Small Cap Value heads Rejoice !!!
Re: Small Cap Value heads Rejoice !!!
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Last edited by Nicolas on Wed Nov 02, 2022 3:39 am, edited 1 time in total.
Re: Small Cap Value heads Rejoice !!!
Only 2.7% for my 401(k)s DFA fund (which seems to be similar to DFA Targeted Value), but I'll take it
Re: Small Cap Value heads Rejoice !!!
I acknowledge it's subjective but I think most people would say 25% in AVUV is a lot. That being said, I hold slightly more, about 28%.FiveFactor wrote: ↑Sat Aug 28, 2021 6:36 am1: 25% is not a lot
Re: Small Cap Value heads Rejoice !!!
I agree. OP also said 25% of their holdings. Not 25% of his stock, or 25% of the domestic stock. Perhaps their portfolio is 25% AVUV, 25% international stocks, 50% bonds. In this case it would be inappropriate to say "25% is not a lot". But on the other hand if OP has the same asset allocation but only 25% of his domestic stock is AVUV then I can understand. For example 6.25% AVUV, 18.75% VTI, 25% international stock, 50% bonds.YRT70 wrote: ↑Sun Aug 29, 2021 3:14 amI acknowledge it's subjective but I think most people would say 25% in AVUV is a lot. That being said, I hold slightly more, about 28%.FiveFactor wrote: ↑Sat Aug 28, 2021 6:36 am1: 25% is not a lot
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Re: Small Cap Value heads Rejoice !!!
And you are not well suited for it. Congratulating yourself on a few months holding, then feeling so insecure about that that you feel you need to tell me you are wealthy. That is not the psychological profile that succeeds with Value investing. Too impulsive and lacking in solid foundation of self.Nicolas wrote: ↑Sat Aug 28, 2021 7:07 amWell, with the size of my portfolio I feel heavily investedFiveFactor wrote: ↑Sat Aug 28, 2021 6:36 am
1: 25% is not a lot
2: if you are congratulating yourself on holding for a few months, SCV isn’t for you
I see from your sig that you’re at 40%. By the way, it’s spelled “Avantis”, not “Advantis”.
I’ve been holding only since November, not a long time, but I’ve never owned pure value before. I’ve made a lot of money
Keep your wealth. Stay away from value investing.
Small/Value/Profitability: |
30% AVUV |
30% AVDV |
30% AVES |
Momentum: |
5% QMOM |
5% IMOM |
Volatility: |
0.1% PUTW |
Term: |
0.1% BND
Re: Small Cap Value heads Rejoice !!!
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Re: Small Cap Value heads Rejoice !!!
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Re: Small Cap Value heads Rejoice !!!
Yeah you are not fit to invest in SCV with that kind of trading behaviorNicolas wrote: ↑Mon Aug 30, 2021 3:10 pmI didn’t mean to brag I just couldn’t think of anything else to say in reply. The reason I was congratulating myself is because I was sorely tempted to sell in mid-summer, but I did not yield to temptation. I suppose the fact that I was tempted at all is further evidence I shouldn’t be investing in the value segment. But when the first vaccine was announced last year and SCV took off like a rocket I couldn’t resist. I got in early in that move and I made a ton of money. Knowing me if it starts to lag I’ll probably dump it. So I think you’re a good judge of character.FiveFactor wrote: ↑Mon Aug 30, 2021 9:19 am And you are not well suited for it. Congratulating yourself on a few months holding, then feeling so insecure about that that you feel you need to tell me you are wealthy. That is not the psychological profile that succeeds with Value investing. Too impulsive and lacking in solid foundation of self.
Keep your wealth. Stay away from value investing.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
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Re: Small Cap Value heads Rejoice !!!
Are you a retiree? This breakdown is the most aggressive AA I've ever seen, esp. if you don't have pensions / RE.Nicolas wrote: ↑Mon Aug 30, 2021 3:03 pmI’m 98.6% stock, all domestic and mostly S&P 500 index funds/ETFs, except for a big chunk of AAPL that I’ve been holding for eleven years and don’t want to sell because it’s in taxable, and of course the AVUV which is all in Roth accounts, 0.7% bonds, and 0.7% cash.SafeBonds wrote: ↑Mon Aug 30, 2021 8:08 am OP also said 25% of their holdings. Not 25% of his stock, or 25% of the domestic stock. Perhaps their portfolio is 25% AVUV, 25% international stocks, 50% bonds. In this case it would be inappropriate to say "25% is not a lot". But on the other hand if OP has the same asset allocation but only 25% of his domestic stock is AVUV then I can understand. For example 6.25% AVUV, 18.75% VTI, 25% international stock, 50% bonds.
