Search found 634 matches

by Alchemist
Sat Nov 06, 2021 5:44 am
Forum: Investing - Theory, News & General
Topic: 2021 Hedge Fund Contest
Replies: 269
Views: 31347

Re: 2021 Hedge Fund Contest

I wonder if I get a prize for coming in a distant, dead last with negative 467%.

Shorting GME was a bad idea lol.
by Alchemist
Thu Oct 28, 2021 3:41 am
Forum: Personal Consumer Issues
Topic: When does an old smartphone become unsafe to use.
Replies: 41
Views: 6069

Re: When does an old smartphone become unsafe to use.

I wish someone would tell me in concrete terms how, exactly, I'm not protected by applying these incessant updates from Apple. I think it's a bunch of baloney, actually. What is some hacker going to do on my phone, anyway? Read my boring text messages? To the hackers: have fun, dopes. Theoretically, they could hijack your phone and use it in a distributed denial of service attack, using up your data. You would probably recognize it by it quickly draining your battery life. That's about all the risk, if you don't store passwords or log in to personal information sites on the phone. I have an old iPad I use for pictures, videos, and social media and I don't have any banking apps or log in to web sites with personal information on it. It is s...
by Alchemist
Fri Oct 15, 2021 8:07 pm
Forum: Investing - Theory, News & General
Topic: Valuations Matter....So Do Earnings
Replies: 37
Views: 3536

Re: Valuations Matter....So Do Earnings

The OP has the wrong link for Valuation. Shiller PE is actually here: http://www.econ.yale.edu/~shiller/data.htm Shiller PE in Dec 2020 was 33.77 and now (2021.09) it's 38.34, so definitely higher than Dec 2020. I say wrong because P/E 1 is next to useless. And of course "earnings also matter" - it's one of the two variables in Shiller PE, granted it's smoothed 10 year earnings, and I'll not go into why 10 years is used instead of the (near useless) 1 yr earnings. Is 38 and change a bubble for Shiller PE? I think so considering it's only been higher than that for 1.5 years or so of 150 years of history. I do not mention Shiller PE in the OP and neither did I intend to. I referenced the 12 month trailing PE explicitly and linked t...
by Alchemist
Fri Oct 15, 2021 8:20 am
Forum: Investing - Theory, News & General
Topic: Valuations Matter....So Do Earnings
Replies: 37
Views: 3536

Re: Valuations Matter....So Do Earnings

My point is not that valuations, including the Shiller P/E, are meaningless. The point is that they are not some crystal ball and must be considered with a lot of other context. Anyone trying to make real world investing decisions based on valuations have lost out on a lot more gains than they have saved themselves from market drops.
by Alchemist
Fri Oct 15, 2021 7:12 am
Forum: Investing - Theory, News & General
Topic: Valuations Matter....So Do Earnings
Replies: 37
Views: 3536

Valuations Matter....So Do Earnings

In December 2020 the P/E ratio of the S&P 500 was at a shockingly high 39.26. The 10 year treasury was yielding 0.93%. Many posters on Bogleheads were warning of an epic bubble. We were at valuations not seen since dotcom irrational exuberance days, surely the market could go no further. Since then the PE ratio of the S&P 500 tumbled 29% to 27.96 today (14 Oct 2021). The 10 year treasury is now over 1.5%. Surely that means a big tumble in the stock market right? Quite the contrary, Vanguard Total Stock Market Index Fund (VTSAX) is up 18.95% year to date and the Vanguard 500 Index Fund (VFIAX) is up 19.48%. What happened? As myself and some other Bogleheads pointed out time and again, the P/E ratio has two variables. The "E"...
by Alchemist
Wed Oct 13, 2021 7:25 pm
Forum: Personal Consumer Issues
Topic: Need new phone- no clue
Replies: 50
Views: 4124

Re: Need new phone- no clue

I don't know that Apple support their phones longer than Samsung. You opened with a statement that you had your galaxy s3 since 2014 and only now starting having problems with support - and someone brags that they got 2 iphones in 2017 and only had to replace one...hmmm.... You got 7 years out of your Samsung - why not just buy another Samsung? You can get an ealier generation S9 or 10e or one of the budget models depending upon how much you want spend. You are used to Android - you will likely find iphone hard to use. I don't think you understand what 'support' means here. We are talking about software updates for both features and, far more importantly, security updates. The OP's 2014 Samsung hasn't received a software update in more tha...
by Alchemist
Sat Oct 02, 2021 8:39 pm
Forum: Investing - Theory, News & General
Topic: Benz on simple investing strategy
Replies: 18
Views: 3601

Re: Benz on simple investing strategy

tomsense76 wrote: Fri Oct 01, 2021 4:26 pm Perhaps a naive attempt at coming up with a metric would be investor error/deviation from the benchmark. IOW complexity allows more opportunities for error to creep in and return to be lost or excess risk to be taken by accident.
While your points are completely valid about simplicity helping to avoid errors; I think Benz’s point is one that inherently cannot be quantified and will be deeply personal for each individual.

