Search found 1515 matches

by garlandwhizzer
Fri Feb 24, 2017 5:50 pm
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 23521

Re: Extreme Valuations, and why you should reconsider

willthrill81 wrote: Further, how do account for valuations being 'high' for the last 25 years, with only a brief exception? That hasn't happened before. Does that mean that we're truly in 'uncharted territory'? I think that an honest answer would have to be 'maybe'. I agree with this statement. As ...
by garlandwhizzer
Fri Feb 24, 2017 11:54 am
Forum: Investing - Theory, News & General
Topic: "Beware the Pessimists!"
Replies: 3
Views: 793

Re: "Beware the Pessimists!"

Beware of pessimists is right, good advice. Over the long term, optimism in US markets has been rewarded handsomely for those who did not flee during the inevitable downturns. While nothing about the future is certain, this is about as reliable as it gets in investing. The problem has not been so mu...
by garlandwhizzer
Fri Feb 24, 2017 11:37 am
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 23521

Re: Extreme Valuations, and why you should reconsider

willthrill81 wrote as a rebuttal to Larry's point on valuations: Changing your AA on the basis of valuations still sounds very much like market timing to me. You are making a presumption, even if it's an 'educated' one, about future returns and changing your investment strategy on the basis of that...
by garlandwhizzer
Wed Feb 22, 2017 11:43 am
Forum: Investing - Theory, News & General
Topic: Warren Buffett v. Bogleheads
Replies: 40
Views: 4931

Re: Warren Buffett v. Bogleheads

nedsaid wrote: This is not actionable for most investors except at the extremes of market valuation and sentiment. 1+ Market timing and tactical asset allocation tends to work well if your name is Warren Buffett. For most of us, the results aren't so good. Warren has decades of experience in invest...
by garlandwhizzer
Wed Feb 22, 2017 11:25 am
Forum: Investing - Theory, News & General
Topic: Thrill seeking and investor behavior
Replies: 1
Views: 307

Re: Thrill seeking and investor behavior

Interesting post, Larry, thanks. I believe its essential premise to be true. Thrill seeking leads investors to high beta, frequent trading, and likely lower returns. On the other extreme, those who are by temperament extremely risk averse do tolerate market volatility well, and either sell stocks du...
by garlandwhizzer
Tue Feb 21, 2017 12:38 pm
Forum: Investing - Theory, News & General
Topic: Extreme Valuations, and why you should reconsider
Replies: 307
Views: 23521

Re: Extreme Valuations, and why you should reconsider

I believe that US equity valuations are a bit stretched at present, but not in my view in bubble territory. Basically there is already a lot of future good news baked into stock prices now. Valuations currently are not based on what the current corporate profits are but on an optimistic view of anti...
by garlandwhizzer
Fri Feb 17, 2017 12:51 pm
Forum: Investing - Theory, News & General
Topic: 1099-B form from Vanguard has wrong cost basis
Replies: 8
Views: 1222

Re: 1099-B form from Vanguard has wrong cost basis

Vanguard's cost basis may be decreased by dividends/interest paid out?

Garland Whizzer
by garlandwhizzer
Thu Feb 16, 2017 6:45 pm
Forum: Investing - Theory, News & General
Topic: What happens to European bonds if the euro starts to fail?
Replies: 51
Views: 3882

Re: What happens to European bonds if the euro starts to fail?

Haven't read the whole post so I apologize beforehand if someone has made this point before. There is a strategy that largely removes the uncertainty and risk of EURO denominated bonds from the picture. Its called buying US bonds or bond funds which have higher yields and much less, although some, p...
by garlandwhizzer
Mon Feb 13, 2017 8:50 pm
Forum: Investing - Theory, News & General
Topic: RAFI Multi-Factor Indexes
Replies: 21
Views: 2541

Re: RAFI Multi-Factor Indexes

Robert T wrote: Just to note that using the assumption of a -0.10 long-term momentum load on Vanguard Small Value and a +0.30 momentum load on the iShares MSCI USA Momentum would lead to a 25:75 iShares MSCI USA Momentum: Vanguard Small Value combination having a net-zero momentum load - if this ho...
by garlandwhizzer
Mon Feb 13, 2017 12:19 pm
Forum: Investing - Theory, News & General
Topic: RAFI Multi-Factor Indexes
Replies: 21
Views: 2541

