Search found 2266 matches

by dumbmoney
Wed Oct 30, 2013 2:14 am
Forum: Personal Consumer Issues
Topic: Sci-Fi Short Story Recs
Replies: 60
Views: 5173

Re: Sci-Fi Short Story Recs

I recently TRIED to read Stranger in a Strange Land, after having heard of all the hubbub about it for the last 30 years for me (I'm pushing 40). It's been a while, but as I recall, the first half or so was good, or at least not bad, and the second half was a hack job, as if it were finished by a g...
by dumbmoney
Fri Sep 27, 2013 10:24 am
Forum: Personal Consumer Issues
Topic: Refurbished Ipad or ???
Replies: 17
Views: 1833

Re: Refurbished Ipad or ???

The Nook HD+ (9", 1920x1280) at $150 is quite a bargain.
by dumbmoney
Sat Sep 07, 2013 6:47 am
Forum: Investing - Theory, News & General
Topic: Why do stocks go up beyond the rate of inflation?
Replies: 75
Views: 7612

Re: Why do stocks go up beyond the rate of inflation?

US companies therefore do more buybacks, so the difference on dividend yield is somewhat compensated. Estimates by about 1%. Overall US cos *do* have lower payout ratios (Div per share/ Earnings per share): Including buybacks, the yield for U.S. stocks is currently around 5%. Buybacks are consisten...
by dumbmoney
Thu Aug 29, 2013 12:46 am
Forum: Personal Finance (Not Investing)
Topic: Why no Vanguard 2% cash back Visa card?
Replies: 36
Views: 20982

Re: Why no Vanguard 2% cash back Visa card?

nisiprius wrote:Some things Fidelity doesn't do include, oddly enough, ETFs.
Weirdly, they have exactly one ETF, about 10 years old. Recently they've registered a bunch of new ones - some me-too sector funds and some actively managed bond funds.
by dumbmoney
Fri Aug 16, 2013 5:17 pm
Forum: Investing - Help with Personal Investments
Topic: Vanguard needs a cash+ product
Replies: 18
Views: 1919

Re: Vanguard needs a cash+ product

I agree that Vanguard should offer an ultra short bond fund (actually they already have one, but it's for non-US investors). But with short term yields so low, it wouldn't offer much at the moment.
by dumbmoney
Wed Aug 07, 2013 10:20 am
Forum: Investing - Theory, News & General
Topic: would a portfolio last forever if you only took the dividend
Replies: 31
Views: 3973

Re: would a portfolio last forever if you only took the divi

It's true that you lose diversification over time with a static portfolio, but it's a slow process. Note that shrinkage of the number of stocks is not the same as shrinkage of value. The loss of diversification may may be quicker than you think. Consider the S&P500 swapping out 5-10% of the constit...
by dumbmoney
Wed Aug 07, 2013 2:10 am
Forum: Investing - Theory, News & General
Topic: would a portfolio last forever if you only took the dividend
Replies: 31
Views: 3973

Re: would a portfolio last forever if you only took the divi

Agree - you definitely need a mechanism to get new stocks into the portfolio. Over a very long period of time, many/most/all companies will go out of business. The sum value of holding them is the dividends paid out over the years that they were in business. if you want growth to offset this, you w...
by dumbmoney
Wed Aug 07, 2013 1:15 am
Forum: Investing - Theory, News & General
Topic: "past performance does not predict future returns"
Replies: 20
Views: 2836

Re: "past performance does not predict future returns"

Personally I've always detested that SEC disclaimer, because what does it really say? Even the greenest investor knows that past performance doesn't guarantee future results. What he doesn't know is how much significance should be attached to past performance, what time frames are meaningful, etc. T...
by dumbmoney
Mon Aug 05, 2013 5:28 pm
Forum: Investing - Theory, News & General
Topic: It's not your father's indexing
Replies: 40
Views: 5268

Re: It's not your father's indexing

Another example of just how patient you may need to be... DFA was founded for the purpose of launching a small-cap fund, in the wake of Rolf Banz' discovery of the "size effect." I imagine the DFA US Micro Cap fund must be one of the oldest small-cap funds in existence. T. Rowe Price New Horizons (...
by dumbmoney
Thu Aug 01, 2013 5:57 pm
Forum: Investing - Theory, News & General
Topic: Herbalife Saga
Replies: 18
Views: 2085