Giving up the goal of having an optimal portfolio allows one to ensure they have a portfolio that is good enough.
by Alchemist
Sat Aug 21, 2021 10:34 pm
Forum: Investing - Theory, News & General
Topic: Rick Ferri and Larry Swedroe sparring on Twitter.
Replies: 249
Views: 26973

Re: Rick Ferri and Larry Swedroe sparring on Twitter.

If you want insurance against bear markets in equities, you have to look outside the equity market. If you want protection from equities having a bad time....buy bonds. It is just that simple. US TBM has provided better protection and equivalent returns to international stocks since Vanguard began offering an international index fund. LTT's provided the same return with significantly lower risk to a SCV tilt over the past 25 years encompassing the dot com bubble, GFC, and COVID crash. Below are returns as well as standard deviation and max draw down of two 80/20 portfolios. One is 80% TSM and 20% SCV, the other is 80% TSM and 20% LTT. SCV Tilt: Return/Stdev/max drawdown - 6.64% / 17.09% / 58.16% LTT Tilt: Return/Stdev/max drawdown - 6.32% /...
by Alchemist
Sun Aug 15, 2021 6:53 am
Forum: Investing - Theory, News & General
Topic: The Bottom Line on Factor Investing
Replies: 328
Views: 29261

Re: The Bottom Line on Factor Investing

The ultimate "bottom line" is of course, your bottom line. Has factor investing worked in the real world? Judge for yourself. The first 'factor' fund I am aware of is the DFA US Micro Cap Fund (DFSCX). Morningstar has data going back its inception (portfolio visualizer data stops at 1985) date back in December of 1981. It was designed to capture the small cap stock premium. How has it done? From 12/23/1981 until 08/13/2022 it has turned $10,000 into $858,134. That is pretty awesome. How did the dumb Vanguard 500 fund do? Over that same time period it turned $10,000 into an even larger $924,395. So the 'small cap effect' has failed to provide a higher return than the S&P 500 over the previous 40ish years it was available as a d...
by Alchemist
Sun Aug 08, 2021 3:13 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

Wait....so the people saying that a Two Fund Portfolio is reckless because "nobody knows nothin" also say that the U.S. market is too richly valued so they have a massive, concentrated bet on SCV that makes up less than 3% of the market? :confused Seems a bit inconsistent. Anyway I thought I might add this new article from the Economist to the thread: Perhaps growth in expanding, high-productivity industries, which can afford to pay higher wages, will continue, leaving fewer people willing to fill low-productivity, low-wage service-sector jobs. Where past jobless recoveries might have encouraged the creation of more low-wage services jobs, a faster expansion today might break the link, perhaps forcing employers in these industries...
by Alchemist
Sat Jul 03, 2021 12:15 am
Forum: Investing - Theory, News & General
Topic: Higher International returns coming from the falling dollar
Replies: 23
Views: 5195

Re:

But if you decide to buy only domestic stocks based on the argument that currency risk is uncompensated, then you have 100% exposure to the USD. OK, you spend in dollars, but do you really think that the US is about to produce all the energy it uses domestically Forgive the continuation of this thread necromancy but this is too funny to ignore. When this post was written, the Shale Oil boom was only about three years old and would go on to completely change global energy markets with the United States not only becoming the largest producer of both oil and natural gas but also a net exporter of energy since 2019: Total U.S. annual primary energy net imports (imports minus exports) generally increased in most years since the mid-1950s and re...
by Alchemist
Sat Jul 03, 2021 12:06 am
Forum: Investing - Theory, News & General
Topic: Why are you invested (mainly) in US stocks when all long term forecasts are in favour of ex-US?
Replies: 221
Views: 22248

Re: Why are you invested (mainly) in US stocks when all long term forecasts are in favour of ex-US?

