Paul Merriman is my guest on this "Bogleheads on Investing" podcast

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Jags4186
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Jags4186 » Sun Feb 02, 2020 1:39 pm

nedsaid wrote:
Sun Feb 02, 2020 12:28 pm
Elysium wrote:
Sun Feb 02, 2020 8:40 am
smectym wrote:
Sun Feb 02, 2020 2:31 am
I probably have Paul Merriman confused with some other person: he’s not the guy who has generated endless investment spam articles on Marketwatch and other venues for lo these many decades past? If so I would’ve thought he was one of the sources of “noise” that it is an article of faith on this forum that we should all “tune out.”

But as I say, probably my mistake
You are not mistaken. As I said in earlier comments, the marketing may be sleazy but it is a technique proven to work with masses. Offer some magic formula for making excess returns and you'll get enough followers. As evidenced by the supporters on this thread.
Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.

I used to really enjoy Bogleheads but it is becoming as dull as watching tumbleweeds tumble or watching paint dry. I have better things to do with my time. Whether you liked Larry or not, he added a lot of life to the forum and I enjoyed the spirited debates. The forum is no longer enjoyable and like the old soldier in General McArthur's speech, I will just fade away.

I have repeatedly warned what would happen and my warnings have gone unheeded. I plan to spend a whole lot less time here in the future. I might be gone someday for good, probably sooner than later. Good luck with the forum. Something needs to be fixed and it isn't getting fixed.
100% agree. So many folks on here who contribute next to nothing yet want to shout down folks who try to add to the conversation. You can disagree with someone and not insult them.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by anil686 » Sun Feb 02, 2020 2:12 pm

Jags4186 wrote:
Sun Feb 02, 2020 1:39 pm
nedsaid wrote:
Sun Feb 02, 2020 12:28 pm
Elysium wrote:
Sun Feb 02, 2020 8:40 am
smectym wrote:
Sun Feb 02, 2020 2:31 am
I probably have Paul Merriman confused with some other person: he’s not the guy who has generated endless investment spam articles on Marketwatch and other venues for lo these many decades past? If so I would’ve thought he was one of the sources of “noise” that it is an article of faith on this forum that we should all “tune out.”

But as I say, probably my mistake
You are not mistaken. As I said in earlier comments, the marketing may be sleazy but it is a technique proven to work with masses. Offer some magic formula for making excess returns and you'll get enough followers. As evidenced by the supporters on this thread.
Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.

I used to really enjoy Bogleheads but it is becoming as dull as watching tumbleweeds tumble or watching paint dry. I have better things to do with my time. Whether you liked Larry or not, he added a lot of life to the forum and I enjoyed the spirited debates. The forum is no longer enjoyable and like the old soldier in General McArthur's speech, I will just fade away.

I have repeatedly warned what would happen and my warnings have gone unheeded. I plan to spend a whole lot less time here in the future. I might be gone someday for good, probably sooner than later. Good luck with the forum. Something needs to be fixed and it isn't getting fixed.
100% agree. So many folks on here who contribute next to nothing yet want to shout down folks who try to add to the conversation. You can disagree with someone and not insult them.
+2....

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Taylor Larimore
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Taylor Larimore » Sun Feb 02, 2020 2:19 pm

nedsaid wrote: Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.
nedsaid:

Larry Swedroe advocates factor small-cap value stocks and Paul Merriman also advocates small-cap value stocks plus more complex portfolios. It should be expected that anyone who comes on the Bogleheads Forum (whose headline is "Investing Advice Inspired by John Bogle") will be challenged -- it is similar to a Ford salesman who tries selling Fords in a Mercedes showroom.

I welcome discussions with non-Bogleheads. I encouraged Larry to begin posting on this forum and I favorably reviewed TEN of Larry's books in my Investment Gems. I admire Larry and Paul but I disagree with parts of their investing advice -- especially when it is the exact opposite of Jack Bogle's investment advice.

Bogleheads encourage discussions with non-bogleheads. However, many of us feel obligated to show why we think Jack Bogle's advice is usually superior. Most Bogleheads would be much better-off had they adopted Jack Bogle's Words of Wisdom rather than trying to beat the market with small-cap factor funds which are now the worst performing Morningstar asset class.

I agree with you that there is no excuse for "character assassination." Bogleheads can click the exclamation button at the top of every post if they feel a post contains "character assassination." The offending post will be quickly removed. This is our Forum Policy:
This is a moderated forum. We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones. Discussions are about issues, not people. If you disagree with an idea, go ahead and marshal all your forces against it. But do not confuse ideas with the person posting them. At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable. If you feel that someone has attacked you or otherwise violated the policies of this forum, do not respond in kind. Instead, please click the report button on the offending post. This is the quickest method to notify the site moderators.
Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk. -- Selecting funds that will significantly exceed market returns, a search in which hope springs eternal and in which past performance has proven of virtually no predictive value, is a loser’s game. -- By and large I do not approve of factor funds."
Last edited by Taylor Larimore on Sun Feb 02, 2020 2:23 pm, edited 1 time in total.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by goingup » Sun Feb 02, 2020 2:21 pm

What a great interview! Rick did a fabulous job at drawing out Paul's story and investing style. Rick also put in contrast the standard Bogleheads buy and hold style vs how Paul Merriman uses market timing.

Rick demonstrated how you can disagree with someone without being disagreeable. (It's called respect.)