Re: Small Cap Value heads Rejoice !!!
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Re: Small Cap Value heads Rejoice !!!
Awesome, that's some amazing AA hope SCV works out for you as well.Nicolas wrote: ↑Mon Aug 30, 2021 3:22 pm Yes retired five years and I live solely on my non-COLA pension. I have not started SS yet and plan to wait till 70. If inflation takes off SS will take up the slack. Also I have not dipped into my portfolio yet, just riding the wave higher! I may never need my savings, though I have wanted a Corvette since age 7, but I don’t need one (I guess nobody does).
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Re: Small Cap Value heads Rejoice !!!
A roaring bull market like we've had for 12 years except for a very brief Covid bear, creates numerous self-styled investing experts. The easiest mistake to make in the world is for an individual investor to mistake an exuberant bull market for his own investing genius.The prevalence of self-styled investing geniuses declines steadily as the decades pass and yesterdays winners become tomorrows losers. The market over long periods of time cycles from bull to bear and back, from growth to value and back, from US to INTL and back, from momentum to low volatility and back. Investors whose performance shone brightly in the last cycle by overloading on winners often suffer most in the next cycle. As a wise investor once said, "The Market Timing Hall of Fame is an empty room."
After a few decades of investing, most of us if we are honest with ourselves (which many are not) develop some measure of humility and lose some confidence in our ability to separate future winners from future losers on a consistent basis, especially in a risk adjusted manner. If you have done extraordinarily well lately, enjoy your outsized gains from this wonderful bull market. It's wonderful to be on board when that bull train speeds down the tracks. You take risk and get rewarded handsomely for it. IMO it would be unwise to expect this scenario to keep playing forever. When the dominant market theme is performance chasing that historically has been a good time to consider adding a measure of overlooked stocks that have missed that fun bull express train.
Garland Whizzer
After a few decades of investing, most of us if we are honest with ourselves (which many are not) develop some measure of humility and lose some confidence in our ability to separate future winners from future losers on a consistent basis, especially in a risk adjusted manner. If you have done extraordinarily well lately, enjoy your outsized gains from this wonderful bull market. It's wonderful to be on board when that bull train speeds down the tracks. You take risk and get rewarded handsomely for it. IMO it would be unwise to expect this scenario to keep playing forever. When the dominant market theme is performance chasing that historically has been a good time to consider adding a measure of overlooked stocks that have missed that fun bull express train.
Garland Whizzer
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Re: Small Cap Value heads Rejoice !!!
One must be able to stay with SCV for the long-term to reasonably invest in it (or V or SC for that matter).Nathan Drake wrote: ↑Mon Aug 30, 2021 3:11 pmYeah you are not fit to invest in SCV with that kind of trading behaviorNicolas wrote: ↑Mon Aug 30, 2021 3:10 pmI didn’t mean to brag I just couldn’t think of anything else to say in reply. The reason I was congratulating myself is because I was sorely tempted to sell in mid-summer, but I did not yield to temptation. I suppose the fact that I was tempted at all is further evidence I shouldn’t be investing in the value segment. But when the first vaccine was announced last year and SCV took off like a rocket I couldn’t resist. I got in early in that move and I made a ton of money. Knowing me if it starts to lag I’ll probably dump it. So I think you’re a good judge of character.FiveFactor wrote: ↑Mon Aug 30, 2021 9:19 am And you are not well suited for it. Congratulating yourself on a few months holding, then feeling so insecure about that that you feel you need to tell me you are wealthy. That is not the psychological profile that succeeds with Value investing. Too impulsive and lacking in solid foundation of self.
Keep your wealth. Stay away from value investing.
But trading is trading; I am more concerned with the trading itself than the investment that was traded.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
Re: Small Cap Value heads Rejoice !!!
25% is quite substantial if it's the % of total holdings. I'm only at 30% and I have a 50% SCV tilt both domestically and internationally. The other 40% of my portfolio is in bonds and real estate.FiveFactor wrote: ↑Sat Aug 28, 2021 6:36 am
1: 25% is not a lot
2: if you are congratulating yourself on holding for a few months, SCV isn’t for you
Re: Small Cap Value heads Rejoice !!!
hhhhh
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Re: Small Cap Value heads Rejoice !!!
If you get bored, go back to posts in March of 2020 to check out how different the tone of this thread was.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
Re: Small Cap Value heads Rejoice !!!