Re: Herbalife Saga

Buffett on shorting... http://dealbook.nytimes.com/2012/12/03/for-buffett-the-long-run-still-trumps-the-quick-return/?_r=0 “Charlie and I both have talked about it, we probably had a hundred ideas of things that would be good short sales. Probably 95 percent of them at least turned out to be, and I ...
by dumbmoney
Wed Jul 24, 2013 12:01 am
Forum: Investing - Theory, News & General
Topic: SP500 not yet at inflation adjusted high
Replies: 12
Views: 3185

Re: SP500 not yet at inflation adjusted high

Here's another random comparison, but perhaps slightly more meaningful:

Image

Starting from the 3/24/2000 peak, it took just over 13 years for the Vanguard 500 fund (VFINX) to pass the Vanguard money market fund (VMMXX).
by dumbmoney
Mon Jul 22, 2013 9:28 am
Forum: Investing - Theory, News & General
Topic: Vanguard research: How staying the course helped investors.
Replies: 4
Views: 783

Re: Vanguard research: How staying the course helped investo

It is possible to agree with and/or believe everything Vanguard says, while still recognizing that this is not disinterested advice on Vanguard's part. I personally think staying the course is "win-win" and benefits both the investor and the mutual fund company. But clearly it does benefit the mutu...
by dumbmoney
Sat Jul 20, 2013 12:10 am
Forum: Investing - Theory, News & General
Topic: Dimensional Matrix Book 2013
Replies: 4
Views: 893

Re: Dimensional Matrix Book 2013

So there doesn’t seem to be much of a ‘profitability premium” (exclusion of companies with the lowest profitability) in small caps (in US or Int). There was a small premium in US large caps, with largest in intl large, and none in EM (relative to MSCI EM) - at least over last 20 years. From page 66...
by dumbmoney
Wed Jul 17, 2013 8:07 am
Forum: Investing - Theory, News & General
Topic: Cap-weighted funds
Replies: 18
Views: 1393

Re: Cap-weighted funds

Out of curiosity I checked how Bridgeway Blue Chip 35 Index (BRLIX) is doing, which is an equal weighted large cap fund ("Blue chip investing with a 'buy low, sell high' rebalancing approach", the web site says). Since inception in 1997 it has outperformed the S&P 500, but underperformed the stylist...
by dumbmoney
Tue Jul 16, 2013 7:41 pm
Forum: Investing - Help with Personal Investments
Topic: Is Total Bond Market Performance Compromised By The Zero Int
Replies: 43
Views: 3731

Re: Is Total Bond Market Performance Compromised By The Zero

I disagree with the premise that a lower bound on rates automatically makes bonds a bad deal. They are only a bad deal if expected to return less than cash.
by dumbmoney
Sun Jul 14, 2013 4:37 pm
Forum: Investing - Theory, News & General
Topic: Bond Index and Bond Index Funds - Operation in Real Time
Replies: 13
Views: 1364

Re: Bond Index and Bond Index Funds - Operation in Real Time

The index is a 1+ year bond index, so bonds are sold when they hit 1 year to maturity.
by dumbmoney
Fri Jul 05, 2013 7:01 am
Forum: Investing - Theory, News & General
Topic: Anti-Boglehead book recommendations?
Replies: 35
Views: 5482

Re: Anti-Boglehead book recommendations?

"Worry-Free Investing" by Zvi Bodie

"Valuing Wall Street: Protecting Wealth in Turbulent Markets" and "Wall Street Revalued: Imperfect Markets and Inept Central Bankers" by Andrew Smithers
by dumbmoney
Thu Jul 04, 2013 5:56 pm
Forum: Investing - Theory, News & General
Topic: Sell-Off Risk in Bond Funds
Replies: 56
Views: 6207

Re: Sell-Off Risk in Bond Funds

I don't know what is meant by sell off risk, but certainly fund flows can damage share holders, especially if the NAV is wildly unrealistic. A too-high NAV will cause a "run" on the fund by sophisticated investors. After the fund's liquid assets are exhausted and the fund starts selling the illiqui...
by dumbmoney
Wed Jul 03, 2013 9:36 pm
Forum: Investing - Theory, News & General
Topic: Sell-Off Risk in Bond Funds
Replies: 56
Views: 6207

Re: Sell-Off Risk in Bond Funds

I don't know what is meant by sell off risk, but certainly fund flows can damage share holders, especially if the NAV is wildly unrealistic. A too-high NAV will cause a "run" on the fund by sophisticated investors. After the fund's liquid assets are exhausted and the fund starts selling the illiquid...
by dumbmoney
Tue Jul 02, 2013 6:42 pm
Forum: Investing - Help with Personal Investments
Topic: Securities Lending - do I need to worry about such practice?
Replies: 7
Views: 905

