Search found 1167 matches

by Theoretical
Tue Jan 16, 2018 9:32 am
Forum: Investing - Theory, News & General
Topic: Investment Grade (barely)
Replies: 9
Views: 1147

Re: Investment Grade (barely)

Well, the other problem is that many of the Illinois and New Jersey issues are "AAA," but the underlying structure is publicly and obviously rotten. With the non-Chicago issues, the problem will be with anything that's GO. I'd still be cautious but would be slightly more comfortable with basic munic...
by Theoretical
Mon Jan 15, 2018 7:20 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 55
Views: 5336

Re: International Small-cap Value Funds ??

FNDC and the Powershares PDN (.50) are good options. Don't be unduly taken aback by them being "blend funds" as the RAFI methodology tends to grab a lot of deep value and cheap blend-growth. They're also the only good pair of solutions in taxable accounts. DLS is great in tax-deferred accounts but ...
by Theoretical
Mon Jan 15, 2018 5:12 pm
Forum: Investing - Theory, News & General
Topic: Investment Grade (barely)
Replies: 9
Views: 1147

Re: Investment Grade (barely)

This is exactly why Im 100% stocks and unapologetic about it. There is nothing new about this. It is in the inherent nature of profit seeking to reach unduly for yield. When the only thing holding one back from reaching for yield is a risk analysis and self discipline, I think it inevitable for suc...
by Theoretical
Mon Jan 15, 2018 3:22 pm
Forum: Investing - Theory, News & General
Topic: Investment Grade (barely)
Replies: 9
Views: 1147

Re: Investment Grade (barely)

In this era of stretching for yield I think this is a HUGE consideration. I've read dozens of muni bond prospecti and annual reports, both index and active, and what I've seen is that the indexes are naturally loading up on the bloated, dubious pigs like Illinois, New Jersey and the like, BUT SO ARE...
by Theoretical
Sun Jan 14, 2018 7:29 pm
Forum: Investing - Theory, News & General
Topic: International Small-cap Value Funds ??
Replies: 55
Views: 5336

Re: International Small-cap Value Funds ??

FNDC and the Powershares PDN (.50) are good options. Don't be unduly taken aback by them being "blend funds" as the RAFI methodology tends to grab a lot of deep value and cheap blend-growth. They're also the only good pair of solutions in taxable accounts. DLS is great in tax-deferred accounts but n...
by Theoretical
Mon Jan 08, 2018 5:45 pm
Forum: Investing - Theory, News & General
Topic: Long Term Bonds as Alternative Asset Class (Not Fixed Income)
Replies: 11
Views: 989

Re: Long Term Bonds as Alternative Asset Class (Not Fixed Income)

I think I'd do a 50/50 EDV (Vanguard Extended Duration)/LTPZ (PIMCO 15+ year TIPS) of the slug that's being "alt'd" if I was going to do this, though is actually prefer using DXKLX (Direxion 2x Bull Monthly 7-10 year Treasury) and LTPZ in a 1:2 ratio. Either gives you some diversifications on the si...
by Theoretical
Mon Jan 01, 2018 9:41 pm
Forum: Investing - Theory, News & General
Topic: I'm Calling an Emerging Markets Bottom
Replies: 278
Views: 50241

Re: I'm Calling an Emerging Markets Bottom

Something to consider is that Emerging Markets at the time of grap's post were in extreme deep value territory as a collective whole. Market timing in extreme situations, especially contrarian buying, is a pretty nice strategy, partly because it requires nerves of steel. Junk bonds (diversified fund...
by Theoretical
Mon Jan 01, 2018 12:40 am
Forum: Investing - Theory, News & General
Topic: Alternative Investments
Replies: 29
Views: 2209

Re: Alternative Investments

What alternative investment/hedging strategies are there that might offer high liquidity, low cost, and a low correlation with equities in a down market? It really depends why the market is down. Is it a liquidity crunch/flight to safety or an inflationary one? If liquidity, STRIP treasuries of 20 ...
by Theoretical
Sat Dec 30, 2017 9:39 pm
Forum: Investing - Theory, News & General
Topic: Before buying gold, have a look at these returns since 1975
Replies: 84
Views: 6775

Re: Before buying gold, have a look at these returns since 1975

What I have seen somewhere is that gold is very useful for storing a constant value over the extreme long term, so a nice men's suit in the 1800s cost about an ounce of gold and it still does today. A highly volatile zero real return asset that's not really correlated to anything does have some dive...
by Theoretical
Sat Dec 30, 2017 8:34 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: The Tax Efficiency Of Long -Short Strategies
Replies: 4
Views: 657

Re: Larry Swedroe: The Tax Efficiency Of Long -Short Strategies

It is certainly true with the bondlike VMNFX - Vanguard Market Neutral fund, as its tax efficiency is between that of TSM and a munibond fund.
by Theoretical
Fri Dec 29, 2017 1:07 am
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 120
Views: 11927

Re: What ever happened to the Larry portfolio?

