Search found 3746 matches

by peter71
Sat Jul 16, 2011 1:37 pm
Forum: Investing - Theory, News & General
Topic: More Bad News for Market Timers
Replies: 44
Views: 5162

People will always lose money in the long-term trying to time markets using PE or any other means, but that won't stop the hope. Rick Ferri OK, but then why not extend the six-month analysis you present above to prove your point? Best, Pete Here's a link to some data on how the hedge fund index Ric...
by peter71
Sat Jul 16, 2011 12:07 pm
Forum: Investing - Theory, News & General
Topic: More Bad News for Market Timers
Replies: 44
Views: 5162

Rick Ferri wrote: People will always lose money in the long-term trying to time markets using PE or any other means, but that won't stop the hope.
Rick Ferri
OK, but then why not extend the six-month analysis you present above to prove your point?

Best,
Pete
by peter71
Fri Jul 15, 2011 11:17 am
Forum: Personal Finance (Not Investing)
Topic: College Costs increase 6% per annum
Replies: 68
Views: 5513

True, but housing isn't necessarily trailing the CPI, because OER marches (almost inexorably) upward regardless of what house prices are doing. OER is mostly determined by polling owners of their houses and asking what they would rent it out for, subtracting out utilities. Looks like shelter is up ...
by peter71
Fri Jul 15, 2011 10:29 am
Forum: Personal Finance (Not Investing)
Topic: College Costs increase 6% per annum
Replies: 68
Views: 5513

Remember that if housing makes up around 40% of the CPI, most other things are going to outpace the CPI in periods where housing trails it.

http://www.nytimes.com/interactive/2008 ... APHIC.html
by peter71
Fri Jul 15, 2011 7:27 am
Forum: Personal Consumer Issues
Topic: College Conspiracy - A brilliant pump and dump scheme?
Replies: 14
Views: 3793

100 years ago 40 percent of the US population was working in agriculture and Model T style mass employment on assembly lines was the big new thing. I think labor market forces alone predict that people will seek education for other jobs as those jobs have disappeared . . .

Best,
Pete
by peter71
Thu Jul 14, 2011 9:54 pm
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47807

Well, that raises the very different question of what percentage of the population has the potential to be a strong CS major, and I have no problem setting that one at 25% or lower . . .
by peter71
Thu Jul 14, 2011 9:07 pm
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47807

Bond50, Your above post strikes me as a slightly tendentious summary of the qualifications undercutting the main thrust of the Wiki article, but I suppose accurate enough . . . As for the 50% mark, the below article lists Canada as #1 with 56% obtaining "at least an associates degree," so is that cr...
by peter71
Thu Jul 14, 2011 8:20 pm
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47807

Looking at extremes (college graduates who receive job offers in their fields at the age of 23 and gets a raise every year for 40 years and never gets laid off...) is not very helpful to me. I'd call extreme making a billion dollars on your internet startup, winning the lottery, or inheriting a for...
by peter71
Wed Jul 13, 2011 10:57 pm
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47807

This is from some time ago, but mentions 8% unemployment for new grads, that's 1 of every 12 and is probably understated, as many probably went to grad school because of the job market. Also many are "underemployed" in one way or another. http://www.nytimes.com/2010/05/25/business/economy/25gradjob...
by peter71
Wed Jul 13, 2011 8:02 pm
Forum: Investing - Theory, News & General
Topic: Moody's warns it may downgrade US credit rating
Replies: 11
Views: 1447

US public/external debt in comparative perspective:

http://www.usdebtclock.org/world-debt-clock.html

The latter has actually been going down all summer . . .
by peter71
Sun Jul 10, 2011 11:15 pm
Forum: Investing - Theory, News & General
Topic: New Fund: Powershares MENA Frontier Countries Port. (PNMA)
Replies: 22
Views: 3163

Global X is putting together a lot of frontier country funds and a FTSE frontier index. Don't know if it will ever come out. Van Eck has had a frontier index at the SEC for over a year, but keeps churning out small country ETFs such as Viet Nam. http://www.indexuniverse.com/hot-topics/9531-global-x...
by peter71
Thu Jul 07, 2011 11:15 am
Forum: Investing - Theory, News & General
Topic: The first $500,000 is always the hardest
Replies: 260
Views: 47807

