Search found 323 matches

by LoopyGinJuice
Wed Jul 15, 2009 8:06 pm
Forum: Investing - Theory, News & General
Topic: Is Bank of America going to survive?
Replies: 159
Views: 36057

I wonder if the big move in these bank stocks (specifically BAC and WFC) is at least partially in anticipation of a restoration of their previous dividend levels ... or if there are more big rallies to come when that actually does occur. You would think so...although anything with them is a guessin...
by LoopyGinJuice
Wed Jul 15, 2009 12:10 pm
Forum: Investing - Theory, News & General
Topic: Terms That Baffle Me
Replies: 22
Views: 3637

this phenomenon is what's funny to me; take oil as an example, each of the following has an equal likelihood: 1. crude oil up on reduced inventories. 2. crude oil down despite reduced inventories. 3. crude oil down on increased inventories. 4. crude oil up despite increased inventories. watch out f...
by LoopyGinJuice
Wed Jul 15, 2009 11:33 am
Forum: Investing - Theory, News & General
Topic: Terms That Baffle Me
Replies: 22
Views: 3637

Re: Terms That Baffle Me

Expected Earnings - A company beats expected earnings... whose expectation? Are they averaging all the analysts who cover the stock? Pretty much. Not just any random dude with a blog, but it seems pretty close, to me. I'm going to try hard to find a couple of articles I read recently quantifying ho...
by LoopyGinJuice
Wed Jul 15, 2009 9:30 am
Forum: Investing - Theory, News & General
Topic: Trap: if you believe X, then invest in Y
Replies: 15
Views: 2864

This is an excellent point raised by OP. People often rush investment decisions without conducting due diligence. They forecast change in share price of oil-associated firms with change in crude oil price, when often there is either no correlation or worse yet, inverse correlation. I believe this i...
by LoopyGinJuice
Wed Jul 15, 2009 9:19 am
Forum: Investing - Theory, News & General
Topic: How does Goldman Sachs make so much money?
Replies: 20
Views: 5776

Re: How does Goldman Sachs make so much money?

I see that Goldman Sachs has made big profits. They going to pay out something like 18 billion in compensation this year--average of $600K per employee. How to they do it? Here is an article that shed some light on their methods that allow many individuals to receive tens of millions in bonuses eac...
by LoopyGinJuice
Wed Jul 15, 2009 8:47 am
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

You know, of all the boards on the internet that discuss these things, you'd think that this would be one where actual mathematical evidence would outweigh the "Everyone else says so" argument. ;) But I can see I was wrong when I said "most people" are interested in prices. I gue...
by LoopyGinJuice
Tue Jul 14, 2009 11:56 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Even though I've described it as a "fair" bet above, my thinking based on my hasty little regression is that it probably isn't quite fair. That is, particularly as the time period increases, the "uncorrelated" assets you choose are likely to include one low expected return and o...
by LoopyGinJuice
Tue Jul 14, 2009 11:34 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Another example - looking at that 10 year period for SV and ISV. This time showing the Growth of 10K for each and also a 50/50 combination of SV/ISV. The correlation of the annual returns was that -0.1477 figure. Notice how the CAGR of the Port shifts closer to the CAGR of the Highest component, an...
by LoopyGinJuice
Tue Jul 14, 2009 10:41 pm
Forum: Personal Investments
Topic: S&P Index Funds
Replies: 17
Views: 3322

It might also have to do with differences in buy-ins and redemptions. Considering how unpredictable those are, I guess it's pretty remarkable how closely they track both each other and the index...
by LoopyGinJuice
Tue Jul 14, 2009 10:33 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Hi Loopy, On scenario 1, yep, I made exactly the mistake I mentioned to Taylor and my edit of the scenario crossed with your post . . . but I suspect that my most recent post crossed with yours as well . . . what I'm basically saying is that, all math aside, and spuriously or no, Pearson r is likel...
by LoopyGinJuice
Tue Jul 14, 2009 9:43 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