There is a bizarre myopia that afflicts many bogleheads. They look at the P/E ratio and think that only the "P" is variable. They are *both* variables, and during times of immense change/crisis they can both change rapidly. U.S. stocks do look very expensive based on the past 12 months of earnings. That makes sense.....the economy was forcibly shut down by a global catastrophe that has killed hundreds of thousands of Americans. But that is the past . The market is forward looking and sees immense earnings growth in the near and mid-term future for the U.S. market. Forward P/E, based on the future , shows that stocks could trade sideways the rest of the year and the P/E would drop to the low 20's if earnings come in roughly with ex...
by Alchemist
Sun Jun 27, 2021 7:21 am
Forum: Investing - Theory, News & General
Topic: Good Reason to Hold Bonds and International Stocks - 1990's Japan
Replies: 239
Views: 17718

Re: Good Reason to Hold Bonds and International Stocks - 1990's Japan

That’s lovely but what does your crystal ball say about the future? As I stated in the portion you quoted: I do not have a 100% US portfolio because of this track record but instead for forward looking factors I have discussed ad nauseam elsewhere. I could dredge up the same points, at which point you would simply say: "But iTS pRiCed In AlReaDy" Despite the facts clearly laid out that no, the difference between international market performance is decidedly *not* priced in. Otherwise the U.S. market (and a few others) could not have produced a 100 year long track record of beating the international average on a risk adjusted basis. That should not be surprising. There is no "international market" where we can trade the ...
by Alchemist
Sun Jun 27, 2021 2:56 am
Forum: Investing - Theory, News & General
Topic: Good Reason to Hold Bonds and International Stocks - 1990's Japan
Replies: 239
Views: 17718

Re: Good Reason to Hold Bonds and International Stocks - 1990's Japan

I never get this argument and am baffled by the people who put it forward as if it is some super convincing piece of evidence. "See what happened to Japan? You must diversify by doing the one thing that would expose you to the Japanese bubble in question " This is especially ironic to me....posting from my apartment in Japan ...where I have lived cumulatively for more than six years now. Diversification is important. But Total US Bond market has been a far better diversifier for a US equity portfolio than international stocks. In fact international stocks have returned about the same (within 50 basis points or less) as Total US Bond market for the entire history of Vanguard's Total International Stock Market index fund when it was...
by Alchemist
Sun Jun 13, 2021 2:04 am
Forum: Investing - Theory, News & General
Topic: The S&P 500 PE ratio is currently ~36. What would the PE be under old accounting rules?
Replies: 39
Views: 4890

Re: The S&P 500 PE ratio is currently ~36. What would the PE be under old accounting rules?

Current PE is not meaningful given the artificially depressed earnings the last 12 months have due to pandemic related shutdowns. Forward PE is much more meaningful. Currently the S&P 500 forward PE for the next 12 months is 22. That means so long as earnings come in as estimated; prices could remain sideways through the end of the year and the current PE would drop from 36 to 22. You could have a 8% gain for the year and 14 point drop in PE. Everyone forgets that both the "P" and the "E" are variables . Are exUS stocks an amazing value or are US stocks absurdly overvalued? Or neither. Maybe exUS stocks are a value trap and US stocks are fairly valued. So many bogleheads seem convinced that the current market looks l...
by Alchemist
Fri May 28, 2021 2:22 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

Most people have no problem with the U.S. total market and say it's neutral relative to sectors, styles, and sizes. Why, then, are they so adamant about not being neutral relative to countries? The U.S. market is only neutral to sectors, styles, and sizes when you disregard that there are other countries with different weightings of each of those. This is the fundamental question at the bottom of this US-only vs Global Weight stock issue. Do you believe the U.S. is "just another country" or do you believe it has unique attributes and/or advantages that make it a lower risk market to invest in? Those of us who view the U.S. as unique among other nation-states will see international equity investing as an unnecessary additional ris...
by Alchemist
Thu May 27, 2021 6:36 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

I find it odd the religious level zealotry some people have for trying to demand everyone have the same portfolio choices they do.....its just weird. :confused I can sorta understand the argument based on valuations that some folks give as a forward looking argument in favor of adding international stocks; but the historical argument is pretty terrible. There have been some times that international did quite well, but over the 25 years of actual history we have with actual investable mutual funds it was quite bad. Importantly I'm not saying US just did better. Rather I am saying on an objective basis, as an equity investment; Vanguard's Total International Index fund (VGTSX) did poorly. It returned a mere 5.32% while the U.S. market deliver...
by Alchemist
Sun May 23, 2021 5:23 am
Forum: Investing - Theory, News & General
Topic: Implications of global fertility bust for investors ?
Replies: 13
Views: 2728

Re: Implications of global fertility bust for investors ?

You’re on to something important that nearly everyone around here is intent on ignoring because it doesn’t fit the normal way they look at the world…..ie backtests and data mining.

