Search found 3746 matches

by peter71
Mon Aug 15, 2011 5:53 pm
Forum: Investing - Theory, News & General
Topic: The Smartest Bogleheads Post You'll Ever Read
Replies: 13
Views: 2241

The Smartest Bogleheads Post You'll Ever Read

Just kidding! :D

But I am interested in people's opinions about how much hype, marketing and exaggeration is consistent with Boglehead principles! Thoughts?
by peter71
Mon Aug 15, 2011 5:37 pm
Forum: Investing - Theory, News & General
Topic: Have you hit your rebalancing bands yet?
Replies: 41
Views: 9059

Hi TFB,

Looks like great work, but do you have the graph legends partly reversed?

i.e., shouldn't it read, "required drop . . . to INCREASE" and "required gain . . . to REDUCE"?

I'm not a bands guy so apologies if I'm the one who's messed up the mental inversion!

Best,
Pete
by peter71
Mon Aug 15, 2011 11:52 am
Forum: Investing - Theory, News & General
Topic: Buy on the Dips ?
Replies: 89
Views: 17837

I am new around with just 3 months in to investing. Here is my take: If history holds as an average which we use for our bond/stock AA https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations - vanguard portfolio ratios with return vs risk. Dip: Any asset class down by...
by peter71
Mon Aug 15, 2011 11:19 am
Forum: Investing - Theory, News & General
Topic: Asset allocation does not matter
Replies: 49
Views: 6244

Hi Bob, I guess I'll put my AA skeptic hat back on now and ask exactly how much "investors" in general care about volatility . . . I'd think the average person who doesn't post on investing boards probably notices "negative years" more than anything else, and I think reasonable people can question t...
by peter71
Mon Aug 15, 2011 10:53 am
Forum: Investing - Theory, News & General
Topic: Asset allocation does not matter
Replies: 49
Views: 6244

Yeah, as much as I think people fetishize AA I think the message of the charts is more complicated. 1) On the one hand, the premium paid to a hypothetical retiree liquidator in the riskier portfolio was pretty modest in all but one 20 year period (i.e., those who moved all of their holdings from the...
by peter71
Mon Aug 15, 2011 9:07 am
Forum: Investing - Theory, News & General
Topic: Are 200-day market timers ready?
Replies: 185
Views: 43807

Hi Grayfox, Volatility clustering exists, and there's no doubt you can reduce the standard deviation of a portfolio by going from 100% stocks to 100% cash when the VIX hits 45 or 50. The problem is that by the time the VIX has hit 45 or 50 you may well be selling very close to a bottom (and that's w...
by peter71
Mon Aug 15, 2011 12:06 am
Forum: Investing - Theory, News & General
Topic: Are 200-day market timers ready?
Replies: 185
Views: 43807

Hi Don, I agree with most of the above, though I think the way I'd put it is that "volatility spikes" just constitute another potential signal that investors may or may not want to pay attention to along with things like momentum. And while these spikes could be seen as complicating momentum-investi...
by peter71
Sun Aug 14, 2011 7:52 pm
Forum: Investing - Theory, News & General
Topic: Swenson "The Mutual Fund Merry-go-Round"
Replies: 21
Views: 3427

But what exactly is the crisis here? That people follow Morningstar star ratings? If he's going to cite Russ Kinnel's work on investor returns, he should also take Kinnel at his word when, in the very piece he links to, Kinnel says the star ratings are helpful to investors . . . People not saving en...
by peter71
Sun Aug 14, 2011 8:05 am
Forum: Investing - Theory, News & General
Topic: Are 200-day market timers ready?
Replies: 185
Views: 43807

So it looks like when VIX is high, that is a positive for the market over the next 3 months. Can the VIX Signal Market's Direction? An Asymmetric Dynamic Strategy I always associated VIX spiking as being a negative signal. It sounds like I had it backwards. Well, CXO Advisory is the GuruGrades guy,...
by peter71
Sun Aug 14, 2011 7:22 am
Forum: Investing - Theory, News & General
Topic: John Hussman predicts bleak returns for S&P 500 next 10
Replies: 29
Views: 3936