Re: RAFI Multi-Factor Indexes

Robert T, thanks for the correction to my previous post. As usual you're flawless with data and knowledge. MOM didn't get killed during the collapse of the tech bubble but it did suffer severely not long after that. MOM tends to get killed not during a crash but on the recovery from a crash which wa...
by garlandwhizzer
Mon Feb 13, 2017 11:14 am
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 115
Views: 12186

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

Larry wrote: Re mean reversion What you MUST remember is that the US outperformance in recent years, really since 2008, has been due to RISING VALUATIONS mostly, and that means lower expected returns. The CAPE 10 is now 28, way above historical average and meaning real expected return is say 4% at ...
by garlandwhizzer
Sun Feb 12, 2017 5:16 pm
Forum: Investing - Theory, News & General
Topic: RAFI Multi-Factor Indexes
Replies: 21
Views: 2541

Re: RAFI Multi-Factor Indexes

lack_ey wrote: For some factors, particularly the higher turnover ones like momentum, the relationship between factor valuation and subsequent factor return is pretty weak anyway, with even the theoretical benefit of timing being weaker than for market beta and I don't think you suggest timing that...
by garlandwhizzer
Sun Feb 12, 2017 1:18 pm
Forum: Investing - Theory, News & General
Topic: RAFI Multi-Factor Indexes
Replies: 21
Views: 2541

Re: RAFI Multi-Factor Indexes

Robert T wrote: Adding momentum - 30:70 Momentum:Fundemantal Index lowered the tracking error from 4.5% to 3.4% (again see table 3 in the linked article m ... 20Beta.pdf). Table 3 also illustrates that adding momentum is more effective at reducing tacking error than adding low volatility (adding low...
by garlandwhizzer
Sun Feb 12, 2017 12:32 pm
Forum: Investing - Theory, News & General
Topic: vanguard international bond fund
Replies: 22
Views: 5480

Re: vanguard international bond fund

Balance on $10,000 so far: INTL: $11,424 Balance on TBM: $10,774 What to make of that? Who knows, but this fund certainly hasn't harmed holders of Life Strategy and VG Target Date funds. What I make of it is that DM Central Bank policies have diverged from US FED policy. The FED is tapering off of ...
by garlandwhizzer
Fri Feb 10, 2017 8:04 pm
Forum: Investing - Theory, News & General
Topic: Turns out the so-called "smart" money isn't so smart
Replies: 3
Views: 1088

Re: Turns out the so-called "smart" money isn't so smart

I think part of this is due to the relatively short time leash that institutional money and active funds are on these days. Money is pouring out of active management in general and into index funds due to persistent underperformance of the former. Successful value investing and index investing requi...
by garlandwhizzer
Wed Feb 08, 2017 8:34 pm
Forum: Investing - Theory, News & General
Topic: A short study of the recent Japanese crisis
Replies: 56
Views: 4880

Re: A short study of the recent Japanese crisis

Kevin M wrote in response to my post: I think you may be confusing safe withdrawal rates (SWRs) with returns. Sorry about the errors, and thanks for the correction. I didn't read the whole post, just zoomed to the graphs which caught my eye. My comments were based a trio of misperceptions: wrong co...
by garlandwhizzer
Tue Feb 07, 2017 5:52 pm
Forum: Investing - Theory, News & General
Topic: A short study of the recent Japanese crisis
Replies: 56
Views: 4880

Re: A short study of the recent Japanese crisis

Kevin M wrote: If I'm understanding your chart, the SWR for 100% bonds never dropped below 6%. Why isn't anyone remarking on this? That graph looks compelling for 100% bonds over 25 years but I am almost certain those are nominal, not real, rates of return. During the 25 year periods the US suffere...
by garlandwhizzer
Tue Feb 07, 2017 1:38 pm
Forum: Investing - Theory, News & General
Topic: What is the prediction of future long-term returns for your portfolio?
Replies: 63
Views: 5587

Re: What is the prediction of future long-term returns for your portfolio?

