Search found 6186 matches

by mptfan
Mon Jun 18, 2007 7:19 pm
Forum: Investing - Theory, News & General
Topic: Value vs. Growth and Reversion to the Mean?
Replies: 86
Views: 30675

psteinx, I agree that people have referred to the value/size premium as a free lunch, but you will have to ask those people what they meant by that term. I have not used that term, and I choose not to argue over the semantics of how different people might define it. The important point, in my view, ...
by mptfan
Mon Jun 18, 2007 5:29 pm
Forum: Investing - Theory, News & General
Topic: Value vs. Growth and Reversion to the Mean?
Replies: 86
Views: 30675

Now, to the extent that small-value is riskier than the market, it's reasonable to assume that investors will price it to return better than the market in the future. But saying that SV will return 1.5X the market in exchange for 1.5X the risk (or something along those lines) is not what gets folks...
by mptfan
Mon Jun 18, 2007 4:54 pm
Forum: Investing - Theory, News & General
Topic: Value vs. Growth and Reversion to the Mean?
Replies: 86
Views: 30675

psteinx, your argument sounds reasonable. However, would it not apply equally to the equity risk premium? If so, wouldn't it result in the reduction or elimination of the equity risk premium? If not, why not? I think the persistence of the equity risk premium proves the following: The mere fact that...
by mptfan
Mon Jun 18, 2007 4:35 pm
Forum: Investing - Theory, News & General
Topic: Question about dead primary beneficiary using "per stir
Replies: 24
Views: 6954

It would go to their estate. But more importantly, you should avoid that by updating your beneficiaries in the event one of them dies.
by mptfan
Mon Jun 18, 2007 4:27 pm
Forum: Investing - Theory, News & General
Topic: Value vs. Growth and Reversion to the Mean?
Replies: 86
Views: 30675

#2 could in theory have persisted for many years, but the tremendous amount of discussion of this issue in recent years makes me think it's less likely in the near future. i.e. Even unsophisticated investors who may prefer growth to value for irrational reasons are generally aware of the recent str...
by mptfan
Mon Jun 18, 2007 1:20 pm
Forum: Investing - Theory, News & General
Topic: Ric Edelman
Replies: 12
Views: 5036

The advice also makes sense if you are in the money management business. You don't get paid a wrap fee to manage home equity.
by mptfan
Sun Jun 17, 2007 10:58 pm
Forum: Personal Investments
Topic: Switching Out of High Expense 401-k Funds to Vanguard
Replies: 25
Views: 8202

Since you work for a small company, you should recommend a SIMPLE IRA. My company has one with Schwab, and it is free. I think they might be interested in free?
by mptfan
Sun Jun 17, 2007 8:05 pm
Forum: Personal Investments
Topic: Salary v. 401K
Replies: 12
Views: 2851

Grabiner, I agree with you. But let's be realistic, how many people are going to inquire about the expense ratios and fees associated with the mutual funds available in a company's retirement plan as part of their decision whether to accept the job? That may be something that people on this board th...
by mptfan
Sun Jun 17, 2007 7:38 pm
Forum: Personal Investments
Topic: How many Bogleheads with modest incomes?
Replies: 22
Views: 7858

I did a survey on the retire early board and was surprised at the number of people whose net worth was greater than their lifetime earnings. Obviously it takes a number of years for this to happen to allow for the magic of compounding on the early savings. This can also be accomplished by receiving...
by mptfan
Sun Jun 17, 2007 4:05 pm
Forum: Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2892

Dave, I see, your reference was to the alpha of BRSIX in particular, not to microcaps as an asset class. :oops:
by mptfan
Sun Jun 17, 2007 3:44 pm
Forum: Personal Investments
Topic: Time to exit REIT's ?
Replies: 91
Views: 35595

I don't understand the analogy? Do Diehards want me to performance chase? Is that why I am doing the opposite? Doesn't make sense.

