Search found 33919 matches

by nisiprius
Tue Nov 20, 2007 2:48 pm
Forum: Investing - Theory, News & General
Topic: I-bonds now have a better yield than 5yr TIPS
Replies: 25
Views: 5891

Another nice thing about I bonds is that those interest rates will stay the same until, what is it, May, so you've got plenty of time to think about it and see what other bonds do...
by nisiprius
Tue Nov 20, 2007 12:31 pm
Forum: Investing - Theory, News & General
Topic: SD: How calculated? Comparing active/passive?
Replies: 22
Views: 2636

Re: SD: How calculated? Comparing active/passive?

Usually people compare Sharpe ratios which are similar to what you described but different. The numerator is "excess returns" (fund return - risk free return), and the denominator is stdev. Thanks. The Sharpe ratio is exactly the concept I was groping for. Recency bias? How can you be sur...
by nisiprius
Tue Nov 20, 2007 10:30 am
Forum: Investing - Theory, News & General
Topic: SD: How calculated? Comparing active/passive?
Replies: 22
Views: 2636

I would recommend calculating the standard deviation yourself rather than trying to determine how each fund company performed the caclulations. For instance, you could take annual returns for the last 10 years and use Excel to calculate an average return and a standard deviation. You can then graph...
by nisiprius
Tue Nov 20, 2007 9:31 am
Forum: Investing - Theory, News & General
Topic: Help with Savings Bond - Please Provide Info
Replies: 3
Views: 1148

Go for it! I think series I bonds would be a good choice, because even though they are not a "really good rate," they are not bad, either. If held for more than five years (to avoid a three-month's-interest penalty), if things go about as expected they should do about as well as bank CDs o...
by nisiprius
Tue Nov 20, 2007 9:13 am
Forum: Investing - Theory, News & General
Topic: SD: How calculated? Comparing active/passive?
Replies: 22
Views: 2636

If return of B / SD of B is higher than return of A / SD of A, one might consider switching from fund A to fund B, but one might also consider adjusting holdings by buying a larger amount of fund B (SD A / SD B), selling low-risk holdings to do so. Standard deviations and annual returns are not con...
by nisiprius
Tue Nov 20, 2007 6:16 am
Forum: Investing - Theory, News & General
Topic: SD: How calculated? Comparing active/passive?
Replies: 22
Views: 2636

SD: How calculated? Comparing active/passive?

1) How is the "standard deviation" as presented in fund summaries calculated? I'd assume it is the result of taking the annual total returns, including reinvested dividends, for (how many? ten?) years, and calculating the standard deviation e.g. the way a spreadsheet or statistics book wou...
by nisiprius
Mon Nov 19, 2007 7:15 pm
Forum: Personal Finance (Not Investing)
Topic: Warren Buffett on Estate Taxes
Replies: 79
Views: 16072

Re: Buffet on Estate Taxes

It is not up to the government, the doctors, or the health care system to make people responsible adults. From memory: Establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare , and secure the blessing of Liberty for ourselves and our posterity......
by nisiprius
Mon Nov 19, 2007 3:23 pm
Forum: Investing - Theory, News & General
Topic: What role to high yield bonds play?
Replies: 65
Views: 18259

nisiprius wrote: As a very basic investor, I don't quite understand why one would be shopping around for a class of bonds with higher risk and higher return than (say) the total bond market. There is a whole spectrum of risky assets from Treasury bonds to Emerging Market Stocks. Sure, but you can t...
by nisiprius
Mon Nov 19, 2007 3:01 pm
Forum: Personal Finance (Not Investing)
Topic: Warren Buffett on Estate Taxes
Replies: 79
Views: 16072

Re: Buffet on Estate Taxes

Income equality is rising but the lower middle class today live better than the lower middle class of any era in history. Not in recent history in the United States, it hasn't. Many factors of general economic well-being are indicating problems. For example, infant mortality is rising in the United...
by nisiprius
Sun Nov 18, 2007 8:39 pm
Forum: Investing - Theory, News & General
Topic: What role to high yield bonds play?
Replies: 65
Views: 18259

As a very basic investor, I don't quite understand why one would be shopping around for a class of bonds with higher risk and higher return than (say) the total bond market. If you want higher risk and higher return, what's wrong with stocks? What, exactly, does an allocation of X% of junk bonds do ...
by nisiprius
Sun Nov 18, 2007 8:34 pm
Forum: Investing - Theory, News & General
Topic: Gold is on a rampage
Replies: 161
Views: 41187

