:01 pm
Forum: Investing - Help with Personal Investments
Topic: Having a hard time pulling the trigger...
Replies: 25
Views: 2365

Re: Having a hard time pulling the trigger...

Wow, lots of good advice here. I think the point about not being as risk tolerant as I think I should be is valid, and very much true. Risk tolerances can be broken down as need, ability, and willingness. The first 2 are quantifiable and we can debate the "correct" for a given circumstance. The las...
by alex_686
Mon Jun 18, 2018 11:27 am
Forum: Investing - Help with Personal Investments
Topic: Having a hard time pulling the trigger...
Replies: 25
Views: 2365

Re: Having a hard time pulling the trigger...

My reservation around investing in VTI right now is that the market is pretty close to an all-time high and it ramped up very quickly after our last election so I fear I have missed on the gains and won't see those in the future with a much larger down-side potential (market correction). That reall...
by alex_686
Mon Jun 18, 2018 9:09 am
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

Nothing is black and white Now CAPE is high and the curve yield is flattened Doesn't it means the probability of a recession is higher than 5 years ago? Wouldn't this (just probability) hold by backtesting? CAPE does not indicate if the market is overvalued, nor is it designed to. Back-testing show...
by alex_686
Sun Jun 17, 2018 10:26 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

I remember Warren buffet once said: buy the dips and value investing. the stock market always go higher due to inflation in the long term, however, should not we buy the dips? Are those crazy tech stocks still value investing ? I am expecting the dips. I can't think of any time when Buffet has said...
by alex_686
Sun Jun 17, 2018 10:13 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

FOGU wrote:
Sun Jun 17, 2018 4:50 pm
Just downloaded the free Kindle version. I was looking for a new book. A new free book. Thank you for the citation.
Can you report back here on what you think? I think it is a great book and I have recommended it before, but it is a bit dense and technical.
by alex_686
Sun Jun 17, 2018 9:35 pm
Forum: Investing - Theory, News & General
Topic: Illiquid Assets - Volatility
Replies: 4
Views: 467

Re: Illiquid Assets - Volatility

desafinado wrote:
Sun Jun 17, 2018 9:01 pm
alex_686 wrote:
Sun Jun 17, 2018 4:49 pm
FYI, I do think that Illiquid assets does carry a premium.
I wonder if the premium persists after crossing the spread to buy and sell :beer
I would assume a holding period of 5+ years, so yes. A fair amount of nuance goes into this, but, generally yes.
by alex_686
Sun Jun 17, 2018 4:49 pm
Forum: Investing - Theory, News & General
Topic: Illiquid Assets - Volatility
Replies: 4
Views: 467

Re: Illiquid Assets - Volatility

From a technical angle, fewer samples and lower pricing transparency means lower volatility and lower correlations. This defect is well known. I don't know of any standardized solutions. Trying to parse data requires subjective judgement.

FYI, I do think that Illiquid assets does carry a premium.
by alex_686
Sun Jun 17, 2018 3:18 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

show me the 80 years bull? 1990-2000-2008 all most every ten years Humans are fantastic pattern finding creatures. Our brain must find patterns, even when they are not there. I will point out that 1990 was a down year but not a bear year. Most consider the longest US bull market to be form 1982 to ...
by alex_686
Sun Jun 17, 2018 2:47 pm
Forum: Investing - Theory, News & General
Topic: Basic Inflation Questions
Replies: 21
Views: 1069

Re: Basic Inflation Questions

More "value" - as in cars - is also a challenge. Consumers cannot choose lesser qualify in a car - for mandatory safety features, better fuel economy, etc. You cannot buy a new 1960's era VW Beetle today. To extend a bit, is a 2010 Mustang better than a 1960s Mustang? The first has more power and f...
by alex_686
Sun Jun 17, 2018 2:41 pm
Forum: Investing - Theory, News & General
Topic: Very confused with the current market
Replies: 93
Views: 8295

Re: Very confused with the current market

- the fundamental law says it will recycle every 10 years What fundamental law do you quote? Studies I have seen says that length of a bull market has zero predictive power when it comes to determining when something will crash. I can even find bull runs that have lasted 80 years if I am allowed to...
by alex_686
Sun Jun 17, 2018 2:35 pm
Forum: Investing - Theory, News & General
Topic: Basic Inflation Questions
Replies: 21
Views: 1069

