Is anyone tempted by value investing right now?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Beensabu wrote: Mon Sep 13, 2021 12:54 am
40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm
HanSolo wrote: Sun Sep 12, 2021 5:43 pm
40 Years' Gatherin's wrote: Sun Sep 12, 2021 4:15 pm
Triple digit golfer wrote: Sun Sep 12, 2021 3:35 pm

Is focusing on one country market timing?
Nope. VTSAX is all you need. I know you International Fetishists hate hearing it lol
Not owning bonds (and/or market timing them) is very UnBogle-like.
Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
If you sell all your bonds because interest rates are low, that's (attempted) market timing.

You don't have to admit it. It still is, though.
Well, not really. We can somewhat predict Bond performance based on the current interest rate, which is very low. So, if you invest in intermediate or long term bonds right now, you're basically guaranteed to get a paltry rate of return on that money. This is ok if you're very old or very rich and you're simply trying to preserve what you've got. But if you're young, say under 50, and still in the accumulating phase of building wealth, investing heavily in bonds makes little to no sense at this point in time. So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
User avatar
Beensabu
Posts: 1073
Joined: Sun Aug 14, 2016 3:22 pm

Re: Is anyone tempted by value investing right now?

Post by Beensabu »

40 Years' Gatherin's wrote: Mon Sep 13, 2021 4:08 pm So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Beensabu wrote: Mon Sep 13, 2021 7:48 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 4:08 pm So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
Triple digit golfer
Posts: 8313
Joined: Mon May 18, 2009 5:57 pm

Re: Is anyone tempted by value investing right now?

Post by Triple digit golfer »

40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm
Beensabu wrote: Mon Sep 13, 2021 7:48 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 4:08 pm So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Triple digit golfer wrote: Mon Sep 13, 2021 8:59 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm
Beensabu wrote: Mon Sep 13, 2021 7:48 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 4:08 pm So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
Absolutely not. I've decided I'm not touching bonds until I'm at least 55, maybe 60. Bonds preserve wealth, not build it. I'm in the wealth accumulation phase via VTSAX & FXAIX. I'm nobody special, just your average middle class Boglehead.
User avatar
Beensabu
Posts: 1073
Joined: Sun Aug 14, 2016 3:22 pm

Re: Is anyone tempted by value investing right now?

Post by Beensabu »

40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
Okay. If you don't think interest rates are "market conditions" and that "bonds are dead" is presently a popular sentiment based on current market conditions, then of course you do not think of it as market timing.
I've decided I'm not touching bonds until I'm at least 55, maybe 60.
Okay. Perhaps you have found your correct AA. As long as your AA takes into consideration the possibility of at least one drop of at least 50% in equities at some point in the next 15 to 20 years, with an unknown period of recovery. How would I know? I'm not you.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Beensabu wrote: Mon Sep 13, 2021 9:19 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
Okay. If you don't think interest rates are "market conditions" and that "bonds are dead" is presently a popular sentiment based on current market conditions, then of course you do not think of it as market timing.
I've decided I'm not touching bonds until I'm at least 55, maybe 60.
Okay. Perhaps you have found your correct AA. As long as your AA takes into consideration the possibility of at least one drop of at least 50% in equities at some point in the next 15 to 20 years, with an unknown period of recovery. How would I know? I'm not you.
I can handle a 50% drop in stocks Great Recession style. Now, a 90% drop with a 25 year recovery a la the Great Depression? That one would hurt. Ok, maybe Bonds aren't so bad :oops:
Triple digit golfer
Posts: 8313
Joined: Mon May 18, 2009 5:57 pm

Re: Is anyone tempted by value investing right now?

Post by Triple digit golfer »

40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:04 pm
Triple digit golfer wrote: Mon Sep 13, 2021 8:59 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm
Beensabu wrote: Mon Sep 13, 2021 7:48 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 4:08 pm So, eschewing bonds in this current low interest rate environment is totally different from stock sector jumping.
It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
Absolutely not. I've decided I'm not touching bonds until I'm at least 55, maybe 60. Bonds preserve wealth, not build it. I'm in the wealth accumulation phase via VTSAX & FXAIX. I'm nobody special, just your average middle class Boglehead.

