Search found 788 matches

by Murray Boyd
Fri Feb 20, 2009 10:02 pm
Forum: Personal Consumer Issues
Topic: Any recommendations for a book on U.S. History?
Replies: 17
Views: 3293

It's not a complete history of America, but I have to take this opportunity to recommend to everyone "A Struggle for Power: The American Revolution" by Theodore Draper. It's about the run-up to the War for Independence. It's full of lots of little surprises.
by Murray Boyd
Fri Feb 20, 2009 2:23 am
Forum: Investing - Theory, News & General
Topic: GE hit single digit
Replies: 6
Views: 1783

I guess we should stop treating Jack Welch like the greatest leader since the pharaohs.
by Murray Boyd
Thu Feb 19, 2009 7:49 pm
Forum: Personal Finance (Not Investing)
Topic: Survey Consumer Finances & the Household Balance Sheet
Replies: 8
Views: 1696

Re: Zvi Bodie on the Future of Retirement Products

As he converts his retirement assets to income, Bodie plans to use inflation-protected immediate annuity products. But he doesn’t plan to do so until he reaches age 70, in order to receive the maximum Social Security benefits. That's an answer to my earlier question about when to annuitize. I guess...
by Murray Boyd
Wed Feb 18, 2009 10:33 pm
Forum: Investing - Theory, News & General
Topic: Goldman says partners hit by margin calls
Replies: 11
Views: 2088

I think most of the people on this board knew about the housing bubble. I think a lot of the people on this board knew to stay away from mortgage bonds. So I don't feel like a know-it-all for knowing those things. But I never would have expected the big banks to keep trash on their books. I thought ...
by Murray Boyd
Wed Feb 18, 2009 3:14 pm
Forum: Personal Consumer Issues
Topic: Ancient Greece Book?
Replies: 44
Views: 13994

Also, please note that the Peloponnesian War was a civil war that started out with Sparta on one side and Athens on the other. At no point in Thucydides history does he call it the Peloponnesian War. To be utterly pedantic about it, it wasn't a civil war because the cities weren't united in the fir...
by Murray Boyd
Wed Feb 18, 2009 1:28 am
Forum: Investing - Theory, News & General
Topic: Failure to save East Europe will lead to worldwide meltdown
Replies: 12
Views: 2208

Yow.

Thanks for the link, I think.
by Murray Boyd
Tue Feb 17, 2009 4:27 am
Forum: Investing - Theory, News & General
Topic: Nationalize banks now = rally
Replies: 33
Views: 5358

Every week the FDIC eats a bad bank or three. The trick is to eat the too-big-to-fail banks. Everybody is still working that one out ...
by Murray Boyd
Tue Feb 17, 2009 2:27 am
Forum: Investing - Help with Personal Investments
Topic: Inflation and TIPS
Replies: 65
Views: 12025

Somebody calculated what the CPI would be if they still used house prices instead of Owner's Equivalent Rent (OER). They used the Case-Shiller Housing Index to come up with a "Case-Shiller CPI" (CS-CPI) and compared it to CPI-U. Chart of CPI-U and CS-CPI http://3.bp.blogspot.com/_nSTO-vZpSgc/SYl249...
by Murray Boyd
Mon Feb 16, 2009 2:45 pm
Forum: Investing - Theory, News & General
Topic: Hour of Power? Taleb & Kahneman at DLD
Replies: 41
Views: 5506

I'll quote myself : While I enjoyed his books, I'm not much interested in defending Taleb. I think he can take care of himself. However, it wasn't until fairly recently that Taleb started talking about 90% bills / 10% high risk. I get the impression that he got tired of trying to deflect questions a...
by Murray Boyd
Mon Feb 16, 2009 2:32 pm
Forum: Personal Finance (Not Investing)
Topic: PBS Bill Moyers with Simon Johnson
Replies: 34
Views: 6217

