Search found 20713 matches

by willthrill81
Sat Oct 10, 2020 10:42 am
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

But my experience in real estate investing is that the largest return almost always comes from price appreciation , and the tax advantages of depreciation is another large contributor to the overall return. But, that is on properties chosen to be rentals from the start. I do not doubt that at all, ...
by willthrill81
Sat Oct 10, 2020 10:33 am
Forum: Investing - Theory, News & General
Topic: Anyone going for the Dragon portfolio?
Replies: 25
Views: 3013

Re: Anyone going for the Dragon portfolio?

steve321 wrote: Sat Oct 10, 2020 4:32 amIf you do, what do you use to invest in commodity trend and long volatility?
Both commodities and long volatility, TMK, have an expected long-term real return of 0%. That's not the case with stocks, so I'm not sure what's to be gained by the commodities and long vol.
by willthrill81
Sat Oct 10, 2020 10:31 am
Forum: Investing - Theory, News & General
Topic: "Active" Index investing vs. "Passive" Index investing
Replies: 197
Views: 7798

Re: "Active" investing vs. "Passive" investing

What I find interesting in this thought excercise is the risk adverse nature of this board. Everyone who chimed in always has the specter of failure. If picking individual companies is impossible, then how has Buffett been doing it? No one on this board has answered this question. If he was a nobod...
by willthrill81
Sat Oct 10, 2020 10:28 am
Forum: Investing - Theory, News & General
Topic: "Active" Index investing vs. "Passive" Index investing
Replies: 197
Views: 7798

Re: "Active" investing vs. "Passive" investing

I believe all John Bogle was advocating for was a method to make "B" above more achievable and more pleasant. Not a strategy to get rich. You can definitely get 'rich' being a passive investor. You're just not going to get 'rich' quickly, nor is being a passive investor going to lead to outsized re...
by willthrill81
Sat Oct 10, 2020 10:25 am
Forum: Investing - Theory, News & General
Topic: "Bonds as a way to generate cash if the stock market is in the toilet"
Replies: 93
Views: 5267

Re: "Bonds as a way to generate cash if the stock market is in the toilet"

If an investor is looking for an effective asset to hedge stocks, I would suggest that long-term bonds, both nominals and TIPS, are still a good option for long-term investors. The trouble is that long term bonds are very risky now because of the low interest rates and high duration. A small increa...
by willthrill81
Sat Oct 10, 2020 10:13 am
Forum: Investing - Theory, News & General
Topic: "Bonds as a way to generate cash if the stock market is in the toilet"
Replies: 93
Views: 5267

Re: "Bonds as a way to generate cash if the stock market is in the toilet"

The title is a quote is from today's piece by Jonathan Clements: https://humbledollar.com/2020/10/game-over/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7 He argues that given low yields, bonds won't act as a source of yield (since real returns are expected to be negative) no...
by willthrill81
Sat Oct 10, 2020 10:07 am
Forum: Investing - Theory, News & General
Topic: "What the Harvard endowment’s below-average grade can teach you about index funds and your investments"
Replies: 45
Views: 4347

Re: "What the Harvard endowment’s below-average grade can teach you about index funds and your investments"

University endowments need to pay for ongoing expenses, not unlike someone in retirement, and so a 100% equities index is probably not the right benchmark. (The article does mention that Harvard has also lagged a 60/40 benchmark.) Correct. How often do BHs suggest that retirees currently drawing fr...
by willthrill81
Sat Oct 10, 2020 10:06 am
Forum: Investing - Theory, News & General
Topic: "Active" Index investing vs. "Passive" Index investing
Replies: 197
Views: 7798

Re: "Active" investing vs. "Passive" investing

firebirdparts wrote: Sat Oct 10, 2020 10:00 amThis is not a good plan; it is merely a plan with a chance of success.
Bingo.