Rick ended the interview by saying that Paul had tremendous respect from the Bogleheads and the investing community for providing information, though not everyone agrees with him on everything. "Oh I know they don't!", Paul responded. :D

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by willthrill81 » Sun Feb 02, 2020 2:57 pm

nedsaid wrote:
Sun Feb 02, 2020 12:28 pm
Elysium wrote:
Sun Feb 02, 2020 8:40 am
smectym wrote:
Sun Feb 02, 2020 2:31 am
I probably have Paul Merriman confused with some other person: he’s not the guy who has generated endless investment spam articles on Marketwatch and other venues for lo these many decades past? If so I would’ve thought he was one of the sources of “noise” that it is an article of faith on this forum that we should all “tune out.”

But as I say, probably my mistake
You are not mistaken. As I said in earlier comments, the marketing may be sleazy but it is a technique proven to work with masses. Offer some magic formula for making excess returns and you'll get enough followers. As evidenced by the supporters on this thread.
Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.

I used to really enjoy Bogleheads but it is becoming as dull as watching tumbleweeds tumble or watching paint dry. I have better things to do with my time. Whether you liked Larry or not, he added a lot of life to the forum and I enjoyed the spirited debates. The forum is no longer enjoyable and like the old soldier in General McArthur's speech, I will just fade away.

I have repeatedly warned what would happen and my warnings have gone unheeded. I plan to spend a whole lot less time here in the future. I might be gone someday for good, probably sooner than later. Good luck with the forum. Something needs to be fixed and it isn't getting fixed.
Sadly, I entirely agree. Anyone who suggests anything other than the 3-fund portfolio (which isn't even part of the BH philosophy) is subject to attack by certain people on the forum, some of them unfortunately being prominent forum members. This is despite the fact that Bogle himself did not exclusively hold such a portfolio. Some of his investments certainly had a value tilt.

While I can certainly understand your fading away from the forum, I hope that you will reconsider. I have always enjoyed your posts and insights, and you have been a great contributor.

And for the record, Paul Merriman is one of the good guys in the personal investing space.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by abuss368 » Sun Feb 02, 2020 6:51 pm

Jack Bogle was a total market investor. Balanced Index fund. Wellington. Total Bond.

Where is the “value” tilt Bogleheads?
Last edited by abuss368 on Sun Feb 02, 2020 7:13 pm, edited 1 time in total.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Rick Ferri » Sun Feb 02, 2020 6:55 pm

Jack also invested in his son’s quant fund, so let’s not be too critical of friends who are factor investors.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by One Ping » Sun Feb 02, 2020 6:59 pm

abuss368 wrote:
Sun Feb 02, 2020 6:51 pm
Jack Bogle was a total market investor. Balanced Index fund. Wellington. Total Bond.

Where is the “value” tilt Bogleheads?

Taylor are you aware of this?
Here's the 2016 thead: viewtopic.php?t=199786#p3058020

Here's the quote:
Here is an excerpt from the Bogle article:

"What may surprise some of you is that not all of Jack's portfolio is indexed. About 24% is invested in actively managed funds. "I own roughly 6% in Vanguard Explorer (VEXRX) (with its low costs and multiple managers, sort of an index fund cousin) and the equity portions of three 'legacy' funds that I just can't bear to sell ( Vanguard Wellington (VWENX), Vanguard Wellesley Income (VWIAX), and Vanguard Windsor (VWNEX)). More importantly, these funds are broadly diversified largely with a value orientation, which is deliberate on my part."
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by abuss368 » Sun Feb 02, 2020 7:08 pm

Rick Ferri wrote:
Sun Feb 02, 2020 6:55 pm
Jack also invested in his son’s quant fund, so let’s not be too critical of friends who are factor investors.

Rick Ferri
I forgot about that!

I think Mr. Bogle noted that earlier in his career active funds only were available. Index funds were not yet started. To sell after many years would have result in a large tax bill.
Last edited by abuss368 on Sun Feb 02, 2020 7:22 pm, edited 1 time in total.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by willthrill81 » Sun Feb 02, 2020 7:12 pm

abuss368 wrote:
Sun Feb 02, 2020 6:51 pm
Jack Bogle was a total market investor. Balanced Index fund. Wellington. Total Bond.

Where is the “value” tilt Bogleheads?

Taylor are you aware of this?
Wellington's equities are large-cap value according to Morningstar. It certainly isn't a total market fund.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by theorist » Sun Feb 02, 2020 7:18 pm

I listened to the podcast during my workout today, as I’ve listed to some of Paul Merriman’s own podcasts (including one studying the asset class returns over the past ten decades, with his definition of asset class — which differs slightly from Rick’s, apparently). I enjoy hearing what he has to say! It was a well done interview.

I have a question: while I’m not a timer and don’t plan to become one, I was intrigued by his assertion that he has a system that allows him to reasonably time with a 70/30 portfolio, in such a way that it matches the statistical performance of a 50/50 buy and hold in some respects but has (he feels, I guess) a more defensive nature in case of a big drawdown. For that reason he was recommending it for older investors, who don’t have a long time to recover from drawdowns.

This must be subject to very easy statistical backtesting, so someone must have done studies on such things. Are there backtested examples of algorithms that take one out and into the market based on certain moving averages, and that perform reasonably well? I hadn’t heard about any, but it seems like an obvious idea that must have been quantitatively explored.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by rascott » Sun Feb 02, 2020 7:23 pm

abuss368 wrote:
Sun Feb 02, 2020 6:51 pm
Jack Bogle was a total market investor. Balanced Index fund. Wellington. Total Bond.