How about throwing in AVUV, VBR, and IJS/VIOV/SLYV in there for comparison? And heck also VTI while you're at it?hdas wrote: ↑Tue Aug 31, 2021 12:47 pm It's interesting to look at the best performers. I like to pick Nov2020 as a reference date as we all knew (ex-ante) the consequences of the election in the perception of investors relative to the Value/Growth spread.
Bridgeway Small-Cap Value +91.38%
Invesco S&P SmallCap 600 Revenue ETF +90.09%
Invesco S&P SmallCap Value with Momt ETF +81.75%
Invesco S&P SmallCap 600 Pure Value ETF +75.44%
* As of July 31st.
Cheers
Re: Small Cap Value heads Rejoice !!!
Back then I made a few posts expressing my gratitude for the restraint most Bogleheads showed by not "spiking the football" and rubbing our poor performance in our faces. There were really only one or two prolific posters who I would say went that far. But it's possible my mind is hiding memories of those times from myselfMassdriver wrote: ↑Tue Aug 31, 2021 2:05 pm If you get bored, go back to posts in March of 2020 to check out how different the tone of this thread was.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
Re: Small Cap Value heads Rejoice !!!
Yes we remember all too well these prolific posters who were determined to do everything possible to get us to change course in the face of short term underperformance. I felt their posts, while perhaps well intended, were very unBoglehead-like, during a time when the best advice was to ignore the noise and stay the course regardless of chosen asset allocation. Amazing the slings and arrows we endured by straying from the 2 or 3 fund portfolio.SafeBonds wrote: ↑Tue Aug 31, 2021 2:07 pmBack then I made a few posts expressing my gratitude for the restraint most Bogleheads showed by not "spiking the football" and rubbing our poor performance in our faces. There were really only one or two prolific posters who I would say went that far. But it's possible my mind is hiding memories of those times from myselfMassdriver wrote: ↑Tue Aug 31, 2021 2:05 pm If you get bored, go back to posts in March of 2020 to check out how different the tone of this thread was.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
Re: Small Cap Value heads Rejoice !!!
Ex-US Value is really cheap, Wes Gray on Twitter; https://twitter.com/alphaarchitect/stat ... 31971?s=21
Amateur Self-Taught Senior Macro Strategist
Re: Small Cap Value heads Rejoice !!!
I've been holding DFIVX DFA International Value for years, and AVDV Avantis International Small Cap Value for over a year now too. Maybe one day it will pay offForester wrote: ↑Wed Sep 01, 2021 1:26 am Ex-US Value is really cheap, Wes Gray on Twitter; https://twitter.com/alphaarchitect/stat ... 31971?s=21
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Re: Small Cap Value heads Rejoice !!!
AVDV has outperformed VXUS, though admittedly it’s not apples to apples since AVDV omits EMSafeBonds wrote: ↑Wed Sep 01, 2021 8:22 amI've been holding DFIVX DFA International Value for years, and AVDV Avantis International Small Cap Value for over a year now too. Maybe one day it will pay offForester wrote: ↑Wed Sep 01, 2021 1:26 am Ex-US Value is really cheap, Wes Gray on Twitter; https://twitter.com/alphaarchitect/stat ... 31971?s=21
What’s strange is how much more volatile AVUV seems to be compared to AVDV
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Small Cap Value heads Rejoice !!!
A lot of us, me included, are legends in our own minds. What Garland has reminded us of is that our individual crystal balls are always cloudy. I got really excited about Small-Cap Value tilting back in 2007-2008 and we all know how that turned out. Hopefully, 2020 and 2021 will reverse the Large Growth trend and reward those of us who very patiently have been waiting for the return of Small Value. So far so good for the more recent Value and Small Value trend.garlandwhizzer wrote: ↑Mon Aug 30, 2021 4:00 pm A roaring bull market like we've had for 12 years except for a very brief Covid bear, creates numerous self-styled investing experts. The easiest mistake to make in the world is for an individual investor to mistake an exuberant bull market for his own investing genius.The prevalence of self-styled investing geniuses declines steadily as the decades pass and yesterdays winners become tomorrows losers. The market over long periods of time cycles from bull to bear and back, from growth to value and back, from US to INTL and back, from momentum to low volatility and back. Investors whose performance shone brightly in the last cycle by overloading on winners often suffer most in the next cycle. As a wise investor once said, "The Market Timing Hall of Fame is an empty room."