'Beating the market' is not a good goal and definitely not a plan. A good plan should specify precisely what will be done and should have a high probability of success.
by willthrill81
Sat Oct 10, 2020 9:53 am
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 3208
Views: 552645

Re: What are you up YTD? [Year To Date]

Best fund so far is Vanguard Total Stock Market Index Fund (VTSAX), total return is up 9.79% year to date. M* shows VTSAX up 8.97% YTD. For Vanguard Total Stock Market Index Fund (VTSAX) Morningstar shows a total return of 9.79% year to date. You must be looking a share price. I thought that M*'s p...
by willthrill81
Sat Oct 10, 2020 9:42 am
Forum: Investing - Theory, News & General
Topic: What are you up YTD? [Year To Date]
Replies: 3208
Views: 552645

Re: What are you up YTD? [Year To Date]

ruralavalon wrote: Sat Oct 10, 2020 9:40 am Best fund so far is Vanguard Total Stock Market Index Fund (VTSAX), total return is up 9.79% year to date.
M* shows VTSAX up 8.97% YTD.
by willthrill81
Sat Oct 10, 2020 9:34 am
Forum: Investing - Theory, News & General
Topic: "Active" Index investing vs. "Passive" Index investing
Replies: 197
Views: 7798

Re: "Active" investing vs. "Passive" investing

If I need to explain "how do you know which ones?", then this approach is not for you. Recognizing these few performing stocks in the index takes time, effort, intuition and know-how. Do you have more "time, effort, intuition and know-how" than the thousands of active managers out there who have be...
by willthrill81
Fri Oct 09, 2020 10:54 pm
Forum: Investing - Theory, News & General
Topic: The end of LendingClub
Replies: 19
Views: 3775

Re: The end of LendingClub

Since everyone has piled on to bash LC, let me point out that for me the big negatives were not actually risk of losing money due to defaults. It was (a) risk of LC going out of business and leaving me completely unsecured, (b) illiquidity, and (c) complicated taxes (and taxation as income). I made...
by willthrill81
Fri Oct 09, 2020 10:36 pm
Forum: Personal Consumer Issues
Topic: Marketers think I'm elderly. I'm not.
Replies: 47
Views: 4308

Re: Marketers think I'm elderly. I'm not.

About 10 years ago, I started getting bulk mailings from mortuaries asking me to return a card for a chance to win a free cremation. For about the last five years, I've been getting more mail announcing that I'm turning 65 and should sign up for their medicare supplement plan or hearing aids. At th...
by willthrill81
Fri Oct 09, 2020 10:31 pm
Forum: Personal Consumer Issues
Topic: Solar PV / Thermal vs merely reducing energy use (Budget RV-style but at home?)
Replies: 17
Views: 979

Re: Solar PV / Thermal vs merely reducing energy use (Luxury RV-style but at home?)

As AC / Hot Water Heating / and Fridge, I believe they told me, where the main consumers of energy in a home. The first two are mostly true, but the latter is definitely not. Cooling and heating (not really a big deal in FL) are certainly the most intensive consumers of electricity in most homes, f...
by willthrill81
Fri Oct 09, 2020 9:55 pm
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

But my experience in real estate investing is that the largest return almost always comes from price appreciation , and the tax advantages of depreciation is another large contributor to the overall return. But, that is on properties chosen to be rentals from the start. I do not doubt that at all, ...
by willthrill81
Fri Oct 09, 2020 9:53 pm
Forum: Investing - Theory, News & General
Topic: Is deflation good or bad for the S&P 500?
Replies: 38
Views: 3894

Re: Is deflation good or bad for the S&P 500?

Well, I'm going to go out on a limb and guess that deflation won't be bad for the S&P 500. It may even be actively good as megacaps crush main street businesses during a deflationary event. I remember 15-20 years ago hearing so-called oracles of business decrying large companies, saying that they w...
by willthrill81
Fri Oct 09, 2020 9:07 pm
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

But my experience in real estate investing is that the largest return almost always comes from price appreciation , and the tax advantages of depreciation is another large contributor to the overall return. But, that is on properties chosen to be rentals from the start. I do not doubt that at all, ...
by willthrill81
Fri Oct 09, 2020 9:00 pm
Forum: Investing - Theory, News & General
Topic: "Active" Index investing vs. "Passive" Index investing
Replies: 197
Views: 7798

