Search found 2298 matches

by dmcmahon
Wed May 27, 2020 12:56 am
Forum: Investing - Theory, News & General
Topic: Swedroe’s Bond Advice - no total bond index
Replies: 195
Views: 16939

Re: Swedroe’s Bond Advice - no total bond index

If I recall, Larry is not a fan of corporate bonds because of their correlation with equity performance and frequent use of call features embedded in the bonds. He also does not like the mortgage-backed securities, I believe because of pre-payment risk and the fact that if rates rise those are long...
by dmcmahon
Sat May 23, 2020 9:16 pm
Forum: Personal Finance (Not Investing)
Topic: What do people spend money on?
Replies: 52
Views: 5224

Re: What do people spend money on?

College for the kids. Paying off the house.Charities. A few “toys”.
by dmcmahon
Sat May 23, 2020 9:14 pm
Forum: Investing - Theory, News & General
Topic: S&P500 vs World Performance
Replies: 195
Views: 13190

Re: S&P500 vs World Performance

There's been a terrible opportunity cost to having invested in international for the last decade. I have quite a strong bias towards the US because I believe we have the most dynamic economy in the world. Maybe at sometime in the future international will do well but in the meantime the US is good ...
by dmcmahon
Sat May 23, 2020 5:27 pm
Forum: Investing - Theory, News & General
Topic: TIAA warns on negative yields on money market funds
Replies: 71
Views: 5027

Re: TIAA warns on negative yields on money market funds

T-bills out to six months are trading at negative yields. Money's cheap. That is one way to look at it. However, the other side is this makes retirement saving and planning very difficult. We always here how little Americans have saved for retirement. Negative and 0 yields actually make this proble...
by dmcmahon
Mon May 18, 2020 10:04 pm
Forum: Investing - Theory, News & General
Topic: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates
Replies: 79
Views: 7891

Re: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates

Fair point. The flip side: the idea that savers who just want to defer some of their spending for a later day deserve to have it inflated away and then get heavily taxed on the “interest” that doesn’t even make up for what inflation is destroying is equally strange. What's wrong with TIPS? If those...
by dmcmahon
Mon May 18, 2020 1:06 am
Forum: Investing - Theory, News & General
Topic: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates
Replies: 79
Views: 7891

Re: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates

How many retirees would trade away ultra-low inflation for higher interest rates? This idea that people deserve interest for doing nothing but stashing cash in a liquid government-backed account is strange, really. Fair point. The flip side: the idea that savers who just want to defer some of their...
by dmcmahon
Sun May 17, 2020 9:50 am
Forum: Investing - Theory, News & General
Topic: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates
Replies: 79
Views: 7891

Re: NYTs article:— New York Times article May 17, Dealing With the Dark Side of Low Interest Rates

Interest rates are so low largely because the economy is so weak. That economic frailty has damaged other important sources of investor income as well. That jumped out at me. Where’s he been living the last 10 years? Rates were at bare break-even levels even while the economy was booming. It should...
by dmcmahon
Sun May 17, 2020 9:43 am
Forum: Investing - Theory, News & General
Topic: S&P500 vs World Performance
Replies: 195
Views: 13190

Re: S&P500 vs World Performance

The VT is clearly beaten by the SPY. I was wondering if the obvious geographic diversification benefit of the VT outweighs its lower performance over the SPY? Here is the performance head to head over the past 10 years. http://image.noelshack.com/fichiers/2020/20/7/1589713314-screen-shot-2020-05-17...
by dmcmahon
Sat May 16, 2020 5:02 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 18576

Re: Rekenthaler: Long Bonds Are for Fools

As I pointed out: - the difference in max drawdown was trivial (1%) - as was the difference in returns adjusted for volatility (risk-adjusted returns). - the ONLY meaningful difference was the difference in annualized returns (about 1% annualized). I still don't see the objection: the investor expe...
by dmcmahon
Sat May 16, 2020 4:59 pm
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 18576

Re: Rekenthaler: Long Bonds Are for Fools

The guy buying it at 1% yield. Of course he’ll look like a genius when he unloads it to someone else at -1% yield.