I don't think I'd bother with the guns and ammo unless you're pretty sure that you're at least as tough as the average tough guy. Isn't the point of guns and ammo to bridge the gap between you and the tough guy? You don't have to be tough to know how to use a gun. From my extensive expertise as a r...
by nisiprius
Sun Nov 18, 2007 5:43 pm
Forum: Investing - Help with Personal Investments
Topic: Are TIPS too expensive to buy now?
Replies: 38
Views: 7531

Should I wait and hope that TIPS real yields go up in the future making them more attractive or should I bite the bullet and jump in now? My approach would be to determine what real rate you need to meet your goals. If you can meet your goals with 1.8% real over the next 10-years then lock it in. P...
by nisiprius
Sun Nov 18, 2007 5:39 pm
Forum: Investing - Theory, News & General
Topic: Gold is on a rampage
Replies: 161
Views: 41187

I can not see the logic of an emergency food supply of more than a week. If you have a total collapse of the banking system, maybe a few months food would come in handy, but even then you would probably be better off with gold coins. When Y2K hits, you'll understand. How many people were bartering ...
by nisiprius
Sun Nov 18, 2007 10:57 am
Forum: Investing - Theory, News & General
Topic: You can find an expert to tell you anything you want to hear
Replies: 2
Views: 749

You can find an expert to tell you anything you want to hear

How about this one. "For amusement purposes only." Sharks, not minnows make stock killings Invest Like a Shark Small fish have little chance of making money in a sea of whales on Wall Street unless they learn how to swim and attack like sharks. That's the approach James DePorre advocates i...
by nisiprius
Sat Nov 17, 2007 7:31 pm
Forum: Personal Finance (Not Investing)
Topic: Windows Vista.....whaddaya think?
Replies: 105
Views: 26492

I think my husband has figured out by now, that I'd be much happier with a different OS rather than Vista. I do think that "you can recognize the pioneers by the arrows in their backs" applies here. If it's not personally important to you to be the first on the block to experience Aero Gl...
by nisiprius
Sat Nov 17, 2007 7:15 pm
Forum: Personal Finance (Not Investing)
Topic: Something to collect before it's collectible
Replies: 0
Views: 674

Something to collect before it's collectible

I want to give this my fellow man while I'm still able. A surefire million-dollar idea. No, really. I've come up an idea for a category of collectibles that nobody realizes are collectibles yet. Credit cards. Just think. They've got all the characteristics of a good collectible. 1) They're attractiv...
by nisiprius
Sat Nov 17, 2007 7:00 pm
Forum: Personal Finance (Not Investing)
Topic: Health insurer tied bonuses to dropping sick policyholders
Replies: 12
Views: 2266

OK, maybe it's unfair to pile on with my trivial issue, which I know pales in comparison to people with real complaints... [snip BCBS story] In about twenty years total off and on with Blue Cross Blue Shield, my final conclusion is that they're champs in my book. I say this although the number of s...
by nisiprius
Sat Nov 17, 2007 4:30 pm
Forum: Personal Finance (Not Investing)
Topic: Health insurer tied bonuses to dropping sick policyholders
Replies: 12
Views: 2266

But if all insurance companies avoid insuring people who are bad risks, the people who are bad risks will have no insurance, will get free care at the emergency room subsidized by cost shifting--in the end nobody saves any money, and the system is less efficient both in terms of costs and health ou...
by nisiprius
Sat Nov 17, 2007 2:23 pm
Forum: Investing - Theory, News & General
Topic: The American Economy
Replies: 53
Views: 12748

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had every...
by nisiprius
Sat Nov 17, 2007 2:07 pm
Forum: Personal Finance (Not Investing)
Topic: Windows Vista.....whaddaya think?
Replies: 105
Views: 26492

P. S. If you do go for Vista, at least make sure you get the version of Vista which actually has the stuff that Vista is supposed to have that is supposed to make Vista worth having. I can't keep track of all the flavors of Vista, but the one that is sold with low-end systems is condemned even by Mi...
by nisiprius
Sat Nov 17, 2007 1:58 pm
Forum: Personal Finance (Not Investing)
Topic: Windows Vista.....whaddaya think?
Replies: 105
Views: 26492

To order a Dell without Vista...