Re: Securities Lending - do I need to worry about such pract

The key part is, "Funds participating in securities lending retain 60% of the revenue generated, while BlackRock receives 40%..." So basically it's a sneaky way for Blackrock to charge more fees. As a result they have an incentive to take more risk with lending than is in the best interest of the in...
by dumbmoney
Sun Jun 30, 2013 9:05 pm
Forum: Investing - Theory, News & General
Topic: Liquidity as factor
Replies: 20
Views: 2376

Re: Liquidity as factor

There's something a little strange about trying to get a liquidity premium from an open-ended fund, which itself is perfectly liquid (buy/sell at NAV, no spread).
by dumbmoney
Mon Jun 24, 2013 6:23 pm
Forum: Investing - Theory, News & General
Topic: Why do EM bonds react to U.S. Fed "tapering?"
Replies: 13
Views: 1254

Re: Why do EM bonds react to U.S. Fed "tapering?"

These are all dollar bonds, so they are only linked to foreign countries by default risk.
by dumbmoney
Thu Jun 20, 2013 8:19 pm
Forum: Investing - Theory, News & General
Topic: Help explain how QE works
Replies: 24
Views: 2389

Re: Help explain how QE works

The Fed created money in a bank's reserve account to buy the bond. The $1000 bond is an asset. The $1000 in the reserve account is a liability. They balance. Ok. When the bond matures, nothing happens to the balance sheet. The Fed just surrenders the bond and gets real cash from the Treasury accoun...
by dumbmoney
Wed Jun 19, 2013 4:08 pm
Forum: Investing - Theory, News & General
Topic: Would you buy Total World index if it had Admiral Shares?
Replies: 68
Views: 12226

Re: Would you buy Total World index if it had Admiral Shares

I don't know why anyone would want Total World (though some people clearly do). Since stocks rarely move between the U.S. index and international index, you aren't reducing turnover.
by dumbmoney
Wed Jun 19, 2013 3:46 pm
Forum: Investing - Theory, News & General
Topic: Help explain how QE works
Replies: 24
Views: 2389

Re: Help explain how QE works

Simple! Ha! There are dozens of different theories about how QE works (plus no shortage of theories that say it doesn't work). Here's one I happened to read today, which is fairly typical of the genre (the author is an academic economist): http://blog.supplysideliberal.com/post/53335388874/qe-or-not...
by dumbmoney
Wed Jun 19, 2013 11:07 am
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 207
Views: 14303

Re: Dividends Are Different?

The absurdity of a strict dividend rule is illustrated by what happened when Berkshire bought Burlington partly with stock. Burlington was held by dividend funds, and they were forced to sell because Berkshire doesn't pay dividends. How dumb is that? Not only did they arbitrarily exclude Berkshire a...
by dumbmoney
Tue Jun 18, 2013 9:37 am
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 207
Views: 14303

Re: Dividends Are Different?

Dividends are the only thing that gives stocks a value at all. Then how is it that the biggest single annual return I ever got from a stock (when I had some) was when the company went private and the new holders bought everybody out? The point is that someone can actually remove stock from the mark...
by dumbmoney
Tue Jun 18, 2013 8:47 am
Forum: Investing - Theory, News & General
Topic: Dividends Are Different?
Replies: 207
Views: 14303

Re: Dividends Are Different?

If we plot price per share rather than growth, it is clear that there is a dramatic difference in the composition of the two funds, and that indeed Vanguard Equity Income had far, far less capital appreciation than 500 Index. Obviously the dividends paid out by the dividend stocks slowed their capi...
by dumbmoney
Fri Jun 14, 2013 6:47 am
Forum: Investing - Theory, News & General
Topic: Pimco's Commodity Fund is not really a commodity fund
Replies: 24
Views: 4167

Re: Pimco's Commodity Fund is not really a commodity fund

Consider two S&P 500 index funds. Fund A buys index futures and invests its collateral in a money market fund. Fund B buys index futures and invests its collateral in long term treasuries. If an investor in fund A wanted to replicate the return of fund B, he would have to borrow money on margin and ...
by dumbmoney
Sun Jun 09, 2013 2:58 pm
Forum: Investing - Theory, News & General
Topic: NY Times:"Bond Market Decline That Baffles The Experts"
Replies: 71
Views: 9306

Re: NY Times:"Bond Market Decline That Baffles The Experts"

Is there is some generally accepted definition of a bond bear market? I've read many times that a stock bear market = 20% decline, but I don't recall ever reading that a bond bear market = 2% (or whatever) decline. Maybe the reason why nobody talks about bond bear markets is that a 2% loss just isn'...
by dumbmoney
Tue Jun 04, 2013 8:29 am
Forum: Investing - Theory, News & General
Topic: VG Total International Bond Fund is open
Replies: 88
Views: 16274

Re: VG Total International Bond Fund is open

leod wrote:does this include Greece bonds or from countries that have talks of defaulting?
It's an "investment grade" bond fund, so there is a minimum credit rating. I assume Greek bonds are still "junk" bonds, but maybe things have changed.
by dumbmoney
Mon Jun 03, 2013 9:42 pm
Forum: Investing - Theory, News & General
Topic: Emerging Markets ETF (VWO) up 1.6%, VEMAX down .06% today?
Replies: 19
Views: 2639

Re: VWO up 1.6%, VEMAX down .06% today?