Something else to consider re: value is that one of the ultimate value plays in bonds was described by Benjamin Graham and is still strong today, and that is the Fallen Angels phenomenon of where there's a lot of opportunities in corporate bonds that started as investment grade and got downgraded to...
by Theoretical
Wed Dec 27, 2017 10:33 pm
Forum: Investing - Theory, News & General
Topic: M1 Finance
Replies: 11
Views: 2240

Re: M1 Finance

So the interesting question is how much a single block of trading either helps or hurts trading low liquidity stocks like microcaps in terms of the spreads. Because if it doesn't...then I could see a very nice ultra microcap diy or mutual fund clone happening.
by Theoretical
Wed Dec 27, 2017 1:13 pm
Forum: Investing - Theory, News & General
Topic: TIPS Questions
Replies: 4
Views: 587

Re: TIPS Questions

The yield curve sometimes inverts, including the real one (I'd imagine). Also, you're seeing some of the effects of TIPS illiquidity compared to nominal treasuries. Also, the Schwab listing may be both lower due to markup on said illiquid bond and it may not reflect the inflationary adjustment baked...
by Theoretical
Tue Dec 26, 2017 3:33 pm
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 120
Views: 11927

Re: What ever happened to the Larry portfolio?

FNDA and FNDE are on Larry's list of funds BAM uses in his book The Only Guide You Need to Factor Investing. Based on the criteria for inclusion in the book, FNDC should also qualify now, or come very close - average trading value is about $4.9 million per day and it has $1.6 billion AUM. Thus, the ...
by Theoretical
Sun Dec 24, 2017 3:54 pm
Forum: Investing - Theory, News & General
Topic: What ever happened to the Larry portfolio?
Replies: 120
Views: 11927

Re: What ever happened to the Larry portfolio?

The main change to the Larry Portfolio for his circumstances is to replace some of the bonds with the alts like reinsurance/alt lending/managed futures/risk premia.

So it's probably now closer to a 30/15-20/50 portfolio.
by Theoretical
Wed Dec 20, 2017 9:37 am
Forum: Investing - Theory, News & General
Topic: AQR: The Illusion of Active Fixed Income Diversification
Replies: 4
Views: 769

Re: AQR: The Illusion of Active Fixed Income Diversification

I think you're on the right track, but one thing the article wasn't always the clearest on is that it's not investment grade corporates that the article says are providing the bulk of the outperformance, but rather a permanent, strategic tilt to junk or bond strategies or securities that perform lik...
by Theoretical
Wed Dec 20, 2017 2:10 am
Forum: Investing - Theory, News & General
Topic: AQR: The Illusion of Active Fixed Income Diversification
Replies: 4
Views: 769

AQR: The Illusion of Active Fixed Income Diversification

https://www.aqr.com/library/aqr-publications/alternative-thinking-4q-2017-the-illusion-of-active-fixed-income-diversification I saw this article earlier today, and thought it would be of interest. Feel free to ignore the last half of the conclusion paragraph that's their sales pitch for their own s...
by Theoretical
Wed Dec 20, 2017 1:22 am
Forum: Investing - Theory, News & General
Topic: Momentum: the unfortunate difference between theory and practice
Replies: 7
Views: 1297

Re: Momentum: the unfortunate difference between theory and practice

I'm so thankful that Research Affiliates is always around to "save" a factor from its demise. I really like their research, but man, they sure as hell like to self promote how smart and awesome they are. I think they have "saved" 4 factors in the last year... :oops: Yeah, I rather like their Fundam...
by Theoretical
Sun Dec 17, 2017 5:59 pm
Forum: Investing - Theory, News & General
Topic: Best 401k Employer Match Structure
Replies: 115
Views: 9528

