Small Cap Value heads Rejoice !!!

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Nathan Drake
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

Huge outperformance today for SCV
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Re: Small Cap Value heads Rejoice !!!

Post by SafeBonds »

Nathan Drake wrote: Mon Sep 27, 2021 9:09 am Huge outperformance today for SCV
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Re: Small Cap Value heads Rejoice !!!

Post by SadCryingValiant »

Feels pretty good to be all in SCV this week.
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Re: Small Cap Value heads Rejoice !!!

Post by Hedgy »

FiveFactor wrote: Sat Sep 25, 2021 11:54 am
nisiprius wrote: Sat Sep 25, 2021 11:24 am
FiveFactor wrote: Sat Sep 25, 2021 5:47 am...Larry Swederoe recommends 100% SCV for equities...
No. He. Does. Not.
Yes, he [Larry Swedroe] does. He also said his personal portfolio is 100% SV for equities. The rest of his portfolio are alternatives. He abandond bonds. Posted all of this on the RR forum. You can go search it yourself.
Can anyone elaborate on this claim? I've long been an avid reader of Larry's work and following his guidance has had a great impact on my investing. If he has truly abandoned bonds, I'd really like to know that, as well as the rationale.
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

I think the point Five Factor is making is that Larry uses bonds plus SCV, where 100% of the equity portion is SCV, not 100% of the portfolio. For example a portfolio of 40% treasuries plus 60% SCV

I also do not agree that Larry recommends 100% SCV for most people
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Re: Small Cap Value heads Rejoice !!!

Post by Jack56 »

Doesn't seem smart to be 100% in anything -- since that would indicate that you are confident you can foresee the future with 100% probability.
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Re: Small Cap Value heads Rejoice !!!

Post by thenextguy »

Looks like valuations matter today.
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Re: Small Cap Value heads Rejoice !!!

Post by Hedgy »

muffins14 wrote: Mon Sep 27, 2021 12:32 pm I think the point Five Factor is making is that Larry uses bonds plus SCV, where 100% of the equity portion is SCV, not 100% of the portfolio. For example a portfolio of 40% treasuries plus 60% SCV

I also do not agree that Larry recommends 100% SCV for most people
That's not what Five Factor said. Five Factor said that 100% of Larry's equities are in SCV, that he invests in alternatives, and that "He abandoned bonds." Not sure how you're getting 40% treasuries from the statement that "He abandoned bonds." Both can't be true. As I said, since I value Larry's guidance tremendously (and have a significant bond position due in part to Larry's guidance), I'm concerned, and I'd appreciate it if anyone could elaborate.
Thanks, all.
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Re: Small Cap Value heads Rejoice !!!

Post by SafeBonds »

Hedgy wrote: Mon Sep 27, 2021 1:02 pm
muffins14 wrote: Mon Sep 27, 2021 12:32 pm I think the point Five Factor is making is that Larry uses bonds plus SCV, where 100% of the equity portion is SCV, not 100% of the portfolio. For example a portfolio of 40% treasuries plus 60% SCV

I also do not agree that Larry recommends 100% SCV for most people
That's not what Five Factor said. Five Factor said that 100% of Larry's equities are in SCV, that he invests in alternatives, and that "He abandoned bonds." Not sure how you're getting 40% treasuries from the statement that "He abandoned bonds." Both can't be true. As I said, since I value Larry's guidance tremendously (and have a significant bond position due in part to Larry's guidance), I'm concerned, and I'd appreciate it if anyone could elaborate.
Thanks, all.
FiveFactor suggested you search these posts he made on the RR forum. Though it would have been nice if he did the work himself and backed up his claim with a link to a post

https://community.rationalreminder.ca/u ... e/activity
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

Hedgy wrote: Mon Sep 27, 2021 1:02 pm
muffins14 wrote: Mon Sep 27, 2021 12:32 pm I think the point Five Factor is making is that Larry uses bonds plus SCV, where 100% of the equity portion is SCV, not 100% of the portfolio. For example a portfolio of 40% treasuries plus 60% SCV

I also do not agree that Larry recommends 100% SCV for most people
That's not what Five Factor said. Five Factor said that 100% of Larry's equities are in SCV, that he invests in alternatives, and that "He abandoned bonds." Not sure how you're getting 40% treasuries from the statement that "He abandoned bonds." Both can't be true. As I said, since I value Larry's guidance tremendously (and have a significant bond position due in part to Larry's guidance), I'm concerned, and I'd appreciate it if anyone could elaborate.
Thanks, all.
I am just giving you an example split because I do not see evidence that Larry has completely abandoned bonds either for himself or in his recommendations for others. I was trying to illustrate that someone can have “100% of equities” in SCV, but that that doesn’t mean you can’t have bonds.
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Re: Small Cap Value heads Rejoice !!!