However, wouldn't it make more sense to NOT use taxpayer dollars to bail out these big banks whose foolish decisions got them into this mess, but instead, identify and then use the dollars to increase the capitalization of the "good" banks who have show they can act responsibly (and don't carry the...
by Murray Boyd
Mon Feb 16, 2009 2:26 pm
Forum: Investing - Theory, News & General
Topic: "The Term Structures of Equity and Interest Rates"
Replies: 1
Views: 637

"The Term Structures of Equity and Interest Rates"

New paper by Lettau and Wachter (who have written interesting stuff on the value premium before): This paper proposes a dynamic risk-based model capable of jointly explaining the term structure of interest rates, returns on the aggregate market and the risk and return characteristics of value and gr...
by Murray Boyd
Mon Feb 16, 2009 2:40 am
Forum: Investing - Theory, News & General
Topic: Timber for the Individual Investor
Replies: 51
Views: 13194

is there a way for the individual investor to reap some of the diversification benefits in a low-cost manner?
No. You can buy timber company stocks, which is not the same as actual timber. Or you can buy timberland, which has its own risks.
by Murray Boyd
Sun Feb 15, 2009 10:15 pm
Forum: Personal Finance (Not Investing)
Topic: PBS Bill Moyers with Simon Johnson
Replies: 34
Views: 6217

Re: Profile of Simon Johnson and Baseline Scenario

In this week's edition of Economic Principals David Warsh profiles Simon Johnson and his blog, Baseline Scenario , and how both are shaping opinion on the banking crisis. Link to article on Simon Johnson and Baseline Scenario in this week's Economic Principals : http://www.economicprincipals.com/is...
by Murray Boyd
Sun Feb 15, 2009 10:12 pm
Forum: Personal Finance (Not Investing)
Topic: PBS Bill Moyers with Simon Johnson
Replies: 34
Views: 6217

I realize my understanding of all this is amateurish, but, the basic argument seems to be that if we (the gov't) don't save these banks, credit will freeze and world economy grinds to a halt. However, wouldn't it make more sense to NOT use taxpayer dollars to bail out these big banks whose foolish ...
by Murray Boyd
Sun Feb 15, 2009 1:12 pm
Forum: Personal Finance (Not Investing)
Topic: PBS Bill Moyers with Simon Johnson
Replies: 34
Views: 6217

I'm not sure the FDIC has the resources in terms of either staff or capital to close down a string of large US banks. From what I've read the FDIC can reboot a bank over a weekend. The catch is that they do it by transferring its customers to another bank. What do you do when the top six banks are ...
by Murray Boyd
Sun Feb 15, 2009 1:06 pm
Forum: Investing - Theory, News & General
Topic: Hour of Power? Taleb & Kahneman at DLD
Replies: 41
Views: 5506

20 or 25 years is a long run. As I said in previous post, even starting out in 1929 a 100% TSM portfolio beat a 100% tbill portfolio over the following 20 years. Per Jeremy Siegel's research (who wrote the book) there are _zero_ 20 year period since 1802 in which bonds outperformed stocks. Maybe in...
by Murray Boyd
Sun Feb 15, 2009 12:19 pm
Forum: Personal Finance (Not Investing)
Topic: PBS Bill Moyers with Simon Johnson
Replies: 34
Views: 6217

Did you hear Simon Johnson's interview with the ransom note guy on Planet Money? That was brilliant the way they put that together.

http://baselinescenario.com/2009/02/13/ ... interview/
by Murray Boyd
Sat Feb 14, 2009 2:08 pm
Forum: Investing - Theory, News & General
Topic: Hour of Power? Taleb & Kahneman at DLD
Replies: 41
Views: 5506

I thought part of Larry's thinking is that his human capital (his job managing money) is highly correlated with the US market anyway, so he already had too much "exposure" to LC US anyway.
by Murray Boyd
Fri Feb 13, 2009 10:50 pm
Forum: Investing - Theory, News & General
Topic: Hour of Power? Taleb & Kahneman at DLD
Replies: 41
Views: 5506

Taleb is more modest, and more likable, when he's around somebody who's smarter than he is. Thanks for the link.
by Murray Boyd
Wed Feb 11, 2009 2:50 pm
Forum: Investing - Theory, News & General
Topic: Global Investment Returns Yearbook 2009
Replies: 8
Views: 1717

Robert T, thanks for the run-down.