Re: Best 401k Employer Match Structure

aarsmith54 wrote:
Sun Dec 17, 2017 1:20 pm
My company funds my 401k to the IRS maximum $55k without requiring any contributions from me. I am also fully vested immediately. This is in lieu of a higher salary (I make less than $100k).
Now that's a winner! Wow!
by Theoretical
Sun Dec 17, 2017 4:00 pm
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 198
Views: 26608

Re: My Favorite Alternative Funds

Alternative Risk Premia Fund (QRPIX) - Invest long and short across four different asset groups: Stocks & Industries, Equity Indices, Fixed Income and Currencies based on six investment styles: Value, Momentum, Carry, Defensive, Trend and Volatility . Style Premia Alternative Fund (QSPIX) - Invest ...
by Theoretical
Sun Dec 17, 2017 11:05 am
Forum: Investing - Theory, News & General
Topic: Best 401k Employer Match Structure
Replies: 115
Views: 9528

Re: Best 401k Employer Match Structure

My company has a pricey 401k but a very generous policy:

100% of first 4 percent and 50% of the next 2% match, fully vested.
by Theoretical
Thu Dec 14, 2017 5:26 pm
Forum: Investing - Theory, News & General
Topic: How Much To Tilt To Small Value?
Replies: 227
Views: 33385

Re: How Much To Tilt To Small Value?

I'm bumping my own thread, but the following point of view isn't heard as much as it should be, so I thought that I should write this post. https://www.investingdaily.com/10884/buy-small-cap-stocks-before-they-grow-up Jeremy Grantham: "Value investing has always had a hidden but serious risk — the ...
by Theoretical
Sun Dec 10, 2017 9:09 pm
Forum: Investing - Theory, News & General
Topic: BAM List of "Preferred" Muni Issuers
Replies: 1
Views: 283

Re: BAM List of "Preferred" Muni Issuers

I know the following were definitely on the naughty list: Illinois Massachusetts Kentucky Maryland New Jersey Connecticut Puerto Rico Alaska Hawaii There are some others. It lined up pretty well with this study: https://www.mercatus.org/statefiscalrankings . The states that rock for fiscal health ar...
by Theoretical
Fri Dec 08, 2017 2:09 am
Forum: Investing - Theory, News & General
Topic: Call the top! - Bitcoin
Replies: 182
Views: 18199

Re: Call the top! - Bitcoin

$75,350
by Theoretical
Fri Dec 08, 2017 12:17 am
Forum: Investing - Theory, News & General
Topic: AQR/Asness - You Can Have Your Momentum Factor and Eat it Too
Replies: 21
Views: 1845

Re: AQR/Asness - You Can Have Your Momentum Factor and Eat it Too

QSPIX has higher loadings on all the juicy "drivers of return" (i.e. factors) except for size, yet over it's life has a 7.65% CAGR vs 15%-16% for the other funds which load on alpha. So if QSPIX is pure factor investing, what is explaining the returns? You're missing the factor loading it does NOT ...
by Theoretical
Thu Dec 07, 2017 3:32 pm
Forum: Investing - Theory, News & General
Topic: Unsolicited advice - 32 yo w/ 80% bonds, fixed income fund
Replies: 36
Views: 3243

Re: Unsolicited advice - 32 yo w/ 80% bonds, fixed income fund

20/80 is really extreme, but there could be a lot of reasons for that allocation: 1. Extreme career volatility or high risk of disability, especially if family medical history makes him uninsurable. 2. Serious family medical history (or need to save a large amount to care for aging parents) 3. Tryin...
by Theoretical
Thu Dec 07, 2017 11:00 am
Forum: Investing - Theory, News & General
Topic: When Bitcoin blows-up
Replies: 55
Views: 4649

Re: When Bitcoin blows-up

The biggest commonality here will be a liquidity crunch, so Japanese and American government bonds will be the best assets, based simply on th amount of debt out there. But the wrinkle here will be if Bitcoin gets significant amounts of real assets linked to it to cause an inflationary spiral when i...
by Theoretical
Thu Dec 07, 2017 8:37 am
Forum: Investing - Theory, News & General
Topic: My Favorite Alternative Funds
Replies: 198
Views: 26608

Re: My Favorite Alternative Funds

https://am.jpmorgan.com/us/en/asset-management/gim/adv/products/d/jpmorgan-managed-futures-strategy-etf-etf-shares-46641q829##Documents http://www.etf.com/sections/daily-etf-watch/jpmorgan-launching-managed-futures-etf Here's a really interesting new ETF. It's a managed futures AND Carry ETF with a...
by Theoretical
Wed Dec 06, 2017 1:27 am
Forum: Investing - Help with Personal Investments
Topic: Factoring in value as a strategy
Replies: 10
Views: 1045