Post by YRT70 »

Hedgy wrote: Mon Sep 27, 2021 12:29 pm
FiveFactor wrote: Sat Sep 25, 2021 11:54 am
nisiprius wrote: Sat Sep 25, 2021 11:24 am
FiveFactor wrote: Sat Sep 25, 2021 5:47 am...Larry Swederoe recommends 100% SCV for equities...
No. He. Does. Not.
Yes, he [Larry Swedroe] does. He also said his personal portfolio is 100% SV for equities. The rest of his portfolio are alternatives. He abandond bonds. Posted all of this on the RR forum. You can go search it yourself.
Can anyone elaborate on this claim? I've long been an avid reader of Larry's work and following his guidance has had a great impact on my investing. If he has truly abandoned bonds, I'd really like to know that, as well as the rationale.
I think it's correct that Larry switched from bonds to alternatives. He's been talking about it on this forum too, and received a lot of criticism because of it. You can probably find some threads on this forum where he has talked about alternatives. There's also his book 'Reducing the risk of black swans' where he explains alternatives.

I don't know enough about alternatives to truly evaluate them but if I had access to them I probably wouldn't invest in them. I don't like the combination of relatively high costs, relatively short track records with so-so returns. There's even the risk of closure which has happened to one of these funds.
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

Here is a recent post by Larry about fixed income
My pleasure
Here is my thought if not aware. Bonds like Treasuries have TWO risks despite most investors thinking they have one–rising rates. But they have two, falling rates which creates reinvestment risk. So I want to balance duration risk with reinvestment risk. So I think good place to be, which matches what historically has been about the sweet spot is say 4-5 years. I will extend a bit (year or 2) when curve very steep and shorten a bit (maybe to 3 years, but not less) if curve flat, which is based on the evidence.
Now in recent years with negative real rates and IMO significant inflation risk I have moved away from all bonds being “safe” (basically no credit risk) to taking credit risk in private debt (big illiquidity premium which is not a risk for me) in return for large spread (current yields about 7-8%+) and eliminating basically interest rate risk. So to me that is a good trade off—equity like returns expected but only about 1/4-1/5 volatility of equities and even less downside than that in tail risks. But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.
Hope that helps
Larry
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Re: Small Cap Value heads Rejoice !!!

Post by fennewaldaj »

Is today's SCV over LCG growth rotation tied to any piece of news? Usually with something this dramatic you expect to see a cause.
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

Maybe just renewed interest in taper plus inflation plus economic improvements correlating with good opportunities for value stocks?
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Re: Small Cap Value heads Rejoice !!!

Post by stocknoob4111 »

don't worry, tomorrow it will give back all it's gains, Small Caps have been vacillating in this same range for the last 8 months.. until there is a breakout I don't buy that it's outperforming
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Re: Small Cap Value heads Rejoice !!!

Post by nisiprius »

Nathan Drake wrote: Mon Sep 27, 2021 1:36 pm Here is a recent post by Larry about fixed income
My pleasure
Here is my thought if not aware. Bonds like Treasuries have TWO risks despite most investors thinking they have one–rising rates. But they have two, falling rates which creates reinvestment risk. So I want to balance duration risk with reinvestment risk. So I think good place to be, which matches what historically has been about the sweet spot is say 4-5 years. I will extend a bit (year or 2) when curve very steep and shorten a bit (maybe to 3 years, but not less) if curve flat, which is based on the evidence.
Now in recent years with negative real rates and IMO significant inflation risk I have moved away from all bonds being “safe” (basically no credit risk) to taking credit risk in private debt (big illiquidity premium which is not a risk for me) in return for large spread (current yields about 7-8%+) and eliminating basically interest rate risk. So to me that is a good trade off—equity like returns expected but only about 1/4-1/5 volatility of equities and even less downside than that in tail risks. But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.
Hope that helps
Larry
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Re: Small Cap Value heads Rejoice !!!