In another thread tonight you said cash is your preferred fixed income, but in this thread you said you hold 100% stocks. Do you also hold cash and if so, why do you choose cash over bonds?
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Triple digit golfer wrote: Mon Sep 13, 2021 9:33 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:04 pm
Triple digit golfer wrote: Mon Sep 13, 2021 8:59 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm
Beensabu wrote: Mon Sep 13, 2021 7:48 pm

It is interesting that you consider stock sector jumping to be market timing (which it is) but not jumping between stocks and bonds. Changing your stock:bond AA based on current market conditions is market timing.

When people swap out of stocks and into bonds, they are decreasing their risk in order to potentially decrease losses. That might work out how they thought it would. Or they may instead end up missing out on a lot of gains. Or it might turn out about the same, depending on when they did it.

When people swap out of bonds and into stocks, they are increasing their risk in order to potentially increase gains. That might work out how they thought it would. Or they may instead end up with a lot of losses. Or it may turn out about the same, depending on when they did it.

As with all market timing, it may work out in your favor or to your detriment, or not make much difference at all.

Everyone is always sure they know how it's going to work out for them when they do it. But that doesn't mean that's what is going to happen.

An appropriate AA is one that you can hold regardless of market conditions. Where it doesn't matter if stock market valuations are high or low, and whether they can still get higher or not. Where it doesn't matter if rates are high or low, or which way they might go. Where you actually can "tune out the noise" on both the stock and bond fronts because it doesn't matter if any of that noise turns out to be right or not -- you have already selected an AA that allows you to stop caring about what is or isn't happening, because that's all you can do besides continuing to save and not spending all your money.

It's different for everyone, because everyone is different. Some people don't care about potential losses, because they'll make up for them with contributions. Some people do, because they won't. You don't have to be old or rich to be risk averse, just as you don't have to be young or poor to be risk seeking.

I understand that people can change their AA because the one they had wasn't actually right for them (I've done it myself). But if someone finds themselves about to do that, they probably need to think long and hard about what their actual long-term AA (to handle a variety of different kinds of stuff happening) should be, so that they don't instead embark on a series of short-term reactions to changing market conditions (I've done that too). It's a very eerie feeling when you find the balance that's right for you and simply don't feel the need to do anything at all in response to whatever.
No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
Absolutely not. I've decided I'm not touching bonds until I'm at least 55, maybe 60. Bonds preserve wealth, not build it. I'm in the wealth accumulation phase via VTSAX & FXAIX. I'm nobody special, just your average middle class Boglehead.

In another thread tonight you said cash is your preferred fixed income, but in this thread you said you hold 100% stocks. Do you also hold cash and if so, why do you choose cash over bonds?
Sorry for the confusion, but I don't count my emergency cash reserves (about 24 months of expenses) toward my portfolio allocation.
Triple digit golfer
Posts: 8313
Joined: Mon May 18, 2009 5:57 pm

Re: Is anyone tempted by value investing right now?

Post by Triple digit golfer »

40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:37 pm
Triple digit golfer wrote: Mon Sep 13, 2021 9:33 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:04 pm
Triple digit golfer wrote: Mon Sep 13, 2021 8:59 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 8:57 pm

No shifting of stocks & bonds anymore. I did dump my very small bond position, but now I'm 100% stocks, baby! Has nothing to do with "market conditions", it has to do with the fact that, as Mr Buffett has said, "Bonds are dead". And they are.
You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
Absolutely not. I've decided I'm not touching bonds until I'm at least 55, maybe 60. Bonds preserve wealth, not build it. I'm in the wealth accumulation phase via VTSAX & FXAIX. I'm nobody special, just your average middle class Boglehead.

In another thread tonight you said cash is your preferred fixed income, but in this thread you said you hold 100% stocks. Do you also hold cash and if so, why do you choose cash over bonds?
Sorry for the confusion, but I don't count my emergency cash reserves (about 24 months of expenses) toward my portfolio allocation.
Got it.

If you were to count it, what would your AA be?

I'm 80/20 but if I took out 24 months of expenses in bonds bonds I'd be about 92/8.
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

Triple digit golfer wrote: Mon Sep 13, 2021 9:49 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:37 pm
Triple digit golfer wrote: Mon Sep 13, 2021 9:33 pm
40 Years' Gatherin's wrote: Mon Sep 13, 2021 9:04 pm
Triple digit golfer wrote: Mon Sep 13, 2021 8:59 pm

You spoke of eschewing bonds in this low interest rate environment. That strongly implies doing so based on market conditions.