Re: Basic Inflation Questions

Correct me if I am wrong, but the goal or general idea is that the substitution (or mix) will result in the about the same "quality of life" before and after. More "value" - as in cars - is also a challenge. Consumers cannot choose lesser qualify in a car - for mandatory safety features, better fue...
by alex_686
Sun Jun 17, 2018 2:13 pm
Forum: Investing - Theory, News & General
Topic: Basic Inflation Questions
Replies: 21
Views: 1069

Re: Basic Inflation Questions

The main thing I'd caution you about is how the CPI (Consumer Price Index) is calculated. The CPI is the number used by the federal government as the "official" inflation rate for many things, including cost of living increases for programs like Social Security. The word of caution is this: CPI is ...
by alex_686
Sun Jun 17, 2018 1:15 pm
Forum: Investing - Theory, News & General
Topic: Basic Inflation Questions
Replies: 21
Views: 1069

Re: Basic Inflation Questions

It means that seasonally adjusted annualized inflation is 2.8%. The simple answer is, yes, you want your fund to return over 2.8%. This includes capital gains, less taxes. The more correct and complex answer is to ignore individual holdings and focus at the portfolio level. This gets into diversific...
by alex_686
Sat Jun 16, 2018 8:30 pm
Forum: Investing - Help with Personal Investments
Topic: Last 10 years Stock market Returns - for benchmarking
Replies: 3
Views: 386

Re: Last 10 years Stock market Returns - for benchmarking

There have been multiple threads on backtesting and the use of historical data. Use it with extreme caution. The human mind is very good at finding patterns, and will find patterns even when they don't exist. The history of the stock market is littered with them. Strike returns. The volatility of th...
by alex_686
Fri Jun 15, 2018 3:30 pm
Forum: Personal Consumer Issues
Topic: Light Camping Trailer
Replies: 42
Views: 3398

Re: Light Camping Trailer

With a small child I would at least recommend a porta-potty if you forgo the built-in toilet. You can get little portable ones if the camper doesn't come with one. Some of the camp sites have long walks to the bathroom ... I camped for many years with 3 young children. The potty is a must. Especial...
by alex_686
Fri Jun 15, 2018 3:18 pm
Forum: Investing - Theory, News & General
Topic: Flaw in Logic? CD ladder instead of bond funds
Replies: 63
Views: 4497

Re: Flaw in Logic? CD ladder instead of bond funds

Where's the flaw in my logic in thinking a CD ladder will be a better investment than a bond fund? What is logic for? I will point out that bonds are a class of bonds, and if you own 2 or more CDs than you have got yourself a bond fund. :happy I will also point out that many people confuse the cont...
by alex_686
Fri Jun 15, 2018 12:52 pm
Forum: Investing - Theory, News & General
Topic: Are Bogleheads smarter than the bond market?
Replies: 40
Views: 4138

Re: Are Bogleheads smarter than the bond market?

Maybe we are smarter. The Efficient Market Hypothesis rests on the fact that the market is efficient. What if it is not? First, I more or less disregard all of the people saying that rates will go up and thus bond prices will go down. That is already priced into the bond market. The market is effici...
by alex_686
Thu Jun 14, 2018 4:32 pm
Forum: Investing - Theory, News & General
Topic: Why do we need 529?
Replies: 41
Views: 3485

Re: Why do we need 529?

One can save over $400,000 in a 529 plan; just try that with a ROTH IRA. One can withdraw principal from a ROTH IRA, one CAN NOT withdraw earnings from a ROTH IRA unless you are age 59.5. Will you be age 59.5 when child goes to school? First, yes. But for those who will not be, you use the principa...
by alex_686
Thu Jun 14, 2018 4:28 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2478

Re: Factor-based strategy is better (winer), OK. then who are the losers?

That is what I am thinking. After more investors find out this, more will load up on these factors, and finally their outperformance will gone. I am happy with my total market fund (VTI), but this is just my own opinion. All roads leads to Rome. Maybe. There is another path. I will use myself as a ...
by alex_686
Thu Jun 14, 2018 4:11 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2478

Re: Factor-based strategy is better (winer), OK. then who are the losers?