Post by Hedgy »

Thank you, Nathan Drake, for posting. Oh boy - that's what I was afraid of reading!
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

More recent thoughts from Larry on this podcast. Discussion of his strategies starts around 20 minutes.

https://youtu.be/celBzz8JClw
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

Hedgy wrote: Mon Sep 27, 2021 4:41 pm Thank you, Nathan Drake, for posting. Oh boy - that's what I was afraid of reading!
Why were you afraid of reading that? He says to keep holding bonds

“ But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.”

More specifically he seems to be saying he considers other things to increase yield besides only relying on treasuries (the zero credit-risk asset)
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Re: Small Cap Value heads Rejoice !!!

Post by typical.investor »

Nathan Drake wrote: Mon Sep 27, 2021 1:36 pm Here is a recent post by Larry about fixed income
My pleasure
Here is my thought if not aware. Bonds like Treasuries have TWO risks despite most investors thinking they have one–rising rates. But they have two, falling rates which creates reinvestment risk. So I want to balance duration risk with reinvestment risk. So I think good place to be, which matches what historically has been about the sweet spot is say 4-5 years. I will extend a bit (year or 2) when curve very steep and shorten a bit (maybe to 3 years, but not less) if curve flat, which is based on the evidence.
Now in recent years with negative real rates and IMO significant inflation risk I have moved away from all bonds being “safe” (basically no credit risk) to taking credit risk in private debt (big illiquidity premium which is not a risk for me) in return for large spread (current yields about 7-8%+) and eliminating basically interest rate risk. So to me that is a good trade off—equity like returns expected but only about 1/4-1/5 volatility of equities and even less downside than that in tail risks. But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.
Hope that helps
Larry
Interesting. Larry often does deep dives into predictions and actual returns. I find it curious that there has been no deep dive into the alternatives he recommended to replace safe bonds (no not entirely).

So how have the "equity like returns" and downside turned out in the 2020 downturn?

In any case, with small value not doing well in recent years, and treasuries which Larry used heavily to balance off the higher risk of small value; it's no wonder he is looking for higher yield. Plus, the firm he works for needs a recommendation to sell.

Anyway, ok. Take credit risk in private debt Larry says because the illiquidity isn't a concern (for him).

For me, I was happy to be longer than 4-5 years in safe assets when the economy tumbled, and I think having value exposure will offset duration risk. However I am not separating my holdings and looking at them individually, but rather overall.

Is using the peer lending fund, reinsurance fund, QSPIX (alternative style premium) [and paying an advisor's fee] really better than just carrying a little higher equity allocation balanced off with safe assets?

And is there investment capacity with private debt? Larry gets very defensive and attacks when someone points out industry reviews citing large flows into reinsurance as potentially reducing future premiums. I haven't looked at it real recently, but I don't see his statements as always being real objective.

So is there anything objectively written about how alternatives have actually performed in terms of returns and volatility?
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Re: Small Cap Value heads Rejoice !!!

Post by 000 »

Nathan Drake wrote: Mon Sep 27, 2021 1:36 pm Here is a recent post by Larry about fixed income
My pleasure
Here is my thought if not aware. Bonds like Treasuries have TWO risks despite most investors thinking they have one–rising rates. But they have two, falling rates which creates reinvestment risk. So I want to balance duration risk with reinvestment risk. So I think good place to be, which matches what historically has been about the sweet spot is say 4-5 years. I will extend a bit (year or 2) when curve very steep and shorten a bit (maybe to 3 years, but not less) if curve flat, which is based on the evidence.
Now in recent years with negative real rates and IMO significant inflation risk I have moved away from all bonds being “safe” (basically no credit risk) to taking credit risk in private debt (big illiquidity premium which is not a risk for me) in return for large spread (current yields about 7-8%+) and eliminating basically interest rate risk. So to me that is a good trade off—equity like returns expected but only about 1/4-1/5 volatility of equities and even less downside than that in tail risks. But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.
Hope that helps
Larry
Where have I heard that before....?
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