Re: "Active" investing vs. "Passive" investing

"The best stocks" Sounds easy but extremely hard. Especially when the lion's share of stocks have not historically done better than T-bills. Virtually all of stocks' historic returns have come from a very small proportion of stocks. If you pick the ten stocks that you think are the 'best', there's ...
by willthrill81
Fri Oct 09, 2020 8:16 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

I don't think so, a dollar is simply worth whatever it can be exchanged for and that value varies with the overall level of prices. Yep. It's called fiat money and has no intrinsic value. It only has value because we collectively agree that it does. This is true of all money, fiat or not. True.
by willthrill81
Fri Oct 09, 2020 7:58 pm
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

The OP mention a purchase price and a current value, this determines a CAGR. Sure there are unknowns in projecting it into the future, but cash flows for stocks didn't come down the mountain engraved on Moses' tablets. Lots of unknowns there also, but most of us put money into stocks. Stocks and re...
by willthrill81
Fri Oct 09, 2020 4:56 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

I don't think so, a dollar is simply worth whatever it can be exchanged for and that value varies with the overall level of prices. Yep. It's called fiat money and has no intrinsic value. It only has value because we collectively agree that it does. And to be fair because the government will accept...
by willthrill81
Fri Oct 09, 2020 4:55 pm
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

...How much price appreciation will the house experience? That's an unknown. Cash flows, on the other hand, are known. The OP mention a purchase price and a current value, this determines a CAGR. Sure there are unknowns in projecting it into the future, but cash flows for stocks didn't come down th...
by willthrill81
Fri Oct 09, 2020 4:47 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

jeffyscott wrote: Fri Oct 09, 2020 2:09 pm I don't think so, a dollar is simply worth whatever it can be exchanged for and that value varies with the overall level of prices.
Yep. It's called fiat money and has no intrinsic value. It only has value because we collectively agree that it does.
by willthrill81
Fri Oct 09, 2020 10:26 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

I suppose in the broadest sense it could be considered an increase in prices, but could it not also be considered a devaluation of currency? An increase in nominal prices (i.e. how many dollars and cents something costs) for the same item is, by definition, inflation. Your second question is a pote...
by willthrill81
Fri Oct 09, 2020 10:16 am
Forum: Investing - Theory, News & General
Topic: HEDGEFUNDIE's excellent adventure Part II: The next journey
Replies: 6571
Views: 618704

Re: HEDGEFUNDIE's excellent adventure Part II: The next journey

10 years is not nearly enough data to draw conclusions, backtests are not suited for this type of analysis. This is consistent with my own experiments where I found that simplistic timings methods don't improve expected utility out-of-sample. I was only able to obtain positive out-of-sample perform...
by willthrill81
Fri Oct 09, 2020 10:14 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

If prices are lower they are lower, that's deflation. If they are higher that's inflation. The reason why does not matter. There's the answer to the OP's question. It doesn't matter that Fed money printing is the reason why prices rise. But that's what the data I presented in the OP demonstrate: a ...
by willthrill81
Fri Oct 09, 2020 10:10 am
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

...How much price appreciation will the house experience? That's an unknown. Cash flows, on the other hand, are known. The OP mention a purchase price and a current value, this determines a CAGR. Sure there are unknowns in projecting it into the future, but cash flows for stocks didn't come down th...
by willthrill81
Fri Oct 09, 2020 9:55 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

Financially, at least in terms of the market, isn't the key the impact of inflation, whether accurately or inaccurately stated, on the stock market rather than other pocketbook issues? That is my interpretation, at least as far as investing in the current market is concerned. The consumer price ind...
by willthrill81
Fri Oct 09, 2020 9:54 am
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

If they were buying the ingredients and making their own sandwich, they'd probably be seeing much less inflation in the cost of the sandwich. The blogger that I referenced is doing just that. And the overall inflation rate over the basic food items he's been tracking for 12 years matches up pretty ...
by willthrill81
Thu Oct 08, 2020 9:21 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