If interest rates rise 5%, will you jump back in?
Absolutely not. I've decided I'm not touching bonds until I'm at least 55, maybe 60. Bonds preserve wealth, not build it. I'm in the wealth accumulation phase via VTSAX & FXAIX. I'm nobody special, just your average middle class Boglehead.

In another thread tonight you said cash is your preferred fixed income, but in this thread you said you hold 100% stocks. Do you also hold cash and if so, why do you choose cash over bonds?
Sorry for the confusion, but I don't count my emergency cash reserves (about 24 months of expenses) toward my portfolio allocation.
Got it.

If you were to count it, what would your AA be?

I'm 80/20 but if I took out 24 months of expenses in bonds bonds I'd be about 92/8.
Good question! If I counted cash toward my portfolio allocation, I'd be about 90/10.
User avatar
WingsFan4Life
Posts: 78
Joined: Fri Jul 18, 2014 6:54 pm

Re: Is anyone tempted by value investing right now?

Post by WingsFan4Life »

K8ya wrote: Sat Sep 04, 2021 3:34 pm I personally am; index funds are at high P/Es right now. It goes against the Bogle ethos but my god, at some point you have to look at the price of the thing you're buying and hesitate.
Steel companies and Intel are some value plays, but this is the wrong board for that kind of talk!
User avatar
Portfolio7
Posts: 1030
Joined: Tue Aug 02, 2016 3:53 am

Re: Is anyone tempted by value investing right now?

Post by Portfolio7 »

Not with a penny of my retirement portfolio. As for my self direct funds: No. I was a year ago, and I bought in with new cash flows. I sold it a couple months ago, redistributed into my standard AA. When the Pandemic fades, I'll consider value again.
"An investment in knowledge pays the best interest" - Benjamin Franklin
User avatar
HanSolo
Posts: 598
Joined: Thu Jul 19, 2012 3:18 am

Re: Is anyone tempted by value investing right now?

Post by HanSolo »

40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm
HanSolo wrote: Sun Sep 12, 2021 5:43 pm
40 Years' Gatherin's wrote: Sun Sep 12, 2021 4:15 pm
Triple digit golfer wrote: Sun Sep 12, 2021 3:35 pm
40 Years' Gatherin's wrote: Sun Sep 12, 2021 3:21 pm Value investing, or focusing on any sector, is very UnBogle-like. It's basically market-timing
Is focusing on one country market timing?
Nope. VTSAX is all you need. I know you International Fetishists hate hearing it lol
Not owning bonds (and/or market timing them) is very UnBogle-like.
Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
But he didn't advise people to bet the farm on an "almost guarantee" (although he did recommend "age in bonds", which is clearly a 100/0 recommendation for some subset of the population).

Your previous post (below) is evidence of market timing. And since you dumped bonds because you find them too pricey, that's value investing.

Conclusion: You are a value investor.

Welcome to the club.
40 Years' Gatherin's wrote: Fri Aug 27, 2021 8:47 pm Currently 41 years old, just sold all of my bonds. Moved half the money to VTSAX and the other half to my money market. With today's low interest rates, bonds are a waste of time for anyone under 60. Sell your bonds!
VBIAX and chill
User avatar
HanSolo
Posts: 598
Joined: Thu Jul 19, 2012 3:18 am

Re: Is anyone tempted by value investing right now?

Post by HanSolo »

nedsaid wrote: Sun Sep 12, 2021 9:48 pm In answer to your question, yes my comments are based upon "feel". Forward P/E ratios are 21, which don't seem excessive, that is if inflation and interest rates remain low. If inflation heats up, that is if higher inflation is not just transitory, then interest rates would need to go up, and probably P/E ratios would need to come down. I don't see excessive optimism in the financial media, I don't see euphoria in the markets. Indeed, last week was a down week for the U.S. Stock Market.
I'm assuming you're aware that some Bogle-minded people don't think it's a good idea to time the market based on a feel. I'm not going to say it's wrong, because I do it myself, to some degree. However, I don't use a "euphoria or not" model, but a graduated model. As the market gets more overvalued, I make gradual adjustments in my AA.