After a few decades of investing, most of us if we are honest with ourselves (which many are not) develop some measure of humility and lose some confidence in our ability to separate future winners from future losers on a consistent basis, especially in a risk adjusted manner. If you have done extraordinarily well lately, enjoy your outsized gains from this wonderful bull market. It's wonderful to be on board when that bull train speeds down the tracks. You take risk and get rewarded handsomely for it. IMO it would be unwise to expect this scenario to keep playing forever. When the dominant market theme is performance chasing that historically has been a good time to consider adding a measure of overlooked stocks that have missed that fun bull express train.
Garland Whizzer
A fool and his money are good for business.
Re: Small Cap Value heads Rejoice !!!
I joked about capitulation during this time and did a bit of reverse psychology, naming names and daring them to sell their Small Value investments. It was done with a sense of fun but in my own way was warning people not to sell out at precisely the wrong time. I was concerned about lack of conviction from the folks who ought to have known better. The Small Value tilting is a long term project and the premium often shows up in short, violent upward bursts. You have to be on the train when it leaves the station. Small Value was brilliant in the aftermath of the 2020 Covid Bear Market.BabaWawa wrote: ↑Tue Aug 31, 2021 4:16 pmYes we remember all too well these prolific posters who were determined to do everything possible to get us to change course in the face of short term underperformance. I felt their posts, while perhaps well intended, were very unBoglehead-like, during a time when the best advice was to ignore the noise and stay the course regardless of chosen asset allocation. Amazing the slings and arrows we endured by straying from the 2 or 3 fund portfolio.SafeBonds wrote: ↑Tue Aug 31, 2021 2:07 pmBack then I made a few posts expressing my gratitude for the restraint most Bogleheads showed by not "spiking the football" and rubbing our poor performance in our faces. There were really only one or two prolific posters who I would say went that far. But it's possible my mind is hiding memories of those times from myselfMassdriver wrote: ↑Tue Aug 31, 2021 2:05 pm If you get bored, go back to posts in March of 2020 to check out how different the tone of this thread was.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
All that being said, as I get older I am a bit less enthusiastic about factor investing, a big reason being that the phenomenon is so well known. But I chose a course and will stick to it.
A fool and his money are good for business.
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Re: Small Cap Value heads Rejoice !!!
It’s well known, yet looking at the spreads between growth and value being at 95th percentile, apparently not widely adoptednedsaid wrote: ↑Wed Sep 01, 2021 11:11 amI joked about capitulation during this time and did a bit of reverse psychology, naming names and daring them to sell their Small Value investments. It was done with a sense of fun but in my own way was warning people not to sell out at precisely the wrong time. I was concerned about lack of conviction from the folks who ought to have known better. The Small Value tilting is a long term project and the premium often shows up in short, violent upward bursts. You have to be on the train when it leaves the station. Small Value was brilliant in the aftermath of the 2020 Covid Bear Market.BabaWawa wrote: ↑Tue Aug 31, 2021 4:16 pmYes we remember all too well these prolific posters who were determined to do everything possible to get us to change course in the face of short term underperformance. I felt their posts, while perhaps well intended, were very unBoglehead-like, during a time when the best advice was to ignore the noise and stay the course regardless of chosen asset allocation. Amazing the slings and arrows we endured by straying from the 2 or 3 fund portfolio.SafeBonds wrote: ↑Tue Aug 31, 2021 2:07 pmBack then I made a few posts expressing my gratitude for the restraint most Bogleheads showed by not "spiking the football" and rubbing our poor performance in our faces. There were really only one or two prolific posters who I would say went that far. But it's possible my mind is hiding memories of those times from myselfMassdriver wrote: ↑Tue Aug 31, 2021 2:05 pm If you get bored, go back to posts in March of 2020 to check out how different the tone of this thread was.
I can't say I have any regrets purchasing more SCV when things were looking really bad. I appreciate everyone here that stood firm.
All that being said, as I get older I am a bit less enthusiastic about factor investing, a big reason being that the phenomenon is so well known. But I chose a course and will stick to it.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Small Cap Value heads Rejoice !!!
Yes, I follow what Larry Swedroe has said on Twitter. With the recent Value trend, the valuation spreads between Growth and Value have fallen from 99% to "only" 95%. I think Value is still a pretty darned good bet here.Nathan Drake wrote: ↑Wed Sep 01, 2021 11:12 amIt’s well known, yet looking at the spreads between growth and value being at 95th percentile, apparently not widely adoptednedsaid wrote: ↑Wed Sep 01, 2021 11:11 am
I joked about capitulation during this time and did a bit of reverse psychology, naming names and daring them to sell their Small Value investments. It was done with a sense of fun but in my own way was warning people not to sell out at precisely the wrong time. I was concerned about lack of conviction from the folks who ought to have known better. The Small Value tilting is a long term project and the premium often shows up in short, violent upward bursts. You have to be on the train when it leaves the station. Small Value was brilliant in the aftermath of the 2020 Covid Bear Market.