I sometimes find Hussman interesting, but objective analysis is tricky to combine with fund marketing. As you can see on the below chart, moreover, plain vanilla VBINX is now running almost even with HSGFX over the past 10 years . . . http://quote.morningstar.com/fund/chart.aspx?t=HSGFX®ion=USA&...
by peter71
Sun Aug 14, 2011 6:54 am
Forum: Investing - Help with Personal Investments
Topic: Avoiding 2000 -style Euphoria with Index Funds?
Replies: 15
Views: 3027

Lots of previous threads on this . . . could search "equal weightiing," '"roach motel," "fundamental index" and, of course, "valuations."
by peter71
Sat Aug 13, 2011 9:48 pm
Forum: Investing - Theory, News & General
Topic: John Hussman predicts bleak returns for S&P 500 next 10
Replies: 29
Views: 3936

I sometimes find Hussman interesting, but objective analysis is tricky to combine with fund marketing. As you can see on the below chart, moreover, plain vanilla VBINX is now running almost even with HSGFX over the past 10 years . . . http://quote.morningstar.com/fund/chart.aspx?t=HSGFX®ion=USA&c...
by peter71
Sat Aug 13, 2011 8:59 pm
Forum: Investing - Theory, News & General
Topic: Swenson "The Mutual Fund Merry-go-Round"
Replies: 21
Views: 3427

Gotta like the shout-out to Vanguard, but overall I find the piece rambling and jumbled . . . among other things, it seems perverse to base an argument on a Morningstar study while at the same time attacking investors for paying attention to Morningstar star ratings . . . the star ratings seem to ha...
by peter71
Sat Aug 13, 2011 4:09 pm
Forum: Investing - Theory, News & General
Topic: Buy on the Dips ?
Replies: 89
Views: 17837

Re: Buy on the Dips ?

Hi Bogleheads: Bogleheads are noted for making investment decisions based on reliable academic research. I have noticed several posters recommending "buy on the dips." Now, Morningstar has done a study of "buying on dips" and this is part of their conclusion: "Buying the dips hurt returns in stocks...
by peter71
Sat Aug 13, 2011 2:30 pm
Forum: Investing - Theory, News & General
Topic: Lake Nogebow - where everybody is below average.
Replies: 42
Views: 4827

Given the immense wealth of companies like Goldman S., Birkshire, Hedge funds etc, for them to beat the market by 1% would mean a whole lot of individual investor wealth to represent the losing side of the deal. So when these size of entities beat the market by a lot, it has to come from somewhere....
by peter71
Sat Aug 13, 2011 9:35 am
Forum: Investing - Theory, News & General
Topic: Are 200-day market timers ready?
Replies: 185
Views: 43807

So now there is above-average valuations, negative momentum and high implied volatility. This sounds like a triple threat! (Cue scary music) :shock: Hi Grayfox, I think it's a wash right now . . . I don't disagree with saying the last 4 days moved valuations back to "above average" (nor with the cl...
by peter71
Sat Aug 13, 2011 8:32 am
Forum: Investing - Theory, News & General
Topic: Lake Nogebow - where everybody is below average.
Replies: 42
Views: 4827

I don't know where you can find a full distribution, but this article supports the theory that active management returns are not a symetrical bell curve: http://www.thestreet.com/story/10942428/1/10-worst-performing-mutual-funds-of-2010.html So basically, the S&P gained 5%, the top active funds gai...
by peter71
Fri Aug 12, 2011 9:10 pm
Forum: Investing - Theory, News & General
Topic: Lake Nogebow - where everybody is below average.
Replies: 42
Views: 4827

thanks Peter. so maybe virtually all underperformance CAN be traced to expenses. I do still tend to believe that among individual investors the ones who greatly outperform the market are primarily those who didn't diversify and just happened to "win the lottery" by hitching their wagon to the right...
by peter71
Fri Aug 12, 2011 7:15 pm
Forum: Investing - Theory, News & General
Topic: Lake Nogebow - where everybody is below average.
Replies: 42
Views: 4827

Sad to see people are still invoking the DALBAR study:

See dozens of previous threads, as well as here:

http://thefinancebuff.com/dalbar-study- ... iming.html
by peter71
Fri Aug 12, 2011 5:05 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