Personally, I don't have a good feel for the markets, so I try to find relevant numbers. Right now, the numbers I can find say that the market is not only overvalued, but more overvalued than it usually is. I don't know whether or not to label that as euphoria. All I know is that the numbers are telling me to reduce equity exposure to below my average, at least to a degree, so I did. The numbers I'm looking at are summarized in a chart in this article:
https://www.cmgwealth.com/ri/on-my-rada ... r-returns/

If a feel works for you, I think that's fine. Different strokes for different folks. But please let me know when you reach a sell signal!
VBIAX and chill
Shallowpockets
Posts: 2053
Joined: Fri Nov 20, 2015 10:26 am

Re: Is anyone tempted by value investing right now?

Post by Shallowpockets »

Value stocks, low P/E are such for a reason. No one is interested in them. The stock market, aside from indexing, is dominated by behavior. When you look at P/Es, you think you are looking at values, but your looking at them is behavior.
Value is in the eye of the beholders. That is plural. So the up or down of a P/E is predicated on the price they will pay for it. What you are doing is speculating that that company will eventually rise on the promise of its intrinsic value. But that is not what is seen by the masses at present. It is contrarian. It is a bet.
It is like you want to buy the losers on a hope they will be winners, one day.
User avatar
HanSolo
Posts: 598
Joined: Thu Jul 19, 2012 3:18 am

Re: Is anyone tempted by value investing right now?

Post by HanSolo »

Shallowpockets wrote: Tue Sep 14, 2021 7:48 am Value stocks, low P/E are such for a reason. No one is interested in them.

...

It is like you want to buy the losers on a hope they will be winners, one day.
It depends on what you mean by value investing. Buffett said, "Our goal is to find an outstanding business at a sensible price, not a mediocre business at a bargain price." He built a pretty good career around that.
VBIAX and chill
User avatar
nedsaid
Posts: 15051
Joined: Fri Nov 23, 2012 12:33 pm

Re: Is anyone tempted by value investing right now?

Post by nedsaid »

HanSolo wrote: Tue Sep 14, 2021 1:08 am
nedsaid wrote: Sun Sep 12, 2021 9:48 pm In answer to your question, yes my comments are based upon "feel". Forward P/E ratios are 21, which don't seem excessive, that is if inflation and interest rates remain low. If inflation heats up, that is if higher inflation is not just transitory, then interest rates would need to go up, and probably P/E ratios would need to come down. I don't see excessive optimism in the financial media, I don't see euphoria in the markets. Indeed, last week was a down week for the U.S. Stock Market.
I'm assuming you're aware that some Bogle-minded people don't think it's a good idea to time the market based on a feel. I'm not going to say it's wrong, because I do it myself, to some degree. However, I don't use a "euphoria or not" model, but a graduated model. As the market gets more overvalued, I make gradual adjustments in my AA.

Personally, I don't have a good feel for the markets, so I try to find relevant numbers. Right now, the numbers I can find say that the market is not only overvalued, but more overvalued than it usually is. I don't know whether or not to label that as euphoria. All I know is that the numbers are telling me to reduce equity exposure to below my average, at least to a degree, so I did. The numbers I'm looking at are summarized in a chart in this article:
https://www.cmgwealth.com/ri/on-my-rada ... r-returns/

If a feel works for you, I think that's fine. Different strokes for different folks. But please let me know when you reach a sell signal!
I have noted several times that the valuation gap between Growth and Value is at the 95% percentile. I have done very gradual shifting from Growth to Value over the last few years for that reason. Occasionally, Larry Swedroe will post this metric on his Twitter feed. I still don't think that a 21 Forward P/E in the U.S. Stock market is unjustified.

I was not aware of the Citi metric. There used to be a bullish/bearish survey of money managers and Louis Rukeyser on his Wall $treet Week show would talk about that a lot. It was a good contrary indicator, bearishness was actually good for the markets and a bullish survey was worrisome.