Just my 2 cents worth. If those returns are real and inflation adjusted I believe CALPERS predictions over the next decade or so are markedly optimistic. If they are nominal returns (which I suspect) I believe they're mildly optimistic. I have a 2/3 equity 1/3 bond portfolio and my rather conservati...
by garlandwhizzer
Tue Feb 07, 2017 8:39 am
Forum: Investing - Theory, News & General
Topic: Research Affiliates Latest Research
Replies: 4
Views: 733

Re: Research Affiliates Latest Research

There is no doubt that based on backtesting, a well-chosen multi-factor portfolio looks great in terms of both performance and lower volatility. Theoretically it is very appealing. Backtesting multi-factors is easy. You select the right mixture of factors in the right proportions, the right criteria...
by garlandwhizzer
Mon Feb 06, 2017 1:02 pm
Forum: Investing - Theory, News & General
Topic: A note of caution from Robert Shiller
Replies: 66
Views: 10734

A note of caution from Robert Shiller

Amidst the optimism demonstrated by multiple new highs in US equity markets, Robert Shiller sounds a message of caution. Comments? The Dow is up only 19% in real (inflation-adjusted) terms since 2000. A 19% increase in 17 years is underwhelming, and the national home price index that Case and I crea...
by garlandwhizzer
Mon Feb 06, 2017 11:52 am
Forum: Investing - Theory, News & General
Topic: How the Bogle Model Beats the Yale Model
Replies: 28
Views: 3465

Re: How the Bogle Model Beats the Yale Model

Great post! Demonstrates that a high cost complex "secret sauce" portfolio has reliably achieved only one thing relative to a simple inexpensive 3 fund portfolio over the past 10 years. The thing it has reliably achieved is lots of income and fees for those who create and market it. Take h...
by garlandwhizzer
Sun Feb 05, 2017 1:06 pm
Forum: Investing - Theory, News & General
Topic: Fresh Look at the "Larry Portfolio" from Portfolio Charts
Replies: 115
Views: 12186

Re: Fresh Look at the "Larry Portfolio" from Portfolio Charts

I don't think there's any portfolio with reasonable expected returns that better prepares for black swans than Larry's. It is expected to produce a very high Sharpe ratio (return per unit of risk). Having said that, like other bond dominated portfolios it currently looks great on backtesting because...
by garlandwhizzer
Sat Feb 04, 2017 11:59 am
Forum: Investing - Theory, News & General
Topic: Dividends vs rent vs loan interest
Replies: 15
Views: 1494

Re: Dividends vs rent vs loan interest

crowd funded rental properties and p2p hard money loans paying 12%. In my opinion, anything in the current market/fixed income environment that pays 12% annually has risk, likely considerable risk to either principal loss or failure to make interest payments. Crowd funded rental properties and p2p ...
by garlandwhizzer
Sat Feb 04, 2017 11:42 am
Forum: Investing - Theory, News & General
Topic: 30 yr TIPS Auction Feb 16: real yield 1.1%?
Replies: 40
Views: 4655

Re: 30 yr TIPS Auction Feb 16: real yield 1.1%?

Guaranteed 1% real in this fixed income market isn't bad. The problem however is that a 30 year instrument maximizes duration/interest rate risk. If you need the money before 30 years and you're forced to sell your 30 year TIPS, you may suffer considerable principal loss if rates are higher and espe...
by garlandwhizzer
Fri Feb 03, 2017 12:35 pm
Forum: Investing - Theory, News & General
Topic: Factor-Diversified Portfolio
Replies: 175
Views: 16414

Re: Factor-Diversified Portfolio

Robert T wrote: Choose a portfolio you can stick with over the long-term. Personalize it to you. Robert 1+ I believe this is the essence of successful long term investing, more important than whether you choose a high versus low bond allocation or a factor based versus cap weighted index approach. ...
by garlandwhizzer
Thu Feb 02, 2017 8:13 pm
Forum: Investing - Theory, News & General
Topic: Bobbie Christensen "She explains how to find safe and secure investments with 100%+ growth per year."
Replies: 55
Views: 5620

Re: Bobbie Christensen "She explains how to find safe and secure investments with 100%+ growth per year."