This is from some time ago, but mentions 8% unemployment for new grads, that's 1 of every 12 and is probably understated, as many probably went to grad school because of the job market. Also many are "underemployed" in one way or another. http://www.nytimes.com/2010/05/25/business/economy/25gradjob...
by peter71
Wed Jul 06, 2011 8:09 pm
Forum: Personal Finance (Not Investing)
Topic: Washington Mutual class action suit- should I file a claim?
Replies: 58
Views: 17541

Hi LG, If you got the letter it should only take you 10 mins and a stamp to fill out (and for me most of that was finding my acct # and trying to figure out why it had a different number of digits than there were spaces). People sometimes have ethical qualms about these things but the settlement is ...
by peter71
Tue Jul 05, 2011 12:13 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Bobby, I thought you were clear enough re "mutual fund" investors in your first post, but TFB's article does speak to the subset of retail folks who own mutual funds (it certainly seems likely that retail stock pickers, for example, would do worse). As for my own anecdotal experience, I also knew...
by peter71
Tue Jul 05, 2011 8:13 am
Forum: Personal Investments
Topic: Where are Theses by Bogleheads?
Replies: 6
Views: 1322

I believe Princeton is pretty unusual in that it both a) requires every undergrad to write a thesis and b) archives copies of them . . . so while PhD dissertations are archived by Proquest/UMI, you'd probably have to go directly to the author. (As a person who dreads having to advise, read and grade...
by peter71
Mon Jul 04, 2011 12:31 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Taylor,

Yep. We're definitely talking past one another. (My basic point is that the data at your link don't tell us anything meaningful about, e.g., a "behavior gap.")

It's a complicated issue but not necessarily an important one!

Best,
Pete
by peter71
Mon Jul 04, 2011 9:16 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Taylor, Read the linked piece by The Finance Buff (and/or my own approximately 500 prior posts on this). While it's indeed possible for mutual fund investors to underperform and non-mutual fund investors to outperform, there's only very, very slim evidence of this happening in practice. Best, Pete
by peter71
Mon Jul 04, 2011 7:10 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Deduction: 6% underperformance is perhaps the craziest claim out there. I can't think of anyone doing that year after year, much less imagine most every mutual fund investor doing that. Empirics: (Using the data in DALBAR's own study): The correct figure is probably about 0.25%. http://thefinancebuf...
by peter71
Fri Jul 01, 2011 8:58 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi John,

Back from night out. Glad you too had wine.

Time files; too much time on net risk mounts.

Best,
Pete
by peter71
Fri Jul 01, 2011 5:07 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Bob, I vote "no" and I think the chart helpfully shifts the subject from SD. You can say the chart sends investors the wrong message, but I certainly wouldn't say he erred. Moreover, you can also say that Samuelson's core message that "a large pile means a lot to lose" is rather trivial (and that...
by peter71
Fri Jul 01, 2011 3:56 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

As wealth goes down it goes down too. :D And doesn't "losses" have two syllables? :D H e w h o a c t s i n N p l a y s t o m a k e h i s m e a n l o g o f w e a l t h a s b i g a s i t c a n b e m a d e will, w i t h o d d s t h a t g o t o o n e a s N s o a r s , b e a t m e w h o a c t s t o m e e...
by peter71
Fri Jul 01, 2011 1:20 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

Dingle wrote:
In fact just the opposite, everyone I meet picks individual stocks, NEVER LOSES and makes 35% per year :wink:
You must be hanging out with advisors! :D
by peter71
Fri Jul 01, 2011 1:02 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

Dingle, You are not worth arguing with. Trust me, I have a PhD in this stuff! Best, Pete Well, that's all the proof I need :roll: I thought you liked authority figures speaking authoritatively. Would it help if I charged you 1% AUM? :D Re the OP, by the way, I have no problem with people "giving it...
by peter71
Fri Jul 01, 2011 12:56 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

Dingle,

You are not worth arguing with. Trust me, I have a PhD in this stuff!