000 wrote: Mon Sep 27, 2021 7:24 pm
Nathan Drake wrote: Mon Sep 27, 2021 1:36 pm Here is a recent post by Larry about fixed income
My pleasure
Here is my thought if not aware. Bonds like Treasuries have TWO risks despite most investors thinking they have one–rising rates. But they have two, falling rates which creates reinvestment risk. So I want to balance duration risk with reinvestment risk. So I think good place to be, which matches what historically has been about the sweet spot is say 4-5 years. I will extend a bit (year or 2) when curve very steep and shorten a bit (maybe to 3 years, but not less) if curve flat, which is based on the evidence.
Now in recent years with negative real rates and IMO significant inflation risk I have moved away from all bonds being “safe” (basically no credit risk) to taking credit risk in private debt (big illiquidity premium which is not a risk for me) in return for large spread (current yields about 7-8%+) and eliminating basically interest rate risk. So to me that is a good trade off—equity like returns expected but only about 1/4-1/5 volatility of equities and even less downside than that in tail risks. But still hold significant safe bonds to have negatively correlating assets to rebalance with if the left tail economic risks do show up.
Hope that helps
Larry
We've heard this before...
Larry has worked his entire career around managing risks. I am a little skeptical of that statement, however part of the reason for "equity like" returns is due to the illiquidity premium he talks about for these alternates.
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Re: Small Cap Value heads Rejoice !!!

Post by 000 »

Nathan Drake wrote: Mon Sep 27, 2021 7:28 pm Larry has worked his entire career around managing risks. I am a little skeptical of that statement, however part of the reason for "equity like" returns is due to the illiquidity premium he talks about for these alternates.
Well of course, if it's illiquid you can't notice the volatility! :oops:
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Re: Small Cap Value heads Rejoice !!!

Post by typical.investor »

My pleasure
equity like returns expected but only about 1/4-1/5 volatility of equities
Larry
000 wrote: Mon Sep 27, 2021 7:52 pm
Nathan Drake wrote: Mon Sep 27, 2021 7:28 pm Larry has worked his entire career around managing risks. I am a little skeptical of that statement, however part of the reason for "equity like" returns is due to the illiquidity premium he talks about for these alternates.
Well of course, if it's illiquid you can't notice the volatility! :oops:
And if true, why isn't credit risk in private debt the default portfolio for the average investor? Except for the most active traders, who would be unable to say ok 15% or so of my retirement money will be in illiquid investments?

Similarly, if SCV is so sure to outperform, then why isn't a SCV tilt the default portfolio? Fama isn't arguing it should be.

I'd argue in both cases that there is a real risk that the expected returns are not actually what the returns turn out to be. I'd also argue the the premium for these investments is earned by taking that risk.

And I think that Larry's advice is shaded to the best case for these investments because he is, at his job, looking for investments that justify the fee that the company he works for charges. Maybe this is a result of an advisor previously having recommended private REITs pre 2007. Some eventually went public and some eventually went bankrupt. I am thus forever wary.

To me, value stocks kinda seem like a hedge to inflation risk anyway.
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Re: Small Cap Value heads Rejoice !!!

Post by dan7800 »

typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
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Re: Small Cap Value heads Rejoice !!!

Post by typical.investor »

dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I don't view them that way.

Sure, in the 2002 drop they were much better than TSM. That is the period of outperformance for real SCV funds of course.

In general though, small caps suffer worse drawdowns. 2008-2009, SCV was the worst. In 2001, SC was worse than SCV but both worse than TSM. Same in 2016. In 2020, SCV was the worst (-35% for SCV vs -20% for TSM), and Larry's recommended SCV fund BOSVX lost 50% -- not necessarily a bad fund but it is truly SCV and behaving how I'd expect.

I don't see value as hedging the market in downturns, but I am looking at actual funds. Not sure what hypothetical long/short exposure shows.
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I would argue the exact opposite: SCV earns a premium on average because it will do poorly first in a downturn
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Re: Small Cap Value heads Rejoice !!!

Post by kelway »

muffins14 wrote: Mon Sep 27, 2021 10:20 pm
dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I would argue the exact opposite: SCV earns a premium on average because it will do poorly first in a downturn
...And tends to recover first after the recovery begins.
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

kelway wrote: Mon Sep 27, 2021 10:25 pm
muffins14 wrote: Mon Sep 27, 2021 10:20 pm
dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I would argue the exact opposite: SCV earns a premium on average because it will do poorly first in a downturn
...And tends to recover first after the recovery begins.
maybe?
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Re: Small Cap Value heads Rejoice !!!