This information packed seminar will show you how to safely turn $50 a month into $100,000 in just 10 years! The obvious question is: if she knows how to do this why is she offering such incredibly precious information to you for $49? Perhaps she prefers not to hog all those fabulous gains just for...
by garlandwhizzer
Wed Feb 01, 2017 9:38 pm
Forum: Investing - Theory, News & General
Topic: Is a total market fund the most diversified
Replies: 157
Views: 15363

Re: Is a total market fund the most diversified

Larry wrote regarding fundamental indexing as per Asness: The funds are okay to use, but it's their mechanism to create them I find without justification, and can be exposed as nothing more than a value/size tilt, as Asness did. They created them to be able to license them IMO Larry I'd like to tak...
by garlandwhizzer
Mon Jan 30, 2017 12:12 pm
Forum: Investing - Theory, News & General
Topic: How to Produce High Quality Investment Research - Valuation
Replies: 5
Views: 637

Re: How to Produce High Quality Investment Research - Valuation

Excellent article, matjen, thanks for posting. Many US-centric investors have for long years ignored or seriously underweighted INTL and especially EM and it has paid off well for them to do so. There is however in financial markets a thing called reversion to mean. I don't know when it will happen-...
by garlandwhizzer
Sun Jan 29, 2017 1:17 pm
Forum: Investing - Theory, News & General
Topic: US versus Intl. value tilt: Does it make a difference?
Replies: 16
Views: 6486

Re: US versus Intl. value tilt: Does it make a difference?

Very interesting post, Robert T, thanks for posting it. I'll add one point which I got from Larry's recent book. Since its discovery and widespread publication in the financial literature the value premium as well as all of the other described premiums persist but have modestly decreased in magnitud...
by garlandwhizzer
Sat Jan 28, 2017 2:14 pm
Forum: Investing - Theory, News & General
Topic: Discuss hedging the market with puts on an S&P fund.
Replies: 33
Views: 3154

Re: Discuss hedging the market with puts on an S&P fund.

valuethinker wrote:
if you don't understand it, you shouldn't invest in it.


1+ Actually it's quite simple.

Garland Whizzer
by garlandwhizzer
Sat Jan 28, 2017 2:06 pm
Forum: Investing - Theory, News & General
Topic: "Markets Are Right More Often Than You Think"
Replies: 9
Views: 1938

Re: "Markets Are Right More Often Than You Think"

Park wrote: What leads to secular bear markets? From my nonexpert point of view, overpriced markets play a significant role in secular bear markets. How can one deal with an overpriced market? One can short, but that's even more difficult than beating the market going long, which is how the vast ma...
by garlandwhizzer
Fri Jan 27, 2017 12:30 pm
Forum: Investing - Theory, News & General
Topic: "Markets Are Right More Often Than You Think"
Replies: 9
Views: 1938

Re: "Markets Are Right More Often Than You Think"

Great post, Taylor, thanks. It is very hard to beat the market and it gets harder every year. The question is not whether the market always sets prices perfectly (EMH) but whether you as an investor can accurately determine whether those market prices are too high or too low for a given stock. If yo...
by garlandwhizzer
Thu Jan 26, 2017 11:37 am
Forum: Investing - Theory, News & General
Topic: Whole life & Annuities
Replies: 11
Views: 1184

Re: Whole life & Annuities

Both annuities and whole life insurance policies are financial products that usually pay very generous sales commissions to those who peddle them and considerable profits to companies who offer them which is precisely why these products are pushed so enthusiastically to the frightened and insecure b...
by garlandwhizzer
Sat Jan 21, 2017 12:26 pm
Forum: Investing - Theory, News & General
Topic: American Century decreasing stock allocations - Interesting article
Replies: 16
Views: 2271

Re: American Century decreasing stock allocations - Interesting article

I do not believe that this information is actionable if you already have a well thought out asset allocation plan. That said, current prices of US equities have a lot of good news already baked into them. Investors are anticipating Trump administration induced increased corporate profits and much of...
by garlandwhizzer
Mon Jan 16, 2017 12:44 pm
Forum: Investing - Theory, News & General
Topic: The gulf between MOM fund returns and MOM factor returns
Replies: 30
Views: 1945

Re: The gulf between MOM fund returns and MOM factor returns

For the record, Larry's new book is an excellent source for those who want to take a serious in depth look at factor investing research.