What else are you suggesting should be compared ? === The actual prices of the assets, as I mentioned in my post above. See my "Scenario 2" in my last post (positive returns for both assets but perfect negative correlation). In that example, correlation of returns was a perfect -1 (i.e., ...
by LoopyGinJuice
Tue Jul 14, 2009 4:01 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Hi Pete, Not entirely relevant to your question, but just fyi, the correlation for Scenario 1 can't be calculated, since the standard deviations are zero (i.e. no "directional movement" to speak of). I think I'd first advise caution about what a given correlation actually means. As I noted...
by LoopyGinJuice
Tue Jul 14, 2009 1:45 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Re: Correlation questions

If we assume periodic returns are normally distributed (big if, I know) wouldn't it be the case per the central limit theorem or something that observing a correlation of 1 over 2000 periodic observations would be much more likely to indirectly capture some information about magnitude than observin...
by LoopyGinJuice
Tue Jul 14, 2009 1:07 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

US Small Value & International Small Value have extremely low (often negative) correlations. Below shows a cut from a excel sheet where I have the annual returns for SV and ISV listed, and a section where I calculated the correlations for rolling 10 year periods. I highlited one of the cells wh...
by LoopyGinJuice
Tue Jul 14, 2009 12:54 pm
Forum: Investing - Theory, News & General
Topic: Correlation questions
Replies: 58
Views: 6059

Both right. Correlation requires standard deviations for each variable, and a standard deviation can't be calculated for just one observation (undefined). The general formula for R is: 1 / DF * SUM ( Z1 * Z2 ) (sorry, I don't know how to express summation in ASCII). DF = Degrees of Freedom = Number ...
by LoopyGinJuice
Tue Jul 14, 2009 8:58 am
Forum: Investing - Theory, News & General
Topic: Asset Allocation is Dead-- R.I.P.
Replies: 60
Views: 8562

Re: Asset Allocation is Dead-- R.I.P.

Just to clarify, it isn't mathematically impossible to calculate correlations - it's just that you get wildly varying results depending on the time period used, whether you use daily, weekly, monthly, or annual closing prices, and so forth. Hardly anyone who looks at published correlation data ever...
by LoopyGinJuice
Mon Jul 13, 2009 8:13 pm
Forum: Personal Investments
Topic: S&P Index Funds
Replies: 17
Views: 3322

Looks like: FSMKX Expense ratio: 0.10% Min. investment: $10,000 VFINX Expense ratio: 0.16% Min. investment: $3,000 Those are the only two meaningful differences, as far as I can tell...their total returns are very, very slightly different in some years (about 0.1% - not sure why), but Morningstar li...
by LoopyGinJuice
Mon Jul 13, 2009 5:21 pm
Forum: Investing - Theory, News & General
Topic: Hey Buddy - Can You Spare a Dime?
Replies: 24
Views: 4203

They could raise taxes, cut spending in other areas, see increased revenue from economic growth, etc. Raise taxes = political suicide, would cause market crash. There are plenty of ways to raise taxes that typical voters are too ignorant to figure out. They've been doing it for years. Amen. In fact...
by LoopyGinJuice
Mon Jul 13, 2009 1:44 pm
Forum: Investing - Theory, News & General
Topic: Does everybody reinvest it all?
Replies: 20
Views: 3364

In taxable brokerage account: No, because I incur transaction fees whenever I buy/sell.

In tax-deferred retirement account: Yes, because it's all mutual funds that have no transaction fees.
by LoopyGinJuice
Mon Jul 13, 2009 1:40 pm
Forum: Personal Investments
Topic: Gold in 1979
Replies: 17
Views: 2867

Maybe the ER for GLD? I'm not sure how else one would invest without actually owning gold. M* currently lists the ER as 0.40%.

http://quicktake.morningstar.com/ETFNet ... ountry=USA
by LoopyGinJuice
Mon Jul 13, 2009 11:24 am
Forum: Personal Investments
Topic: Gold in 1979
Replies: 17
Views: 2867

I'm sure there are plenty of reasons for that. Some may use the closing price at the end of a period, others may use the average daily closing price over some period, etc.
by LoopyGinJuice
Mon Jul 13, 2009 9:32 am
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