Where is the “value” tilt Bogleheads?

Wellington is an actively managed, value titled fund!

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Nate79 » Sun Feb 02, 2020 7:24 pm

Excellent podcast. One of your better ones.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by stlutz » Sun Feb 02, 2020 7:56 pm

willthrill81 wrote:
Sun Feb 02, 2020 2:57 pm
nedsaid wrote:
Sun Feb 02, 2020 12:28 pm

Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.

I used to really enjoy Bogleheads but it is becoming as dull as watching tumbleweeds tumble or watching paint dry. I have better things to do with my time. Whether you liked Larry or not, he added a lot of life to the forum and I enjoyed the spirited debates. The forum is no longer enjoyable and like the old soldier in General McArthur's speech, I will just fade away.

I have repeatedly warned what would happen and my warnings have gone unheeded. I plan to spend a whole lot less time here in the future. I might be gone someday for good, probably sooner than later. Good luck with the forum. Something needs to be fixed and it isn't getting fixed.
Sadly, I entirely agree. Anyone who suggests anything other than the 3-fund portfolio (which isn't even part of the BH philosophy) is subject to attack by certain people on the forum, some of them unfortunately being prominent forum members. This is despite the fact that Bogle himself did not exclusively hold such a portfolio. Some of his investments certainly had a value tilt.

While I can certainly understand your fading away from the forum, I hope that you will reconsider. I have always enjoyed your posts and insights, and you have been a great contributor.

And for the record, Paul Merriman is one of the good guys in the personal investing space.
So I'm taking a look at the theory board right now and I see ongoing discussions about SCV, whether negative-real-yield bonds should be included in one's portfolio, dividends vs. stock buybacks, ESG investing, the 4% rule, leveraged investing, commodities, and overweighting frontier markets. That's just on page one. (Looks like a market-timing thread is missing from page 1, however).

Sure every thread has multiple posts arguing that one should just buy, hold, and rebalance a combination of VTI, VXUS, and BND, but isn't that the default to which any of these is compared to? And that's not just on Bogleheads. In my 401K, the default option is the target fund that corresponds to the date I reach age 65. That's determined by my company and plan administrator, not bogleheads.org. The question for me in managing that is whether I can do better with my own choices than with the default. And it's a good question.

The discussions that are going on in the threads righit now are definitely less heated that the numerous ones that were Larry Swedroe driven, and so in that sense they may be less entertaining. The discussion tracks are different, but still highly useful. I for one have found it interesting to hear different arguments in favor of SCV, commodities, lower withdrawal rates etc. than Swedroe made.

Finally, everyone is well aware that there have been, are, and always will be posters who are very down on anybody making money professionally in finance. I've been reading and posting on this board for a dozen years and there is nothing new or unsual in that regard.

I'm about to start listening to Rick's podcast now since I'm not going to waste my time watching a barbaric sport that accomplishes nothing positive beyond driving up everyone's cable TV bills. (How's that for a negative attack? :P :wink: )

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Picksburgh » Sun Feb 02, 2020 8:06 pm

Haven’t listened to the podcast yet but holy smokes. I always think of this forum as being different than most places on the internet because of civil discussion. But the toxicity in this thread reminds me it’s mainly the moderators who keep the lid on this place.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by stlutz » Sun Feb 02, 2020 9:07 pm

Excellent podcast Rick! And thanks to Paul M. for taking the time. That was the most interesting & enjoyable one thus far for me. :sharebeer

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by nedsaid » Sun Feb 02, 2020 11:15 pm

Taylor Larimore wrote:
Sun Feb 02, 2020 2:19 pm
nedsaid wrote: Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.
nedsaid:

Larry Swedroe advocates factor small-cap value stocks and Paul Merriman also advocates small-cap value stocks plus more complex portfolios. It should be expected that anyone who comes on the Bogleheads Forum (whose headline is "Investing Advice Inspired by John Bogle") will be challenged -- it is similar to a Ford salesman who tries selling Fords in a Mercedes showroom.

I welcome discussions with non-Bogleheads. I encouraged Larry to begin posting on this forum and I favorably reviewed TEN of Larry's books in my Investment Gems. I admire Larry and Paul but I disagree with parts of their investing advice -- especially when it is the exact opposite of Jack Bogle's investment advice.

Bogleheads encourage discussions with non-bogleheads. However, many of us feel obligated to show why we think Jack Bogle's advice is usually superior. Most Bogleheads would be much better-off had they adopted Jack Bogle's Words of Wisdom rather than trying to beat the market with small-cap factor funds which are now the worst performing Morningstar asset class.