Ben Felix has a good video out on YouTube: Understanding the Fed's "Money Printer" (QE, the Stock Market, and Inflation). He says something someone controversial but it has been established elsewhere, that is bank reserves have no effect upon actual bank lending. What constrains bank lending is the...
by willthrill81
Thu Oct 08, 2020 8:33 pm
Forum: Personal Finance (Not Investing)
Topic: Buying second house - dilemma
Replies: 46
Views: 5583

Re: Buying second house - dilemma

Keeping and renting current house would be something like $15000 income on $500k of equity if mortgage were paid off. That's a pretty poor return on investment. About 3.0%... As a long-time real estate investor and landlord, I laugh at that analysis. It does not take price appreciation into account...
by willthrill81
Thu Oct 08, 2020 8:22 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

I don't know about you all but in major cities, inflation has been quite rampant the past 10 years. Even goods. Prices of avocado sandwiches are quite something today. I live in NYC and have not seen prices increase by all that much in the last 10 years. Housing is getting cheaper if anything and I...
by willthrill81
Thu Oct 08, 2020 7:43 pm
Forum: Investing - Theory, News & General
Topic: TIPS for moderately higher inflation
Replies: 30
Views: 1477

Re: TIPS for moderately higher inflation

How do you figure that? TIPS have a negative real yield. Gold has no yield at all. So if something has no yield, then its real yield will be greater than TIPs? Physical dollar bills also have no yield, yet TIPs stand a very good chance of producing a higher real yield :confused At least in theory, ...
by willthrill81
Thu Oct 08, 2020 6:09 pm
Forum: Personal Consumer Issues
Topic: Solar PV / Thermal vs merely reducing energy use (Budget RV-style but at home?)
Replies: 17
Views: 979

Re: Solar PV / Thermal vs merely reducing energy use (Luxury RV-style but at home?)

As AC / Hot Water Heating / and Fridge, I believe they told me, where the main consumers of energy in a home. The first two are mostly true, but the latter is definitely not. Cooling and heating (not really a big deal in FL) are certainly the most intensive consumers of electricity in most homes, f...
by willthrill81
Thu Oct 08, 2020 5:53 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

The Federal Reserve's rapid and intense response to the economic situation caused by COVID-19 has alarmed many investors, making them very concerned about inflation. Many are convinced that an increased money supply will inevitably lead to higher inflation. This post is a humble questioning of that...
by willthrill81
Thu Oct 08, 2020 5:45 pm
Forum: Investing - Theory, News & General
Topic: TIPS for moderately higher inflation
Replies: 30
Views: 1477

Re: TIPS for moderately higher inflation

Gold has a higher real yield than TIPS right now. :P How do you figure that? TIPS have a negative real yield. Gold has no yield at all. So if something has no yield, then its real yield will be greater than TIPs? Physical dollar bills also have no yield, yet TIPs stand a very good chance of produci...
by willthrill81
Thu Oct 08, 2020 5:40 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

The financial value of owning a home may very well have shifted, due in no small part to lower interest rates, for instance. I get your point regarding more education potentially being needed in the marketplace, but that's a separate issue from the cost of education. You're saying that people may n...
by willthrill81
Thu Oct 08, 2020 4:57 pm
Forum: Investing - Theory, News & General
Topic: TIPS for moderately higher inflation
Replies: 30
Views: 1477

Re: TIPS for moderately higher inflation

The honest answer is TIPS have never been tested under real inflation (pun intended) before. Anyway, I'm increasingly less confident TIPS will actually work as advertised. Aren't they tested each and every year with inflation greater than zero? Mine have always worked as advertised. Perhaps "work a...
by willthrill81
Thu Oct 08, 2020 4:53 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

As far as college costs, it is also necessary to look at the cost versus the value received. Does a B.A. have the same financial value in 2020 as 2002? To be honest, that's a bit of a rabbit hole. The value received, whether financial or otherwise, from any number of things may have shifted substan...
by willthrill81
Thu Oct 08, 2020 4:31 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

Grt2bOutdoors wrote: Thu Oct 08, 2020 4:27 pmI look at M2 instead of M3.
The M2 chart is below. It looks almost identical to M3.