Here's a sobering graph:

Image
by Murray Boyd
Wed Feb 11, 2009 2:21 pm
Forum: Investing - Theory, News & General
Topic: Will Low Interest Rates Support a Double Digit PE Ratio?
Replies: 17
Views: 2906

I wonder how reliable those stats are. Are they using today's prices and earnings from nine months ago?
by Murray Boyd
Wed Feb 11, 2009 2:18 pm
Forum: Personal Finance (Not Investing)
Topic: Plan B: Is there a new Bogleheads paradigm?
Replies: 148
Views: 20598

Bob K (bobcat2) has been talking about "Paradigm 2" since at least 2005, often in the context of Zvi Bodie's Worry-Free Investing.
by Murray Boyd
Wed Feb 11, 2009 1:10 pm
Forum: Investing - Theory, News & General
Topic: Global Investment Returns Yearbook 2009
Replies: 8
Views: 1717

Maybe do a "save as" on the link if it's not working. Works for me.
by Murray Boyd
Wed Feb 11, 2009 12:35 pm
Forum: Investing - Theory, News & General
Topic: Global Investment Returns Yearbook 2009
Replies: 8
Views: 1717

Global Investment Returns Yearbook 2009

Image

Global Investment Returns Yearbook 2009 PDF

Most of the data is split off into the "Sourcebook" which is apparently unavailable (Anybody a Credit Suisse client?)
by Murray Boyd
Wed Feb 11, 2009 11:56 am
Forum: Personal Consumer Issues
Topic: Martin Wolf's Financial Times article today
Replies: 13
Views: 2106

Yeesh. We're talking about dealing with a crashed banking system here, not taxes.

In the 1990s Sweden nationalized, recapitalized, and privatized its banks quickly, and got back on track in two or three years. Japan let them linger on as zombies for a decade and it cost them a fortune.
by Murray Boyd
Wed Feb 11, 2009 2:23 am
Forum: Personal Consumer Issues
Topic: Martin Wolf's Financial Times article today
Replies: 13
Views: 2106

Japan vs Sweden

Well, the POTUS just referred to Japan vs Sweden tonight: TERRY MORAN: There are a lot of economists who look at these banks and they say all that garbage that's in them renders them essentially insolvent. Why not just nationalize the banks? PRESIDENT OBAMA: Well, you know, it's interesting. There a...
by Murray Boyd
Tue Feb 10, 2009 7:57 pm
Forum: Investing - Theory, News & General
Topic: Nouriel Roubini and Nassim Taleb on CNBC
Replies: 16
Views: 3901

There was 3 more minutes I forgot to post.

http://www.cnbc.com/id/15840232?video=1027524452&play=1

Confession: I didn't make it all the way to the end of the first clip!
by Murray Boyd
Mon Feb 09, 2009 11:42 pm
Forum: Investing - Theory, News & General
Topic: Nouriel Roubini and Nassim Taleb on CNBC
Replies: 16
Views: 3901

Nouriel Roubini and Nassim Taleb on CNBC

The interviewers really don't get it. It's pretty funny really:

http://www.cnbc.com/id/15840232?video=1027496846&play=1
by Murray Boyd
Mon Feb 09, 2009 7:39 pm
Forum: Investing - Theory, News & General
Topic: Treasury announces future plans
Replies: 30
Views: 5241

Re: TIPS, government, and retirement planning

Hi Murray, I came up with these points on my own, but point #1 was really reinforced by a paper I read last fall. The paper was about improving retirement systems in European countries, but the findings apply to the American retirement system as well. Henriette Prast presented the paper at the Life...
by Murray Boyd
Mon Feb 09, 2009 7:28 pm
Forum: Investing - Theory, News & General
Topic: Small Value Premium going forward?
Replies: 14
Views: 2279

Markets are always changing. Since people can't agree on where the SV effect came from it's pretty hard to argue why it would persist.