Post by absolute zero »

muffins14 wrote: Mon Sep 27, 2021 10:20 pm
dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I would argue the exact opposite: SCV earns a premium on average because it will do poorly first in a downturn
I didn’t hear him cite a specific paper or anything, but this guy from GMO (Ben Inker) claimed around 10:50 that value tends to do a bit better when the economy is doing poorly, but also said that the evidence is pretty weak i.e. data is not very convincing in either direction.

https://youtu.be/ORsJxw1-7s0
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

+1 % relative to total market so far today; rejoice.
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Re: Small Cap Value heads Rejoice !!!

Post by Forester »

absolute zero wrote: Mon Sep 27, 2021 10:50 pm
muffins14 wrote: Mon Sep 27, 2021 10:20 pm
dan7800 wrote: Mon Sep 27, 2021 8:51 pm
typical.investor wrote: Mon Sep 27, 2021 8:13 pm To me, value stocks kinda seem like a hedge to inflation risk anyway.
I believe that SCV have historically done well in down markets? Therefore, can't they viewed as a hedge against a down market?
I would argue the exact opposite: SCV earns a premium on average because it will do poorly first in a downturn
I didn’t hear him cite a specific paper or anything, but this guy from GMO (Ben Inker) claimed around 10:50 that value tends to do a bit better when the economy is doing poorly, but also said that the evidence is pretty weak i.e. data is not very convincing in either direction.

https://youtu.be/ORsJxw1-7s0
I listened to this podcast earlier, it has some fresh takes on value vs growth, well worth a watch/listen
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Re: Small Cap Value heads Rejoice !!!

Post by One More Thing »

Mathematically SCV makes sense. Buy stocks with more room to grow market capital at prices with more room to expand P/E. What is the psychology of the markets that causes SCV to outperform? The markets seem to favor Momentum and Quality over Size or Value. Is this historically persistent except for the sudden rushes to SCV? If so, what causes markets to decide to shift money towards SCV for brief periods of time?
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Re: Small Cap Value heads Rejoice !!!

Post by zie »

One More Thing wrote: Tue Sep 28, 2021 12:49 pm Mathematically SCV makes sense. Buy stocks with more room to grow market capital at prices with more room to expand P/E. What is the psychology of the markets that causes SCV to outperform? The markets seem to favor Momentum and Quality over Size or Value. Is this historically persistent except for the sudden rushes to SCV? If so, what causes markets to decide to shift money towards SCV for brief periods of time?
Up thread, I tried to answer that here:
zie wrote: Fri Sep 24, 2021 3:53 pm ... so far WHY it's true is still up in the air, this paper says:
Across several tests we find no supporting evidence for these explanations, with global return factors bearing basically no relationship to market, downside or macroeconomic risks.
So it doesn't seem to be rational risks, so perhaps it's behavioural? i.e. Momentum comes from Greed and the other factors come from Fear. It's a theory. So far unproven.
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Re: Small Cap Value heads Rejoice !!!

Post by Booogle »

I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
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Re: Small Cap Value heads Rejoice !!!

Post by jason2459 »

Booogle wrote: Tue Sep 28, 2021 6:15 pm I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
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Re: Small Cap Value heads Rejoice !!!

Post by Booogle »

jason2459 wrote: Tue Sep 28, 2021 6:26 pm
Booogle wrote: Tue Sep 28, 2021 6:15 pm I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
https://hsainvestments.com/fundperforma ... ketcycles/

View as desktop site if you're on a phone. Will go back to 2002.
If you take 2011-2021 as a whole, VTSAX outperformed everything besides large cap growth.
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Re: Small Cap Value heads Rejoice !!!

Post by jason2459 »

Booogle wrote: Wed Sep 29, 2021 11:12 am
jason2459 wrote: Tue Sep 28, 2021 6:26 pm
Booogle wrote: Tue Sep 28, 2021 6:15 pm I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
https://hsainvestments.com/fundperforma ... ketcycles/

View as desktop site if you're on a phone. Will go back to 2002.
If you take 2011-2021 as a whole, VTSAX outperformed everything besides large cap growth.
I think I'd be happy with mid-cap value too. One reason I like VBR as it does have mid and small cap value.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: Small Cap Value heads Rejoice !!!

