What is cheap now to buy? - Ideas for the risk averse BH

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hdas
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What is cheap now to buy? - Ideas for the risk averse BH

Post by hdas » Mon Jan 13, 2020 3:19 pm

In modern portfolio theory, risk aversion is measured as the additional expected reward an investor requires to accept additional risk.
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Correlations:
Image

Question: How would you augment this list?

Cheers :greedy
Last edited by hdas on Mon Jan 13, 2020 4:10 pm, edited 2 times in total.
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

Cautionary Tale
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by Cautionary Tale » Mon Jan 13, 2020 3:36 pm

VWO. Vanguard Emerging Markets. Still relatively cheap.

rascott
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by rascott » Mon Jan 13, 2020 3:38 pm

If one was a real contrarian (buy the dogs) they'd probably go emerging markets and US energy.

I can't.... so just bought another slug of small cap value this morning at open

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305pelusa
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by 305pelusa » Mon Jan 13, 2020 3:43 pm

Commodities are still in contango. That’s hardly “cheap” in my book.

asif408
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by asif408 » Mon Jan 13, 2020 3:55 pm

rascott wrote:
Mon Jan 13, 2020 3:38 pm
If one was a real contrarian (buy the dogs) they'd probably go emerging markets and US energy.
These are my largest holdings (I own energy producers, not the commodities/futures). I also own a general foreign developed stock fund and a gold and silver miners fund. I think only 10% of so of my portfolio is in US stocks, and most everything on the foreign developed and EM side is tilted to value.

We'll see how I do. One thing I am sure of is that I'll do different than the 80% US 20% Int'l crowd.

rascott
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by rascott » Mon Jan 13, 2020 3:58 pm

asif408 wrote:
Mon Jan 13, 2020 3:55 pm
rascott wrote:
Mon Jan 13, 2020 3:38 pm
If one was a real contrarian (buy the dogs) they'd probably go emerging markets and US energy.
These are my largest holdings (I own energy producers, not the commodities/futures). I also own a general foreign developed stock fund and a gold and silver miners fund. I think only 10% of so of my portfolio is in US stocks, and most everything on the foreign developed and EM side is tilted to value.

We'll see how I do. One thing I am sure of is that I'll do different than the 80% US 20% Int'l crowd.

If mean reversion is a thing..... you will stand to crush US equities over the coming decade.

Independent George
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by Independent George » Mon Jan 13, 2020 4:00 pm

hdas wrote:
Mon Jan 13, 2020 3:19 pm
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Question: How would you augment this list?

Cheers :greedy
Just to clarify - you propose this for a risk averse person?

asif408
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by asif408 » Mon Jan 13, 2020 4:01 pm

rascott wrote:
Mon Jan 13, 2020 3:58 pm
asif408 wrote:
Mon Jan 13, 2020 3:55 pm
rascott wrote:
Mon Jan 13, 2020 3:38 pm
If one was a real contrarian (buy the dogs) they'd probably go emerging markets and US energy.
These are my largest holdings (I own energy producers, not the commodities/futures). I also own a general foreign developed stock fund and a gold and silver miners fund. I think only 10% of so of my portfolio is in US stocks, and most everything on the foreign developed and EM side is tilted to value.

We'll see how I do. One thing I am sure of is that I'll do different than the 80% US 20% Int'l crowd.

If mean reversion is a thing..... you will stand to crush US equities over the coming decade.
And if not I'll come back to eat crow.

KlangFool
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by KlangFool » Mon Jan 13, 2020 4:04 pm

OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool

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hdas
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by hdas » Mon Jan 13, 2020 4:18 pm

Independent George wrote:
Mon Jan 13, 2020 4:00 pm
hdas wrote:
Mon Jan 13, 2020 3:19 pm
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Question: How would you augment this list?

Cheers :greedy
Just to clarify - you propose this for a risk averse person?
Yes. You could, for instance mix this with some short term bonds. It does seem that the one requirement is to not mind tracking error. Cheers :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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hdas
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by hdas » Mon Jan 13, 2020 4:19 pm

KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
I don't "know". I'm a speculator. I like the odds here. Size your bets well. Cheers :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

quantAndHold
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by quantAndHold » Mon Jan 13, 2020 5:06 pm

Independent George wrote:
Mon Jan 13, 2020 4:00 pm
hdas wrote:
Mon Jan 13, 2020 3:19 pm
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Question: How would you augment this list?