You can never step in the same river twice!
by Murray Boyd
Mon Feb 09, 2009 7:11 pm
Forum: Investing - Theory, News & General
Topic: How do Socialists Invest?
Replies: 20
Views: 4150

I noticed a lot of talk about socialists and socialism right about the time liberals stopped being afraid of being called liberals.
by Murray Boyd
Sun Feb 08, 2009 3:45 pm
Forum: Investing - Theory, News & General
Topic: Please critique my next annuity article (second in a series)
Replies: 36
Views: 7892

Re: annuities

An excellent survey of life annuities is provided by Eytan Sheshinski in his new book, The Economic Theory of Annuities . There is a very enthusiastic review of the book at Amazon by a reader from Massachusetts. :D Link: http://www.amazon.com/Economic-Theory-Annuities-Eytan-Sheshinski/dp/0691133050...
by Murray Boyd
Sun Feb 08, 2009 3:43 pm
Forum: Investing - Theory, News & General
Topic: Treasury announces future plans
Replies: 30
Views: 5241

Re: 3 points

I'd like to make three points about the TIPS program. 1) If the federal government wants to help Americans with their retirement, about the best thing the government can do is issue TIPS. This is no secret. Geithner, Summers, Orzag, Romer, and others in the Administration know this. 2) The Wall Str...
by Murray Boyd
Sun Feb 08, 2009 3:33 pm
Forum: Investing - Theory, News & General
Topic: Worst US stock decade ever
Replies: 36
Views: 6168

Unfortunately, many people got the wrong idea from Siegel's book. Stocks are risky no matter how long the investment horizon. If that was not true then stocks would get bid up to a level that resulted in returns being the same as that of Treasuries. A couple of weeks ago I read a quote from Keynes ...
by Murray Boyd
Sun Feb 08, 2009 12:40 pm
Forum: Personal Consumer Issues
Topic: NYtimes: The End of the Princeton Pipeline to Wall St?
Replies: 25
Views: 3779

This is also good news for people who are just interested in finance. I'm thinking of a friend who went to a flagship state university, majored in finance, but couldn't get a foot in the door on Wall St., since apparently what everybody wanted was tall guys with great hair and degrees in English fro...
by Murray Boyd
Thu Feb 05, 2009 2:18 pm
Forum: Investing - Theory, News & General
Topic: People thought the Fed was a crazy idea once too ...
Replies: 0
Views: 824

People thought the Fed was a crazy idea once too ...

This column proposes a new paradigm to reconcile Keynesian economics with general equilibrium theory. It suggests that, just as it sets the fed funds rate to control inflation, the Fed should set a stock market index to control unemployment. This would not let every manufacturing firm and every ban...
by Murray Boyd
Wed Feb 04, 2009 1:38 am
Forum: Investing - Theory, News & General
Topic: duration of stocks
Replies: 19
Views: 3132

I think using stdev as a measure of risk is wacky. I care about losing my money. I'd be thrilled to have a three stdev increase in my returns!
by Murray Boyd
Tue Feb 03, 2009 7:08 pm
Forum: Investing - Theory, News & General
Topic: Financial Markets and the Singularity
Replies: 40
Views: 5595

You mean the rapture for nerds? I thought prophesies were for religion, not science.
by Murray Boyd
Mon Feb 02, 2009 4:04 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Re: glide path

Murray Boyd wrote:At what point do you start making transactions incorporating longevity risk?
I don't know either.