Post by Booogle »

jason2459 wrote: Wed Sep 29, 2021 1:42 pm
Booogle wrote: Wed Sep 29, 2021 11:12 am
jason2459 wrote: Tue Sep 28, 2021 6:26 pm
Booogle wrote: Tue Sep 28, 2021 6:15 pm I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
https://hsainvestments.com/fundperforma ... ketcycles/

View as desktop site if you're on a phone. Will go back to 2002.
If you take 2011-2021 as a whole, VTSAX outperformed everything besides large cap growth.
I think I'd be happy with mid-cap value too. One reason I like VBR as it does have mid and small cap value.

Extended Market stomps on VBR

https://www.portfoliovisualizer.com/bac ... ion2_2=100
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jason2459
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Re: Small Cap Value heads Rejoice !!!

Post by jason2459 »

Booogle wrote: Wed Sep 29, 2021 4:53 pm
jason2459 wrote: Wed Sep 29, 2021 1:42 pm
Booogle wrote: Wed Sep 29, 2021 11:12 am
jason2459 wrote: Tue Sep 28, 2021 6:26 pm
Booogle wrote: Tue Sep 28, 2021 6:15 pm I can't read 100 pages.

Is there a part of the total market that outperformed the SP500 in the last ten years?

As far as I know, it was mega cap growth.
https://hsainvestments.com/fundperforma ... ketcycles/

View as desktop site if you're on a phone. Will go back to 2002.
If you take 2011-2021 as a whole, VTSAX outperformed everything besides large cap growth.
I think I'd be happy with mid-cap value too. One reason I like VBR as it does have mid and small cap value.

Extended Market stomps on VBR

https://www.portfoliovisualizer.com/bac ... ion2_2=100
You mean stomped and in that particular time period. No idea what it will do. Either way no thanks. I already own the extended market through other means.
"In the short run, the stock market is a voting machine; in the long run, it is a weighing machine" ~Benjamin Graham
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Re: Small Cap Value heads Rejoice !!!

Post by LadyGeek »

The discussion is getting derailed. Please stay on-topic, which is small-cap value.
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Re: Small Cap Value heads Rejoice !!!

Post by SadCryingValiant »

Good month for SCV.
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Re: Small Cap Value heads Rejoice !!!

Post by Whakamole »

For those holding both domestic and international SCV - do you have strong feelings on placing it in taxable vs. Roth vs. tax-deferred?

I've been leaning towards tax-deferred or Roth, in case Avantis loses the plot, or a better alternative comes along.
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Re: Small Cap Value heads Rejoice !!!

Post by muffins14 »

No strong feelings. I'm maybe 50% SCV and 50% total market funds.

In taxable it's closer to say 70 total market and 30 SCV and in tax-deferred it's closer to 30/70. Thought process is that i'd rather avoid more taxes on the usually-higher yields of the value stocks relative to total market or even growth stocks (which I hold some of in taxable to further reduce taxes)
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Re: Small Cap Value heads Rejoice !!!

Post by Nicolas »

Whakamole wrote: Tue Oct 05, 2021 8:58 am For those holding both domestic and international SCV - do you have strong feelings on placing it in taxable vs. Roth vs. tax-deferred?

I've been leaning towards tax-deferred or Roth, in case Avantis loses the plot, or a better alternative comes along.
My SCV is all in Roth and in my HSA. I had a chunk in taxable for awhile but I was afraid of the capital gains so I sold that and redeployed it into VOO, but it was only about 2% or 3% of my SCV. I probably should’ve just left it alone. Overall my SCV is 26% of my portfolio and it’s all in AVUV.
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Re: Small Cap Value heads Rejoice !!!

Post by Nathan Drake »

Whakamole wrote: Tue Oct 05, 2021 8:58 am For those holding both domestic and international SCV - do you have strong feelings on placing it in taxable vs. Roth vs. tax-deferred?

I've been leaning towards tax-deferred or Roth, in case Avantis loses the plot, or a better alternative comes along.
Yields for AVUV and AVDV are reasonably low, and no capital gains have been distributed.

While I hold most SCV in tax advantaged, I am making all after tax contributions to SCV funds
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Small Cap Value heads Rejoice !!!

Post by absolute zero »

Nathan Drake wrote: Tue Oct 05, 2021 2:07 pm
Whakamole wrote: Tue Oct 05, 2021 8:58 am For those holding both domestic and international SCV - do you have strong feelings on placing it in taxable vs. Roth vs. tax-deferred?