I agree with you that there is no excuse for "character assassination." Bogleheads can click the exclamation button at the top of every post if they feel a post contains "character assassination." The offending post will be quickly removed. This is our Forum Policy:
This is a moderated forum. We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones. Discussions are about issues, not people. If you disagree with an idea, go ahead and marshal all your forces against it. But do not confuse ideas with the person posting them. At all times we must conduct ourselves in a respectful manner to other posters. Attacks on individuals, insults, name calling, trolling, baiting or other attempts to sow dissension are not acceptable. If you feel that someone has attacked you or otherwise violated the policies of this forum, do not respond in kind. Instead, please click the report button on the offending post. This is the quickest method to notify the site moderators.
Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk. -- Selecting funds that will significantly exceed market returns, a search in which hope springs eternal and in which past performance has proven of virtually no predictive value, is a loser’s game. -- By and large I do not approve of factor funds."
Taylor, spirited and yet polite discussion is what makes a forum. I have not been happy because of the endless attacks on Larry and now on Paul. Whatever flaws Larry and Paul might have, they are among the good guys in the investment business. I have never seen a person with Larry's stature in the investment business take so much time to interact with average investors and answer questions. Paul Merriman is another who has been very unselfish with his time. Folks have no idea of what we have lost here. There is a problem with the forum and no solution in sight and I have first gently and later not so gently brought up issues. It is at the point where folks will just have to discover certain things for themselves. I cannot cause people to see what they don't want to see. It is particularly disheartening when I point things out and just get the double down. So good luck and best wishes.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by andromeda2k12 » Mon Feb 03, 2020 12:14 am

guyinlaw wrote:
Sun Feb 02, 2020 1:15 am
Here is the comparison of 4 fund portfolio (LCB, LCV, SCB, SCV) that Paul recommends and compared to TSM (very close to SP500 or LCB)

From 1972 it 4 fund portfolio has outperformed TSM by 1.51%. You can see the performance with actual funds and representative indexes.. There are many SC and SCV funds much cheaper than DFA now..

Image
[url]https://paulmerriman.com/90-years-of-ev ... r-returns/[/url
The 4 fund portfolio above and his suggested 10 fund portfolio is better than 90% of the bad investing advice out there (not saying its better than market weighted) it seems pretty reasonable and mild in comparison to a lot of other ideas. It will likely perform close to market cap weighted over the long run with a chance of slight outperformance.

What’s so bad about that advice? We don’t need a holier than thou competition, I think he sparks interesting dialogue

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by spdoublebass » Mon Feb 03, 2020 12:15 am

Great podcast Rick!!!
All of them have been great to be honest, but I have been looking forward to this one ever since you announced Paul Merriman as the guest. While I don’t tilt to SCV, I’ve always enjoyed Paul’s podcasts as well.

How anyone could walk away from listening to this interview and have a negative thought is mind blowing to me.

One reason I don’t tilt is because I’m too easily swayed. I learned that behavioral trait about myself from listening to Merriman in particular. I hear the sound of his voice and I start thinking maybe I should tilt (joking). But then I go back and forth and end up doing nothing and just standing there. My point is interviews like these are very helpful to someone like myself because I feel I walk away realizing I really don’t know that much and I just focus on getting a few things right.

Rick it should be noted, you are successful in the financial world, books etc., but you are also a fantastic interviewer. I particularly like how you let people speak and then will chime in to break it down for the average person. (Although, in this last interview Paul, as always, speaks very well and clear to the general public)
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by xxd091 » Mon Feb 03, 2020 4:37 am

One of your great podcasts Rick. I don’t agree with Paul’s investing premises but no one person even John Bogle has possession of the “Holy Grail” and other investing points of view are constantly needed to be listened to and analysed
Your interview technique was superb-letting Paul develop his ideas with some polite cross questioning
People seem to like these long form discussions where everybody has a chance to develop and expand their ideas without the current “gotcha” behaviour of interviewers
That is how we should all learn-I learnt a lot even if it was only to confirm my Boglehead ideas
I am 73 -17 years retd and still learning-investing is so interesting!
Keep up the good work !
xxd09
PS off to listen to the John Bogle/Paul Merriman interview/podcast Paul mentioned!

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Rick Ferri » Mon Feb 03, 2020 5:42 am

I believe successful investors possess three attributes.

1) Have a sensible investment philosophy;
2) Develop a prudent strategy of low-cost funds based on your needs;
3) Stick to your plan with unyielding discipline.

Philosophy is universal in that we all believe in the same basic principals of investing. Some aspects may vary slightly, but those are minor. Paul has the same philosophy as I do, although he believes that older investors should use a moving average to get out of a market that has fallen whereas my view is that if an investor doesn't have the tolerance for risk to have less in stocks from the onset.

Strategy is personal in that it is the unique way each investor personalizes the philosophy. Every investor should customize their portfolio to their own needs and desires. Paul believes in more complexity that involves slice and dice and particularly small-cap value. I believe in the simplicity of a three-fund portfolio and Core-4 at times. :wink:

Discipline is the last attribute and the hardest. Staying the course allows the universal philosophy and your personal strategy to work. Paul and I both agree on this.

It takes all three traits to succeed long-term.

Where am I going with this?

We are all alike philosophically, but I guarantee no one on this forum has the exact same strategy as anyone else because we are all uniquely different. That's OK. The idea is to develop the right portfolio FOR YOU so that YOU will stay disciplined long enough to benefit from it.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Call_Me_Op » Mon Feb 03, 2020 8:21 am

I listened to the podcast yesterday. I am also a long-time follower of Paul Merriman's work. The podcast was good, but I think Rick got too hung-up on the issue of what is the definition of an "asset class." It doesn't really matter whether you call small-cap value a style, an asset category, an asset class, an asset subclass, or something else. Not worth spending any energy on arbitrary definitions.