Yes, I do. "higher returns than the total market for positive loading on small and value factors" If that is the case, all investors, in their rational minds, should all load up on small and value factors. Then again, if this does happen, who will be the losers? Points. Small and Value factor premi...
by alex_686
Thu Jun 14, 2018 2:50 pm
Forum: Investing - Theory, News & General
Topic: Factor-based strategy is better (winer), OK. then who are the losers?
Replies: 55
Views: 2478

Re: Factor-based strategy is better (winer), OK. then who are the losers?

One of my basic beliefs is that all investors as a group in a market, must earn the average total return of that market before expenses. There are winners, there must be losers, so that they offset each other (zero-sum game before expense). The stock market is not a zero sum game. Just because one ...
by alex_686
Thu Jun 14, 2018 2:37 pm
Forum: Personal Consumer Issues
Topic: Light Camping Trailer
Replies: 42
Views: 3398

Re: Light Camping Trailer

Everybody, thanks for your thoughts. After sharing this with my wife she wants something she can stand up in (so no teardrop trailers) and not a pop-up (does not like the idea of fabric sides). We have now refined the towing weight down to 2700 pounds. I think this puts us at a 13 foot Scamp. We wil...
by alex_686
Thu Jun 14, 2018 2:30 pm
Forum: Investing - Help with Personal Investments
Topic: Thrivent?
Replies: 17
Views: 1719

Re: Thrivent?

In what way is it Lutheran? M I don't think it is any more. It used to be "Lutheran Brotherhood," then it was "Thrivent Financial for Lutherans," but now it is just "Thrivent." (Checking) It stopped being Lutheran in 2013. It is now "a financial membership organization for Christians." Like a credi...
by alex_686
Thu Jun 14, 2018 11:43 am
Forum: Investing - Theory, News & General
Topic: Mutual fund analysis tool
Replies: 2
Views: 223

Re: Mutual fund analysis tool

They are collective investment trusts. One of the reasons why their ER is so low is that they get to skip some SEC regulations - like having to pay to post their NAV each day. Use the underlying index or some other index fund that tracks the index you want. Just make sure that fund uses that index f...
by alex_686
Thu Jun 14, 2018 3:39 am
Forum: Investing - Help with Personal Investments
Topic: Thrivent?
Replies: 17
Views: 1719

Re: Thrivent?

Another former Thrivent Employee. I worked in the back office. It is a very conservative and risk adverse organization. It is a half-step behind many other organizations but then again that might not be a bad thing for a insurance company. I have said this about EJ and Amerprise, it is not the firm ...
by alex_686
Wed Jun 13, 2018 10:04 pm
Forum: Personal Finance (Not Investing)
Topic: Paying off mortgage early
Replies: 43
Views: 3475

Re: Paying off mortgage early

First, a mortgage is a negative bond. Second, what is the best use of your cash? Invest it in a 3.8% bond - that is 3.8% risk free. Or do you invest it something else - some higher return higher risk investment? If it were me, I would invest it in equities over a mortgage. I am confident that I woul...
by alex_686
Wed Jun 13, 2018 9:52 pm
Forum: Investing - Help with Personal Investments
Topic: VMATX Maturity/Duration Question
Replies: 5
Views: 406

Re: VMATX Maturity/Duration Question

I have a follow-up question for the group regarding Vanguard's duration numbers. Which duration number does Vanguard provide for its fixed income funds ... Modified Duration or Effective Duration? Thanks to anyone who might know the answer. Neither. Mutual funds use Macaulay duration.So average cas...
by alex_686
Wed Jun 13, 2018 8:40 pm
Forum: Investing - Theory, News & General
Topic: Imagine a 10 year, 0%, noncallable loan
Replies: 49
Views: 2991

Re: Imagine a 10 year, 0%, noncallable loan

in some ways it is like analyzing a mortgage, but in other ways it is more complicated. with a mortgage, i have to use the money to buy my home. some find incentive in paying down the mortgage quicker based on the interest rate and mortgage payment; others like the "liquidity" of the mortgage. So I...