Cheers :greedy
Just to clarify - you propose this for a risk averse person?
I'm also not suggesting that OP's portfolio is low risk. But one mistake I think gets made a lot, especially on Bogleheads, is confusing tracking error with risk. And the corollary, confusing lack of tracking error with lack of risk. There is nothing particularly low risk about VTI.

Back to the original post, I don't think you need to break things out into subsectors this small to find value.

VWO (emerging markets) is my largest (but not only) holding right now. It's both still pretty cheap, and has strong positive momentum. That said, it's been cheap for awhile, so YMMV.

lazyday
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by lazyday » Mon Jan 13, 2020 5:38 pm

It’s probably better to buy what’s cheap than to buy what’s done best in recent years.

If you buy what’s up most over the intermediate term, then you are generally reducing your diversification and increasing risk. You also may be selling low to buy high, and more likely to underperform the market.

If you have skill in evaluating what’s cheap, then buying it should increase your expected return, provided you can hold through years of disappointment. But you are probably reducing diversification and increasing risk. Your risk adjusted returns might suffer.

I believe that most people are better off just owning their risky assets in market weight, such as with Total World Stock. Or close to market weight as part of Target Retirement.

That said, I do make speculative bets based on valuations. I like non-US value stocks.

columbia
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by columbia » Mon Jan 13, 2020 5:48 pm

Cautionary Tale wrote:
Mon Jan 13, 2020 3:36 pm
VWO. Vanguard Emerging Markets. Still relatively cheap.
The poster indicated “risk averse.” ;)

rascott
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by rascott » Mon Jan 13, 2020 7:25 pm

lazyday wrote:
Mon Jan 13, 2020 5:38 pm
It’s probably better to buy what’s cheap than to buy what’s done best in recent years.

If you buy what’s up most over the intermediate term, then you are generally reducing your diversification and increasing risk. You also may be selling low to buy high, and more likely to underperform the market.

If you have skill in evaluating what’s cheap, then buying it should increase your expected return, provided you can hold through years of disappointment. But you are probably reducing diversification and increasing risk. Your risk adjusted returns might suffer.

I believe that most people are better off just owning their risky assets in market weight, such as with Total World Stock. Or close to market weight as part of Target Retirement.

That said, I do make speculative bets based on valuations. I like non-US value stocks.

What fund are you using?

I have a small bit of EFV (intl large cap value) ..... that's been the biggest dog in my portfolio, by a decent bit. Bunch of large familiar names. Thing just does nothing.... thinking the energy portions have been an anchor on it.

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Forester
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by Forester » Mon Jan 13, 2020 7:47 pm

Gold miners look cheap relative to the metal

Individual stocks
$ASPS (hedge against higher rates / housing bust)
$DLAR.L (hedge against inflation)

TonyDAntonio
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by TonyDAntonio » Mon Jan 13, 2020 7:51 pm

KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.

MarkBarb
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by MarkBarb » Mon Jan 13, 2020 7:53 pm

Based on what I can see, nothing appears to be cheap. They are all trading at market value.

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JoMoney
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by JoMoney » Mon Jan 13, 2020 8:22 pm

Cash is cheap. 30 year fixed-rate mortgages at 3.5%
Unfortunately, housing prices are not :(
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

KlangFool
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by KlangFool » Mon Jan 13, 2020 8:29 pm

TonyDAntonio wrote:
Mon Jan 13, 2020 7:51 pm
KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.
I have a fixed AA. I buy according to my AA. It is not dependent on whether I think and knows something is cheap or expensive.

KlangFool

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MEA
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by MEA » Mon Jan 13, 2020 8:34 pm

TonyDAntonio wrote:
Mon Jan 13, 2020 7:51 pm
KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.

“The definition of genius is taking the complex and making it simple.”


― Albert Einstein
“Stay the course is the most important piece of advice I can give you.”-Bogle

delrinson
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by delrinson » Mon Jan 13, 2020 8:42 pm

Berkshire Hathaway still very reasonably priced. Trading at 1.4 book at end of Q3. Since actual book is certainly higher (maybe 175 a B share?), I think of it as trading at about 1.3 actual book. Not fire sale prices, but reasonably priced, and certainly more downside protection than the market as a whole.

lazyday
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by lazyday » Mon Jan 13, 2020 9:04 pm

rascott wrote:
Mon Jan 13, 2020 7:25 pm
What fund are you using?
Fundamental indexes FNDE and FNDF.

Also Korea FLKR. Low price multiples, low ER, and helps a bit to balance sector weights.