You can see my thoughts below, but be warned this is apparently a “trolling topic” so your thread may be closed :?

https://www.bogleheads.org/forum/viewt ... st=5421960
by Alchemist
Fri May 21, 2021 6:40 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle's ghost warns about 401(k): Marketwatch article claims to use Bogle forecast model
Replies: 13
Views: 1980

Re: Jack Bogle's ghost warns about 401(k): Marketwatch article claims to use Bogle forecast model

Jack Bogle would never advise someone make portfolio decisions based on his simple model. His reference to it had more to do with explaining the fundamentals behind stocks than actually trying to predict the future. It also makes no consideration for interest rates and how they would make stocks more/less attractive as an investment.
by Alchemist
Fri May 21, 2021 6:34 am
Forum: Investing - Theory, News & General
Topic: Value and Momentum- Zero premium for twenty years
Replies: 60
Views: 6054

Re: Value and Momentum- Zero premium for twenty years

XacTactX wrote: Thu May 20, 2021 10:52 am 2. Fama-French define the value factor as P/B but an important characteristic about factors is they don't have to be strictly defined in one way.
What good is a 'factor' if you can simply re-define it at will?
by Alchemist
Sun May 16, 2021 3:20 am
Forum: Investing - Theory, News & General
Topic: "Beware of Sci-Fi Portfolios"
Replies: 185
Views: 19604

Re: "Beware of Sci-Fi Portfolios"

Set aside the Alternatives and even the Factor Funds for a moment.

Any advisor that puts their clients in a 15 fund portfolio with an average ER or 1.05% plus their advisor fee; is not a good advisor. Certainly not one that is boglehead friendly.

Just to break even the portfolio will have to outperform by at least 2%
by Alchemist
Sun May 16, 2021 12:56 am
Forum: Investing - Theory, News & General
Topic: "Beware of Sci-Fi Portfolios"
Replies: 185
Views: 19604

Re: "Beware of Sci-Fi Portfolios"

It is pretty clear to me that Alan Roth's article was a critique of Academic Research, Factor Investing, Alternative Investments, and Advisory firms in general. We don't need a decoder ring to know which advisory firm and which two well known factor investing practitioners he was criticizing specifically. Saying that other people in the business were wrong is fair game but the article seemed too much like a cheap shot personal attack and the words were pretty loaded. I expected better. Obviously this is a Buckingham portfolio. It is also a dumpster fire of 15 different funds with an average expense ratio of 1.05% before you slap on the advisor fee. Any advisor that suggest this kind of an absolute mess of an expensive portfolio deserves to...
by Alchemist
Sat May 15, 2021 11:35 pm
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 22381
Views: 2120891

Re: U.S. stocks continue to soar!

the inflation scare is transitory, once capacity catches up with demand in commodities in a few months people freaking out over inflation will look as silly as they did in 2011 Larry Summers is gonna look pretty silly! "Summers says inflation indicators 'flashing red alarm'" Run for the lifeboats!! Even permabull Jeremy Siegel is hopping on the high inflation express: "Siegel believes inflation will surge a bracing 20% over the next three or four years. That means it could be as high as 6.7% annually during that span...Siegel predicted that the Federal Reserve, which has held short-term rates near zero and says it intends to do so for the next two years, will end up hiking them later in 2021." Hiking later this year??! ...
by Alchemist
Sat May 15, 2021 11:30 pm
Forum: Investing - Theory, News & General
Topic: "Beware of Sci-Fi Portfolios"
Replies: 185
Views: 19604

Re: "Beware of Sci-Fi Portfolios"

I read Larry’ s books as i read alot of books. How come all these alternative investment have been doing terrible? Is there really a time in history they performed well. Overall good article Allan Roth. One can just invest in a single fund like sp500 fund and most likely come out ahead of this portfolio. Over the last 17 years you would have done better with VFIAX than with a Buckingham / Swedroe portfolio as DFA SCV has trailed TSM by 1.6% CAGR. If you add the advisor fee and the dead weight of the Alts (and commodities fund he advocated prior to the Alts) then you would have lagged VFIAX by a significant margin. Oh yeah, and would have done so while experiencing higher risk (as measured by volatility and draw downs). https://www.portfoli...
by Alchemist
Sat May 15, 2021 6:55 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 22381
Views: 2120891

Re: U.S. stocks continue to soar!

Meh, CAPE is about as reliable as tarot cards and chicken bones. Speaking of 2011 there were plenty of CAPE predictions back then too that have turned out to be nonsense.