All that being said, as I get older I am a bit less enthusiastic about factor investing, a big reason being that the phenomenon is so well known. But I chose a course and will stick to it.
A fool and his money are good for business.
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Re: Small Cap Value heads Rejoice !!!
As someone getting in just recently, I’d like to hope so…I’ve been steadfast with exUS underperformance so I’m confident I can make a lifelong commitment to SCV and hope to be rewardednedsaid wrote: ↑Wed Sep 01, 2021 11:16 amYes, I follow what Larry Swedroe has said on Twitter. With the recent Value trend, the valuation spreads between Growth and Value have fallen from 99% to "only" 95%. I think Value is still a pretty darned good bet here.Nathan Drake wrote: ↑Wed Sep 01, 2021 11:12 amIt’s well known, yet looking at the spreads between growth and value being at 95th percentile, apparently not widely adoptednedsaid wrote: ↑Wed Sep 01, 2021 11:11 am
I joked about capitulation during this time and did a bit of reverse psychology, naming names and daring them to sell their Small Value investments. It was done with a sense of fun but in my own way was warning people not to sell out at precisely the wrong time. I was concerned about lack of conviction from the folks who ought to have known better. The Small Value tilting is a long term project and the premium often shows up in short, violent upward bursts. You have to be on the train when it leaves the station. Small Value was brilliant in the aftermath of the 2020 Covid Bear Market.
All that being said, as I get older I am a bit less enthusiastic about factor investing, a big reason being that the phenomenon is so well known. But I chose a course and will stick to it.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Small Cap Value heads Rejoice !!!
Those of us with ex-US exposure are getting beaten up elsewhere on this forum now, similar to what we experienced last year with SCV. That's a good sign for international performance to come.Nathan Drake wrote: ↑Wed Sep 01, 2021 11:21 amAs someone getting in just recently, I’d like to hope so…I’ve been steadfast with exUS underperformance so I’m confident I can make a lifelong commitment to SCV and hope to be rewardednedsaid wrote: ↑Wed Sep 01, 2021 11:16 amYes, I follow what Larry Swedroe has said on Twitter. With the recent Value trend, the valuation spreads between Growth and Value have fallen from 99% to "only" 95%. I think Value is still a pretty darned good bet here.Nathan Drake wrote: ↑Wed Sep 01, 2021 11:12 amIt’s well known, yet looking at the spreads between growth and value being at 95th percentile, apparently not widely adoptednedsaid wrote: ↑Wed Sep 01, 2021 11:11 am
I joked about capitulation during this time and did a bit of reverse psychology, naming names and daring them to sell their Small Value investments. It was done with a sense of fun but in my own way was warning people not to sell out at precisely the wrong time. I was concerned about lack of conviction from the folks who ought to have known better. The Small Value tilting is a long term project and the premium often shows up in short, violent upward bursts. You have to be on the train when it leaves the station. Small Value was brilliant in the aftermath of the 2020 Covid Bear Market.
All that being said, as I get older I am a bit less enthusiastic about factor investing, a big reason being that the phenomenon is so well known. But I chose a course and will stick to it.
While it's an interesting bellwether, you wouldn't expect that behavior from seasoned Bogleheads.
Re: Small Cap Value heads Rejoice !!!
Great thread. I don't own any SCV though I have considered it. So here's my hang up and I'm wondering if anyone shares the same concern or if anyone has any thoughts around it
SCV outperformed for decades, there is no question about that. However, in general, these were times of increasing inflation, higher interest rates, and strong economic growth. When opposing economic conditions appeared (i.e., low inflation, low interest rates, and slow economic growth) SCV underperformed. This does make sense that in general growth companies do better when interest rates are low and value does better when interest rates are high. So, I can't help but think that SCV is doomed to keep underperforming due to the current macro-economic conditions which are predicted to last decades. What am I missing?
SCV outperformed for decades, there is no question about that. However, in general, these were times of increasing inflation, higher interest rates, and strong economic growth. When opposing economic conditions appeared (i.e., low inflation, low interest rates, and slow economic growth) SCV underperformed. This does make sense that in general growth companies do better when interest rates are low and value does better when interest rates are high. So, I can't help but think that SCV is doomed to keep underperforming due to the current macro-economic conditions which are predicted to last decades. What am I missing?
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Re: Small Cap Value heads Rejoice !!!