Hi Again E, The passive planner probably doesn't need to know much about you b/c you're paying someone else to "act passively" for you, and that's kind of an oxymoron. First line phone reps at Vanguard being dumb could well be a problem, but presumably they're just pushing buttons on a computer that...
by peter71
Fri Aug 12, 2011 4:40 pm
Forum: Investing - Theory, News & General
Topic: Buy and Hold is flawed in the New Normal
Replies: 64
Views: 9937

Re: Buy and Hold is flawed in the New Normal

Sure, the markets are volatile. But who's to say the volatility without HF trading is the "true" volatility? I agree there some shady practices with how HF traders place and pull back orders, etc. and these probably warrant some regulation, but fundamentally I don't see how the fact that a trade is...
by peter71
Thu Aug 11, 2011 5:37 pm
Forum: Investing - Theory, News & General
Topic: Poll: Changing allocation due to market?
Replies: 51
Views: 6216

So, I will just stick to my randomly selected DCA day each month. Now watch, the market will be up 500+ points tomorrow again. Hi Slowmoney, Just to clarify. did you violate your IPS on Aug. 2 but then stick to the portion of your IPS that said to buy on a particular "random day"? If so, it seems t...
by peter71
Thu Aug 11, 2011 2:17 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

Both financial planners we are considering have about the same cost: $1500. And then, we are also considering Vanguard: $250. - E Those all sound like lower than average flat-fee prices . . . all else equal I'd go with Vanguard, but I guess someone who's adjusting valuations for you is "doing" a bi...
by peter71
Thu Aug 11, 2011 1:13 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

A bit off-topic (apologies to the OP) but has anyone else noticed the progression of R48's empire over on M* . . . ? http://socialize.morningstar.com/NewSocialize/user/Profile.aspx?q=D9D45094E00F0A0D To RB's credit, I'd love to see even an incoherent 18-point list titled, "The Case Against Pyramidin...
by peter71
Thu Aug 11, 2011 1:03 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

Oh, anybody recognize the guy in the link? Hi Rod, Oh sure, but I think the more important question, as you suggest, is how much the acolyte is charging . . . the sad fact is probably that self-promotion works, and I myself remember innocently stumbling across RB's site about four years ago. Best, ...
by peter71
Thu Aug 11, 2011 12:44 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

I agree with Nisi that that particular line is 100% unadulterated sales BS, but I guess I'd put it in its wider context . . . I've never known an advisor/planner who didn't overstate their pitch, and again, in this case I think you're in less danger than is someone who employs an advisor who conclud...
by peter71
Thu Aug 11, 2011 12:24 pm
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

It's hard to know whether your planner understands the problems with that particular site or not. Having said that, some of the passive advisors on here have previously advocated INCREASING stock allocations when stocks are expensive relative to earnings, and if I had to hire a planner I'd much rath...
by peter71
Thu Aug 11, 2011 11:49 am
Forum: Investing - Theory, News & General
Topic: The Case Against Valuation-Informed Indexing???
Replies: 27
Views: 6181

These issues are really tricky. I wouldn't rely on a website in which someone's trying to brand something or, for that matter, on an advisor's book. It's incredibly easy to cherry pick evidence to prove that the approach is either great or terrible. That doesn't mean that everything that academic ec...
by peter71
Wed Aug 10, 2011 10:14 pm
Forum: Investing - Theory, News & General
Topic: Buy on the Dips ?
Replies: 89
Views: 17837

It's highly possible that all "plans" whereby one randomly or otherwise accumulates appreciating assets work about the same.
by peter71
Wed Aug 10, 2011 10:03 pm
Forum: Investing - Theory, News & General
Topic: Is this a boglesque forum still?
Replies: 59
Views: 6947

The "don't even discuss it" crowd should remember that this is the "theory" sub-forum . . . if you think all investment theory questions have been settled once and for all . . . this sub-forum probably won't be of much interest.
by peter71
Wed Aug 10, 2011 9:54 pm
Forum: Investing - Theory, News & General
Topic: Is this a boglesque forum still?
Replies: 59
Views: 6947

Re: Is this a boglesque forum still?