Anyone buying an “investment” with a negative expected value could reasonably be called the bigger fool, could they not? At what point does something become a pure speculation?
by dmcmahon
Sat May 16, 2020 10:49 am
Forum: Investing - Theory, News & General
Topic: Rekenthaler: Long Bonds Are for Fools
Replies: 346
Views: 18576

Re: Rekenthaler: Long Bonds Are for Fools

I've heard variations of this argment since joining this Forum 10 years ago. The argument was wrong then and is wrong now. By the way, at 1.3% yield, US 30-year treasuries are a bargain compared to Swiss 10-year treasuries (current yield of -0.554%). Why is it wrong? It’s essentially the bigger foo...
by dmcmahon
Fri May 15, 2020 8:30 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income lessons learned from Coronavirus?
Replies: 48
Views: 4326

Re: Fixed Income lessons learned from Coronavirus?

1. Municipal Bonds I had no allocation but for tax reasons had thought to switch 25% of my bond allocation over to the VG California fund. Abandoned this after the pandemic hit, will stick with treasuries and CDs. With yields so low, the tax effects are in the noise for me. 2. Allocate 5% to cash N...
by dmcmahon
Fri May 15, 2020 8:24 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

I have been involved in a few of these discussions, out of the 1700+ and counting, over the years. My conclusion is: There are those that believe in US only and no need for International per specific Bogle and Buffett statements. There are those that believe in International and US allocations at m...
by dmcmahon
Thu May 14, 2020 10:18 pm
Forum: Investing - Theory, News & General
Topic: Fixed Income lessons learned from Coronavirus?
Replies: 48
Views: 4326

Re: Fixed Income lessons learned from Coronavirus?

1. Municipal Bonds I had no allocation but for tax reasons had thought to switch 25% of my bond allocation over to the VG California fund. Abandoned this after the pandemic hit, will stick with treasuries and CDs. With yields so low, the tax effects are in the noise for me. 2. Allocate 5% to cash No...
by dmcmahon
Thu May 14, 2020 9:30 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

There are only 3,530 companies worth buying, the other 7,425 are just an absolute joke. As negative as I am, I don't believe this, and I don't think you do either. Nestle, Unilever, Toyota, Daimler, Samsung, BP, Novartis, SAP, the list goes on and on. How is it that these companies can't hold a can...
by dmcmahon
Thu May 14, 2020 9:17 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

unclescrooge wrote:
Thu May 14, 2020 8:33 pm
willthrill81 wrote:
Thu May 14, 2020 1:56 pm
How many U.S. investors have a big stake in Chinese stocks? I certainly wouldn't.
So you would deliberately ignore one of the largest economies in the world?
The question is how much of that economy's growth is being allowed to accrue to shareholders.
by dmcmahon
Thu May 14, 2020 9:15 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

I'll ask you this. If International indexes start to outperform tomorrow and the next 10 years, will you switch? Yes or No? Most of the "Jack and Warren said so" crowd side steps this question. No. One day is ultra-short term. :happy If you were being figurative and actually mean a longer example, ...
by dmcmahon
Thu May 14, 2020 11:47 am
Forum: Investing - Theory, News & General
Topic: International market recovery
Replies: 146
Views: 9695

Re: International market recovery

I'd encourage you to compare US vs exUS CAGR for the last 10 years, the last 20 years, the last 30 years, the last 50 years. I'm not sure how you define 'folk wisdom rather than data' - but, it seems to me there's an awful lot of historical data out there. Speaking for myself, I invest in equities ...
by dmcmahon
Tue May 12, 2020 9:27 pm
Forum: Investing - Theory, News & General
Topic: Paul Tudor: Compelling case for bitcoin ?
Replies: 229
Views: 11809

Re: Paul Tudor: Compelling case for bitcoin ?