Yes, I am reacting to market conditions, within the range of a few percentage points of my overall portfolio. But I'm not performance chasing. :wink:
by mptfan
Sun Jun 17, 2007 3:32 pm
Forum: Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2892

Dave, that is the nature of uncorrelated assets, they zig when others zag, and that's exactly why they are beneficial to your portfolio. If micro caps always went up when larger caps went up, then they would provide little diversification benefits. Also, no one suggests micro caps because of "s...
by mptfan
Sun Jun 17, 2007 3:06 pm
Forum: Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2892

In my opinion, micro caps deserve an overweight allocation. The average market cap of Vanguard's small cap index fund is 1.9 Billion dollars. Compare that to the average market cap of BRSIX which is 231 million. Thus, the average stock in the small cap fund is 8 times larger than the average stock i...
by mptfan
Sun Jun 17, 2007 2:59 pm
Forum: Personal Investments
Topic: Time to exit REIT's ?
Replies: 91
Views: 35595

I have been considering overweighting REITS for at least six months, and I decided against it six months ago because they felt overvalued to me, and I didn't think they could keep growing to the sky. It turns out I was right at least for the last six months (the Vanguard REIT fund is down -1.72% YT...
by mptfan
Sun Jun 17, 2007 11:56 am
Forum: Investing - Theory, News & General
Topic: ETFs at a premium
Replies: 21
Views: 5298

Anyways, I think what you can do with ETFs during the day overwhelms any premium and bid/ask spread. That is, if you care to pay attention. I don't. :wink: My time during the day is more productively spent on my occupation, as opposed to constantly monitoring the bid/ask spread on ETFs to save a fe...
by mptfan
Sun Jun 17, 2007 11:54 am
Forum: Personal Investments
Topic: Salary v. 401K
Replies: 12
Views: 2851

Re: About dollar for dollar, unless you max out

More important than the match is the overall quality of the 401(k), if you plan to stay with the employer for a long time. That extra 1% in fees reduces the value of the whole plan, not just the match, for as long as you stay with the employer. :shock: I am constantly surpised at how some people on...
by mptfan
Sun Jun 17, 2007 11:41 am
Forum: Investing - Theory, News & General
Topic: ETFs at a premium
Replies: 21
Views: 5298

I would be concerned. People seem to get all worked up about something like Emerging Market index's .45% purchase fee and then in the next breath say that ETFs are all great because there is no purchase fee. Paying a premium to NAV is no different than paying a purchase fee. Now you might get back ...
by mptfan
Sun Jun 17, 2007 11:30 am
Forum: Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2892

I've admitted that this may be a factor in my considering the possibility of selling microcaps. (That motive may not matter so much if others on this board are right that this class isn't really necessary.) But for some time I've been waiting for an intl. SC fund - even before looking at recent res...
by mptfan
Sun Jun 17, 2007 11:13 am
Forum: Personal Investments
Topic: Help Wanted: What to Sell to Buy More Intl. SC?
Replies: 16
Views: 2892

It seems to me that you are performance chasing. Microcaps have been lagging the market lately, and international small caps have been doing very well. DLS is up over 42 % in the last year. Don't do it. Retrain your brain.
by mptfan
Sun Jun 17, 2007 10:58 am
Forum: Personal Investments
Topic: Time to exit REIT's ?
Replies: 91
Views: 35595

Emergdoc, I have been considering overweighting REITS for at least six months, and I decided against it six months ago because they felt overvalued to me, and I didn't think they could keep growing to the sky. It turns out I was right at least for the last six months (the Vanguard REIT fund is down...
by mptfan
Sun Jun 17, 2007 9:40 am
Forum: Personal Investments
Topic: Time to exit REIT's ?
Replies: 91
Views: 35595

Emergdoc, I have been considering overweighting REITS for at least six months, and I decided against it six months ago because they felt overvalued to me, and I didn't think they could keep growing to the sky. It turns out I was right at least for the last six months (the Vanguard REIT fund is down ...
by mptfan
Sun Jun 17, 2007 9:34 am
Forum: Personal Investments
Topic: Time to exit REIT's ?
Replies: 91
Views: 35595

Rick, that chart shows the monthly REIT valuations versus their underlying NAV estimates. Their estimates may be right, but they may be wrong, that's why their called *estimates.*
by mptfan
Sat Jun 16, 2007 10:08 am
Forum: Personal Investments
Topic: 529s Upromise Program Free Lunch
Replies: 27
Views: 7473

The lunch is not free. It requires registering your credit card, agreeing to the terms of the registration, spending some of your brain power to figure out which products are in the plan and where you have to go to buy those products, keeping track of the list, buy those products, then keep track of...
by mptfan
Sat Jun 16, 2007 10:03 am
Forum: Investing - Theory, News & General
Topic: Economics 101
Replies: 8
Views: 2245