Tip: If you want to buy a Dell with XP instead of Vista, the trick is to visit the "small business" part of their website rather than the "home" part... or to call the corresponding phone numbers. You can mostly get the same machines, but it's much, much easier to get them with X...
by nisiprius
Sat Nov 17, 2007 1:43 pm
Forum: Investing - Theory, News & General
Topic: Gold is on a rampage
Replies: 161
Views: 41187

I have never understood the purchase of gold in current times. Gold is just a rock. It has very few practical uses. I, for one, consider computers & other electronics to be very practical. Although I can see how loud people on cell phones and pimple-faced teenagers with Playstation 3s might mak...
by nisiprius
Sat Nov 17, 2007 10:49 am
Forum: Investing - Theory, News & General
Topic: Who is going to pay for the S&D yachts?
Replies: 81
Views: 17644

And now for the really important question:

What exactly would you call this thingy?

Is that a yacht?

If not, what is it?

If so, whose is it?
by nisiprius
Fri Nov 16, 2007 4:17 pm
Forum: Investing - Theory, News & General
Topic: "Debunking 5 Myths About Investing"
Replies: 9
Views: 2978

Except... why do so many short, pithy, lay-oriented pieces like this mention "the risk of outliving your money" without mentioning the existence of single-premium immediate annuities? So often, it seems to be taken as a given that the solution space for retirement income consists entirely ...
by nisiprius
Fri Nov 16, 2007 2:49 pm
Forum: Investing - Theory, News & General
Topic: MSNBC - How Much To Save? *Flashy* Display 11/15/07
Replies: 6
Views: 2488

Not to criticize your posting of that Dinkytown calculator link, but I'm not very impressed by it. It, too, wants me to assume the entire burdenof predicting the future, assumes inflation won't boost my salary or my monthly contributions (or even that I might get real raises), and doesn't help me de...
by nisiprius
Fri Nov 16, 2007 2:45 pm
Forum: Investing - Theory, News & General
Topic: Fund of funds expense ratios? Do-it-yourself-mixing?
Replies: 3
Views: 959

Fund of funds expense ratios? Do-it-yourself-mixing?

This is doubtless a frequently asked question, but I did a bit of searching in the forum and the answer didn't leap out at me... feel free to show me a link and make me look silly... I've always assumed that the expense ratio for a "fund of funds" reflects only the management expenses for ...
by nisiprius
Fri Nov 16, 2007 11:47 am
Forum: Investing - Theory, News & General
Topic: Amsterdam House Prices almost back to 1736 Highs
Replies: 16
Views: 3943

I saw another reference to this and I forgot to mention with the neighborhood in question is they are measuring the value of the same 270+ year old houses. Paul What's the age of the water, sewerage, gas, electric, telephone, cable TV, and high-speed Internet connections? Or do those houses lack th...
by nisiprius
Fri Nov 16, 2007 7:15 am
Forum: Investing - Theory, News & General
Topic: Subsidized expense ratios: should I care, and if so, why?
Replies: 3
Views: 1013

Subsidized expense ratios: should I care, and if so, why?

For low-cost non-Vanguard funds, e.g. Fidelity's Total International Index, it's not uncommon to read that the expense ratio is "after reductions," and to read language such as Effective October 14, 2005, FMR has voluntarily agreed to reimburse Investor Class of Spartan International Index...
by nisiprius
Thu Nov 15, 2007 10:00 pm
Forum: Investing - Theory, News & General
Topic: GE redeeming enhanced cash fund at 96 cents on the dollar
Replies: 10
Views: 2371

The first sentence of the quote from the prospectus: "Although the Fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the Fund" appears verbatim in the Vanguard Prime Money Market prospectus. Must be a bit of SEC-mandated verb...
by nisiprius
Thu Nov 15, 2007 9:57 pm
Forum: Investing - Theory, News & General
Topic: Amsterdam House Prices almost back to 1736 Highs
Replies: 16
Views: 3943

But, but, but... that's not hedonically adjusted.
by nisiprius
Thu Nov 15, 2007 7:45 pm
Forum: Investing - Theory, News & General
Topic: Here's a new twist on foreclosures
Replies: 5
Views: 1614