As someone who owns a little bit of both bitcoin and gold, the responses in this thread are very reassuring. It seems that most mainstream investors are pricing the possibility of hyper-inflation or some sort of collapse of the monetary system at essentially 0. I think that’s a non-zero probability...
by dmcmahon
Tue May 12, 2020 9:03 pm
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: [Are American markets likely to outperform INTL]

The yield on international funds certainly looks good. Or should I say, looked good. How many of those dividends are going to be cut in the face of the global pandemic? As for book value, I'm not sure it's meaningful anymore. You have governments printing trillions of dollars, what does that do to e...
by dmcmahon
Fri May 08, 2020 11:48 pm
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: [Are American markets likely to outperform INTL]

As usual, we see two camps forming: 1) People who think markets are relatively efficient, or at least better at pricing global equities than we are as individuals. 2) People who can write novel-length posts about why the US can, should and will offer greater return with less risk. I'm clearly in th...
by dmcmahon
Fri May 08, 2020 11:21 pm
Forum: Investing - Theory, News & General
Topic: Why doesn't everybody replace SP500 with NTSX?
Replies: 70
Views: 7126

Re: Why doesn't everybody replace SP500 with NTSX?

It’s riskier. It uses leverage to get a 90/60 profile. So effectively 50% more investment exposure, through leverage. Riskier in what sense? LTT are uncorrelated to S&P500. It is true that it is levered but the prospectus states that it is expected to have approximately the same return as the S&P50...
by dmcmahon
Fri May 08, 2020 10:50 am
Forum: Investing - Theory, News & General
Topic: Why doesn't everybody replace SP500 with NTSX?
Replies: 70
Views: 7126

Re: Why doesn't everybody replace SP500 with NTSX?

It’s riskier. It uses leverage to get a 90/60 profile. So effectively 50% more investment exposure, through leverage.
by dmcmahon
Wed May 06, 2020 10:54 am
Forum: Personal Investments
Topic: Munis: Hold or Sell
Replies: 31
Views: 2301

Re: Munis: Hold or Sell

What’s your expectation for your tax bracket until retirement? What yield are you getting on the munis and what credit quality do you have? My personal bias: at these abysmal interest rates I do not believe I’m compensated for taking any credit risk. Total bond market I think has an increasing amoun...
by dmcmahon
Wed May 06, 2020 10:46 am
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: [Are American markets likely to outperform INTL]

US interest rates were substantially higher than those of Japan, Germany, etc. for much of the past decade. The Fed tightened while other central banks allowed or even encouraged negative rates. That interest rate spread likely drove the dollar up. Our rates are still higher than most developed cou...
by dmcmahon
Wed May 06, 2020 12:16 am
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: [Are American markets likely to outperform INTL]

I saw a video recently but I can't find it or even remember who was presenting it. It explained that because the USD is the world's reserve currency, it causes capital to flow to the US and will also cause the dollar to keep rising in value compared to other currencies. This process will continue u...
by dmcmahon
Tue May 05, 2020 11:41 pm
Forum: Investing - Theory, News & General
Topic: Why doesn’t Jim Cramer start a fund?
Replies: 26
Views: 3287

Re: Why doesn’t Jim Cramer start a fund?

I learn more about what’s going on from Fast Money.
by dmcmahon
Tue May 05, 2020 11:08 pm
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: American exceptionalism

With all of the exceptionalism here, remember the exceptional greed that caused the Great Recession. Great point. It's that exceptional greed that has driven p/e multiples through the roof as well, making u.s.-equity investors happy due to loads of "speculative return," as Jack would call it. It co...
by dmcmahon
Tue May 05, 2020 11:05 pm
Forum: Investing - Theory, News & General
Topic: Trading Baskets of Stocks
Replies: 27
Views: 1704

Re: Trading Baskets of Stocks

True. The problem is, truly high yielding stocks are likely to include a lot of dogs. Or, at best, a lot of flat businesses with no growth.

But OK, help us out, what would be the top 30 holdings of your hypothetical portfolio?
by dmcmahon
Mon May 04, 2020 11:58 pm
Forum: Investing - Theory, News & General
Topic: What if the market is 100% passive?
Replies: 27
Views: 2085

Re: What if the market is 100% passive?