Maybe what you are missing is that valuations matter? The outperformance of growth over value has been entirely due to P/E expansion. My understanding is that earnings have been nearly stable for growth v. value. I don’t think valuation spreads can continue to increase indefinitely. Asness wrote an essay called The Long Term Is Lying To You.Ramjet wrote: ↑Tue Sep 07, 2021 8:31 am Great thread. I don't own any SCV though I have considered it. So here's my hang up and I'm wondering if anyone shares the same concern or if anyone has any thoughts around it
SCV outperformed for decades, there is no question about that. However, in general, these were times of increasing inflation, higher interest rates, and strong economic growth. When opposing economic conditions appeared (i.e., low inflation, low interest rates, and slow economic growth) SCV underperformed. This does make sense that in general growth companies do better when interest rates are low and value does better when interest rates are high. So, I can't help but think that SCV is doomed to keep underperforming due to the current macro-economic conditions which are predicted to last decades. What am I missing?
https://images.aqr.com/-/media/AQR/Docu ... CFCEC3366E
Dave
Re: Small Cap Value heads Rejoice !!!
There should be more rejoicing today.
Go IJS! Go Macys! Go First Hawaiian Bank!
Go IJS! Go Macys! Go First Hawaiian Bank!
Crom laughs at your Four Winds
Re: Small Cap Value heads Rejoice !!!
I'm sure this is a common refrain from him, but Meb Faber on the Morningstar Long View podcast effectively said that the only US stocks he wants to own are SCV:
He also talked a bit about the valuation expansion that Dave mentioned above.And that is much as I've been ranting and pulling my hair out about market-cap-weighted U.S. stocks, you know, one of our largest funds is a U.S. stock fund. I will say U.S. stocks are an attractive asset class if you tilt toward value, by the way, small cap and value. This is actually one of the biggest opportunities in history for value stocks in avoiding the market-cap-weighting.
A useful razor: anyone asking about speculative strategies on Bogleheads.org has no business using them.
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Re: Small Cap Value heads Rejoice !!!
Thoughts on domestic SCV versus international SCV?
- Taylor Larimore
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Re: Small Cap Value heads Rejoice !!!
One More Thing:
The market weight of domestic SCV stocks and International SCV stocks are both contained in The Three-Fund Portfolio.
Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk."
"Simplicity is the master key to financial success." -- Jack Bogle
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Re: Small Cap Value heads Rejoice !!!
But not the factor tilt. Apples and oranges.Taylor Larimore wrote: ↑Wed Sep 22, 2021 6:48 pmOne More Thing:
The market weight of domestic SCV stocks and International SCV stocks are both contained in The Three-Fund Portfolio.
Best wishes.
TaylorJack Bogle's Words of Wisdom: "The beauty of owning the market is that you eliminate individual stock risk, you eliminate market sector risk, and you eliminate manager risk."
Small/Value/Profitability: |
30% AVUV |
30% AVDV |
30% AVES |
Momentum: |
5% QMOM |
5% IMOM |
Volatility: |
0.1% PUTW |
Term: |
0.1% BND
Re: Small Cap Value heads Rejoice !!!
I'd say get them both. International is a bit more attractively priced so you could overweight that a bit.
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Re: Small Cap Value heads Rejoice !!!
Noted. I am now acquainted with Avantis ETFs over in another thread and they sound like the best game in town. AVDV and AVUV sound like the way to go, no?
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Re: Small Cap Value heads Rejoice !!!
and AVES when it launchesOne More Thing wrote: ↑Wed Sep 22, 2021 11:30 pmNoted. I am now acquainted with Avantis ETFs over in another thread and they sound like the best game in town. AVDV and AVUV sound like the way to go, no?
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: Small Cap Value heads Rejoice !!!
Yes I came to a similar conclusion. Here's a good read on them: https://www.pwlcapital.com/resources/fi ... with-etfs/One More Thing wrote: ↑Wed Sep 22, 2021 11:30 pmNoted. I am now acquainted with Avantis ETFs over in another thread and they sound like the best game in town. AVDV and AVUV sound like the way to go, no?
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Re: Small Cap Value heads Rejoice !!!
I can think of a few things you might be missing.Ramjet wrote: ↑Tue Sep 07, 2021 8:31 am Great thread. I don't own any SCV though I have considered it. So here's my hang up and I'm wondering if anyone shares the same concern or if anyone has any thoughts around it
SCV outperformed for decades, there is no question about that. However, in general, these were times of increasing inflation, higher interest rates, and strong economic growth. When opposing economic conditions appeared (i.e., low inflation, low interest rates, and slow economic growth) SCV underperformed. This does make sense that in general growth companies do better when interest rates are low and value does better when interest rates are high. So, I can't help but think that SCV is doomed to keep underperforming due to the current macro-economic conditions which are predicted to last decades. What am I missing?