The Glass-Steigel Act was repealed in 1995 and is beginning to look like a mistake. Considering financial blowups appear to show up every ten years or so it would make sense to bring it back. Sure. By 1995, most people with personal memories of the Great Depression were dead, and it was easier to p...
by nisiprius
Thu Nov 15, 2007 7:23 pm
Forum: Investing - Theory, News & General
Topic: GE redeeming enhanced cash fund at 96 cents on the dollar
Replies: 10
Views: 2371

I don't know what it is, either. For what it's worth, Bloomberg calls it a "bond fund" and says [quote heavily edited] A short-term bond fund run by General Electric Co.'s GE Asset Management returned money to investors at 96 cents on the dollar.... Enhanced cash funds usually offer higher...
by nisiprius
Thu Nov 15, 2007 7:16 pm
Forum: Investing - Theory, News & General
Topic: MSNBC - How Much To Save? *Flashy* Display 11/15/07
Replies: 6
Views: 2488

Yeah, that's like the silly worksheets they used to hand out fifteen years ago. We can figure your retirement income to the penny, just tell us how long you plan to live, what inflation will be for the next thirty years, and how you think the market will do for the next thirty years. Reminds me of t...
by nisiprius
Thu Nov 15, 2007 7:06 pm
Forum: Investing - Theory, News & General
Topic: Who is going to pay for the S&D yachts?
Replies: 81
Views: 17644

Here's what I got...

OK, here's how I did the math, answering the question I wanted to answer. I used the figures from 1926 to 2004 from Ibbotson's "Stocks, Bonds, Bills and Inflation" for total annual returns from "large company stocks," "small company stocks," and "long-term corporat...
by nisiprius
Thu Nov 15, 2007 3:38 pm
Forum: Investing - Theory, News & General
Topic: Examination of Risk Tolerance related to max-tolerable-loss
Replies: 25
Views: 5235

When I start asking myself this kind of question, it means that I'm uncomfortable with the amount of risk I've taken on and am looking for ways to avoid confronting myself with the reality of that risk. All the past really teaches us is that "if it happened, it was possible ." I don't thin...
by nisiprius
Thu Nov 15, 2007 11:52 am
Forum: Investing - Theory, News & General
Topic: Treasury Market Inflation Anxiety - Bloomberg
Replies: 15
Views: 2937

I don't understand why anyone would buy 3 or 6 month T-bills yieldsing 3.56% or less, when you could put your money in the Vanguard Treasury MMF yielding 4.03%. I am sure there is some reason I don't understand. Maybe someone can explain it to me. Just a guess but I think the difference is that VG ...
by nisiprius
Thu Nov 15, 2007 9:02 am
Forum: Investing - Theory, News & General
Topic: Here's a new twist on foreclosures
Replies: 5
Views: 1614

It's about time. I don't think banks should be permitted to own branches across state lines, and I don't think a bank should be allowed to own a mortgage unless someone at that bank has personally seen the house, at least through a car window while driving by. And should now more about the mortgagor...
by nisiprius
Thu Nov 15, 2007 8:50 am
Forum: Investing - Help with Personal Investments
Topic: Investing a very small life savings at retirement - bonds?
Replies: 7
Views: 1744

If he's thinking long-term, he might at least consider Series I savings bonds. There's a three-month's-worth-of-interest penalty if you redeem them within five years. Otherwise, they earn 1.2%-plus-CPI (currently = 4.68%). They're about as safe as anything can be, there's no market risk (they do not...
by nisiprius
Thu Nov 15, 2007 6:53 am
Forum: Investing - Theory, News & General
Topic: GE redeeming enhanced cash fund at 96 cents on the dollar
Replies: 10
Views: 2371

Gatorman, please change the topic title. The title of the article you reference is, quite plainly, "Mortgage Woes Damage a GE Bond Fund."
by nisiprius
Thu Nov 15, 2007 5:41 am
Forum: Investing - Help with Personal Investments
Topic: FTSE All-World ex US Index Fund (VFWIX) - Advice Please
Replies: 10
Views: 2957

As a matter of curiosity, why did you pick VFWIX rather than VGTSX? I'm embarrassed to say I bought some VFWIX by accident: I wanted a foreign stock index fund and didn't notice that Vanguard had two! After I realized that they did, I was baffled as to what the difference was. Yes, I see that they t...
by nisiprius
Wed Nov 14, 2007 4:08 pm
Forum: Investing - Theory, News & General
Topic: 14% for the S&P 500???
Replies: 12
Views: 3466