What % of the market needs to be passive for it to "stop working"? Virtually all of it. Market prices are not set by “holdings”, they are set by “trading”. As long as there are at least two traders in every stock, setting prices, the system continues to function. So 90+ percent could be index and t...
by dmcmahon
Mon May 04, 2020 11:29 pm
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: [Are American markets likely to outperform INTL]

It seems to me that some obvious trends have been in place for a while: Population growth is slowing The amount of energy and materials needed to produce a unit of GDP is dropping Information technology is remaking many aspects of the delivery of goods and services The world is becoming more interco...
by dmcmahon
Sun May 03, 2020 11:18 pm
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: American exceptionalism

JoMoney wrote: I'll see if I can find a quote/reference for what I'm saying, but I would be interested if you could find a reference for yours stating that he believed it would outperform. Perhaps I misspoke. It's safe to say that all investors who are interested in optimizing returns or risk adjus...
by dmcmahon
Sun May 03, 2020 8:22 pm
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: Why value is dead
Replies: 96
Views: 9111

Re: Bill Bernstein: Why value is dead

Since the famous research was done, two new factors have been “discovered”: quality and momentum. Is it possible there is factor drift such that these factors matter more than value or size?
by dmcmahon
Sun May 03, 2020 12:53 pm
Forum: Investing - Theory, News & General
Topic: Trading Baskets of Stocks
Replies: 27
Views: 1704

Re: Trading Baskets of Stocks

I've never liked the high-dividend indexes because they would tend to overweight sectors such as financials or energy or pharma. That might be good or bad depending on your point of view. FWIW I own VIG in some of the trusts I manage. Take a look at the holdings and see how they line up with the na...
by dmcmahon
Sun May 03, 2020 8:45 am
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

I just don't find this line of argument convincing at all. Yeah everything crashes in a crisis but you get meaningful differences in performance over 10 year periods. in the 00s people were glad to have ex-US and in the 10s people were glad to have US. Ex-US out-performed US by less than 2% a year ...
by dmcmahon
Sun May 03, 2020 12:51 am
Forum: Investing - Theory, News & General
Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
Replies: 65
Views: 5130

Re: Vanguard 2-factor authentication becoming mandatory and available for non-US

Good for Vanguard. :beer 2FA isn't "minimal" extra security, properly implemented it eliminates phishing attacks: https://security.googleblog.com/2019/05/new-research-how-effective-is-basic.html Now if Vanguard will just let customers use *only* Yubikeys without the phone fallback. Its been a coupl...
by dmcmahon
Sun May 03, 2020 12:26 am
Forum: Investing - Theory, News & General
Topic: [Are American markets likely to outperform INTL]
Replies: 237
Views: 16314

Re: American exceptionalism

I’ll go with reserve currency, tech companies, and avoiding the forces of stagnation that have overcome Europe and Japan.
by dmcmahon
Sun May 03, 2020 12:03 am
Forum: Investing - Theory, News & General
Topic: When to sell low? Buffett sells entire airline stake
Replies: 81
Views: 11768

Re: When to sell low? Buffett sells entire airline stake

https://www.google.com/amp/s/www.cnbc.com/amp/2020/05/02/warren-buffett-says-berkshire-sold-its-entire-position-in-airlines-because-of-the-coronavirus.html I take Jack Bogle's advice to buy and hold forever quite seriously. In your investment plan, are there any situations in which you would sell c...
by dmcmahon
Sat May 02, 2020 8:58 pm
Forum: Investing - Theory, News & General
Topic: When to sell low? Buffett sells entire airline stake
Replies: 81
Views: 11768

Re: When to sell low? Buffett sells entire airline stake

https://www.google.com/amp/s/www.cnbc.com/amp/2020/05/02/warren-buffett-says-berkshire-sold-its-entire-position-in-airlines-because-of-the-coronavirus.html I take Jack Bogle's advice to buy and hold forever quite seriously. In your investment plan, are there any situations in which you would sell c...
by dmcmahon
Sat May 02, 2020 8:51 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

Corruption, threat of nationalization. Look at Venezuela. It was relatively rich oil exporter until it was not. Russian Yukos oil giant was nationalized, etc. Chinese companies are semi-government entities. Since 1820 Argentina defaulted 8 times, Ecuador and Venezuela 10, Mexico and Turkey 8, Chile...
by dmcmahon
Sat May 02, 2020 8:34 pm
Forum: Investing - Theory, News & General
Topic: Vanguard reviews “commodities futures” for inclusion in Target Date Retirement Funds
Replies: 32
Views: 2980

Re: Vanguard reviews “commodities futures” for inclusion in Target Date Retirement Funds

Physical goods hedge against a particular type of bad market, a stagflationary period which we haven’t seen in a long time. I don’t regard it as impossible. I view unleveraged real estate as such a hedge though it seems impossible to find that as an investment. Gold also, if physical. CCF an imperfe...
by dmcmahon
Sat May 02, 2020 7:10 pm
Forum: Personal Investments
Topic: Anyone on here trade Options? Suggestions / Inputs / Critique?
Replies: 15
Views: 1224

Re: Anyone on here trade Options? Suggestions / Inputs / Critique?