Garland Whizzer
by garlandwhizzer
Mon Jan 16, 2017 12:18 pm
Forum: Investing - Theory, News & General
Topic: The gulf between MOM fund returns and MOM factor returns
Replies: 30
Views: 1945

Re: The gulf between MOM fund returns and MOM factor returns

Robert T wrote: The very large negative alpha on the AQR momentum funds is concerning, something the iShares fund has managed to avoid so far. m ... ssetType=1 Not sure if the same momentum approach is used in the AQR multi-factor strategies, but if so, would also have concerns. May be these will b...
by garlandwhizzer
Sun Jan 15, 2017 4:57 pm
Forum: Investing - Theory, News & General
Topic: The gulf between MOM fund returns and MOM factor returns
Replies: 30
Views: 1945

The gulf between MOM fund returns and MOM factor returns

MOM has produced robust factor returns on long term and even short term backtesting (9% premium according to Larry's recent excellent book, greater even that beta returns, and with greater persistence of results). Many sophisticated factor posters on this forum advocate AQR as a firm who understands...
by garlandwhizzer
Fri Jan 13, 2017 5:23 pm
Forum: Investing - Theory, News & General
Topic: VMMXX-Vanguard Prime Money Market is 55% Yankee/Foreign
Replies: 25
Views: 2993

Re: VMMXX-Vanguard Prime Money Market is 55% Yankee/Foreign

justinvest wrote: Well, the fact remains that Vanguard *itself* does not think VMMXX is safe enough to clear their own customer's trades through it. I mentioned the realities of the MM fund regulation reforms of 2016 earlier, and those reforms are the reason why VMMXX is not deemed safe enough. Ins...
by garlandwhizzer
Fri Jan 13, 2017 1:41 pm
Forum: Investing - Theory, News & General
Topic: "2016 Shows That Factors Are Fickle"
Replies: 45
Views: 3897

Re: "2016 Shows That Factors Are Fickle"

Bill Bernstein is an intelligent, knowledgeable, rational, and experienced student of the market in my opinion. In his latest book, RATIONAL EXPECTATIONS, he writes the following about multi-factor approaches. [quote]As I write this, mutual fund and etf providers are already rolling out products tha...
by garlandwhizzer
Wed Jan 11, 2017 8:47 pm
Forum: Investing - Theory, News & General
Topic: AQR Relaxed Constraint Equity Funds
Replies: 26
Views: 2786

Re: AQR Relaxed Constraint Equity Funds

Stated simply, because there is a plausible theoretical argument for increased risk adjusted returns in complex multi-style and style premia funds does not mean that they will achieve increased risk-adjusted return. It is possible but not certain, like everything else in markets. What is certain is ...
by garlandwhizzer
Wed Jan 11, 2017 12:48 pm
Forum: Investing - Theory, News & General
Topic: 2016 Callan Periodic Table of Investment Returns
Replies: 27
Views: 4285

Re: 2016 Callan Periodic Table of Investment Returns

The table visually makes a good case for wide diversification and reversion to the mean.

Garland Whizzer
by garlandwhizzer
Wed Jan 11, 2017 12:41 pm
Forum: Investing - Theory, News & General
Topic: VMMXX-Vanguard Prime Money Market is 55% Yankee/Foreign
Replies: 25
Views: 2993

Re: VMMXX-Vanguard Prime Money Market is 55% Yankee/Foreign

VMMXX is in my opinion one of the safest places in the world to park money and preserve capital, safer than any short term or intermediate term bond instrument for that purpose. The weighted average life of the credit instruments in their portfolio is 88 days, less than 3 months, and their credit qu...
by garlandwhizzer
Sat Jan 07, 2017 12:49 pm
Forum: Investing - Theory, News & General
Topic: Treasury returns historically almost match corporate bonds?
Replies: 9
Views: 1084

Re: Treasury returns historically almost match corporate bonds?