The US economy and equity market is set to continue soaring.
by Alchemist
Sat May 15, 2021 6:23 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 22381
Views: 2120891

Re: U.S. stocks continue to soar!

Reason for Bullishness:

1) Forward PE of the S&P 500 is still only 21; if earnings come in anywhere near expectation there is plenty of room to run with interest rates still low

2) the inflation scare is transitory, once capacity catches up with demand in commodities in a few months people freaking out over inflation will look as silly as they did in 2011

And most importantly….

3) Forester has made another doom monger post!
by Alchemist
Fri May 14, 2021 9:21 pm
Forum: Investing - Theory, News & General
Topic: AQR Style Premia Update; Certainly Low Correlations
Replies: 100
Views: 9864

Re: AQR Style Premia Update; Certainly Low Correlations

Are you sure? What if you had entered the stock market in 2000 and evaluated your results in 2012? Would have given up on the market factor forever? The S&P500 underperformed TBills for three long stretches: 1929-43, 1966-82, 2000-12. It’s really really hard to know when to give up on a strategy. I’ll agree with you that the threshold for throwing in the towel is probably way lower when expenses are high! Dave My previous comment was short on details so I will attempt to expand on my point below. A strategy must be evaluated on its outcome compared to its goals . For instance if you want to lower the risk of your portfolio by adding more bonds then your potential returns will be expected to decrease. If your addition of bonds increased...
by Alchemist
Thu May 13, 2021 8:00 am
Forum: Investing - Theory, News & General
Topic: AQR Style Premia Update; Certainly Low Correlations
Replies: 100
Views: 9864

Re: AQR Style Premia Update; Certainly Low Correlations

Random Walker wrote: Thu May 13, 2021 7:48 am Cant judge a strategy by the outcome.
Sounds like something an advisor would say to excuse bad advice.

The *only* way to judge a strategy is by its outcome.
by Alchemist
Thu May 13, 2021 4:48 am
Forum: Investing - Theory, News & General
Topic: AQR Style Premia Update; Certainly Low Correlations
Replies: 100
Views: 9864

Re: AQR Style Premia Update; Certainly Low Correlations

You could have just held cash in a HYSA and done far better. Even in a brokerage account a STT fund would have stomped QSPRX.

Also don't forget that in addition to the huge ER of the fund, you need to pay an advisor for the privilege of having access to it :oops:

So the middlemen are getting paid at least.
by Alchemist
Tue May 04, 2021 4:05 am
Forum: Investing - Theory, News & General
Topic: Why do small caps outperform during inflation?
Replies: 18
Views: 3026

Re: Why do small caps outperform during inflation?

I think you guys are over thinking this. My assumption has always been that two things were going on:

1) Small cap companies tend to have high debt loads. Inflation makes those debts smaller and easier to deal with

2) Alot of regional banks and other financial institutions in the small cap space. High inflation means high interest rates, higher interest rates mean higher earnings for financial companies
by Alchemist
Mon Apr 26, 2021 6:13 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

Right. And there's a reason I didn't hold just Apple stock, and that is because the future is unknowable and holding all of your eggs in one basket is risky. This is the same reason I don't just hold US stocks, regardless of the "outcome" over the last 10-20 years which you are confusing with "strategy". Because the risk of a prolonged downturn in the US stock market when valuations are much higher relative to international means that there's a high risk of mean reversion and poor outcomes during my investment horizon if I were to stake my entire portfolio in just that asset class. There are a lot of things to unpack here but I will try to instead focus on a couple of the most important to clarify our discussion and kee...
by Alchemist
Sun Apr 25, 2021 4:11 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 22381
Views: 2120891

Re: U.S. stocks continue to soar!

Beensabu wrote: Sat Apr 24, 2021 12:58 pm I also want a winged unicorn that can fly me through rainbows.
I did not realize until this moment how very much I also want a winged unicorn to fly me through rainbows...