Best,
Pete
by peter71
Fri Jul 01, 2011 12:43 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

Studies that give a figure that high are crap. IIRC you yourself have participated in threads discussing how a more realistic figure is around 0.25%. (See also TFB's blog post on this using DALBAR's own numbers.) So one study claims .25% and several claim much much higher. Prove which study is corr...
by peter71
Fri Jul 01, 2011 12:33 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

Studies that give a figure that high are crap. IIRC you yourself have participated in threads discussing how a more realistic figure is around 0.25%. (See also TFB's blog post on this using DALBAR's own numbers.) So one study claims .25% and several claim much much higher. Prove which study is corr...
by peter71
Fri Jul 01, 2011 12:16 pm
Forum: Investing - Theory, News & General
Topic: Any Bogleheads Give it up to a Financial Advisor?
Replies: 85
Views: 9830

There have been numerous studies stating that the average investor earns anywhere betweeen 4% to 6% LESS THAN market returns. You can have an asset allocation that is within your risk frame, buy low cost index funds, rebalance all to perfection BUT these studies prove that investors CANNOT behave i...
by peter71
Thu Jun 30, 2011 5:10 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

"In order to manage risk, we must first understand risk . . . in order to understand risk, we must first define risk."

http://www.youtube.com/watch?v=laKprX-HP94
by peter71
Thu Jun 30, 2011 2:20 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

My goal is to average 10% per annum with a positive investment return each and every month . . . but just in case that doesn't work out, I'm saving 40% of my income and hoping for the best :D

Best,
Pete
by peter71
Thu Jun 30, 2011 12:28 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Dick, To return to our earlier philosophical discussion, I'd say the problem is actually that you're being a "hedgehog" :D -- i.e., "a person who views the world through a single defining idea." http://en.wikipedia.org/wiki/The_Hedgehog_and_the_Fox Empirical research suggests that, even in compar...
by peter71
Wed Jun 29, 2011 10:18 pm
Forum: Personal Investments
Topic: TIAA-CREF Real Estate: Anyone Buying These Days?
Replies: 39
Views: 12573

Anyone care to provide an update as to who is buying it now and why? Do you see now as a good time to start investing in this account? I realize we are buy and hold investors, but I'd be interested in hearing any and all opinions as to the TIAA Real Estate Variable Annuity Account. "Symbol" and ana...
by peter71
Wed Jun 29, 2011 1:41 pm
Forum: Personal Consumer Issues
Topic: Is anyone an economics professor/teacher in this forum?
Replies: 83
Views: 6799

Re: Is anyone an economics professor/teacher in this forum?

richard wrote:
Dingle wrote:No Sir, this is basic supply and demand work. Its macro.
Basic supply and demand at the individual or firm level is micro. Macro is economy-wide issues.
Yep, this is micro. Macro would be government spending, interest rates, capital and current accounts, etc.
by peter71
Tue Jun 28, 2011 10:54 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Dick, I'm now above my pay grade too, but if we set aside the "people free" issue then my sense is that economists see MC as one of many possible "resampling" techniques out there, but for one reason or another often end up choosing bootstrapping or other non-MC options instead . . . Having said ...
by peter71
Tue Jun 28, 2011 4:43 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Dick, It seems to me you're in part referring to a universal difference between researchers and practitioners/clinicians. Medical researchers, for example, often helpfully ignore "real world human beings" to benefit real world human beings by doing research at the level of the disease, the cell, ...
by peter71
Tue Jun 28, 2011 3:59 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

I think that with a lot of philosophy you need to understand the intellectual climate of the time. I had that with the early Wittgenstein, but not Kant. Peter Gay's series on the Enlightenment makes a case that Kant isn't really so different from Voltaire and Hume in his distrust of (at least extan...
by peter71
Tue Jun 28, 2011 12:49 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