Image
by willthrill81
Thu Oct 08, 2020 4:28 pm
Forum: Personal Finance (Not Investing)
Topic: Solar Panel Proposal
Replies: 20
Views: 1290

Re: Solar Panel Proposal

But as an environmental issue you have to take into account component disposal. The panels themselves have rare earth elements that are had to properly dispose of as are the battery banks. Panels have lifespans spanning decades, and means of recycling old panels are highly likely to be developed in...
by willthrill81
Thu Oct 08, 2020 4:21 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

Regarding higher ed, the HEPI shows that costs did not materially outpace CPI from 2009-2018 (24.5% cumulative inflation vs. 19.5%). HEPI is deceiving. From 2000 to 2015 HEPI significantly outpaced inflation however what college students actually paid kept pace with inflation. HEPI measures the off...
by willthrill81
Thu Oct 08, 2020 4:19 pm
Forum: Personal Consumer Issues
Topic: Solar PV / Thermal vs merely reducing energy use (Budget RV-style but at home?)
Replies: 17
Views: 979

Re: Solar PV / Thermal vs merely reducing energy use (Luxury RV-style but at home?)

As AC / Hot Water Heating / and Fridge, I believe they told me, where the main consumers of energy in a home. The first two are mostly true, but the latter is definitely not. Cooling and heating (not really a big deal in FL) are certainly the most intensive consumers of electricity in most homes, f...
by willthrill81
Thu Oct 08, 2020 4:05 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

As far as college costs, it is also necessary to look at the cost versus the value received. Does a B.A. have the same financial value in 2020 as 2002? To be honest, that's a bit of a rabbit hole. The value received, whether financial or otherwise, from any number of things may have shifted substan...
by willthrill81
Thu Oct 08, 2020 3:56 pm
Forum: Investing - Theory, News & General
Topic: Is this the worse time to FIRE?
Replies: 20
Views: 1776

Re: Is this the worse time to FIRE?

It seems like the stock market has peaked. This cannot be objectively determined. With regard to valuations, we are nowhere near the highest levels of CAPE that the U.S. has already experienced, especially when you adjust it for current interest rates. Investors are going to have to take more risk ...
by willthrill81
Thu Oct 08, 2020 3:47 pm
Forum: Investing - Theory, News & General
Topic: TIPS for moderately higher inflation
Replies: 30
Views: 1477

Re: TIPS for moderately higher inflation

Second, why are you doing this? If inflation hits 5% the real return on TIPS is going to be modest. That's true, but the break-even inflation rate on 10 year TIPS is only 1.71%. If inflation is 5%, then 10 year TIPS stand to make over 3% real , which is fantastic for fixed income. Isn't a -0.95% 10...
by willthrill81
Thu Oct 08, 2020 3:39 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

So what happened to all those new monies created? Much of the new monies are sitting in people's savings account or sitting as bank reserves of depository institutions. Correct. A big chunk of the newly created money is just sitting on banks' balance sheets. Much of it has also found its way into t...
by willthrill81
Thu Oct 08, 2020 3:35 pm
Forum: Investing - Theory, News & General
Topic: Whence inflation?
Replies: 127
Views: 6768

Re: Whence inflation?

As far as a longer time frame, like the last decade or two, I think there has been plenty of inflation in housing, healthcare, and higher education. This is a common perception, but I'm not sure that the data provide that much support for it over the last decade, at least not for all of those categ...
by willthrill81
Thu Oct 08, 2020 3:02 pm
Forum: Investing - Theory, News & General
Topic: New Bengen Article Citing Kitces. SWR vs Valuation
Replies: 96
Views: 7014

Re: New Bengen Article Citing Kitces. SWR vs Valuation

Why don't you address the elephant in the room directly by showing that CAPM and derivatives are misspecified. i.e. E[real market return] = E[equity risk premium] (probably a constant) rather than E[real market return] = E[real risk free rate] + E[equity risk premium]? If CAPM was correct, then T-b...