Our deficits are funded by borrowing, not printing money. It seems to me that there is a bit of self-perpetuation going on, too. China gets lots of net US$ because of its trade deficit with the US and what can it do with them but lend them back to the US. As long as there is a source of US$ out the...
by mptfan
Sat Jun 16, 2007 9:58 am
Forum: Investing - Theory, News & General
Topic: Private Equity
Replies: 19
Views: 4382

I know that the following observations are not novel, but it seems to me that physicians are especially vulnerable to sales pitches for high cost and high risk investment vehicles which ultimately serve to enrich the salesman. To follow up on emergdoc's comments, it seems to me that physicians assum...
by mptfan
Fri Jun 15, 2007 6:36 pm
Forum: Personal Investments
Topic: Thinking of passing on free money
Replies: 7
Views: 2274

This is a no brainer! Take the free money!

Don't let the expense ratio tail wag the investment dog.
by mptfan
Thu Jun 14, 2007 10:24 pm
Forum: Investing - Theory, News & General
Topic: Gus Sauter on fundamental indexing
Replies: 4
Views: 1830

A few comments in response. Regarding the first quote, I have stated several times that a person with access to Vanguard funds can approximate a fundamental index portfolio at a cost which is lower than the current fundamental index products by using value tilts. Regarding the second quote, I'm supr...
by mptfan
Thu Jun 14, 2007 10:11 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Security
Replies: 15
Views: 4439

I also recall that Vanguard does not allow passwords with more than 10 characters.

It seems to me that Vanguard places too many limits on passwords, which makes them less secure than they can be, which is a shame for a company that claims to place a high priority on security.
by mptfan
Thu Jun 14, 2007 9:15 pm
Forum: Personal Investments
Topic: PDF problem and new Vanguard statement area
Replies: 40
Views: 14758

I just downloaded a statement to test this. The new statement has blurry text, compared to previously downloaded statements which have clear text. I also notice that the new statement has a red Vanguard ship in the top left, whereas the old statement had a blurry black and white Vanguard ship! I rat...
by mptfan
Thu Jun 14, 2007 9:05 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Security
Replies: 15
Views: 4439

techno, I seem to recall from a previous discussion that Vanguard does not allow special characters to be used in passwords. Maybe my memory is wrong about that, and invite someone to correct me if it is.
by mptfan
Thu Jun 14, 2007 11:32 am
Forum: Investing - Theory, News & General
Topic: Was the decision on how to set your equity-fixed spli
Replies: 67
Views: 29447

Hard because I seem to be more cautious than everybody else. Which makes me question my decision making. Oh well, ultimately I've got to go with what let's me sleep at night and not worry about it. jh, we are all making educated guesses about the future. None of us knows who will turn out to be rig...
by mptfan
Wed Jun 13, 2007 4:26 pm
Forum: Personal Investments
Topic: Buying a new house and selling or renting the old house
Replies: 28
Views: 8386

If I sell it to my brother for 300K, then buy it back for 300K, then sell it for 500K in 5 years, I only pay cap gains on 200K (500K-300K). tc, what if your brother decides that he doesn't want to sell it back to you? Did you think of that? And PLEASE don't say..."He's my brother, he would nev...
by mptfan
Wed Jun 13, 2007 3:53 pm
Forum: Investing - Theory, News & General
Topic: Was the decision on how to set your equity-fixed spli
Replies: 67
Views: 29447

My allocation to equities is 118 minus the average of my age and my spouses age. I am in my late 30's and working.
by mptfan
Wed Jun 13, 2007 2:06 pm
Forum: Investing - Theory, News & General
Topic: Your worst investing mistake
Replies: 145
Views: 37445

My Top 5 mistakes. 1) High maintenance females -- soaked up way more than all of the above mistakes combined. I think this can be a great mistake and see it all the time. Any person (male or female) who thinks they "deserve" to be continuously pampered can be a terrible investment of both...
by mptfan
Wed Jun 13, 2007 9:47 am
Forum: Personal Investments
Topic: How did you teach your children about investing and finance?
Replies: 37
Views: 17446

This may be offbeat, but whenever I see a commercial on TV, I make a comment about the product: They are a rip-off! No money down? Look at that interest rate! You sure don't want to have a truck loan! AIG!? They sell annuities, so you certainly don't want those! Hartford? That's who mom has for her...
by mptfan
Tue Jun 12, 2007 5:08 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

This is not a board which encourages intellectual discussion. This is a board which encourages groupthink and rejects any ideas or arguments which are contrary. Actually, I don't think that's true and I think the Arnott approach is worth thinking about and discussing at length. You claim the fundam...
by mptfan
Tue Jun 12, 2007 4:40 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