I've been leaning towards tax-deferred or Roth, in case Avantis loses the plot, or a better alternative comes along.
Yields for AVUV and AVDV are reasonably low, and no capital gains have been distributed.

While I hold most SCV in tax advantaged, I am making all after tax contributions to SCV funds
AVUV was extremely tax efficient last year. AVDV, on the other hand, had a pretty decent sized tax drag (IMO). Thread below started by grabiner has more details.

viewtopic.php?t=342708
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Re: Small Cap Value heads Rejoice !!!

Post by grabiner »

Whakamole wrote: Tue Oct 05, 2021 8:58 am For those holding both domestic and international SCV - do you have strong feelings on placing it in taxable vs. Roth vs. tax-deferred?

I've been leaning towards tax-deferred or Roth, in case Avantis loses the plot, or a better alternative comes along.
If you might want to switch providers, this suggests holding a fund in tax-advantaged.

Otherwise, or if you have to hold something in taxable, look at the tax costs of the individual funds: Tax costs for US and international value ETFs. Based on the historical tax costs, I chose to hold IVLU (iShares EAFE Factor Value ETF, large-cap foreign value) in taxable, and VFVA (Vanguard Factor Value ETF) and AVDV (iShares International Small-Cap Value ETF) in my Roth IRA and HSA.

It is probably better to hold blend funds in taxable and value factor funds in tax-advantaged if you have the choice, since value funds tend to have higher dividends. i don't have the choice because I ran out of tax-deferred room.
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Re: Small Cap Value heads Rejoice !!!

Post by FiveFactor »

Hedgy wrote: Mon Sep 27, 2021 12:29 pm
FiveFactor wrote: Sat Sep 25, 2021 11:54 am
nisiprius wrote: Sat Sep 25, 2021 11:24 am
FiveFactor wrote: Sat Sep 25, 2021 5:47 am...Larry Swederoe recommends 100% SCV for equities...
No. He. Does. Not.
Yes, he [Larry Swedroe] does. He also said his personal portfolio is 100% SV for equities. The rest of his portfolio are alternatives. He abandond bonds. Posted all of this on the RR forum. You can go search it yourself.
Can anyone elaborate on this claim? I've long been an avid reader of Larry's work and following his guidance has had a great impact on my investing. If he has truly abandoned bonds, I'd really like to know that, as well as the rationale.
Simple answer. When the evidence changes, Larry changes his mind, while bogleheads dig into dogma. At some point that gap between evidence and dogma got wide enough that bogleheads now see “good Larry” - from back when opinions were more aligned - and “bad Larry” - who is now derided as a hedge fund shill.

Personally, I stick with the evidence, not the dogma.

Larry’s Twitter feed has most of his published works. Want his opinion, use that as your directory
Small/Value/Profitability: | 30% AVUV | 30% AVDV | 30% AVES | Momentum: | 5% QMOM | 5% IMOM | Volatility: | 0.1% PUTW | Term: | 0.1% BND
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Re: Small Cap Value heads Rejoice !!!

Post by nisiprius »

FiveFactor wrote: Sat Oct 09, 2021 5:20 am...bogleheads now see “good Larry” - from back when opinions were more aligned - and “bad Larry” - who is now derided as a hedge fund shill.
I can't remember Larry Swedroe ever having a good thing to say about hedge funds. Not then, not now.

Not in 2009, in The Only Guide to Alternative Investments You'll Ever Need: The Good, the Flawed, the Bad, and the Ugly:

Image

Not in 2021: Be Thankful You Don't Have Access To Hedge Funds
  • The exclusive nature of hedge funds, available only to institutional and wealthy (accredited) investors, makes many small individual investors wish they had access to this exotic asset.
  • Over the last 10, 15, and 20 years, an exposure to global stocks (bonds) of 31.0%(69%), 24.5 (75.5.%), and 23.7% (76.3%), would have matched the volatility of hedge funds while producing higher returns.
  • Gold has provided more downside protection than have hedge funds.
  • Hedge fund performance has deteriorated over the past 20 years as markets became more efficient and their trades become more crowded.
I don't remember any Boglehead ever saying that Larry Swedroe was shilling for hedge funds, either.
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