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UpsetRaptor
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by UpsetRaptor » Mon Jan 13, 2020 10:51 pm

What are some cheap stock sectors? Newspapers, coal industry, bookstores.

Cheap countries? Venezuela, Ukraine, Zimbabwe.

Obviously “cheap” doesn’t necessarily revert to some supposed mean, nor is it automatically correlated to being “risk-averse”.

venkman
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by venkman » Tue Jan 14, 2020 12:05 am

Sears Holding Corp (SHLDQ) is only 19 cents per share. Can't get much cheaper than that! :D

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by danielc » Tue Jan 14, 2020 4:40 am

hdas wrote:
Mon Jan 13, 2020 3:19 pm
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)
How do you figure that LEMB, BCI, and MJ are cheap? I'm not even sure how I would even begin to guess the fair market value of those things. LEMB has a high yield, but so do junk bonds. I have a fair bit of emerging market debt in hard currency (EMB) but that's because I think it's a risky asset with low correlation with equities; it's not because I think they are cheap right now.

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DartThrower
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by DartThrower » Tue Jan 14, 2020 6:49 am

I thought Japan was getting cheap in 1995. The fact that I didn't act on impulses like that is a major reason I was able to retire early last year. If you want my opinion, diversify broadly then stay the course.
A Boglehead can stay the course longer than the market can stay irrational.

TonyDAntonio
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by TonyDAntonio » Tue Jan 14, 2020 6:52 am

KlangFool wrote:
Mon Jan 13, 2020 8:29 pm
TonyDAntonio wrote:
Mon Jan 13, 2020 7:51 pm
KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.
I have a fixed AA. I buy according to my AA. It is not dependent on whether I think and knows something is cheap or expensive.

KlangFool
You're buying what is cheapest (has grown the least) in your AA. Every time you have money to invest you could easily just randomly pick an asset to buy. That would be investing without any care (knowledge) of what to buy.

KlangFool
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by KlangFool » Tue Jan 14, 2020 8:30 am

TonyDAntonio wrote:
Tue Jan 14, 2020 6:52 am
KlangFool wrote:
Mon Jan 13, 2020 8:29 pm
TonyDAntonio wrote:
Mon Jan 13, 2020 7:51 pm
KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.
I have a fixed AA. I buy according to my AA. It is not dependent on whether I think and knows something is cheap or expensive.

KlangFool
You're buying what is cheapest (has grown the least) in your AA. Every time you have money to invest you could easily just randomly pick an asset to buy. That would be investing without any care (knowledge) of what to buy.
I don't pretend to know which asset class is the cheapest as per the market at the moment. That is the key point.

I don't even have to listen to any news.

KlangFool

TonyDAntonio
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by TonyDAntonio » Tue Jan 14, 2020 8:54 am

KlangFool wrote:
Tue Jan 14, 2020 8:30 am
TonyDAntonio wrote:
Tue Jan 14, 2020 6:52 am
KlangFool wrote:
Mon Jan 13, 2020 8:29 pm
TonyDAntonio wrote:
Mon Jan 13, 2020 7:51 pm
KlangFool wrote:
Mon Jan 13, 2020 4:04 pm
OP,

I know that I know nothing.

So, I have an AA with fixed allocation to US stock Index, International Stock Index, Total bond market index and so on. I know what to buy because if the allocation is low, I buy that. It is very simple and does not require me to know anything.

Please explain to me why you think you know what is cheap now.

KlangFool
You said you don't know what to buy and you know what to buy. Which is it? If you truly don't know, throw a dart.
I have a fixed AA. I buy according to my AA. It is not dependent on whether I think and knows something is cheap or expensive.

KlangFool
You're buying what is cheapest (has grown the least) in your AA. Every time you have money to invest you could easily just randomly pick an asset to buy. That would be investing without any care (knowledge) of what to buy.
I don't pretend to know which asset class is the cheapest as per the market at the moment. That is the key point.

I don't even have to listen to any news.

KlangFool
I do the same. I'm just being nitpicky for no reason at all. Now that I'm in retirement I just sell the asset class that has the most money allocated to it. Implicitly, though, by doing this I'm saying that I believe that asset class is overvalued with respect to all the others I own, ie. I know something. In reality, I don't really know. But we've got to take some rational action, don't we. Have a good day.

aristotelian
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by aristotelian » Tue Jan 14, 2020 8:59 am

Value investing is not necessarily risk averse. If you believe S&P is expensive, then inverse S&P ETF is cheap. Yet I would not say it is risk averse.