But I'll settle for S&P 500 closing the year at >4,000 :sharebeer
by Alchemist
Sun Apr 25, 2021 4:09 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

Much simpler to have just owned apple stock for this period. Much better returns, less cost to own, less complexity. The one stock portfolio. If you had been both recommending such a move and actually followed through with it yourself 10 or 15 or 20 years ago then you would deserve a lot of credit for an amazing investment strategy. But you didn't....so this is just a silly straw man argument. Jack Bogle was recommending U.S. only since the 1990's when international investing was first becoming mainstream and Vanguard (among others) were launching international index funds. He remained consistent over the decades. Myself and most people posting in this thread have had a two fund portfolio and have been recommending it on this forum for yea...
by Alchemist
Sat Apr 24, 2021 7:14 pm
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

But it’s sad that this thread promotes lack of regional diversification, and that certain posters continuously link within the forum back to this thread. The last thing newbie investors should be taught is to ignore mainstream portfolio recommendations, like those that are created by Vanguard, Fidelity, State Street, Schwab, etc. I think the first thing newbie investors should be taught is to ignore mainstream portfolio recommendations. They are often higher cost and higher complexity. Additionally for the entire 25 years that international index funds have been available the only thing they would have provided anyone’s portfolio is higher cost, higher risk, and lower returns. Any ‘newbie’ coming to the bogleheads forum since it started in...
by Alchemist
Thu Apr 22, 2021 4:18 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

] We've got folks in this thread (including you) giving high-fives to each other over an SP500 + cash portfolio. That's most definitely a poor level of diversification. No exposure to stocks outside of 1 single country, no exposure to small companies, no exposure to term risk. To be clear, there are certainly bigger investing mistakes that can be made than a "jack bogle two fund portfolio." So I guess you and others in this thread can take solace in that. I take plenty of solace in having a two fund portfolio that has had both higher returns and lower risk than a portfolio that includes an international allocation over my entire investing lifetime thus far. I own TSM, but even a ‘mere’ S&P 500 fund is plenty diversified for a...
by Alchemist
Wed Apr 21, 2021 5:15 am
Forum: Investing - Theory, News & General
Topic: Here's my portfolio
Replies: 168
Views: 45754

Re: Here's my portfolio

absolute zero wrote: Tue Apr 20, 2021 10:56 pm
Carol88888 wrote: Tue Apr 20, 2021 10:15 pm Has this portfolio outperformed 85% VTI and 15% BND? By how much? Was it really worth the time and trouble to put this together?
My guess is that Vineviz did not know 10 years ago that his portfolio would be outperformed by a US Total market fund. Maybe if you have a time machine you could go back in time and let him know that US large caps would dominate the 2010’s. Let me know too, please.
Jack Bogle tried to tell you....
by Alchemist
Wed Apr 21, 2021 5:14 am
Forum: Investing - Theory, News & General
Topic: Jack Bogle - Two Fund Portfolio
Replies: 2645
Views: 320066

Re: Jack Bogle - Two Fund Portfolio

absolute zero wrote: Tue Apr 20, 2021 9:58 pm But then again, the “Jack Bogle two fund portfolio” that many are describing in this thread is pretty poorly diversified to begin with.
This is the height of silliness. VTSAX, and other US TSM stock funds like it, own around 3,000 stocks across all size cohorts and across all industries.

VTSAX is a highly diversified fund.
by Alchemist
Sun Apr 11, 2021 7:11 am
Forum: Investing - Theory, News & General
Topic: U.S. stocks continue to soar!
Replies: 22381
Views: 2120891

Re: U.S. stocks continue to soar!

I was thinking this market was a bit....euphoric feeling. So I went to check P/E ratios based on forward looking earnings estimates. Turns out they have fallen from 33 a year ago to a mere 21 today.

That's right, at a P/E of 21 based on forward earnings estimates the S&P 500 actually might still look *cheap* in the context of 1.7% ten year treasuries and even reasonably priced if interest rates go up :shock:

https://ycharts.com/indicators/sp_500_p ... d_estimate
by Alchemist
Sat Apr 10, 2021 7:55 pm
Forum: Investing - Theory, News & General
Topic: Stone Ridge All Asset Variance Risk Premium Fund
Replies: 133
Views: 9141

Re: Stone Ridge All Asset Variance Risk Premium Fund

Pretty strong statement based on 3 years performance data. You could well be right, and the strong statement warranted, only time will tell. But 3 years is very short. All sorts of excuses can be made for the individual funds: Bad performance of value for QSPRX Calif wildfires and hurricanes for SRRIX COVID unemployment for LENDX COVID equity hit for AVRPX We’ll just have to see over time. Potentially there will always be an excuse. Alternatively, maybe it is just a convergence of some uncorrelated bad luck over last few years. Dave The strong statement is warranted not because of the time frame, but because the Alt investment strategy has completely failed in its purpose. Larry Swedroe advocated for them on this board and in an entire boo...
by Alchemist
Sat Apr 10, 2021 7:43 am
Forum: Investing - Theory, News & General
Topic: Stone Ridge All Asset Variance Risk Premium Fund
Replies: 133
Views: 9141