Re: Factoring in value as a strategy

As a heavy tilter (all Value with lots of small), My personal opinion is that tilting to size, value, or other factors is something to do only when you don't have to ask if you should. That is intended as a seriously helpful remark and not as a put-down. The actual data once surveyed on this forum i...
by Theoretical
Tue Dec 05, 2017 2:52 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 156
Views: 17502

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

As Grap tries to point out, it is a total disservice to discuss factor funds on the basis of "performance". e.g. with value, I *want* the one that has underperformed because HML is negative over the trailing 11 years. I agree with grap, fwiw, but I don't see my post as being in contradiction with t...
by Theoretical
Mon Dec 04, 2017 12:42 pm
Forum: Investing - Theory, News & General
Topic: Fama - Embrace passive management already
Replies: 16
Views: 2598

Re: Fama - Embrace passive management already

Please explain to me how DFA can do "patient trading" without doing any "timing." This is about being a provider of liquidity. If one is concerned about tracking error and slavishly following an index, trades can be forced into a market when liquidity is lacking, increasing market impact costs. Thi...
by Theoretical
Sat Dec 02, 2017 10:00 pm
Forum: Investing - Theory, News & General
Topic: Fama - Embrace passive management already
Replies: 16
Views: 2598

Re: Fama - Embrace passive management already

What he's talking about is saying factor X is expensive so we won't buy it (or as much) or saying Y is cheap so we'll buy it/more of it). It's the difference between a consistent factor load and the variable level load of a RAFI fund.
by Theoretical
Sat Dec 02, 2017 9:14 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Finding The Source Of Value
Replies: 19
Views: 2296

Re: Larry Swedroe: Finding The Source Of Value

With the Vanguard funds, it's a design flaw that causes this much blendiness because value-growth is a 50-50 split that's compounded by the extremely wide rebalance bands whereby 50% of a stock that was value but is now growth remains in the index awhile longer. So it means you've got about 75% of e...
by Theoretical
Fri Dec 01, 2017 11:50 pm
Forum: Investing - Theory, News & General
Topic: Funds creeping into non tax efficient accounts
Replies: 6
Views: 765

Re: Funds creeping into non tax efficient accounts

Ok so FSITX = Total Bond Index and FSTVX is Total Stock.

A few questions:

1. What tax bracket are you in? Does your state have an income tax?
2. How comfortable are you with municipal bonds or straight treasuries?
3. Are you comfortable with ETFs?
by Theoretical
Fri Dec 01, 2017 11:43 pm
Forum: Investing - Theory, News & General
Topic: Bonds Are Riskier Than People Think
Replies: 142
Views: 14064

Re: Bonds Are Riskier Than People Think

I think one distinction here is the difference between a bank CD (non-negotiable with a discretionary early withdrawal and penalty) vs a brokered CD (fully negotiable but instead of the penalty you get skewered by the bond spread - which can be your reward when buying odd lots in the secondary marke...
by Theoretical
Fri Dec 01, 2017 11:41 am
Forum: Investing - Theory, News & General
Topic: Larry Swedroe: Finding The Source Of Value
Replies: 19
Views: 2296

Re: Larry Swedroe: Finding The Source Of Value

It's always been a head-scratcher for me why the "go-go" growth stocks are actually less risky. Those ones aren't, but we're dealing in an era of a lot of extreme-high valued growth stocks that speculative. Yes, I count Amazon in this. Moderately growth stocks are extremely good and stable companie...
by Theoretical
Fri Dec 01, 2017 1:22 am
Forum: Investing - Theory, News & General
Topic: Ok reasons for a 37 year old to have a 60/40 mix?
Replies: 61
Views: 9217

Re: Ok reasons for a 37 year old to have a 60/40 mix?