I traded options long ago. Bid/ask spreads are wide, and thanks to the unprecedented volatility we have, premiums are likely to be high. My options broker (yes, this was back in the days when you called someone on the phone) would always tell me "options traders are thieves" as a reminder to me to b...
by dmcmahon
Sat May 02, 2020 6:50 pm
Forum: Personal Investments
Topic: It seems the writing is on the wall...question about cash allocation
Replies: 17
Views: 1951

Re: It seems the writing is on the wall...question about cash allocation

Looked at bond yields lately? Yeah, that. Seriously, put yourself in the position of the manager of a large pension fund right now, looking at sub-1% returns on 10-year treasuries. You have to make 7% returns on your portfolio to make sure the pensioners get their retirement checks. Meanwhile a whol...
by dmcmahon
Sat May 02, 2020 6:40 pm
Forum: Investing - Theory, News & General
Topic: Trading Baskets of Stocks
Replies: 27
Views: 1704

Re: Trading Baskets of Stocks

A financial advisor tried to sell this basket idea to me about 12 years back. But when you at the super-low ERs of Vanguard's funds you realize you're in the noise. Why bother unless you can find a fund close to your needs? It is a good question. I am a very experienced investor including a long ti...
by dmcmahon
Fri May 01, 2020 11:13 pm
Forum: Personal Investments
Topic: BND vs CDs
Replies: 6
Views: 1158

Re: BND vs CDs

I am moving over to 2-fund portfolio strategy and wanted general advice on how to allocate 25% (my allocation for fixed income). Though I have invested a bit in bonds in past (MUB) trying to understand more about bonds especially in the current scenarios of low-interest rates. I do see the advantag...
by dmcmahon
Fri May 01, 2020 9:21 pm
Forum: Investing - Theory, News & General
Topic: Trading Baskets of Stocks
Replies: 27
Views: 1704

Re: Trading Baskets of Stocks

A financial advisor tried to sell this basket idea to me about 12 years back. But when you at the super-low ERs of Vanguard's funds you realize you're in the noise. Why bother unless you can't find a fund close to your needs?
by dmcmahon
Fri May 01, 2020 8:03 pm
Forum: Investing - Theory, News & General
Topic: Bill Bernstein: Why value is dead
Replies: 96
Views: 9111

Re: Bill Bernstein: Why value is dead

Based on Dr. Bernstein's analysis, it might be the case that the deflationary forces now in effect aren't going to be good for value stocks for the foreseeable future. And unless inflation comes roaring back soon, Value is Dead or at least Sleeping Soundly. Happen to agree with Mr. Bernstein. The c...
by dmcmahon
Fri May 01, 2020 7:45 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

Currency doesn't account for the underperformance. There's a great interview done by Christine Benz from pre-crash where she talked to an analyst that deconstructed the performance and broke out the currency effect, the sector effect (i.e. US has more tech), the P/E expansion effect, and none of th...
by dmcmahon
Fri May 01, 2020 12:04 am
Forum: Investing - Theory, News & General
Topic: Money market mutual fund assets broke the $​5.​0 trillion level for the first time ever on Tuesday, April 27
Replies: 19
Views: 2721

Re: Money market mutual fund assets broke the $​5.​0 trillion level for the first time ever on Tuesday, April 27,

I wonder how much of that money is people who bailed out of other stock/bond investments, and believe they're going to get back in at a better price before all the other money does. Whaetver money the Fed created during "operations" has to be somewhere. There's no avoiding it. People are selling bo...
by dmcmahon
Thu Apr 30, 2020 11:19 pm
Forum: Personal Investments
Topic: Why international?
Replies: 636
Views: 42033

Re: Why international?

Currency doesn't account for the underperformance. There's a great interview done by Christine Benz from pre-crash where she talked to an analyst that deconstructed the performance and broke out the currency effect, the sector effect (i.e. US has more tech), the P/E expansion effect, and none of the...