Re: Stone Ridge All Asset Variance Risk Premium Fund

I posted above the last available performance information on all 4 funds, the information is from Bloomberg. You could do a 3 year chart as of early February 2021 based on my data. It wouldn't be perfect but it would give you an idea. I would be interested in seeing the results of your efforts. I think I am doing the rough math correctly.... I get a total return of an evenly split portfolio of the Four Hors....I mean Alts...of negative 4.2% for the three year period listed in your previous post. This would have turned $10k into $8,792. It of course gets far uglier when you remember that an advisor fee was necessary for the privilege of owning these dumpster fires. For comparison, Vanguard Total Bond Market Index (VBTLX) provided a positive...
by Alchemist
Sat Apr 10, 2021 7:20 am
Forum: Investing - Theory, News & General
Topic: CAPE: A much stronger predictor of stock returns than many think
Replies: 1022
Views: 80867

Re: CAPE: A much stronger predictor of stock returns than many think

Cliff Asness is kind enough to provide us an easily tested real world application. In November of 2012, he used CAPE to predict the return of the S&P 500 over the following decade. The prediction still has a year an half or so to reach a full decade but we can examine how it is going so far. Asness calculated CAPE prediction: 0.9% Actual return of VFIAX up to March 2021: 15.36% The prediction was off by 15.25% :oops: To be fair to Cliff, his prediction ranged from -4.4% to +8.3% so it is a ‘mere’ 7.06% outside of the already pretty useless 12.7% error range. There also could be some horrific market crash between today and November 2022. It will be interesting to come back and check on how this prediction of his fully fleshes out. Link f...
by Alchemist
Mon Mar 15, 2021 5:30 am
Forum: Investing - Theory, News & General
Topic: How has U.S outperformed International?
Replies: 133
Views: 12688

Re: How has U.S outperformed International?

Before responding to Nathan's thoughtful post, it is worth addressing some straw men being attacked. No one is saying the US TSM will beat all other countries. The choice given to US investors is not to pick a basket of individual country ETFs (which are obnoxiously expensive in many cases...) but instead whether or not to add an international index fund like VTIAX or using a global weight index fund like VT. The argument John Bogle made for many years, and was dramatically proven correct by history, is that US based investors do not need international stocks and adding them are likely to lead to higher risk without larger rewards. The specific argument I have made repeatedly is that going forward (and starting about a decade ago); most of ...
by Alchemist
Sat Mar 13, 2021 11:36 pm
Forum: Investing - Theory, News & General
Topic: How has U.S outperformed International?
Replies: 133
Views: 12688

Re: How has U.S outperformed International?

If you take one thing versus a group of other things, it will either do better or worse. If you pick one period to examine, and break 'international' down by country, the US did better than some, worse than others. There's no bigger question here to analyze. It simply happened. You missed my point entirely. I was not just comparing the US to international. I was comparing international to its own expected performance from 25 years ago when Vanguard started VGTSX. I doubt anyone buying it would have expected a poor return that failed to even beat investment grade intermediate bonds. So, regardless to how US stocks performed, it is worth asking why did international returns disappoint on their own merits? Further breaking that down, we know ...
by Alchemist
Sat Mar 13, 2021 4:21 am
Forum: Investing - Theory, News & General
Topic: How has U.S outperformed International?
Replies: 133
Views: 12688

Re: How has U.S outperformed International?

To further illustrate the cherry-picking issue, let's back up a few years - six, to be exact. Six years ago US and international were tied for fourteen-year returns. So if we stopped the clock then, there was no big divergence. I don't know why anyone would read a lot into one half-decade. If I read your post without doing my own double-check, I'd have thought US was winning most of the last 20 years, but ... it wasn't. In fact, if you chart both back 20 years, you'll find that international was in the lead about half of the period in question. http://quotes.morningstar.com/chart/fund/chart.action?t=VTSAX&region=usa&culture=en-US&dataParams=%7B%22zoomKey%22%3A11%2C%22version%22%3A%22US%22%2C%22showNav%22%3Atrue%2C%22defaultShow...
by Alchemist
Fri Feb 26, 2021 5:44 am
Forum: Investing - Theory, News & General
Topic: Re-evaluating Total World Bond (BNDW)?
Replies: 153
Views: 14173

Re: Re-evaluating Total World Bond (BNDW)?