Also note that I have often said that it is better to "panic" at market highs rather than after the market has already crashed. If valuations concern you, this is a good time to book some profits, nothing irrational about that. I have been mildly rebalancing whenever the market hits new highs since July of 2013. I have about 63%/64% in stocks, had I just let things ride, I would be over 75% stocks today. I also have been slowly de-risking my portfolio as well. So I share your concerns. I would say that valuations are stretched but not irrationally so. If inflationary trends continue, all bets are off, interest rates will have to go up and P/E ratios will have to come down. Let's see what happens.
A fool and his money are good for business.
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

HanSolo wrote: Tue Sep 14, 2021 12:45 am
40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm
HanSolo wrote: Sun Sep 12, 2021 5:43 pm
40 Years' Gatherin's wrote: Sun Sep 12, 2021 4:15 pm
Triple digit golfer wrote: Sun Sep 12, 2021 3:35 pm

Is focusing on one country market timing?
Nope. VTSAX is all you need. I know you International Fetishists hate hearing it lol
Not owning bonds (and/or market timing them) is very UnBogle-like.
Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
But he didn't advise people to bet the farm on an "almost guarantee" (although he did recommend "age in bonds", which is clearly a 100/0 recommendation for some subset of the population).

Your previous post (below) is evidence of market timing. And since you dumped bonds because you find them too pricey, that's value investing.

Conclusion: You are a value investor.

Welcome to the club.
40 Years' Gatherin's wrote: Fri Aug 27, 2021 8:47 pm Currently 41 years old, just sold all of my bonds. Moved half the money to VTSAX and the other half to my money market. With today's low interest rates, bonds are a waste of time for anyone under 60. Sell your bonds!
"Welcome to the club."

Cool! When do I get my own Value Investor decoder ring? lol
User avatar
HanSolo
Posts: 598
Joined: Thu Jul 19, 2012 3:18 am

Re: Is anyone tempted by value investing right now?

Post by HanSolo »

40 Years' Gatherin's wrote: Tue Sep 14, 2021 6:56 pm
HanSolo wrote: Tue Sep 14, 2021 12:45 am
40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm
HanSolo wrote: Sun Sep 12, 2021 5:43 pm
40 Years' Gatherin's wrote: Sun Sep 12, 2021 4:15 pm

Nope. VTSAX is all you need. I know you International Fetishists hate hearing it lol
Not owning bonds (and/or market timing them) is very UnBogle-like.
Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
But he didn't advise people to bet the farm on an "almost guarantee" (although he did recommend "age in bonds", which is clearly a 100/0 recommendation for some subset of the population).

Your previous post (below) is evidence of market timing. And since you dumped bonds because you find them too pricey, that's value investing.

Conclusion: You are a value investor.

Welcome to the club.
40 Years' Gatherin's wrote: Fri Aug 27, 2021 8:47 pm Currently 41 years old, just sold all of my bonds. Moved half the money to VTSAX and the other half to my money market. With today's low interest rates, bonds are a waste of time for anyone under 60. Sell your bonds!
"Welcome to the club."

Cool! When do I get my own Value Investor decoder ring? lol
You don't need one. We have decoded you! lol
VBIAX and chill
40 Years' Gatherin's
Posts: 149
Joined: Sun Jul 26, 2020 7:39 am

Re: Is anyone tempted by value investing right now?

Post by 40 Years' Gatherin's »

HanSolo wrote: Tue Sep 14, 2021 7:30 pm
40 Years' Gatherin's wrote: Tue Sep 14, 2021 6:56 pm
HanSolo wrote: Tue Sep 14, 2021 12:45 am
40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm
HanSolo wrote: Sun Sep 12, 2021 5:43 pm

Not owning bonds (and/or market timing them) is very UnBogle-like.
Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
But he didn't advise people to bet the farm on an "almost guarantee" (although he did recommend "age in bonds", which is clearly a 100/0 recommendation for some subset of the population).

Your previous post (below) is evidence of market timing. And since you dumped bonds because you find them too pricey, that's value investing.

Conclusion: You are a value investor.

Welcome to the club.
40 Years' Gatherin's wrote: Fri Aug 27, 2021 8:47 pm Currently 41 years old, just sold all of my bonds. Moved half the money to VTSAX and the other half to my money market. With today's low interest rates, bonds are a waste of time for anyone under 60. Sell your bonds!
"Welcome to the club."

Cool! When do I get my own Value Investor decoder ring? lol
You don't need one. We have decoded you! lol
Ok, well I'll see you at the Value Investor retreat at the Sheboygan Applebee's in October!
000
Posts: 5178
Joined: Thu Jul 23, 2020 12:04 am

Re: Is anyone tempted by value investing right now?