Every third commercial on Bloomberg Television is screaming BUY GOLD NOW! That doesn't tell you anything? How many more bubbles do you have to live through? Rick Ferri Are you advocating that people alter their fixed asset allocations based on what they see in the news? I understand the point thoug...
by LoopyGinJuice
Mon Jul 13, 2009 8:43 am
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

That is a great chart. Is there any way you could add bars for the real S&P500 return? Also I would be curious to see a recipe of one part gold and and one part S&P500. That would be a bit tricky, since you'd have to add in dividends to produce a total return figure for each year. I'll try ...
by LoopyGinJuice
Mon Jul 13, 2009 8:41 am
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

Long term means that it can't be inflated away. If dollar inflation is low then gold is going to perform poorly. If however dollar inflation, or the threat of inflation, is in the air gold will do very well. A market panic is not a pure reason for gold to do well. It just depends on what is causing...
by LoopyGinJuice
Sun Jul 12, 2009 9:30 pm
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

If it tracked inflation perfectly, we would expect it to be 0% across the board. Holy volatility, Batman! Gold tracks inflation over the long term. Always has and always will. The volatility you see is not gold, but the anticipations of the market on the inflation prospects of the dollar. The bette...
by LoopyGinJuice
Sun Jul 12, 2009 9:08 pm
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

Your chart is all but useless. Go back to 1800, before the price of gold was fixed by the government. $35 was the official gold price as set by the US Treasury from 1934 on. Prior to 1934, the gold price had been fixed at $20.67 for almost a century. We came off fixed prices in 1974. So, gold price...
by LoopyGinJuice
Sun Jul 12, 2009 8:59 pm
Forum: Personal Investments
Topic: Gold in 1979
Replies: 17
Views: 2867

Try this: http://www.wrenresearch.com.au/downloads/index.htm It's what I used for my real-returns chart in the theory forum. Noting the web sites .au extension I assume the returns are Australian dollars except where noted? Paul Hmm, not sure about the other stats, but the price data for gold says ...
by LoopyGinJuice
Sun Jul 12, 2009 3:58 pm
Forum: Personal Investments
Topic: Gold in 1979
Replies: 17
Views: 2867

Try this:

http://www.wrenresearch.com.au/downloads/index.htm

It's what I used for my real-returns chart in the theory forum.
by LoopyGinJuice
Sun Jul 12, 2009 1:56 pm
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

Btw - I know this topic has been beaten to death, but I'm posting this anyway: inflation-adjusted price appreciation of gold by year: http://i27.tinypic.com/2d76m9g.jpg This is using year-end gold prices and year-end CPI-U. Gold price data from http://www.wrenresearch.com.au/downloads/index.htm CPI-...
by LoopyGinJuice
Sat Jul 11, 2009 9:08 am
Forum: Investing - Theory, News & General
Topic: Gold!
Replies: 82
Views: 10582

Karl wrote:
Rick Ferri wrote:At least TIPS pay interest.
Yeah, I think I got something $58 or so in dividends this year from about $125K in Vanguard TIPS fund.

Any idea on what I should spend my $58 on?
How about...GOLD!!! Yee-haw!
by LoopyGinJuice
Thu Jul 09, 2009 11:26 am
Forum: Investing - Theory, News & General
Topic: What is the best way to invest in Gold/Precious medals?
Replies: 24
Views: 3671

Re: investing in gold

Keeping cash that is not doing thing is counterproductive. Gold allows access to ready cash transactions. I am banking on the communist (note I did not soften by saying Marksist) driving us into hyperinflation by putting so much money into circulation. Uhh. Maybe you should have: a) Read the forum ...
by LoopyGinJuice
Thu Jul 09, 2009 11:19 am
Forum: Investing - Theory, News & General
Topic: What is the best way to invest in Gold/Precious medals?
Replies: 24
Views: 3671

