Search found 1803 matches

by cjking
Fri Oct 19, 2018 10:42 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1194
Views: 99290

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

Interesting. How were you able to find the Cape for 2003 for the FTSE 100? I had my own time monthly time series which I hadn't updated since March 2017. The data came from daily FTSE 100 index values and FTSE 100 PEs published by FT.com, however when I went to bring it up-to-date I found the relev...
by cjking
Fri Oct 19, 2018 5:52 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1194
Views: 99290

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

I just looked at the price charge for VEU (Total International Vanguard ETF) and in August 2008 before the Financial Crisis kicked in, the ETF traded in the low 48s. Price today: 48.28. That's more than 10 years of earning nothing other than the dividend. The longest comparison (in multiples of 5 y...
by cjking
Wed Oct 17, 2018 5:09 am
Forum: Personal Consumer Issues
Topic: Need new email address. Gmail or ???
Replies: 70
Views: 5104

Re: Need new email address. Gmail or ???

Even though I do use a PC client, I don't duplicate my email locally, that seems like unnecessary clutter and complexity to me. I don't worry that google will delete my old emails without warning Gmail can collect your emails from several other providers, so that's not a reason to use a PC client. I...
by cjking
Mon Oct 15, 2018 11:33 am
Forum: Personal Consumer Issues
Topic: Need new email address. Gmail or ???
Replies: 70
Views: 5104

Re: Need new email address. Gmail or ???

I've had gmail for a long time and I do not have a problem with it. However, a friend and I were talking about one of its rather obnoxious recent 'upgrades' which occurred without my realizing how it happened - it now 'suggests' 3 separate responses at the close of the letter sent to me. These sugg...
by cjking
Mon Oct 15, 2018 11:25 am
Forum: Personal Consumer Issues
Topic: Need new email address. Gmail or ???
Replies: 70
Views: 5104

Re: Need new email address. Gmail or ???

I have a gmail account. When I started using a monitor in portrait mode, I got Mailbird as my email client, as the Gmail web client didn't give me the preview layout i wanted. I also liked not having any screen space taken up by adverts. I had reason to use the Gmail client recently, and there were ...
by cjking
Fri Oct 12, 2018 6:26 am
Forum: Investing - Theory, News & General
Topic: Does it make sense to consider that stocks are 'on sale' when there's a correction?
Replies: 84
Views: 4278

Re: Does it make sense to consider that stocks are 'on sale' when there's a correction?

On the subject of interest rates, in "Valuing Wall Street" Andrew Smithers said that central bank interest rates and bond yields are irrelevant in valuing stocks, therefore any models that use them are worthless. (This includes "the Fed model", whatever that is.) I think he said you can use the divi...
by cjking
Thu Oct 11, 2018 6:00 am
Forum: Investing - Theory, News & General
Topic: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!
Replies: 1194
Views: 99290

Re: It's not enough to mumble "Stay the Course"... INT'L Investing has been a disaster!

I don’t have the numbers in front me, but I’m pretty sure 5 years ago those P/E ratios were very similar. Looking at the below chart, over the last 5 years S&P 500 prices have increased by more than (ten year average of) earnings. It is more expensive now than it was five years ago. http://www.mult...
by cjking
Sun Sep 30, 2018 8:51 am
Forum: Investing - Theory, News & General
Topic: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015
Replies: 62
Views: 2545

Re: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015

My current strategy restricts me to holding twice a countries share of world market capitalisation, so I've piled into Italy and Spain to the maximum extent allowed. Which means 1.6% exposure to Italy and and 1.8% to Spain. Us "market-timers" like to live dangerously. :D (After implementing a change...
by cjking
Sun Sep 30, 2018 8:41 am
Forum: Investing - Theory, News & General
Topic: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015
Replies: 62
Views: 2545

Re: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015

Among other questions, this raises the frequency of adjustment. If you base your ten year projected returns on current valuations, how often do you change your allocation? If you bought Italy and Spain a few years ago when their CAPEs were low, what do you do now? Here's a simple example of a strat...
by cjking
Sun Sep 30, 2018 8:24 am
Forum: Investing - Theory, News & General
Topic: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015
Replies: 62
Views: 2545

Re: CAPE-Based Robert Shiller Bought Italy and Spain Indexes in 2015

I doubt he predicted those markets were a better bet over three years. Stock-market returns over one year will be close to random, over three years not much less so. Even over the 10 to 30 year periods that are more appropriate for this kind of prediction, they will be a lot of noise overlaying the ...
by cjking
Wed Sep 12, 2018 2:03 pm
Forum: Investing - Theory, News & General
Topic: Bill Sharpe's preferred portfolio
Replies: 128
Views: 27237