Matt, please read my later post, I admitted and corrected my error. Have you ever typed something in haste and later realized it was wrong and corrected it? It is astonishing to me how some people on this board react when someone presents sound arguments that challenge their beliefs. This is not a b...
by mptfan
Tue Jun 12, 2007 4:04 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

I'm obviously not going to convince you re RAFI. You've been filled with RA propaganda and first year finance bumf and can imagine an explanation for just about anything. Markets are not going to do what you or Rob Arnott (or I) like. I wish you all the best buying expensive product that is IMO bas...
by mptfan
Tue Jun 12, 2007 3:59 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

I don't care WHY something correlates, just THAT it correlates. Too good an opening. I'm sorry to do this to you. Google David Leinweber, who demonstrated truly remarkable correlations between S&P 500 returns and 1) butter production in Bangladesh 2) butter production in Bangladesh and the US 3...
by mptfan
Tue Jun 12, 2007 3:52 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

Thus, it is logical to buy a lesser amont of BigCo, if your goal is to underweight growth and overweight value. If that's your goal, then why pay the additional tax, trading and mangement expenses of a fundamentally weighted ETF over an instrument based on the most proven predictor of value - BtM? ...
by mptfan
Tue Jun 12, 2007 3:10 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

On a more serious note, let's think some more. Let's go back to some of the criteria that survived the RAFImine and just pick one at random, say gross sales. Suppose BigCo has 100 times the sales of SmallCo. Suppose BigCo's market cap is 150 times that of SmallCo. I can see no reason to conclude fr...
by mptfan
Tue Jun 12, 2007 3:00 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

However, correlation is not causation, and without causation there is no reason to believe the approach will work in future. I agree that correlation is not causation, and I did not suggest otherwise. However, your logic is flawed. Just because a factor does not CAUSE a result, does not mean that i...
by mptfan
Tue Jun 12, 2007 2:57 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

And the doctrine of economies of scale would have you thinking the opposite relationship would hold. I disagree. Economies of scale would cause a large company to earn a higher relative return for the same level of costs, but this would make the return LESS risky, not more risky, than a smaller com...
by mptfan
Tue Jun 12, 2007 2:38 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

zhwiller, I did not suggest that the number of employees was a predictor of stock price. Therefore, your statement does not follow. I said that it was plausible and reasonable to consider the number of employees as a factor to determine future returns as part of the scientific process. I also said i...
by mptfan
Tue Jun 12, 2007 1:48 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

That's not how science works. The scientific process consists of formulating a hypothesis and then testing it. In this case, to be considered scientific, they would have to identify the factors in advance based on some process of plausible reasoning and then test if their hypothesis was consistent ...
by mptfan
Tue Jun 12, 2007 1:31 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

[quote="grumel
So you are basically saying higher returns that are explained by higher risk are ok. [/quote]

Yes, I am saying that. And so does every academic who studies finance theory.
by mptfan
Tue Jun 12, 2007 1:00 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

MPTfan said: Norbert, I think we agree more than we disagree. I agree that no system of identifying undervalued vs. overvalued securities in advance will be perfect. If it were, then the market would adjust and the inefficiency would disappear. But, I think we can apply sound logic and reason and f...
by mptfan
Tue Jun 12, 2007 12:43 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

Fundamental indexing is one such approach but looks and smells of data mining. As I already said, number of employees was considered and then discarded. I'll bet they tried everything. We might as well consider weighting by number of employees who smoke or number of employees who are gay or company...
by mptfan
Tue Jun 12, 2007 12:16 pm
Forum: Personal Investments
Topic: Growth vs Value
Replies: 3
Views: 1414

Your question may seem simple, but a proper answer would require an extensive analysis of advanced finance theory, which would include the Fama/French CAPM (capital asset pricing model) and the three factor model, which would include a discussion of the value premium. You can google any of those ter...
by mptfan
Tue Jun 12, 2007 12:05 pm
Forum: Investing - Theory, News & General
Topic: Is S&P 500 index really safe during bubble?
Replies: 41
Views: 12130

The preference to invest in one stock over another (CSCO vs GE) leads you to active management. Not necessarily. It could lead you to fundamental indexing as opposed to cap weighted indexing. Fundamental indexing is just a stable and rule-governed form of active management. Curly, you may be right,...