Hint: We're not going back to the gold standard. So gold is simply a surrogate for commodities. To diversify, if you are attracted to gold, you should buy a broad group of commodities instead, unless you like the portability of some gold bars or coins that you can bring with you as you flee the aut...
by LoopyGinJuice
Thu Jul 09, 2009 11:17 am
Forum: Investing - Theory, News & General
Topic: 30 Year Treasuries yielding almost 4%?! HOW?!
Replies: 25
Views: 3728

30-years are also kind of "special" in that they act as a floor for mortgage rates. In theory, crappy mortgage demand puts downward pressure on mortgage rates, which in turn puts downward pressure on 30-year Treasurys. Of course, I guess there's no rule saying banks *have* to sell mortgages.
by LoopyGinJuice
Thu Jul 09, 2009 10:59 am
Forum: Investing - Theory, News & General
Topic: Missing the ten best days
Replies: 37
Views: 6294

Using the inverted yield curve, you can reduce equity exposure during recessions which is the riskiest time to be invested in stocks. You can buy via DCA during the bear markets and catch the best days. Adrian anenu@tampabay.rr.com Does the inverted yield curve still work? I figured, since most peo...
by LoopyGinJuice
Thu Jul 09, 2009 10:56 am
Forum: Investing - Theory, News & General
Topic: Missing the ten best days
Replies: 37
Views: 6294

Simple equation to figure % gain required to get back to even after a given % loss: %gain required = 100 * %loss / (100 - %loss) Haha. I'm pretty sure you mean 100 * %loss / (1 - %loss): 100 * 0.75 / (100 - 0.75) = 75 / 99.25 = 0.75567 = bizarre! 100 * 0.75 / (1 - 0.75) = 75 / 0.25 = 300 = ahh, muc...
by LoopyGinJuice
Thu Jul 09, 2009 10:14 am
Forum: Investing - Theory, News & General
Topic: Precious metals and mining fund VGPMX
Replies: 16
Views: 6222

I'm probably going to switch out VG Healthcare for VGPMX at my next rebalancing. The reasons are probably similar to your reasoning for REITs - low correlation (and little overlap) with the rest of my holdings. You're right about the volatility, though. I don't think I could bear to put more than 5%...
by LoopyGinJuice
Thu Jul 09, 2009 10:06 am
Forum: Investing - Theory, News & General
Topic: What is the best way to invest in Gold/Precious medals?
Replies: 24
Views: 3671

No I am not voting. You left out the most obvoius and accurate response to vote for. It is, no I am not investing in gold and similar stuff and you should not be so investing. Dave Not voting, same reason. Why did you reply in my post that you have 5% in VGPMX then ? Well, to be fair, VGPMX is an e...
by LoopyGinJuice
Wed Jul 08, 2009 2:41 pm
Forum: Investing - Theory, News & General
Topic: Missing the ten best days
Replies: 37
Views: 6294

Ehh...I wasn't attributing any "meaning" to it, just making sure the math was correct. :)
by LoopyGinJuice
Wed Jul 08, 2009 1:25 pm
Forum: Personal Investments
Topic: Mortgage or pay cash?
Replies: 50
Views: 8475

Practically speaking, I think there are few ways of actually executing a strategy of taking advantage of a mortgage vs. other risk-free instrument spread for most of us. Psychologically, it's extremely difficult for even the most disciplined among us to do what it would take to make it worth it. Ser...
by LoopyGinJuice
Wed Jul 08, 2009 12:28 pm
Forum: Investing - Theory, News & General
Topic: Value Averaging by Michael Edleson
Replies: 54
Views: 8945

Re: Just playing contrarian...