1. You’re focusing on a single variable, interest rates. There’s surely an infinite number of other variables
2. Markets price risk. Risk and expected return are related. Do you think SV is more risky?
3. What do any of us know that is not already priced into the markets?
Dave
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Re: Small Cap Value heads Rejoice !!!
You should checkout the Rational Reminder group if you think that... 100% SCV/concentrated-momentum (50 stock funds) with leveraged is common!Marseille07 wrote: ↑Mon Aug 30, 2021 3:14 pmAre you a retiree? This breakdown is the most aggressive AA I've ever seen, esp. if you don't have pensions / RE.Nicolas wrote: ↑Mon Aug 30, 2021 3:03 pmI’m 98.6% stock, all domestic and mostly S&P 500 index funds/ETFs, except for a big chunk of AAPL that I’ve been holding for eleven years and don’t want to sell because it’s in taxable, and of course the AVUV which is all in Roth accounts, 0.7% bonds, and 0.7% cash.SafeBonds wrote: ↑Mon Aug 30, 2021 8:08 am OP also said 25% of their holdings. Not 25% of his stock, or 25% of the domestic stock. Perhaps their portfolio is 25% AVUV, 25% international stocks, 50% bonds. In this case it would be inappropriate to say "25% is not a lot". But on the other hand if OP has the same asset allocation but only 25% of his domestic stock is AVUV then I can understand. For example 6.25% AVUV, 18.75% VTI, 25% international stock, 50% bonds.
I am guilty of a similar crime...
Last edited by MotoTrojan on Thu Sep 23, 2021 8:13 am, edited 1 time in total.
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Re: Small Cap Value heads Rejoice !!!
For those that are uncomfortable going market-weight to international (or even overweighting) I think a strong/valid strategy is to overweight their value tilt abroad to get more effective exposure to those market's risk-premiums. You could even go all SCV for your foreign stocks.
For example if someone were only comfortable with 25% abroad I think this would be a fantastic portfolio:
50% VTI
25% AVUV
15% AVDV
10% AVES
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Re: Small Cap Value heads Rejoice !!!
I now have this image of a new Three Fund Portfolio being VTI, AVDV, and BND/W.MotoTrojan wrote: ↑Thu Sep 23, 2021 8:11 amFor those that are uncomfortable going market-weight to international (or even overweighting) I think a strong/valid strategy is to overweight their value tilt abroad to get more effective exposure to those market's risk-premiums. You could even go all SCV for your foreign stocks.
For example if someone were only comfortable with 25% abroad I think this would be a fantastic portfolio:
50% VTI
25% AVUV
15% AVDV
10% AVES
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- Joined: Wed Feb 01, 2017 7:39 pm
Re: Small Cap Value heads Rejoice !!!
Light-years better than the 100% VTI folks that frequent this place.One More Thing wrote: ↑Thu Sep 23, 2021 8:29 amI now have this image of a new Three Fund Portfolio being VTI, AVDV, and BND/W.MotoTrojan wrote: ↑Thu Sep 23, 2021 8:11 amFor those that are uncomfortable going market-weight to international (or even overweighting) I think a strong/valid strategy is to overweight their value tilt abroad to get more effective exposure to those market's risk-premiums. You could even go all SCV for your foreign stocks.
For example if someone were only comfortable with 25% abroad I think this would be a fantastic portfolio:
50% VTI
25% AVUV
15% AVDV
10% AVES
Re: Small Cap Value heads Rejoice !!!
Personally I wouldn’t want to remove exposure to emerging marketsOne More Thing wrote: ↑Thu Sep 23, 2021 8:29 amI now have this image of a new Three Fund Portfolio being VTI, AVDV, and BND/W.MotoTrojan wrote: ↑Thu Sep 23, 2021 8:11 amFor those that are uncomfortable going market-weight to international (or even overweighting) I think a strong/valid strategy is to overweight their value tilt abroad to get more effective exposure to those market's risk-premiums. You could even go all SCV for your foreign stocks.
For example if someone were only comfortable with 25% abroad I think this would be a fantastic portfolio:
50% VTI
25% AVUV
15% AVDV
10% AVES
Crom laughs at your Four Winds
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Re: Small Cap Value heads Rejoice !!!