Is this your advice? Some people are actually good at this stuff. I don't believe the markets are completely efficient and opportunities do exist to make money though manager selection and asset allocation decisions. The extreme volatility pretty much demonstrates that markets aren't efficient. I j...
by peter71
Wed Aug 10, 2011 9:40 pm
Forum: Investing - Theory, News & General
Topic: Poll: Changing allocation due to market?
Replies: 51
Views: 6216

Back in 2008 I rebalanced a little before I hit my bands and I think that was the main reason I ended up selling all of my stocks when the S&P hit 700 . . . I only got back in this April and it's been downhill ever since! Do you think maybe I should hire an advisor to help me with my discipline? Jus...
by peter71
Wed Aug 10, 2011 6:52 pm
Forum: Investing - Theory, News & General
Topic: Buy and Hold is flawed in the New Normal
Replies: 64
Views: 9937

Re: Buy and Hold is flawed in the New Normal

I believe Bogleheads are narrow minded. Buy and Hold is flawed. It worked in Jack Bogle's America but times have changed. Obviously everyone knows our fiscal situation but the markets have changed dramatically since 2008/09. Computers (High Frequency Trading) dominate the market and will for a long...
by peter71
Wed Aug 10, 2011 4:09 pm
Forum: Investing - Theory, News & General
Topic: Historical Covariances Reliable between Asset Classes?
Replies: 17
Views: 2118

Hi Ptete, OK, I reposted my reply to your "what's economic significance?" question in the other thread . . . on stationarity, my work as a social scientist is done here and I'm going to hand off to the math folks on that one . . . except to say that if you really want to have fun you should throw i...
by peter71
Wed Aug 10, 2011 1:12 pm
Forum: Investing - Theory, News & General
Topic: Define "Economic Significance"
Replies: 3
Views: 744

Hi Ptete, I haven't read the below paper, but since it comes up first I trust it presents the party line (with which I agree) . . . http://policy.rutgers.edu/facu....m%20ec.pdf One reason I made an additional post to "put a finer point" on things in the other thread however, is that asset correlatio...
by peter71
Wed Aug 10, 2011 1:10 pm
Forum: Investing - Theory, News & General
Topic: Historical Covariances Reliable between Asset Classes?
Replies: 17
Views: 2118

Hi Ptete, OK, I reposted my reply to your "what's economic significance?" question in the other thread . . . on stationarity, my work as a social scientist is done here and I'm going to hand off to the math folks on that one . . . except to say that if you really want to have fun you should throw in...
by peter71
Wed Aug 10, 2011 12:50 pm
Forum: Investing - Theory, News & General
Topic: Historical Covariances Reliable between Asset Classes?
Replies: 17
Views: 2118

To put a finer point on things, to ask whether a correlation coefficient (r)is "statistically significant" typically means to ask whether we can be 95 to 99 percent confident in rejecting the null hypothesis that r is no different from x (where x typically equals 0). Statistical significance in this...
by peter71
Wed Aug 10, 2011 12:20 pm
Forum: Investing - Theory, News & General
Topic: Historical Covariances Reliable between Asset Classes?
Replies: 17
Views: 2118

Given a sample size of 1000 days, a Pearson r of +/- 0.1 for daily correlations would probably be statistically significant (aka have narrow confidence intervals) but that wouldn't make it economically meaningful . . . I thus think the OP's original question about reliability/stability/stationarity ...
by peter71
Wed Aug 10, 2011 9:26 am
Forum: Investing - Theory, News & General
Topic: Best way to do Monte Carlo simulations?
Replies: 190
Views: 19206

Here's an example of this irrational faith: In several posts in other threads in recent days I've heard people say that they are buying after the recent huge market drops and they're happy because they're getting shares at such a low price. This kind of statement only makes sense if you believe tha...
by peter71
Wed Aug 10, 2011 7:54 am
Forum: Investing - Theory, News & General
Topic: Historical Covariances Reliable between Asset Classes?
Replies: 17
Views: 2118

Hi Ptete, That's a weird interpretation of a weird if not kind of backwards quote . . . in my experience social science PhD's like Assness and myself love to throw around the language of "moments," but we're usually just putting on airs, rarely know what we're talking about, and can thus be safely i...
by peter71
Tue Aug 09, 2011 3:41 pm
Forum: Investing - Help with Personal Investments
Topic: Regrets about not buying yesterday?
Replies: 26
Views: 3272