Treasuries have done wonderfully well over the past 3+ decades, offering not only safety but also excellent return especially adjusted for risk. However, like Bogle, I wouldn't rule out owning some corporate bonds. In an increasing interest rate, increasing inflation environment, which is what we ex...
by garlandwhizzer
Fri Jan 06, 2017 11:44 am
Forum: Investing - Theory, News & General
Topic: Timing small caps vs. large caps using valuation
Replies: 5
Views: 803

Re: Timing small caps vs. large caps using valuation

Small caps and SCV in particular have had quite a run in the past year. Some of this is the natural swing in the pendulum from the preceding years in which SC underperformed LC and V underperformed G for a period of years. Assets have moved into SC and particularly SCV in the past year for a number ...
by garlandwhizzer
Tue Jan 03, 2017 5:25 pm
Forum: Investing - Theory, News & General
Topic: Whats your number to walk away?
Replies: 245
Views: 31067

Re: Whats your number to walk away?

I defined my number for stock/bond portfolio at 1.6 Mil. When I was 50, single, no kids, no other income, and my portfolio hit that number I retired. I assumed at that time (1997) that I would average a real return of 7%+/yr. I was much more optimistic 20 years ago about future expected returns than...
by garlandwhizzer
Tue Jan 03, 2017 11:40 am
Forum: Investing - Theory, News & General
Topic: Diversifying SCV with MTUM: yea or nay?
Replies: 29
Views: 2133

Re: Diversifying SCV with MTUM: yea or nay?

Just my two cents worth again. When it comes to factors I think MOM is robust theoretically but very hard to harvest in an after cost fashion. If you're a factor investor I believe that value particularly in the SC space is a more harvestable alternative for long term investors. It, too, has its cha...
by garlandwhizzer
Mon Jan 02, 2017 1:29 pm
Forum: Investing - Theory, News & General
Topic: Diversifying SCV with MTUM: yea or nay?
Replies: 29
Views: 2133

Re: Diversifying SCV with MTUM: yea or nay?

My two cents worth. Back to the original question is SCV + the MTUM (large cap long only) MOM fund a good pairing? If you are a firm believer in factor investing and have no interest in plain beta I think one can make a case for this approach. MOM looks great on backtesting, robust premiums, but the...
by garlandwhizzer
Fri Dec 30, 2016 2:10 pm
Forum: Investing - Theory, News & General
Topic: Bernstein-"To Make Money They Didn't Need".....and Pascal's Wager
Replies: 187
Views: 21511

Re: Bernstein-"To Make Money They Didn't Need".....and Pascal's Wager

Larry's comments are, as usual, insightful and cogent but I'll offer a few points to consider. For those lucky ones who have an asset base large enough to allow for a very high allocation to safe but low return bond investments and take less overall equity risk, concentrating it in higher expected r...
by garlandwhizzer
Wed Dec 28, 2016 11:45 am
Forum: Investing - Theory, News & General
Topic: Does Vanguard always have our best interests in mind?
Replies: 55
Views: 5186

Re: Does Vanguard always have our best interests in mind?

I am surprised by the ire that some on the Forum hold for Vanguard which is far and away more dedicated to client's interests in my view than any other financial firm. If you're upset that V has increased INTL and also equity relative to bond holdings, then you have the simple option not to follow t...
by garlandwhizzer
Mon Dec 26, 2016 1:45 pm
Forum: Investing - Theory, News & General
Topic: Pimco Income Fund vs. Vanguard Total Bond Market
Replies: 51
Views: 6191

Re: Pimco Income Fund vs. Vanguard Total Bond Market

lack_ey wrote: I have not looked at the fund much and would need to study a lot of other things more to have a real opinion, but here is my take on using the fund: You should be very wary of putting a heavy weighting in any very actively managed strategy (manager risk) The fund is relatively narrow...