I've been increasing my tilt the last 18 months towards SCV/factors in accordance with my plan. I wouldn't have a problem sleeping with a 50% allocation to Avantis funds (AVUV, AVDV, AVES).MotoTrojan wrote: ↑Thu Sep 23, 2021 8:34 amLight-years better than the 100% VTI folks that frequent this place.One More Thing wrote: ↑Thu Sep 23, 2021 8:29 amI now have this image of a new Three Fund Portfolio being VTI, AVDV, and BND/W.MotoTrojan wrote: ↑Thu Sep 23, 2021 8:11 amFor those that are uncomfortable going market-weight to international (or even overweighting) I think a strong/valid strategy is to overweight their value tilt abroad to get more effective exposure to those market's risk-premiums. You could even go all SCV for your foreign stocks.
For example if someone were only comfortable with 25% abroad I think this would be a fantastic portfolio:
50% VTI
25% AVUV
15% AVDV
10% AVES
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Re: Small Cap Value heads Rejoice !!!
I am at 60% now (well, once I swap FNDE for AVES). Equal-weighting between those 3 and QVAL/IVAL.Massdriver wrote: ↑Thu Sep 23, 2021 9:00 am
I've been increasing my tilt the last 18 months towards SCV/factors in accordance with my plan. I wouldn't have a problem sleeping with a 50% allocation to Avantis funds (AVUV, AVDV, AVES).
If I weren't in love with Alpha Architect, I think the dream portoflio would be a 5-fund equal-weight of AVUV/AVLV/AVDV/AVIV/AVES. Strong tilt across cap-sizes, low-cost/turnover, profit.
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Re: Small Cap Value heads Rejoice !!!
Sounds like a portfolio of beauty. My tax advantaged accounts are/will be VT+AVUV, AVDV, EMGF (will be AVES) which looks clean. My taxable account is a mess because I'm not taking a tax hit to switch to Avantis. SLYV still treats me okay though! New funds are going Avantis.MotoTrojan wrote: ↑Thu Sep 23, 2021 9:22 amI am at 60% now (well, once I swap FNDE for AVES). Equal-weighting between those 3 and QVAL/IVAL.Massdriver wrote: ↑Thu Sep 23, 2021 9:00 am
I've been increasing my tilt the last 18 months towards SCV/factors in accordance with my plan. I wouldn't have a problem sleeping with a 50% allocation to Avantis funds (AVUV, AVDV, AVES).
If I weren't in love with Alpha Architect, I think the dream portoflio would be a 5-fund equal-weight of AVUV/AVLV/AVDV/AVIV/AVES. Strong tilt across cap-sizes, low-cost/turnover, profit.
Re: Small Cap Value heads Rejoice !!!
Same here, which means that my Roth is going to be mostly SCV. Hopefully those higher expected returns pay offMassdriver wrote: ↑Thu Sep 23, 2021 9:47 am Sounds like a portfolio of beauty. My tax advantaged accounts are/will be VT+AVUV, AVDV, EMGF (will be AVES) which looks clean. My taxable account is a mess because I'm not taking a tax hit to switch to Avantis. SLYV still treats me okay though! New funds are going Avantis.
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Re: Small Cap Value heads Rejoice !!!
My target has long been to get my ex-U.S. to at least 40% small, 40% value, and 20% EM (with some combination of funds, and it would be fine to exceed some of those targets with dual-purpose funds). It has long been off target thanks to limited ex-U.S. options in a critical 401K, but thanks to a growing taxable account it is now basically there.
I also invest in SV in the U.S. though. Although again for similar reasons, much of what should have been in SV has been in things like extended-market instead, and therefore not really on target. But I have so far prioritized getting on target ex-U.S., so now I should be turning to more shifting of that extended-market to U.S. SV.
Anyway, of my 60% of stocks in U.S., only 30% of that is in LB (SP 500), so only 18% of my stocks are not in some sort of small and/or value or EM . . . which might strike some as pretty radical.
And in fact I 100% believe there are higher risks associated with all this SV, of some form. But I have plans in place to manage those risks, at least to the extent I understand them.
I also invest in SV in the U.S. though. Although again for similar reasons, much of what should have been in SV has been in things like extended-market instead, and therefore not really on target. But I have so far prioritized getting on target ex-U.S., so now I should be turning to more shifting of that extended-market to U.S. SV.
Anyway, of my 60% of stocks in U.S., only 30% of that is in LB (SP 500), so only 18% of my stocks are not in some sort of small and/or value or EM . . . which might strike some as pretty radical.
And in fact I 100% believe there are higher risks associated with all this SV, of some form. But I have plans in place to manage those risks, at least to the extent I understand them.