It swung from a 1.05% discount on Friday to a 0.53% premium on Monday.
by dumbmoney
Fri May 31, 2013 2:52 am
Forum: Investing - Theory, News & General
Topic: trading costs matter
Replies: 13
Views: 1322

Re: trading costs matter

There was an ETF, one of the "HOLDRs", that was like a total market stock fund (2,000 stocks or something like that) except that it never, ever traded. The stock holdings were fixed forever. Exactly zero turnover.

For whatever reason, it didn't catch on and was shut down.
by dumbmoney
Thu May 30, 2013 3:03 am
Forum: Investing - Theory, News & General
Topic: Reconciling history of nominal GDP vs. S&P 500 return
Replies: 16
Views: 2703

Re: Reconciling history of nominal GDP vs. S&P 500 return

You're looking at a return including dividends, which is fine. But investors as a whole don't reinvest their dividends. They spend them (and share buybacks too).
by dumbmoney
Tue May 28, 2013 5:58 pm
Forum: Investing - Theory, News & General
Topic: ishares ALT: hedge fund for the masses?
Replies: 6
Views: 2496

Re: ishares ALT: hedge fund for the masses?

ALT is shutting down: http://www.indexuniverse.com/sections/features/18794-ishares-alt-june-4-liquidation-on-track.html ALT, a $43.3 million actively managed exchange-traded fund that has been on the market since October 2009, isn’t resonating with investors, according to iShares. The shuttering is ...
by dumbmoney
Tue May 14, 2013 12:50 pm
Forum: Investing - Theory, News & General
Topic: Hussman: Now is one of the worst times in history to invest
Replies: 51
Views: 8192

Re: Hussman: Now is one of the worst times in history to inv

It's pure luck that Hussman opened his fund very close to the 2000 market top.
by dumbmoney
Sat May 11, 2013 6:00 pm
Forum: Investing - Theory, News & General
Topic: Foreign Vanguard ETF conversion- Premium is disturbing
Replies: 8
Views: 1199

Re: Foreign Vanguard ETF conversion- Premium is disturbing

lazyday wrote:I wouldn't assume that seeing a premium most of the time means it is likely to represent a true premium.
Not sure what you mean by true premium. The NAV may be wrong, but it's still the price at 4PM. Unless the ETF trades very differently at 4PM than at other times, it's valid information.
by dumbmoney
Sat May 11, 2013 11:52 am
Forum: Personal Consumer Issues
Topic: Bidding on Ebay; Ignorance on best Bidding strategy
Replies: 88
Views: 7493

Re: Bidding on Ebay; Ignorance on best Bidding strategy

If everyone understood how ebay worked, then it wouldn't matter much. But there are always lots of newbies who place lowball bids, then raise them if it's not enough. I did it myself when I first used ebay. If you bid at the last second, then they can't amuse themselves at your expense.
by dumbmoney
Fri May 10, 2013 2:39 pm
Forum: Investing - Theory, News & General
Topic: Foreign Vanguard ETF conversion- Premium is disturbing
Replies: 8
Views: 1199

Re: Foreign Vanguard ETF conversion- Premium is disturbing

It's normal for an ETF experiencing inflows to trade at a premium. The premium pays the arbitragers to acquire shares and deliver them to the fund. Although it's not easy to tell whether there's a premium _right_now_ for the reasons lazyday cited, one can play the odds. If an ETF has in the recent p...
by dumbmoney
Mon May 06, 2013 8:37 pm
Forum: Investing - Theory, News & General
Topic: Do you believe stocks are safer the longer they are held?
Replies: 80
Views: 5215

Re: Do you believe stocks are safer the longer they are held

Much of the risk with stocks is that you will eventually have to sell, and the relationship between price and 'fundamental value' fluctuates over a wide range. But I don't want to make too much of this, because there's a simpler and more important point. Investing 100% of a $1 portfolio in stocks is...
by dumbmoney
Sun May 05, 2013 8:47 pm
Forum: Investing - Theory, News & General
Topic: ultra short duration funds
Replies: 7
Views: 982

Re: ultra short duration funds

One of the reasons some 'ultra short' funds blew up is that they weren't really ultra short, in terms of bond maturity. They held long term (as long as 50 years) floating rate bonds, which the SEC allows funds to report as ultra short term bonds.
by dumbmoney
Fri Apr 26, 2013 3:55 pm
Forum: Investing - Theory, News & General
Topic: VMMXX Flatline at 0.01 - is the buck about to break?
Replies: 22
Views: 2430

Re: VMMXX Flatline at 0.01 - is the buck about to break?