1. Heavy value tilting (especially Small Value) is another good reason on the portfolio side. 2. Known likely high expenses beyond normal college/retirement - serious family medical history or having to chip in for elderly family. 3. Volatile personal situations (extended family drama). The list can...
by Theoretical
Tue Nov 28, 2017 3:51 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 156
Views: 17502

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

From the prospecti: • Vanguard U.S. Liquidity Factor ETF invests primarily in U.S. common stocks with the potential to generate higher returns relative to the broad U.S. equity market by investing in stocks with lower measures of trading liquidity as determined by the advisor. The portfolio will inc...
by Theoretical
Tue Nov 28, 2017 2:21 pm
Forum: Investing - Theory, News & General
Topic: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?
Replies: 156
Views: 17502

Re: Vanguard to launch US 'smart beta' ETFs - Will this board burn down?

Unfortunately, for us factor nerds investing in these funds will simply come down to factor exposure versus cost. IMO, it takes at least a couple of years before one can reliably identify the factor loadings of a new fund. Wake me up after three years of results. No doubt these funds won't be said ...
by Theoretical
Mon Nov 27, 2017 1:58 am
Forum: Investing - Theory, News & General
Topic: Have TIPS truly been tested yet?
Replies: 48
Views: 4724

Re: Have TIPS truly been tested yet?

Something to consider is from Bill Bernstein's Deep Risk, where he talks about German bund holders in the Weimar hyperinflation. Fiat nominal bonds got totally wiped out. The partially gold backed bonds something like a quarter of the value owed in the end. So not everything but a lot more than noth...
by Theoretical
Sat Nov 25, 2017 9:15 am
Forum: Investing - Theory, News & General
Topic: Vanguard Equivalents in new TDA commission free list
Replies: 11
Views: 1567

Re: Vanguard Equivalents in new TDA commission free list

Indeed, DLS is a pretty reliable fund, and it's basically tracked DFA's International Small Value fund from the former's inception.
by Theoretical
Thu Nov 23, 2017 8:21 pm
Forum: Investing - Theory, News & General
Topic: Thoughts on why 50/50 DXKLX / VTI seems to perform so well
Replies: 4
Views: 917

Re: Thoughts on why 50/50 DXKLX / VTI seems to perform so well

I think you'd get even better results using 2 and 5 year treasury futures at 3x and 2x leverage (simply don't fully collateralize), as a risk parity strategy, but it could sure punish you too.
by Theoretical
Thu Nov 23, 2017 1:09 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5638

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

Short answer: it's a follow up to a Board analysis of the Vanguard Quantitative Group: https://www.bogleheads.org/forum/viewtopic.php?t=206890 Investment factors considered: All stocks are ranked according to five characteristics: High quality - healthy balance sheets, steady cash flow Effective use...
by Theoretical
Wed Nov 22, 2017 12:16 pm
Forum: Investing - Theory, News & General
Topic: Vanguard Equivalents in new TDA commission free list
Replies: 11
Views: 1567

Re: Vanguard Equivalents in new TDA commission free list

For replacing VSS, that would be correct, though you shouldn't hold either in taxable due to capital gains distributions. On the other hand, you shouldn't worry about the expense ratio directly, as both funds have such extensive securities lending revenues that they routinely run negative expense ra...
by Theoretical
Tue Nov 21, 2017 9:27 pm
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5638

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

This is one of the advantages of the Vanguard Market Neutral fund. It's even more tax efficient than TSM or IJS. It's also levered far less and plays its QVM approach in the small caps.
by Theoretical
Tue Nov 21, 2017 8:50 am
Forum: Investing - Theory, News & General
Topic: Morningstar - AQR: The Vanguard of Alternative Investing?
Replies: 58
Views: 5638

Re: Morningstar - AQR: The Vanguard of Alternative Investing?

As a point of contrast, here's Vanguard's Market Neutral fund: Since Inception (10/31/2017) Pretax Return VMNFX 0.68 -0.59 -1.66 -4.11 1.06 1.43 3.28 0.78 1.39 2.73 Tax-adjusted Return * VMNFX 0.68 -0.59 -1.66 -4.11 0.90 1.37 3.23 0.41 1.02 2.15 % Rank in Category 22 73 74 84 69 36 13 57 64 — Tax Co...
by Theoretical
Sun Nov 19, 2017 10:25 pm
Forum: Investing - Theory, News & General
Topic: Is investing with Vanguard a tragedy of the commons?
Replies: 41
Views: 5152

Re: Is investing with Vanguard a tragedy of the commons?

It's mostly a concern because voting power is collectivized in a way distinct from owning shares of Coke or Nestle. As a fund shareholder, you have the right to vote for management, but the same groups of people are in charge of voting huge amounts of shares monolithically. For example, it'd be very...