I largely agree with the last part of this but diversification is not primarily about black swans or cataclysmic events. For example, if US inflation overshoots the 2% target by a few percentage points (e.g. 2-3) and the Fed has a bit of trouble bringing it back to the target for a few years, the Euro will not implode and foreign currency holdings will provide some protection for US investors. Certainly agree that there are cases when foreign currency may provide a diversification benefit. But there is nothing stopping both the Euro and the Dollar from facing simultaneous inflation overshoots. If inflation is your concern and you are a US based investor then TIPS, I-Bonds, Gold, and maybe REITs would likely provide more reliable protection...
by Alchemist
Wed Feb 24, 2021 8:38 pm
Forum: Investing - Theory, News & General
Topic: Re-evaluating Total World Bond (BNDW)?
Replies: 153
Views: 14173

Re: Re-evaluating Total World Bond (BNDW)?

Are there now more compelling reasons than before for US investors to consider a total world bond approach? Considering how many foreign central banks had to depend on the U.S. Federal Reserve's generosity with bank liquidity swaps during both he GFC and the pandemic; no. Or put differently: when the USD stops being the global reserve currency then non-USD bonds might be something to consider. Until then there is no additional safety to be gained from adding foreign bonds to a US investors portfolio. But wouldn't one like to own the non-USD bonds before (as in, in case) the USD stops being the global reserve currency? The main point is that there is not anywhere to hide in the case of a USD collapse other than perhaps gold or real estate. ...
by Alchemist
Sat Feb 20, 2021 6:07 pm
Forum: Investing - Theory, News & General
Topic: Re-evaluating Total World Bond (BNDW)?
Replies: 153
Views: 14173

Re: Re-evaluating Total World Bond (BNDW)?

watchnerd wrote: Sat Feb 20, 2021 9:49 am Do you think that also applies to the EM bond portion of BNDW?
I would avoid EM bonds for other reasons. While most (all?) EM central banks lack access to Fed liquidity swaps, EM bonds are at a level of risk that makes them a different class of asset to me from US Treasuries or Developed Market sovereign bonds.

If you want to own EM bonds, I would consider them part of your risky assets like stocks and not part of your safe assets like Treasuries or even high quality corporate bonds like those in US Total Bond Market.

I do not now nor do I have any plans to add international bonds to my portfolio.
by Alchemist
Fri Feb 19, 2021 10:10 pm
Forum: Investing - Theory, News & General
Topic: Re-evaluating Total World Bond (BNDW)?
Replies: 153
Views: 14173

Re: Re-evaluating Total World Bond (BNDW)?

watchnerd wrote: Fri Feb 19, 2021 12:32 pm Are there now more compelling reasons than before for US investors to consider a total world bond approach?
Considering how many foreign central banks had to depend on the U.S. Federal Reserve's generosity with bank liquidity swaps during both he GFC and the pandemic; no.

Or put differently: when the USD stops being the global reserve currency then non-USD bonds might be something to consider. Until then there is no additional safety to be gained from adding foreign bonds to a US investors portfolio.
by Alchemist
Sun Feb 07, 2021 7:08 pm
Forum: Personal Consumer Issues
Topic: Hotel / AirBnB WiFi - Trust it?
Replies: 32
Views: 2546

Re: Hotel / AirBnB WiFi - Trust it?

I would think a VPN should take care of this problem for you. ExpressVPN and Private Internet Access are two popular ones. Combined with “HTTPS Everywhere” I wouldn’t worry about public wifis for one more second A VPN adds literally no security in this scenario. This is simply wrong and is exactly the use case for VPNs while traveling. Now, overall, if the websites being visited use HTTPS the risk is already quite low. However, reputable VPNs do add a layer of security. The first is that the websites being visited cannot be logged by the WiFi network. While HTTPS protects internal traffic, the website domain is not obscured. Secondly a VPN prevents man-in-the-middle attacks that would be the most dangerous likely attack on a public WiFi ne...
by Alchemist
Sun Feb 07, 2021 6:02 am
Forum: Investing - Theory, News & General
Topic: Theoretical model: what happens to asset classes when public debts are cancelled?
Replies: 5
Views: 705

Re: Theoretical model: what happens to asset classes when public debts are cancelled?

I hope this thread survives the mods because it is an interesting question... I do not have an answer but just wanted to note a few things. The first is that this would likely be seen as some kind of partial default by the market, at least at first, causing interest rate spikes on the debt not held by central banks. But that is just a guess. The second is that it is already a little bit like this as any profits the central bank accrues (at least in the U.S.) goes to the U.S. treasury anyway. Or put another way, the Treasury pays interest to the Federal Reserve on the Treasuries owned by the Fed. The Fed then passes these payments on to the Treasury as Fed-accrued 'profits'. So that's weird... Third and final thought; if the debt was cancell...