Meh. I bought yesterday but I'd be the first to say it's just another way to waste time if you're the sort of person who enjoys this stuff as a hobby!
by peter71
Tue Aug 09, 2011 3:33 pm
Forum: Investing - Theory, News & General
Topic: Now you know why "market-timing" is foolhardy
Replies: 30
Views: 3625

By the way, our cat (whose name is Samson) doesn't really care about Mr. Market. Samson cares about getting his Science Diet and getting his ears rubbed when he awakes in the morning. Why do I think our cat is a Boglehead? My cat thinks Science Diet is all hype and is pretty happy with Meow Mix. :D
by peter71
Tue Aug 09, 2011 3:26 pm
Forum: Investing - Theory, News & General
Topic: Equity markets up sharply Aug 9
Replies: 2
Views: 597

Funnily enough another thread on here made me think of the "Gentle Ben" episode:

"Let's have less market timing, and more money for public schools!"

http://stars.ign.com/articles/860/860268p1.html

Best,
Pete
by peter71
Tue Aug 09, 2011 3:06 pm
Forum: Investing - Theory, News & General
Topic: Now you know why "market-timing" is foolhardy
Replies: 30
Views: 3625

Were it the case that the Dow was known to trade in a 6% range every day I think that'd actually be an argument for buying at the low end of that range and locking in a respectable year's return . . . granted that's not the case, but given the 5 or so threads about buying yesterday (and none that I ...
by peter71
Tue Aug 09, 2011 11:29 am
Forum: Investing - Theory, News & General
Topic: Jason Zweig: Stocks are cheaper, but they aren't cheap
Replies: 24
Views: 3297

Only problem is that you need to have some research to support using PE1 to inform your stock investing. None exists that I know of, so what is the basis for using it? AFAIK ALL valuations indicators are swamped by momentum in the short-term, which is probably one reason why some smartmoney folks g...
by peter71
Tue Aug 09, 2011 8:50 am
Forum: Investing - Theory, News & General
Topic: Jason Zweig: Stocks are cheaper, but they aren't cheap
Replies: 24
Views: 3297

My recollection is that P/E 10 was up around 24 earlier in the year, and 24 to 19 seems like a significant change . . . throw in a PE 1 around 13, the fact that the multpl.com earnings haven't been updated since December, the fact that the low 2001-2003 earnings probably don't have as much impact o...
by peter71
Tue Aug 09, 2011 8:18 am
Forum: Investing - Theory, News & General
Topic: Jason Zweig: Stocks are cheaper, but they aren't cheap
Replies: 24
Views: 3297

My recollection is that P/E 10 was up around 24 earlier in the year, and 24 to 19 seems like a significant change . . . throw in a PE 1 around 13, the fact that the multpl.com earnings haven't been updated since December, the fact that the low 2001-2003 earnings probably don't have as much impact on...
by peter71
Tue Aug 09, 2011 7:13 am
Forum: Investing - Help with Personal Investments
Topic: Capitulation
Replies: 39
Views: 5122

Hi Livesoft, Per your "uh oh, no capitualtion in here" remark in another thread . . . It probably doesn't matter much what any human investor does anymore, but FWIW the extreme level of panicked shouting audible from the CNBC coverage of the floor yesterday seemed pretty impressive . . . of course, ...
by peter71
Mon Aug 08, 2011 11:26 pm
Forum: Investing - Theory, News & General
Topic: Is passive investing bad for society?
Replies: 18
Views: 1966

enderw88 wrote:
peter71 wrote:This is often discussed here...
I should have figured...sorry for the rehash.
Oh, I think it's a great topic, and definitely refreshing to think about tonight in a somewhat unusual context!
by peter71
Mon Aug 08, 2011 11:20 pm
Forum: Investing - Theory, News & General
Topic: What is Your Rationale For Buying Stocks Now?
Replies: 52
Views: 4735

many of the talking heads are saying this is a good buying opportunity because companies are under valued. if that is true then why are the big hedge funds and institutional investors going to cash? redemption requests, leverage and value at risk models? supposedly abnormal insider buybacks today, ...