Paul's main point - his only point really- is that based upon historical performance, using reconstructed "asset (sub) classes" back to the 1920's, a portfolio of stocks and bonds whose stock allocation was split evenly between "asset classes" has out-performed (on a risk-adjusted basis) a portfolio with the same stock allocation that uses total market index (or S&P 500) only. This is a fact - cannot be disputed. Paul does not say this will repeat, but his does believe (as I do) that over a long period of time this relationship is likely to hold.

By the way, in this context, 10 years is not a long period of time.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by saintsfan342000 » Mon Feb 03, 2020 10:18 am

Really great podcast, Rick. Enjoyed that very much.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by hoops777 » Mon Feb 03, 2020 12:16 pm

Call_Me_Op wrote:
Mon Feb 03, 2020 8:21 am
I listened to the podcast yesterday. I am also a long-time follower of Paul Merriman's work. The podcast was good, but I think Rick got too hung-up on the issue of what is the definition of an "asset class." It doesn't really matter whether you call small-cap value a style, an asset category, an asset class, an asset subclass, or something else. Not worth spending any energy on arbitrary definitions.

Paul's main point - his only point really- is that based upon historical performance, using reconstructed "asset (sub) classes" back to the 1920's, a portfolio of stocks and bonds whose stock allocation was split evenly between "asset classes" has out-performed (on a risk-adjusted basis) a portfolio with the same stock allocation that uses total market index (or S&P 500) only. This is a fact - cannot be disputed. Paul does not say this will repeat, but his does believe (as I do) that over a long period of time this relationship is likely to hold.

By the way, in this context, 10 years is not a long period of time.
This is a very important fact that the most ardent bogleheads seem to overlook. It is great to really believe in and stick to a sound investment philosophy, not so great to make it akin to a religious belief. Too much of that going on in general nowadays. Merriman has an excellent philosophy and if you do not agree with it great.No need to make excuses for Bogle because of his Wellington holdings or anything else he did that was not 100 pct pure.
Just take a step back once in awhile and realize there are millions of successful investors who have no idea what a boglehead is.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by DB2 » Mon Feb 03, 2020 12:49 pm

Rick Ferri wrote:
Mon Feb 03, 2020 5:42 am


We are all alike philosophically, but I guarantee no one on this forum has the exact same strategy as anyone else because we are all uniquely different. That's OK. The idea is to develop the right portfolio FOR YOU so that YOU will stay disciplined long enough to benefit from it.

Rick Ferri
Very well put.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by LadyGeek » Mon Feb 03, 2020 4:46 pm

I removed some off-topic comments and posts. As a reminder, see: General Etiquette
We expect this forum to be a place where people can feel comfortable asking questions and where debates and discussions are conducted in civil tones.

At all times we must conduct ourselves in a respectful manner to other posters.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by bck63 » Mon Feb 03, 2020 5:58 pm

Rick Ferri wrote:
Sat Feb 01, 2020 12:41 pm
Not everyone agrees with the strategies Paul advocates, but that's OK. One goal of the podcast is to offer different opinions from our guests, and that's why I asked Paul to be on the show.

Thanks for listening!

Rick
Thanks for the podcast Rick. I enjoy every one of them. I find Mr. Merriman's strategies a bit too complex for me, but I listen to his podcast regularly and I am always impressed with his sincerity and his generosity of spirit. I don't believe he's getting paid anymore for all of his work on behalf of investors. He's a real gentleman.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Bama12 » Mon Feb 03, 2020 11:00 pm

Rick Ferri wrote:
Sat Feb 01, 2020 9:53 am
I am pleased to present Paul Merriman as my guest on the Bogleheads on Investing podcast.

Episode 018: Paul Merriman, host Rick Ferri

Paul Merriman is a nationally recognized authority on mutual funds, index investing, asset allocation and both buy-and-hold and active management strategies. Now retired from Merriman, the Seattle-based investment advisory firm he founded in 1983, he is dedicated to educating investors, young and old, through weekly articles at Marketwatch.com, and via free eBooks, podcasts, articles, recommendations for mutual funds, ETFs, 401(k) plans and more, at his website.

Our discussion centers on Paul's investment strategies, including his popular "Ultimate Buy-and-Hold Portfolio" and newer "2 Funds for Life” strategy that he created with Chris Pedersen.

Enjoy!

Rick Ferri
Your Host

Thank You Rick!

Great podcast.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Call_Me_Op » Tue Feb 04, 2020 6:41 am

averagedude wrote:
Sat Feb 01, 2020 9:21 pm
I haven't listened to the podcast yet {tomorrow), but I have listened to all of Paul's podcasts. I truly believe he is a class act gentleman with a huge desire to educate young people on being successful in life. He does have strong convictions on small and value premiums, and his road map to reach Dublin is unique. I don't agree with everything he says, but I believe the criticisms of him are a bit unfair. As far as market timing, he personally dabbles in this, and he recommends strongly that people not try it. He will admit that he will get lower returns with this strategy, but he is comfortable in doing this to prevent large drawdowns. He will also admit that he doesn't do it himself because he doesn't want any of his emotions to interfere in this. I could be wrong, but I believe that he has respect for us bogleheads and the three fund portfolio, and I don't think he would talk any retired individual out of the three fund portfolio, if that was how they wanted to invest. Rick, the lineup of guests that you have had on your podcasts is sensational, Paul Merriman included. I'm sure Paul is delighted to be a guest on a podcast with the likes of John Bogle, Jonathon Clemens, Christine Benz, Bill Bernstein, and Larry Swedroe, just to name a few.
I agree with this post. I would not listen to Paul's podcast every week (he does a new one each week) if I did not believe that he is sincere. He likes the Bogleheads. He has no fundamental problem with a 3-fund portfolio, but he thinks it can be improved by tilting to small and value. It's really that simple.