Low yields don't have anything to do with 'breaking the buck', which is caused by capital losses (e.g. bond default).
by dumbmoney
Tue Apr 16, 2013 3:20 am
Forum: Investing - Theory, News & General
Topic: Bogle again calls for a total corporate bond fund
Replies: 26
Views: 5117

Re: Bogle again calls for a total corporate bond fund

Vanguard already has corporate bond funds. I think a better idea would be a "Total Bond excluding U.S. government bonds" fund.
by dumbmoney
Fri Apr 12, 2013 11:51 am
Forum: Investing - Theory, News & General
Topic: J Bogle article: Total Corporate Bond Index Fund
Replies: 60
Views: 10466

Re: J Bogle article: Total Corporate Bond Index Fund

If the current Total Bond Market Index were changed to reflect fully and proportionally the fixed income market, i.e., government, corporate, junk bonds, bank loans, etc., would it not provide a higher yield, albeit with less quality? From Barclays web site, the U.S. Universal index, which "represe...
by dumbmoney
Thu Mar 28, 2013 4:03 pm
Forum: Investing - Theory, News & General
Topic: What doesn't Roger understand?
Replies: 9
Views: 1738

Re: What doesn't Roger understand?

The very riskiest stocks (most of them microcaps/nanocaps) have historically performed terribly in the long run. They do great in bull markets, but all the gains and more are lost in bear markets. On the other hand, the very safest stocks have historically performed about the same as the average sto...
by dumbmoney
Thu Mar 28, 2013 2:46 am
Forum: Investing - Help with Personal Investments
Topic: VXUS vs VTIAX
Replies: 7
Views: 1218

Re: VXUS vs VTIAX

If you go to advisors.vanguard.com and look up VXUS, you can see that in the current quarter, VXUS has consistently traded at a premium to NAV - 57 days at a premium, only 2 days at a discount. Buy the regular (not ETF) shares.
by dumbmoney
Tue Mar 26, 2013 10:04 am
Forum: Investing - Theory, News & General
Topic: Why do investors chase dividend paying strategies
Replies: 439
Views: 56102

Re: Why do investors chase dividend paying strategies

And if the dividend is zero and you expect it to remain zero , then the value becomes indeterminate, or explodes, or is 0/0 or something. If a stock can never pay dividends, then its value is well defined (it's zero). Also if a stock can pay dividends, its value is well defined, even if it never ac...
by dumbmoney
Tue Mar 26, 2013 2:59 am
Forum: Investing - Theory, News & General
Topic: Vanguard Target Retirement Funds adding International Bonds
Replies: 27
Views: 3462

Re: Vanguard Target Retirement Funds adding Internaitonal Bo

Isn't anyone concerned that 13% of the fund (top holding) is in Russian bonds? I remember getting burned with Fidelity Balanced fund because of the Mexican bonds it held. Could I have a cite on that 13%? In an international bond fund, that sounds like an international Emerging Market Bond fund? Yea...
by dumbmoney
Sat Mar 23, 2013 4:24 pm
Forum: Investing - Theory, News & General
Topic: The Economist: Bitcoin's record price looks like a bubble
Replies: 20
Views: 3097

Re: The Economist: Bitcoin's record price looks like a bubbl

Isn't any price above $0 a bubble? I mean, there's no Bitcoin Bank standing behind the bitcoins. It's as if a bank went out of business, but people kept writing and accepting checks like nothing had happened. Alternatively, maybe bitcoins are a peculiar kind of commodity. No, that can't be right. A ...
by dumbmoney
Thu Mar 21, 2013 8:26 pm
Forum: Investing - Theory, News & General
Topic: Country Fund ETF
Replies: 4
Views: 631

Re: Country Fund ETF

I don't think this is the ideal way to compare different stock markets, since stock market size depends as much on how active the country's financial sector is as it does whether the market is 'cheap' or 'overvalued'. For example, the UK stock market is much larger relative to GDP than Germany's, bu...