Post by 000 »

40 Years' Gatherin's wrote: Tue Sep 14, 2021 7:50 pm Ok, well I'll see you at the Value Investor retreat at the Sheboygan Applebee's in October!
I'll bring the coupons!
User avatar
HanSolo
Posts: 598
Joined: Thu Jul 19, 2012 3:18 am

Re: Is anyone tempted by value investing right now?

Post by HanSolo »

40 Years' Gatherin's wrote: Tue Sep 14, 2021 7:50 pm
HanSolo wrote: Tue Sep 14, 2021 7:30 pm
40 Years' Gatherin's wrote: Tue Sep 14, 2021 6:56 pm
HanSolo wrote: Tue Sep 14, 2021 12:45 am
40 Years' Gatherin's wrote: Sun Sep 12, 2021 9:50 pm

Nah, even Jack says you're almost guaranteed to make more money in stocks than in bonds over the long run. So if you can handle it, there is nothing wrong with 100% stocks.
But he didn't advise people to bet the farm on an "almost guarantee" (although he did recommend "age in bonds", which is clearly a 100/0 recommendation for some subset of the population).

Your previous post (below) is evidence of market timing. And since you dumped bonds because you find them too pricey, that's value investing.

Conclusion: You are a value investor.

Welcome to the club.
40 Years' Gatherin's wrote: Fri Aug 27, 2021 8:47 pm Currently 41 years old, just sold all of my bonds. Moved half the money to VTSAX and the other half to my money market. With today's low interest rates, bonds are a waste of time for anyone under 60. Sell your bonds!
"Welcome to the club."

Cool! When do I get my own Value Investor decoder ring? lol
You don't need one. We have decoded you! lol
Ok, well I'll see you at the Value Investor retreat at the Sheboygan Applebee's in October!
Cool! I'll look forward to your latest market timing tips... not that I'll use them! lol
VBIAX and chill
User avatar
Forester
Posts: 2152
Joined: Sat Jan 19, 2019 2:50 pm
Location: UK

Re: Is anyone tempted by value investing right now?

Post by Forester »

Shallowpockets wrote: Tue Sep 14, 2021 7:48 am Value stocks, low P/E are such for a reason. No one is interested in them. The stock market, aside from indexing, is dominated by behavior. When you look at P/Es, you think you are looking at values, but your looking at them is behavior.
Value is in the eye of the beholders. That is plural. So the up or down of a P/E is predicated on the price they will pay for it. What you are doing is speculating that that company will eventually rise on the promise of its intrinsic value. But that is not what is seen by the masses at present. It is contrarian. It is a bet.
It is like you want to buy the losers on a hope they will be winners, one day.
Value stocks, cyclical industries, usually always have lower P/Es, but the spread between the value & growth cohort fluctuates. In 2015/16, US growth stocks had higher P/Es than US value stocks, but by a historically small margin, the expensive stocks were "relatively cheap" versus the cheap stocks. So a strategy which systematically allocated more to growth when growth was cheap, according to a rolling 20yr lookback (or whatever) would have beaten the market. But now there's more awareness of this phenomenon, such a strategy probably wouldn't work (!)
Amateur Self-Taught Senior Macro Strategist
Tattarrattat
Posts: 259
Joined: Wed Aug 19, 2020 6:05 pm

Re: Is anyone tempted by value investing right now?

Post by Tattarrattat »

I'm a fan of the Rip Van Winkle investing philosophy. I only buy things that I would be comfortable holding if I fell asleep for 25 years. Total Stock and SP500 fit that bill. Can throw some Total Intl in there, too.
User avatar
imak
Posts: 122
Joined: Fri Mar 22, 2019 5:18 pm
Location: Austin, TX

Re: Is anyone tempted by value investing right now?

Post by imak »

I am tempted to swing for the fences in Roth IRA which is about 5% of net worth right now. Looking at 2022-2023 LEAPS (deep-in-the-money) on certain mid-cap value stocks (referring Dataroma[1]), but can't bring myself to action. I look at it frequently but then think I should instead spend this time and attention on my career as that is a higher return on my human capital than any stock pick.

[1] https://www.dataroma.com/m/managers.php
Post Reply