Also, the discussion in the Bogleheads on Investing Podcast identified exactly why John Bogle preferred the simpler total-market index fund approach. Jack felt (rightly) that many people could not hold a portfolio with large negative tracking error with respect to the total market. Therefore, titling should only be done by folks who are patient and understand why they are doing it and what to expect when doing it.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by S_Track » Tue Feb 04, 2020 9:02 am

Call_Me_Op wrote:
Tue Feb 04, 2020 6:41 am
averagedude wrote:
Sat Feb 01, 2020 9:21 pm
I haven't listened to the podcast yet {tomorrow), but I have listened to all of Paul's podcasts. I truly believe he is a class act gentleman with a huge desire to educate young people on being successful in life. He does have strong convictions on small and value premiums, and his road map to reach Dublin is unique. I don't agree with everything he says, but I believe the criticisms of him are a bit unfair. As far as market timing, he personally dabbles in this, and he recommends strongly that people not try it. He will admit that he will get lower returns with this strategy, but he is comfortable in doing this to prevent large drawdowns. He will also admit that he doesn't do it himself because he doesn't want any of his emotions to interfere in this. I could be wrong, but I believe that he has respect for us bogleheads and the three fund portfolio, and I don't think he would talk any retired individual out of the three fund portfolio, if that was how they wanted to invest. Rick, the lineup of guests that you have had on your podcasts is sensational, Paul Merriman included. I'm sure Paul is delighted to be a guest on a podcast with the likes of John Bogle, Jonathon Clemens, Christine Benz, Bill Bernstein, and Larry Swedroe, just to name a few.
I agree with this post. I would not listen to Paul's podcast every week (he does a new one each week) if I did not believe that he is sincere. He likes the Bogleheads. He has no fundamental problem with a 3-fund portfolio, but he thinks it can be improved by tilting to small and value. It's really that simple.

Also, the discussion in the Bogleheads on Investing Podcast identified exactly why John Bogle preferred the simpler total-market index fund approach. Jack felt (rightly) that many people could not hold a portfolio with large negative tracking error with respect to the total market. Therefore, titling should only be done by folks who are patient and understand why they are doing it and what to expect when doing it.
Well stated, thanks for summing this up.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by sleepysurf » Wed Feb 12, 2020 6:39 pm

Paul Merriman's latest podcast (https://paulmerriman.com/podcasts/) specifically addresses the issues raised in this thread following his interview with Rick Ferri. I won't try to summarize it, but, rather, just refer Paul's supporters, and naysayers, to have a listen.

From my perspective, I think Paul's overall philosophy, and Jack Bogle's, have far more in common than not. As Rick Ferri alluded, the difference is mainly one of strategy. There are many roads to Dublin!
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by rockstar » Wed Feb 12, 2020 7:51 pm

It was interesting that he suggested more active timing in a retiree's portfolio.

I'm still trying to wrap my head around SCV in a portfolio. I'll have to listen to some of his podcasts to better understand his approach.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by willthrill81 » Wed Feb 12, 2020 8:19 pm

rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.
I don't know that he's ever actually suggested timing to anyone. He's repeatedly said that it's not for 99% of investors and only mentioned that he uses it with half of his own portfolio, but his son-in-law actually executes the strategy for him.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by abuss368 » Wed Feb 12, 2020 8:53 pm

rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.

I'm still trying to wrap my head around SCV in a portfolio. I'll have to listen to some of his podcasts to better understand his approach.
I would agree as I too do not understand the large allocation to Small Cap Value. I would also think that a retiree would value simplicity and not complexity. Less is better.
John C. Bogle - Two Fund Portfolio: Total Stock & Total Bond. "Simplicity is the master key to financial success." || Buy Total Stock until it hurts. Then find a way to buy even more!

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by One Ping » Wed Feb 12, 2020 9:05 pm

willthrill81 wrote:
Wed Feb 12, 2020 8:19 pm
rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.
I don't know that he's ever actually suggested timing to anyone. He's repeatedly said that it's not for 99% of investors and only mentioned that he uses it with half of his own portfolio, but his son-in-law actually executes the strategy for him.
willthrill81, you are right, Paul does not suggest/recommend timing for for everyone. However, the person who does his timing is the head of the research department at his former firm, where he has his portfolio, NOT his son-in-law. After he retired, his SON ran the company for a few years(?) but then he moved on too. Neither Paul, nor anyone in his family, has any role in the company today, although I do believe they continue with the same investment philosophy and fiduciary responsibility toward their clients.
"Re-verify our range to target ... one ping only."