"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." Trebor They could both be. What's not possible is for both of them to think they're getting the better of the other in a deal and both be right. But it's per...
by nisiprius
Wed Nov 14, 2007 2:20 pm
Forum: Investing - Theory, News & General
Topic: 14% for the S&P 500???
Replies: 12
Views: 3466

Exercise for the original poster: before you take any action, first go look and see if you can't find some convincing articles, by people that sound as if they know what they are talking about, that say the S&P 500 will not neither earn anything like 14% over the next three years. After you've f...
by nisiprius
Wed Nov 14, 2007 11:40 am
Forum: Investing - Theory, News & General
Topic: When to pay mortgage?
Replies: 39
Views: 11232

Don't cut that grace period too fine...

By the way... I assume everyone is aware that most financial entities are moving to counting whether a payment is late based on when they say they've received it, rather than when it is postmarked... which is why the giant bank in the huge city mysteriously wants the payments mailed to a post office...
by nisiprius
Wed Nov 14, 2007 11:22 am
Forum: Investing - Theory, News & General
Topic: When to pay mortgage?
Replies: 39
Views: 11232

By the way...

...the last time I ever attempted to verify a bank's interest calculations, I discovered that when a bank pays you interest, a year is an actual full calendar year, but when you pay a bank interest, a year is 360 days. In other words the interest rate is 365/360 = 1.013 times as high as they say it ...
by nisiprius
Wed Nov 14, 2007 9:14 am
Forum: Investing - Theory, News & General
Topic: Who is going to pay for the S&D yachts?
Replies: 81
Views: 17644

Re: TSMers Slice & Dice

If you do not believe that small and value are riskier, than what do you have to lose to S&D? I haven't tried to run any numbers on this myself, but one question is how much do you really have to gain ? Let's assume one has an asset allocation of 50% total stock market and 50% total bond market...
by nisiprius
Wed Nov 14, 2007 6:09 am
Forum: Investing - Theory, News & General
Topic: Buying the dips: neither good nor bad, it seems to me
Replies: 71
Views: 15850

The martingale

For instance, United, I would really like to understand the Martingale process you were describing and if there is a way to use it instead of this brute-force method. Uh, the martingale is a well-known gambling system that is so simple that it's fairly easy to understand why it doesn't work. Here's...
by nisiprius
Tue Nov 13, 2007 2:21 pm
Forum: Investing - Theory, News & General
Topic: Buying the dips: neither good nor bad, it seems to me
Replies: 71
Views: 15850

It isn't accurate to have DCA at the end of the month be the normal strategy. If the money is available at any point during the month then you would invest it at the beginning. Which is why your "invest the first of the month" wins--investing earlier is better most of the time. BINGO! Tha...
by nisiprius
Tue Nov 13, 2007 2:02 pm
Forum: Investing - Theory, News & General
Topic: How do you know you are in a bubble?
Replies: 34
Views: 6894

All together now, in four-part harmony: I'm Forever Blowing Bubbles , John Kellette and Jaan Kenbrovin, 1918. I'm forever blowing bubbles, pretty bubbles in the air; They fly so high! Nearly reach the sky! Then like my dreams, they fade and die. Fortune's always hiding, I've looked everywhere; I'm f...
by nisiprius
Tue Nov 13, 2007 1:57 pm
Forum: Investing - Theory, News & General
Topic: How do FED interest rate changes affect US dollar values?
Replies: 10
Views: 2020

You should have a hard time understanding, since the average american (as well as our government) is in debt up to their eyeballs and would benefit greatly from the ability to pay off that debt with inflated dollars. Indeed. All monetary decisions have a political component. One of the things that ...
by nisiprius
Tue Nov 13, 2007 12:04 pm
Forum: Investing - Theory, News & General
Topic: Efficient Markets, MPT, and Bond AA
Replies: 15
Views: 3357

Re: Efficient Markets, MPT, and Bond AA

[extreme snippages]... basically the same... It's hard to go wrong substituting one type of safe bond for another... there isn't anything obvious....Can't hurt much... But again, it can't hurt much. Best post I've read in a while. I've decided that the default answer to most "what should I do&...