Re: Bill Sharpe's preferred portfolio

If I remember what I've previously read about the Global Market Portfolio correctly, you need to mix it with the appropriate amount of leverage or safe assets to get to your desired risk level. It would be nice if Vanguard offered a base fund, then several derivative funds with weightings from 50% t...
by cjking
Sun Sep 09, 2018 8:20 am
Forum: Investing - Theory, News & General
Topic: Put Options
Replies: 37
Views: 2172

Re: Put Options

Whatever strike you settle on, calculate how long you can keep/renew the bet before you will have spent more in total than you'll make if you're subsequently proved right. I had a similar intuition about the S&P 500 and placed some bets in 1998/1999/2000, but eventually gave up on this strategy when...
by cjking
Tue Sep 04, 2018 9:20 am
Forum: Investing - Theory, News & General
Topic: Why are you not compensated for taking unsystematic risk?
Replies: 42
Views: 2413

Re: Why are you not compensated for taking unsystematic risk?

I don't think the difference between bitcoin and stocks is clear-cut, stock-markets also have irrational bubbles. I think usually most markets are close enough to the required conditions for the wisdom of crowds to work, but when a mania takes hold independence breaks down, then after the bubble bur...
by cjking
Tue Sep 04, 2018 8:45 am
Forum: Investing - Theory, News & General
Topic: Why are you not compensated for taking unsystematic risk?
Replies: 42
Views: 2413

Re: Why are you not compensated for taking unsystematic risk?

this seems to imply that the consensus is better than the informed opinion of some people. Under certain conditions, the average of a crowd of independent expert's opinions is likely to be a better predictor than using any individual opinion. (That the opinions be independent is one of the conditio...
by cjking
Fri Aug 17, 2018 4:55 am
Forum: Investing - Theory, News & General
Topic: How to Underperform the Market
Replies: 48
Views: 4996

Re: How to Underperform the Market

Therefore, if investors are able to consistently lose to the market (by being emotional or by any other reason), then there should be a mirror strategy that consistently beats the market, simply by doing the opposite. I know a company who do precisely this. I have posted about them before. In the U...
by cjking
Tue Aug 14, 2018 2:41 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 229
Views: 14418

Re: Larry Swedroe: Valuations Too High?

I cited it indirectly in a previous post on this thread. I linked to a blog post, which in turn was a summary of the WSJ article. It was a way of getting around the paywall. Yes I see you did, thanks. Not sure why the other post caught my attention more. This does look like an interesting metric, b...
by cjking
Mon Aug 13, 2018 12:03 pm
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Valuations Too High?
Replies: 229
Views: 14418

Re: Larry Swedroe: Valuations Too High?

A recent WSJ article by Mark Hulburt is pertinent: The Eight Best Predictors of the Long-Term Market https://www.wsj.com/articles/the-8-best-predictors-of-the-long-term-market-1533521521 Am I the only one who followed this link? The gist is that there is a predictor far more accurate than CAPE, whi...
by cjking
Mon Jul 23, 2018 10:36 am
Forum: Personal Consumer Issues
Topic: Rain shower
Replies: 25
Views: 2681

Re: Rain shower

I'm facing exactly this issue at the moment. About to redo a bathroom and have the option to put a rain-shower head flush with the lowered bathroom ceiling. I'm fairly sure the rain-shower head would almost never be used. Maybe it would be used when washing hair? (It would only take a couple of butt...
by cjking
Thu Jun 28, 2018 12:57 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9492

Re: "homemade dividends" from Total Stock Market fund

If you want to avoid spending down assets, but take as much income as possible, the dividend yield is a bit too conservative, as for an index like TSM it is typically only half the profits your companies are making. You could aim a bit below the earnings yield and take 150% of the dividend yield as ...
by cjking
Thu Jun 28, 2018 12:46 pm
Forum: Investing - Theory, News & General
Topic: "homemade dividends" from Total Stock Market fund
Replies: 135
Views: 9492

Re: "homemade dividends" from Total Stock Market fund

Suppose you get a dividend that's exactly the price of one share. Ignoring broker costs, spending the money instead of buying one share has exactly the same effect on your future as selling one share for income. In both cases your "seed corn" is one share less than it would have been if you hadn't s...
by cjking
Mon Jun 18, 2018 5:33 am
Forum: Investing - Theory, News & General
Topic: You Can Market Time At Valuation Extremes
Replies: 65
Views: 8154

Re: You Can Market Time At Valuation Extremes

In my early days of exploring using CAPE, I tested timing strategies (that switched in and out of low return safe assets) which showed that in back-testing you could could get somewhere between 0.5% and 1% extra return for a given volatility. (Or equivalently, lesser volatility for given return.) (F...
by cjking
Mon Jun 18, 2018 4:21 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 63
Views: 4336