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by rockstar » Wed Feb 12, 2020 9:08 pm

abuss368 wrote:
Wed Feb 12, 2020 8:53 pm
I would agree as I too do not understand the large allocation to Small Cap Value. I would also think that a retiree would value simplicity and not complexity. Less is better.
I don't understand enough to pull this trigger. My biggest worry about small cap would be corporate debt. I'm not sure if value controls for corporate debt levels.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Prokofiev » Wed Feb 12, 2020 9:12 pm

willthrill81 wrote:
Wed Feb 12, 2020 8:19 pm
rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.
I don't know that he's ever actually suggested timing to anyone. He's repeatedly said that it's not for 99% of investors and only mentioned that he uses it with half of his own portfolio, but his son-in-law actually executes the strategy for him.
For years, I received Emails from Merriman with his latest timing signal. As I recall there were 4 up-down arrows for 4 basic indicators. He suggested that it would lead to lower drawdown in bear markets and minimize volatility which in turn "may" lead to higher portfolio returns. I do give him credit for showing how his preferred portfolios could be constructed within various fund companies - including Vanguard. But talking to him and one of his advisors via telephone, they strongly pushed DFA funds and the extra factor exposure you could obtain. Their advisor fee and extra DFA ER would certainly be covered just by the higher expected returns of DFA. Or so they said.

I also remember being told TIPS were not recommended for any of their portfolios. Short-term bonds and equities would provide any needed inflation protection. About a year after this, I noticed they started recommending TIPS and TIPS funds for some of their clients. I guess they changed their minds.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by One Ping » Wed Feb 12, 2020 9:30 pm

Prokofiev wrote:
Wed Feb 12, 2020 9:12 pm
willthrill81 wrote:
Wed Feb 12, 2020 8:19 pm
rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.
I don't know that he's ever actually suggested timing to anyone. He's repeatedly said that it's not for 99% of investors and only mentioned that he uses it with half of his own portfolio, but his son-in-law actually executes the strategy for him.
For years, I received Emails from Merriman with his latest timing signal.
That doesn't mean he recommends it for you or anyone necessarily. If you were getting emails, it means you expressed an interest in receiving those signals. Paul provides many different approaches to investing. Timing, buy and hold, 2 funds, 10 funds, etc. The point is he is not dogmatic about any of them (ok, maybe SCV :happy ). He wants to help you to find what works for you and then use it. There are many roads to Dublin, he provides an atlas that includes several/many different routes to get there.
"Re-verify our range to target ... one ping only."

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by willthrill81 » Wed Feb 12, 2020 11:41 pm

One Ping wrote:
Wed Feb 12, 2020 9:05 pm
willthrill81 wrote:
Wed Feb 12, 2020 8:19 pm
rockstar wrote:
Wed Feb 12, 2020 7:51 pm
It was interesting that he suggested more active timing in a retiree's portfolio.
I don't know that he's ever actually suggested timing to anyone. He's repeatedly said that it's not for 99% of investors and only mentioned that he uses it with half of his own portfolio, but his son-in-law actually executes the strategy for him.
willthrill81, you are right, Paul does not suggest/recommend timing for for everyone. However, the person who does his timing is the head of the research department at his former firm, where he has his portfolio, NOT his son-in-law. After he retired, his SON ran the company for a few years(?) but then he moved on too. Neither Paul, nor anyone in his family, has any role in the company today, although I do believe they continue with the same investment philosophy and fiduciary responsibility toward their clients.
Thanks for the clarification.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by BroIceCream » Wed Feb 12, 2020 11:51 pm

abuss368 wrote:
Wed Feb 12, 2020 8:53 pm
rockstar wrote:
Wed Feb 12, 2020 7:51 pm
I'm still trying to wrap my head around SCV in a portfolio. I'll have to listen to some of his podcasts to better understand his approach.
I would agree as I too do not understand the large allocation to Small Cap Value. I would also think that a retiree would value simplicity and not complexity.
Today's Merriman podcast referenced earlier does address the small cap value allocation, comparing it to the heavy tilt to large-growth which a TSM/SP500 fund . I recommend a listen.
I've been using his UBH strategy (for 7 years) and 2-funds in different accounts (2 years), and have been very pleased with the allocation. It is most definitely not a burden (I don't understand the negative focus at the 10 vs 3 or 4 as a pain point). I only rebalance UBH once a year, and it takes me <30 minutes total. I've felt the positive impact in recent years with the tilt with Emerging markets and Small cap, and the buffering during the downturns.

https://www.callan.com/wp-content/uploa ... -Table.pdf

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by sleepysurf » Thu Feb 13, 2020 5:42 pm

FYI, Paul also addressed these issues in his MarketWatch article today... https://www.marketwatch.com/story/the-l ... 2020-02-13

It's a nice and concise explanation.

BTW, Paul has previously stated that it's the MarketWatch editors, not him, who assign a "clickbaity" title to his articles there.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by columbia » Thu Feb 13, 2020 5:53 pm

sleepysurf wrote:
Thu Feb 13, 2020 5:42 pm
FYI, Paul also addressed these issues in his MarketWatch article today... https://www.marketwatch.com/story/the-l ... 2020-02-13

It's a nice and concise explanation.

BTW, Paul has previously stated that it's the MarketWatch editors, not him, who assign a "clickbaity" title to his articles there.
Yeah, writers don’t get to pen their own headlines - anywhere.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by CWRadio » Sun Feb 16, 2020 10:11 am

Is there one fund or ETF that covers all Stock Style (Large, Mid, Small, Value, Growth, blend) as Paul Merriman discussed in the podcast?
Thanks Paul

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by willthrill81 » Sun Feb 16, 2020 11:10 am

CWRadio wrote:
Sun Feb 16, 2020 10:11 am
Is there one fund or ETF that covers all Stock Style (Large, Mid, Small, Value, Growth, blend) as Paul Merriman discussed in the podcast?
Thanks Paul
No.