I don't think that any of this is useless or unimportant. Quite the contrary. Both the model-building theoretical mathematics and the empirical studies testing the models are very useful and important, and have important implications for individual investors and their portfolios. (Diversify, divers...
by peter71
Mon Jun 27, 2011 9:47 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Dick, I guess I remain more optimistic in that "fleecing" of retail investors seems to me to have gone down over the same historical period in which mathematical finance has arisen . . . that's by no means to say that mathematical finance has caused ER's and brokerage fees to decline, but it at l...
by peter71
Mon Jun 27, 2011 6:59 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Dick, The OSU B-school lecture I linked to awhile back is chock full of many of the same critiques and qualifications mentioned here, but are there specific things that you'd change about it? Do you have an alternative syllabus or course series that you feel would finally get us all to the mounta...
by peter71
Sat Jun 25, 2011 4:29 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Rod, I'm with you on imprecision, though in my case that's no cure for amateurish tinkering . . . E.g., "Given that valuations look better than average and alternatives to stocks look worse than average and at least short term momentum looks better than average . . . increase stock allocation in ...
by peter71
Sat Jun 25, 2011 3:59 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Also, did anyone say you should not have a plan? That is an odd claim to toss into the mix. The question is what sort of plan. Hey Rod, I guess I'll admit to having a pretty minimal "investment plan." I certainly have a "savings plan," and I certainly try to think about and limit the reasonable wor...
by peter71
Sat Jun 25, 2011 3:40 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

As always the truth shall set us free, and without a plan, or a stated need, incorporated specifically into it, chances of a plan working IMHO is slim to none. And 'desire', or 'want' as a surrogate IMHO, is way too wishy-washy, soft, and non-specific, but again, opinions vary. Well . . . plans dif...
by peter71
Sat Jun 25, 2011 2:18 pm
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

I personally find the entire "need, willingness and ability" to take risk framework unhelpful. Best, Pete Then let me ask you -- How did you as an individual determine your own personal asset allocation percentages? ('Uncomfortable' or 'frightening' or 'distressing' is not the same as 'unhelpful,' ...
by peter71
Sat Jun 25, 2011 11:46 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Yeah, per these OSU B-school slides the tangency portfolio maximizes the Sharpe ratio "for a portfolio of just risky assets" . . . http://fisher.osu.edu/~diether_1/b722/capm_2up.pdf Also goes on to note that given the problematic assumption of "complete agreement" the tangency portfolio is the marke...
by peter71
Sat Jun 25, 2011 10:28 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Rod, Yeah, I guess I don't know enough about MVO to say in what order mean and/or variance were optimized, though I do think Market Timer (ironically) is correct in describing Larry's approach as a constrained optimization approach in another thread . . . I can see where Larry is coming from, bu...
by peter71
Sat Jun 25, 2011 10:00 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Greenspan's own mea culpas have focused more on deductive errors, no? I don't believe we can restrict his errors either to deductive errors or historic errors. I also don't believe he's the most objective source of analysis on what went wrong. His deductive error was wrong because he was not thinki...
by peter71
Sat Jun 25, 2011 9:51 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

He is simply saying that if you need a real return of 4% and you think stocks are going to provide 7% and bonds 1%, then you need a portfolio of 50/50 stocks/bonds. But if you think stocks are only going to return 5% you need to be 75/25. The problem is of course you have now greatly increased risk...
by peter71
Sat Jun 25, 2011 9:38 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Richard, Greenspan's own mea culpas have focused more on deductive errors, no? http://www.guardian.co.uk/business/2008/oct/24/economics-creditcrunch-federal-reserve-greenspan "I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that the...
by peter71
Sat Jun 25, 2011 8:45 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi Rod, Yeah, I guess I don't know enough about MVO to say in what order mean and/or variance were optimized, though I do think Market Timer (ironically) is correct in describing Larry's approach as a constrained optimization approach in another thread . . . I can see where Larry is coming from, but...
by peter71
Sat Jun 25, 2011 8:13 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

Hi CJ, I think I see what you're getting at . . . do you see Larry's circa 2008 advocacy of increasing equity allocations when P/E 10 is high as indicative of someone who actually took MVO seriously? Diasurfer Try this. Sounds backward but correct. From say about 1998-2000 the need to take risk was ...
by peter71
Sat Jun 25, 2011 7:29 am
Forum: Investing - Theory, News & General
Topic: Valuation-based market timing with PE10 can improve returns?
Replies: 696
Views: 128385

If one wants a related debate without sufficient data to complexify things, the Wikipedia page on Tulip Mania is an interesting example: http://en.wikipedia.org/wiki/Tulip_mania It's basically all the same "wisdom of crowds / madness of crowds" debate, and my vague sense is that academic economics i...