SP-diceman -- You are jumping to conclusions. I am really considering purchasing the book from Amazon, but I guess I want to hear the contrarian view also. Maybe someone will point to a study showing otherwise. Like I said, I am surprised more Bogleheads don't employ this strategy especially if it ...
by LoopyGinJuice
Wed Jul 08, 2009 10:03 am
Forum: Investing - Theory, News & General
Topic: Missing the ten best days
Replies: 37
Views: 6294

spam wrote:Remember that it takes a 150% gain to recover from a 75% loss.
Unless I grew up on bizarro-math, I think you mean a 300% gain...?
by LoopyGinJuice
Mon Jul 06, 2009 3:13 pm
Forum: Investing - Theory, News & General
Topic: The current financial crisis and you
Replies: 43
Views: 5951

Increased equity exposure in my retirement account to about 73/27 from 70/30 a year ago. I'll probably switch out VG Healthcare for VG Precious Metals by the end of the year. Increased leverage in my gambling account to about 40% of my net investment (currently leveraged 1.63:1). 60% of those assets...
by LoopyGinJuice
Mon Jul 06, 2009 11:39 am
Forum: Personal Investments
Topic: Vanguard mutual fund investing help
Replies: 7
Views: 1975

You can export both transactions and balance snapshots from Vanguard into Excel (CSV) or Quicken. I do it in Excel and aggregate it there. You only really need the balance snapshot in order to do rebalancing, I guess, but I like to keep track of my contributions/cost basis and see how each slice of ...
by LoopyGinJuice
Mon Jul 06, 2009 9:00 am
Forum: Investing - Theory, News & General
Topic: Value Averaging by Michael Edleson
Replies: 54
Views: 8945

Re: What I am doing now...

This is what I am doing now. In my taxable, I add new money in my money market account every month. I want a 50% stock, 50% bond allocation, so I just move the money every month or two to the appropriate stock or bond fund to keep my 50%/50% allocation. Is this a form of value averaging? Thanks No,...
by LoopyGinJuice
Fri Jul 03, 2009 11:54 am
Forum: Investing - Theory, News & General
Topic: New Book: Myth of the Rational Market by Justin Fox
Replies: 85
Views: 14197

FYI: Justin Fox was on the Jon Stewart show this week (Wednesday? Last-minute replacement guest for Henry Waxman) discussing the book. The interview probably didn't have enough depth for this audience, but thought it was worth mentioning.
by LoopyGinJuice
Fri Jul 03, 2009 10:57 am
Forum: Investing - Theory, News & General
Topic: To Those Of You Holding "Weird" Mutual Funds: Why?
Replies: 26
Views: 4487

Re: To Those Of You Holding "Weird" Mutual Funds:

A simple question to those of you holding non-standard Boglehead funds: Why do you do it? Because we may enjoy the taste of Kool-Aid but don't drink it to the exclusion of everything else? I've never understood why so many people think Bogleheadedness must come with 100% purity or else you're a her...
by LoopyGinJuice
Thu Jul 02, 2009 4:41 pm
Forum: Personal Investments
Topic: Swimming Without a Suit
Replies: 42
Views: 6053

Re: Swimming Without a Suit

That gap always existed and will continue to exist - all students don't have the same capabilities. The link you posted is to an article that is rather formulaic, dated and almost archaic (by about 50 years at least) in its sentiments around IQ and IQ variations. The part comparing two American eth...
by LoopyGinJuice
Thu Jul 02, 2009 3:39 pm
Forum: Personal Investments
Topic: Swimming Without a Suit
Replies: 42
Views: 6053

And a lot of schools try to do nothing but "teach to the test" and still fail. Meanwhile, the ones that everybody knows were good prior to NCLB have no problem getting their students to ace the test AND learn everything else they've always taught. It's a terribly complicated issue. The top...
by LoopyGinJuice
Thu Jul 02, 2009 10:40 am
Forum: Investing - Theory, News & General
Topic: July 1st - Wellington Fund Celebrates 80 Years!
Replies: 9
Views: 2025

Kenster1 wrote:$10,000 invested on 12/31/1976 would be worth the following on 6/30/2009:

VFINX: $215,402 (Vanguard S&P 500)

VWELX: $275,217 (Vanguard Wellington)
Outstanding when you consider 30-40% of VWELX is in bonds.
by LoopyGinJuice
Thu Jul 02, 2009 10:28 am
Forum: Investing - Theory, News & General
Topic: I Bond Question - Why would someone buy now?
Replies: 21
Views: 3596

I guess they *may* be better than a 12-month CD *if* inflation spikes like mad by November?