However, you might be able to implement his strategy with greater simplicity with Motif Investing.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

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A One Fund Portfolio

Post by Taylor Larimore » Sun Feb 16, 2020 11:53 am

CWRadio wrote:
Sun Feb 16, 2020 10:11 am
Is there one fund or ETF that covers all Stock Style (Large, Mid, Small, Value, Growth, blend) as Paul Merriman discussed in the podcast?
Thanks Paul
CWRadio:

Target Retirement Funds do a good job of covering most stock styles in one fund--especially if the target fund holds a total market index fund.

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "My preferred index fund happens to be the total stock market which includes large, medium, and small stocks."
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by valuables » Sun Feb 16, 2020 12:03 pm

I found this document from his website to be particularly helpful in trying to implement this strategy!
https://paulmerriman.com/wp-content/upl ... Update.pdf

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by Dinosaur Dad » Sun Feb 16, 2020 7:14 pm

nedsaid wrote:
Sun Feb 02, 2020 12:28 pm
Elysium wrote:
Sun Feb 02, 2020 8:40 am
smectym wrote:
Sun Feb 02, 2020 2:31 am
I probably have Paul Merriman confused with some other person: he’s not the guy who has generated endless investment spam articles on Marketwatch and other venues for lo these many decades past? If so I would’ve thought he was one of the sources of “noise” that it is an article of faith on this forum that we should all “tune out.”

But as I say, probably my mistake
You are not mistaken. As I said in earlier comments, the marketing may be sleazy but it is a technique proven to work with masses. Offer some magic formula for making excess returns and you'll get enough followers. As evidenced by the supporters on this thread.
Larry Swedroe is gone for good. Now Paul Merriman is getting the same treatment and disrespect here and it was a big mistake for him to agree to the podcast. Rick Ferri has done a great job with these podcasts but the endless trolling is undoing the good Rick is trying to do. This has gone beyond disagreement, it is character assassination and I am shocked the forum is allowing it.

I used to really enjoy Bogleheads but it is becoming as dull as watching tumbleweeds tumble or watching paint dry. I have better things to do with my time. Whether you liked Larry or not, he added a lot of life to the forum and I enjoyed the spirited debates. The forum is no longer enjoyable and like the old soldier in General McArthur's speech, I will just fade away.

I have repeatedly warned what would happen and my warnings have gone unheeded. I plan to spend a whole lot less time here in the future. I might be gone someday for good, probably sooner than later. Good luck with the forum. Something needs to be fixed and it isn't getting fixed.
Nedsaid: sincerely hope you reconsider. Yes there are some ill-considered posts here that take the wrong tone and should be challenged. But without the vast majority of thoughtful and sincere perspectives provided by people like you, those of us with less knowledge/experience would lose out. Many are in your debt. I believe that like many others, I filter the noise and seek out the truth here.
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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by JAZZISCOOL » Sun Feb 16, 2020 7:54 pm

Market timing, even by the "smartest" portfolio and hedge fund managers, is extremely hard to do on a consistent basis. For example, the Wall Street Journal reported that the huge Pure Alpha (global macro) fund managed by Ray Dalio (Bridgewater) was essentially flat in 2019 (+30 basis points.) This in a year when the 60/40 portfolio was far superior. However, P.A. has had other huge up years per the article.

E.g. Vanguard Balanced Index Fund
VBINX +21.67% in 2019

"For seven of the past 11 years, clients in Bridgewater’s flagship Pure Alpha fund would have been better off investing in a low-fee Vanguard fund that tracks bonds and stocks, according to data reviewed by The Wall Street Journal."

WSJ 1/31/20

This is just one data point (n=1). YMMV.

Merriman even states in the podcast that only ~2% of people can learn to become a “successful market timer”. He said he mostly used “trend following” in the 80’s at his firm. If you know you’re going to lose money on 50% of the trend-following trades, as he states, that’s not something I’m interested in.

I also agree with Rick’s point on Paul’s defining small value, small growth, etc. as “asset classes”. That is not correct terminology. Further, I think Paul’s buy and hold strategy is overly complicated with 10 funds for most BH’s. But Merriman also discussed a 2-fund B & H option he developed.

Further, if you are using trend-following in a taxable portfolio, it is generally going to increase turnover which has tax implications.

That said, I found the Merriman podcast interesting.

Thanks Rick!
Last edited by JAZZISCOOL on Sun Feb 16, 2020 9:28 pm, edited 1 time in total.

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by DoTheMath » Sun Feb 16, 2020 8:18 pm

Rick Ferri wrote:
Sat Feb 01, 2020 12:41 pm
Not everyone agrees with the strategies Paul advocates, but that's OK. One goal of the podcast is to offer different opinions from our guests, and that's why I asked Paul to be on the show.

Thanks for listening!

Rick
Rick,

I look forward to listening to the podcast. I find it interesting and useful to listen to thought-provoking points of view which don't necessarily agree with my current thinking. Thanks for taking the time to do the interview!
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir

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Re: Paul Merriman is my guest on this "Bogleheads on Investing" podcast

Post by NDAMERICA » Sun Feb 16, 2020 8:31 pm

Paul is a very nice man but I was not convinced either. A seasoned prop advocating for "market timing" - I thought I was in an alternative universe. Rick was kind to hear him out and not destroy him - I know he could have.

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