Let's try this backwards: if you're implementing a matching strategy, what do stocks match? You could use the stock duration concept, and say that the market portfolio has a duration of 30-60 years.
by Murray Boyd
Sun Feb 01, 2009 11:42 am
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

glide path

Last time I checked there were only two companies offering inflation-adjusted annuities -- Vanguard and Berkshire Hathaway (Not a bad pair). Any more now? For financing retirement , assuming the risk-free investing approach is the way to go, what's the role for stocks? What's the story for a person'...
by Murray Boyd
Sat Jan 31, 2009 11:56 pm
Forum: Investing - Theory, News & General
Topic: Efficient Market Hypothesis
Replies: 15
Views: 2860

The EMH is either utterly wrong, or it's claims and implications are so modest they can be happily ignored.

Don't worry about it either way.
by Murray Boyd
Sat Jan 31, 2009 3:37 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Agreed, but while I hadn't heard the Samuelson quote myself I no longer think it's representative of the discipline, as, for example, the first econ paper on stationarity and ergodicity I linked to has 259 cites Peter, try that search again but replace "ergodicity" with "nonergodicity". (I'm right ...
by Murray Boyd
Sat Jan 31, 2009 3:13 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Participants in modern market auctions have complicated side bets on volatility, credit risk, currency, weather and everything else imaginable--bets that could not have been placed even 20 years ago. I'm sure game theory still applies, but we may not be talking about the same games any more. I've r...
by Murray Boyd
Sat Jan 31, 2009 1:31 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Manufacturing systems imply another variable, which is one of scale. Instead of making a complete widget, you are making a very small widget part, like a transistor (semiconductor fabrication). In this case, you will be working with materials that are so small, you need to consider the effects of p...
by Murray Boyd
Sat Jan 31, 2009 12:30 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Add on top of that the fact that many are unexpectedly hit with early involuntary retirement, unexpected health problems, spouse runs away with the pool boy and takes half the money or more (:)), the uncertainties are endless. I actually wrote a Monte Carlo simulation that simulated loss of human c...
by Murray Boyd
Sat Jan 31, 2009 12:27 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Maybe engineering systems are ergodic because they are designed to be ergodic. When gun parts were handmade by craftsmen the statistics of one part from 100 different craftsmen would be different than the statistics of 100 parts from one craftsman. Interchangeable parts means enforcing specs and st...
by Murray Boyd
Sat Jan 31, 2009 12:44 am
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

That's outside my area of expertise, but it's good to see that ergodicity and stationarity are a part of economics as well as engineering. I'm sure that can be said for anything else, but it's nice to see it in context for this thread. Paul Samuelson, the father of neoclassical economics (that is, ...
by Murray Boyd
Fri Jan 30, 2009 4:04 pm
Forum: Investing - Theory, News & General
Topic: Dr. Phil on Social Security
Replies: 49
Views: 7136

Social Security is simple: we transfer about 4-5% of GDP from working people to old people so old people won't die freezing and starving. When the baby boomer wave peaks the benefits might go as high as 6-7%. A couple of points of GDP for a few years is hardly a crisis. Or we could trim benefits. Ei...
by Murray Boyd
Fri Jan 30, 2009 1:24 pm
Forum: Investing - Theory, News & General
Topic: new study by Sharpe, etal on SWR--dont recall posted
Replies: 97
Views: 13521

Re: Safe Assets and Matching Strategies

We didn’t have TIPS and Ibonds in the past, fifty years SS wasn’t inflation-indexed, and until recently we didn’t have inflation-indexed life annuities. In other words, while most people haven’t been paying attention, LT safe assets have been getting safer by adding inflation protection. It'd be in...
by Murray Boyd
Fri Jan 30, 2009 1:22 pm
Forum: Investing - Theory, News & General
Topic: duration of stocks
Replies: 19
Views: 3132

Depending on how you do the math, share buybacks and dividends are equivalent. And buybacks kinda sorta have a tax advantage.

Conceivably a company could buy back all but one share, and then sell all of its capital, so that last share would be the returned principal.