Re: A different theoretical view of SWR

I do something similar, including the expected returns model, but: - I would be more conservative about life expectancy, the actuarial life expectancy is a probabilistic midpoint, and you don't want to expose yourself to longevity risk (notably if you're healthy and have parents or grandparents who...
by cjking
Mon Jun 18, 2018 3:20 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 63
Views: 4336

Re: A different theoretical view of SWR

I find it more comforting to ask myself what is the relationship between market returns and underlying inflation? And to be sure, my approach is not free from beliefs either. I believe the capitalist system helps stock and bond returns sit on top of inflation. And to be “safe“ I assume returns simp...
by cjking
Sun Jun 17, 2018 7:38 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 63
Views: 4336

Re: A different theoretical view of SWR

So a worked example Current balance: $1 million Portfolio: 60% world index, (E10/P)-[fund charges] = 3.5%, 40% bond fund guesstimated return 1% real. Expected real return: 60%*3.5%+40%*1% = 2.5% Anticipated real return: 50% * 2.5% = 1.25% Current actuarial life expectancy: 30 years This years income...
by cjking
Sun Jun 17, 2018 7:28 am
Forum: Investing - Theory, News & General
Topic: A different theoretical view of SWR
Replies: 63
Views: 4336

Re: A different theoretical view of SWR

A weakness with this method is that we don't really know how long we will live. I would make "n" current actuarial life expectancy, and recalculate each year. Once life-expectancy falls below 15 years, if it looked at that point like finances are going to be tight, I would start converting to annui...
by cjking
Thu Jun 14, 2018 4:28 am
Forum: Investing - Theory, News & General
Topic: You Can Market Time At Valuation Extremes
Replies: 65
Views: 8154

Re: You Can Market Time At Valuation Extremes

The way to market-time is not to switch into cash when the market is expensive and wait for a fall. Because it's entirely possible than even expensive equities will return more than cash over the amount of time you spend waiting for that fall. What you need to do, if you want to time, is change your...
by cjking
Mon Mar 19, 2018 3:52 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

There is one bit of that paper Grayfox linked to that is blowing my mind, even as someone who is now comfortable with the idea that individual banks can create money out of thin air. https://www.sciencedirect.com/science/article/pii/S1057521914001434 Since banks invent money as fictitious deposits, ...
by cjking
Sat Mar 17, 2018 3:50 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

How does this chart not support the multiplier theory? The chart is the ratio of a measure of the money supply, M2, to the amount of reserve balances banks have at the Fed. The fractional reserve theory claims that ratio is fixed. The chart shows that the ratio is not fixed. Ron I've tried to find ...
by cjking
Sat Mar 17, 2018 3:16 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

As soon as the customer takes that 10K out of thier checking account, wouldn't the bank need to subtract 10K from their cash on the asset side? There may not be a difference between the method you are describing and what has been traditionaly understood where after a loan the bank writes a check an...
by cjking
Fri Mar 16, 2018 5:34 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

As I recall Paul Samuelson Econ 101 - so many decades ago - banks indivudually do not create money - the system does. Yup, I had the same text in the same time period. The "reserve requirements" are what set the multiplier. If banks must keep 20% reserves, the money supply will increase by $5 for e...
by cjking
Fri Mar 16, 2018 4:27 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Here is an example from CNBC web site about how a new bank could create money out of thin air by lending to its first customer. In order to avoid quoting most of the article, I've omitted much of the detail of how, after making it's first loan, it meets the reserve and capital requirements the loan ...
by cjking
Thu Mar 15, 2018 3:07 pm
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

No individual bank or credit union can lend mich more than 100% of its deposits and borrowings - letalone 1000%. So many folks posting on this have no clue about this business. I agree I'm clueless, I'm merely extrapolating aloud from what I've read in the various links, quite possibly wrongly. Wha...
by cjking
Thu Mar 15, 2018 11:02 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

If a bank can just create money from thin air, what would stop them from just lending as much money as possible? A quote from the investopedia link I posted earlier, which addresses this question. What Really Affects Banks’ Ability to Lend So if bank lending is not restricted by the reserve require...
by cjking
Thu Mar 15, 2018 9:57 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Imagine you start a new bank with a million dollars capital. You sell 800,000 dollars (held in government bonds) to the central bank, who credit your account with them with 800,000 dollars of "reserves", created at a push of a button. The 800,000 did not come from anywhere, the central bank compute...
by cjking
Thu Mar 15, 2018 6:20 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

I don't think that creation of money by retail banks is the same as creation of money by the Fed (U.S.). I've learned there are generally three kinds of money, "reserves", "cash" and "deposits." "Cash" (notes and coins) is created centrally and is of least interest. "Reserves" are also created cent...
by cjking
Wed Mar 14, 2018 7:36 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

I wondered what google had to say about that. I don't know if this page I found helps. https://bizfluent.com/facts-5723394-reserve-requirements-vs--capital-requirements.html Reserve Requirements Depository institutions, such as banks and credit unions, must hold reserves in the form of cash in their...
by cjking
Tue Mar 13, 2018 7:09 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Just a side-note, I remembered a comment somewhere that not all central banks require commercial banks to hold reserves, so I googled the following. https://en.wikipedia.org/wiki/Reserve_requirement Canada, the UK, New Zealand, Australia, Sweden and Hong Kong[11] have no reserve requirements. This d...
by cjking
Mon Mar 12, 2018 6:59 am
Forum: Investing - Theory, News & General
Topic: Why International again?
Replies: 224
Views: 25849

Re: Why International again?