Cannabis and energy are down from their peak but they are still risky. They could go down further. I suspect many in the cannabis sector will go to zero.

3funder
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by 3funder » Tue Jan 14, 2020 9:09 am

My 403(b) is split evenly among US stocks, international stocks, and US bonds. No need to worry about what is cheap or expensive. That said, I think international stocks are reasonably valued.

DB2
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by DB2 » Tue Jan 14, 2020 9:15 am

What's cheap? Gold, gold miners/royalities, and EM are all in for a good year this year and the 2020s in my opinion.

KlangFool
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by KlangFool » Tue Jan 14, 2020 9:24 am

TonyDAntonio wrote:
Tue Jan 14, 2020 8:54 am

I do the same. I'm just being nitpicky for no reason at all. Now that I'm in retirement I just sell the asset class that has the most money allocated to it. Implicitly, though, by doing this I'm saying that I believe that asset class is overvalued with respect to all the others I own, ie. I know something. In reality, I don't really know. But we've got to take some rational action, don't we. Have a good day.
TonyDAntonio,

You are retired. You can afford to be nitpicky. Congratulation on surviving the Telecom world! I am in the Telecom world too. Trying to retire in a few years too.

KlangFool

TonyDAntonio
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by TonyDAntonio » Tue Jan 14, 2020 12:40 pm

KlangFool wrote:
Tue Jan 14, 2020 9:24 am
TonyDAntonio wrote:
Tue Jan 14, 2020 8:54 am

I do the same. I'm just being nitpicky for no reason at all. Now that I'm in retirement I just sell the asset class that has the most money allocated to it. Implicitly, though, by doing this I'm saying that I believe that asset class is overvalued with respect to all the others I own, ie. I know something. In reality, I don't really know. But we've got to take some rational action, don't we. Have a good day.
TonyDAntonio,

You are retired. You can afford to be nitpicky. Congratulation on surviving the Telecom world! I am in the Telecom world too. Trying to retire in a few years too.

KlangFool
Good luck to you. It sounds like you are just about there. I read your posts. You are a good thinker. My 30 years in Telecom were great. I got lucky. The world's changed though so keep saving as much as you can.

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watchnerd
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by watchnerd » Tue Jan 14, 2020 1:00 pm

Cautionary Tale wrote:
Mon Jan 13, 2020 3:36 pm
VWO. Vanguard Emerging Markets. Still relatively cheap.
+1

And international developed look "cheapish" compared to US (although not necessarily by historical measures).
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

an_asker
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by an_asker » Tue Jan 14, 2020 1:12 pm

hdas wrote:
Mon Jan 13, 2020 3:19 pm
In modern portfolio theory, risk aversion is measured as the additional expected reward an investor requires to accept additional risk.
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Correlations:
Image

Question: How would you augment this list?

Cheers :greedy
The nerd in me asks - why does the table show '-' as the "self-correlation"? Should it not be 1.00?

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jhfenton
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by jhfenton » Tue Jan 14, 2020 1:16 pm

an_asker wrote:
Tue Jan 14, 2020 1:12 pm
The nerd in me asks - why does the table show '-' as the "self-correlation"? Should it not be 1.00?
It's standard to list it as '-' in tables like this. VTI is not perfectly correlated with VTI. VTI is VTI.

Schlabba
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by Schlabba » Tue Jan 14, 2020 1:35 pm

If you want "cheap stuff" why don't you simply buy a value based index?
IWDA: MSCI World | EMIM: MSCI Emerging Markets | AGGH: Global Aggregate Bond Hedged to €

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by whodidntante » Tue Jan 14, 2020 1:47 pm

One can make a good bet and still lose. Or a bad bet and still win. I'll continue investing in throwing my money away on my 50% ex-USA, small and value tilted, EM tilted portfolio in the hopes it will be worth something someday. :beer

JEC
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by JEC » Tue Jan 14, 2020 2:00 pm

DartThrower wrote:
Tue Jan 14, 2020 6:49 am
I thought Japan was getting cheap in 1995. The fact that I didn't act on impulses like that is a major reason I was able to retire early last year. If you want my opinion, diversify broadly then stay the course.
+1

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ReformedSpender
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by ReformedSpender » Tue Jan 14, 2020 2:10 pm

Cheap? Essentially anything international, albeit, not risk adverse...

emerging markets
total international stock index
international value
international small cap
etc.

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by whodidntante » Tue Jan 14, 2020 2:23 pm

venkman wrote:
Tue Jan 14, 2020 12:05 am
Sears Holding Corp (SHLDQ) is only 19 cents per share. Can't get much cheaper than that! :D
Better watch those market orders. On the right news, you might end up buying the whole company. How embarrassing would that be? :happy

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by watchnerd » Tue Jan 14, 2020 3:08 pm

whodidntante wrote:
Tue Jan 14, 2020 2:23 pm
venkman wrote:
Tue Jan 14, 2020 12:05 am
Sears Holding Corp (SHLDQ) is only 19 cents per share. Can't get much cheaper than that! :D
Better watch those market orders. On the right news, you might end up buying the whole company. How embarrassing would that be? :happy
I actually got a warning from Vanguard on an ETF position I was selling today, warning me I should put in a limit order because it was a sizable fraction of the trading volume.

I'd never seen it do that before on a market order.
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by drr1099 » Tue Jan 14, 2020 3:24 pm

I am also risk averse, so years ago, I decided to start investing in "safe" companies (household names) that are near 52 week lows (way undervalued) and pay a good dividend. That's how I put together this gem of a portfolio:
Ford, GE, IBM, Tupperware, ..., you get the idea.
Sometimes, things are cheap for a reason. I am so glad I got out of that business with only modest losses. Now I am using a three fund portfolio and sleep better at night.

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watchnerd
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by watchnerd » Tue Jan 14, 2020 3:35 pm

drr1099 wrote:
Tue Jan 14, 2020 3:24 pm
I am also risk averse, so years ago, I decided to start investing in "safe" companies (household names) that are near 52 week lows (way undervalued) and pay a good dividend. That's how I put together this gem of a portfolio:
Ford, GE, IBM, Tupperware, ..., you get the idea.
Sometimes, things are cheap for a reason. I am so glad I got out of that business with only modest losses. Now I am using a three fund portfolio and sleep better at night.
Tupperware?

I haven't heard that name in years.
70% Global Market Weight Equities | 15% Long Treasuries 15% short TIPS & cash || RSU + ESPP

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by ge1 » Tue Jan 14, 2020 4:33 pm

hdas wrote:
Mon Jan 13, 2020 3:19 pm
In modern portfolio theory, risk aversion is measured as the additional expected reward an investor requires to accept additional risk.
Some folks don't feel comfortable buying what is working right now (growth, megacap, tech), here are some alternatives. We can evaluate going forward how an equal weighted portfolio of these works out vs VTI.

1. European Banks (EUFN)
2. US Energy Stocks (VDE)
3. Emerging Market Debt Local Currencie (LEMB)
4. Commodities (BCI)
5. Cannabis (MJ)

Correlations:
Image

Question: How would you augment this list?

Cheers :greedy
EUFN has been cheap for a long time and for good reason. Whereas US banks are printing money and have demonstrated impressive earnings growth in recent years (JPM just made over 8bn in a quarter), the European Banks are in never ending restructuring mode with zero growth. The annual net income for the big Swiss banks for example has been essentially unchanged for 20 years now, probably the same for UK banks. Let's not even talk about German banks... So you buy EUFN for the dividend and hope it doesn't get cut.

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by bikechuck » Tue Jan 14, 2020 4:42 pm

I used to own Vanguard Emerging Markets but then I realized that it was a tilt because I also own Vanguard's International fund (which includes Emerging Markets). I decided I did not need or want that tilt so now it is just Vanguard Total International as a component of a simpler portfolio.

I am in the Klang Fool mode of establishing an allocation and staying with it.

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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by watchnerd » Tue Jan 14, 2020 5:03 pm

bikechuck wrote:
Tue Jan 14, 2020 4:42 pm
I used to own Vanguard Emerging Markets but then I realized that it was a tilt because I also own Vanguard's International fund (which includes Emerging Markets). I decided I did not need or want that tilt so now it is just Vanguard Total International as a component of a simpler portfolio.

I am in the Klang Fool mode of establishing an allocation and staying with it.
Yes, if you want to own VWO separately, you have to pair it with VEA to avoid overlap.

What VWO gives you that International Fund doesn't is China A Shares.
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hdas
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Re: What is cheap now to buy? - Ideas for the risk averse BH

Post by hdas » Wed Jan 15, 2020 11:21 am

MJ up ~10% in the last 3 days.......

Cheers :greedy
"whenever there is a randomized way of doing something, then there is a nonrandomized way that delivers better performance but requires more thought" ET Jaynes

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