I've just seen there is a "WORLD AC" entry I could have used instead of "developed markets" but at CAPE=25.2 instead of 26.4 it would have given results only slightly more favourable to my argument.
by cjking
Mon Mar 12, 2018 6:56 am
Forum: Investing - Theory, News & General
Topic: Why International again?
Replies: 224
Views: 25849

Re: Why International again?

Note that in that link, you can sort the table by column headings. On the CAPE metric, the US is more expensive than everywhere except Ireland and Denmark. Even Japan is slightly cheaper. (I'm also underweight Japan.)
by cjking
Mon Mar 12, 2018 6:52 am
Forum: Investing - Theory, News & General
Topic: Why International again?
Replies: 224
Views: 25849

Re: Why International again?

To go back to the original question, if you look at this link https://www.starcapital.de/en/research/stock-market-valuation/ You will see CAPE for USA (at end January) at 32.1 and for "developed markets" at 26.4. If we take the US to be roughly 50% of developed markets, that implies world-ex-US is a...
by cjking
Sun Mar 11, 2018 1:50 pm
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Banks are merely intermediaries between savers and borrowers. Deposits fund loans, period. Can you say why the statements to the contrary in the various links are wrong? Wikipedia also appears to disagree with you. https://en.wikipedia.org/wiki/Money_creation Most of the money supply[who?] is in th...
by cjking
Sun Mar 11, 2018 5:26 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

As I recall Paul Samuelson Econ 101 - so many decades ago - banks indivudually do not create money - the system does. My interpretation is that this is the "fractional reserve" theory of how money is created. The paper linked subsequently says that was popular from the 1930's to the late 1960's, wh...
by cjking
Sun Mar 11, 2018 5:15 am
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

That paper seems to be both a serious academic publication, and (to me at least) rather funny. (Did we, in 2014, really not know how money was created? And did we have to conduct a physical experiment inside a bank to find out?) Summary, he reviews three different theories of how money is created, t...
by cjking
Sat Mar 10, 2018 1:54 pm
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Unless I am missing something, when a bank or credit union makes a loan - the balance sheet (assets and liabilities) bottom line stays the same. I think that's right, two things of equal value are created, which offset each other. But only one of the two things is money, therefore the amount of mon...
by cjking
Sat Mar 10, 2018 1:41 pm
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

Here is the article https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf Quote from the introduction, with my bold. In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misund...
by cjking
Sat Mar 10, 2018 12:44 pm
Forum: Investing - Theory, News & General
Topic: How banks create money, not from deposits
Replies: 132
Views: 12377

Re: How banks create money, not from deposits

I was reading this recently on the Bank of England web site. How most money is created: at the point a bank credits x dollars from a new loan to a customer account, x dollars have just been created out of thin air.
by cjking
Thu Mar 08, 2018 10:24 am
Forum: Investing - Theory, News & General
Topic: Using a 5y moving average to smooth withdrawals in VPW?
Replies: 70
Views: 6797

Re: Using a 5y moving average to smooth withdrawals in VPW?

I usually also can't stand cash sitting around. I was hoping to use that emotion to goad me into greater spending. My psychological trick (of having "savings" distinct from "investments") has worked too well though, causing me to not think of savings as investments in low-returning assets at all, so...
by cjking
Thu Mar 08, 2018 9:42 am
Forum: Investing - Theory, News & General
Topic: Using a 5y moving average to smooth withdrawals in VPW?
Replies: 70
Views: 6797

Re: Using a 5y moving average to smooth withdrawals in VPW?

For me the answer to smoothing is to have a buffer between withdrawals and spending. That buffer is called savings, and it's contents are held in cash or cash-proxies. Savings are not part of my asset allocation, and they are not part of the balance on which the withdrawal algorithm operates. Unlike...
by cjking
Thu Mar 01, 2018 3:04 am
Forum: Investing - Theory, News & General
Topic: What if you only live off dividends?
Replies: 316
Views: 37323

Re: What if you only live off dividends?

Even in that context, spending dividends is still a reduction of your capital. Dividends are not qualitatively different from a capital perspective than capital appreciation. It's not a reduction from the current balance that is being avoided, it's a reduction from the initial balance. Anyone who h...