Why Does Anyone Listen To Paul Merriman?

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whereskyle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by whereskyle »

vineviz wrote: Tue May 04, 2021 2:04 pm
whereskyle wrote: Tue May 04, 2021 1:53 pm Again, I'm not trying to be dismissive, but anyone thinking about starting a SCV tilt should know that if they started investing in scv in

;;;;;

they would currently have less money than if they had just invested in a total market fund.
A) That is dismissive.

B) That's some next-level rearview mirror driving.

C) It's partly incorrect (anyone initiating a tilt before September 2003 or after August 2019 has come out ahead)
Thank you for your input, Vineviz. Isn't tilting rear view mirror driving? "Based on past performance, we can tell that SCV outperforms over the long haul" is pretty much the factor model in a nutshell, no?

I think Jack's point in the tell-tale chart that the outperformance over long time periods of any particular asset class is typically due to extreme outperformance over very brief timespans that we cannot reliably predict either will recur or when it will recur is a pretty strong point.

Also, your 2003 and 2019 data seems to rely on a SCV fund that is different from the one under discussion before your contribution to the discussion. Another risk of tilting SCV is that u have to choose the right SCV fund to tilt to.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
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vineviz
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Re: Why Does Anyone Listen To Paul Merriman?

Post by vineviz »

whereskyle wrote: Tue May 04, 2021 2:39 pm Thank you for your input, Vineviz. Isn't tilting rear view mirror driving? "Based on past performance, we can tell that SCV outperforms over the long haul" is pretty much the factor model in a nutshell, no?
Phrases like "tilting" and "rear view mirror driving" are inherently vague and subjective, I suppose.

However, I think there's an important difference between the idea that assets which are more exposed to economic risk should have a higher expected return on the one hand and the idea that we can expect whatever asset happened to perform well recently to keep doing so indefinitely in the future.

In other words, it's going to be true that the long-term expected return of stocks is greater than the expected return of bonds regardless of whether bonds happened to outperform stocks last month or last year. This is true because stocks are generally riskier than bonds.

Likewise, it's going to be true that the long-term expected return of SCV stocks is greater than the expected return of large cap blend stocks regardless of whether SCV happened to outperform large cap blend last month or last year. This is true because SCV stocks are generally riskier than large cap blend stocks.

Whether EITHER of those risk vs reward tradeoffs is worthwhile for an investor is a matter of risk tolerance, not of recent performance.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch
index245
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Re: Why Does Anyone Listen To Paul Merriman?

Post by index245 »

whereskyle wrote: Tue May 04, 2021 2:39 pm
vineviz wrote: Tue May 04, 2021 2:04 pm
whereskyle wrote: Tue May 04, 2021 1:53 pm Again, I'm not trying to be dismissive, but anyone thinking about starting a SCV tilt should know that if they started investing in scv in

;;;;;

they would currently have less money than if they had just invested in a total market fund.
A) That is dismissive.

B) That's some next-level rearview mirror driving.

C) It's partly incorrect (anyone initiating a tilt before September 2003 or after August 2019 has come out ahead)
Thank you for your input, Vineviz. Isn't tilting rear view mirror driving? "Based on past performance, we can tell that SCV outperforms over the long haul" is pretty much the factor model in a nutshell, no?

I think Jack's point in the tell-tale chart that the outperformance over long time periods of any particular asset class is typically due to extreme outperformance over very brief timespans that we cannot reliably predict either will recur or when it will recur is a pretty strong point.

Also, your 2003 and 2019 data seems to rely on a SCV fund that is different from the one under discussion before your contribution to the discussion. Another risk of tilting SCV is that u have to choose the right SCV fund to tilt to.
You are certainly being dismissive, but my point stands regarding any 20 year time period. 10 or 15 years may seem like a long time period to you, but in investing terms it isn't. Also, small cap value has outperformed recently, why is that being overlooked if we are focusing on shorter timelines as a basis to assume the value premium is dead?

In the early-ish to mid 2000's, I remember reading articles that investing directly in the S&P500 was a "loser's bet" as emerging markets were going wild. Glad I didn't take their advice that time as well.

I just prefer to own all (not necessarily at market cap weight) because I don't know exactly how it will turn out. Invest as you wish, I just thought it was odd that Paul Merriman would be flamed for including small cap value as a recommendation (and people were using incorrect data to back such assertions). I think his portfolios are personal preference of course, but he's ultimately trying to encourage a diversified portfolio (his target date + small cap value is a little weird, but certainly works to that effect).
Last edited by index245 on Tue May 04, 2021 4:51 pm, edited 4 times in total.
averagedude
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Re: Why Does Anyone Listen To Paul Merriman?

Post by averagedude »

I really like Paul Merriman. I believe he is one of the true greats on educating young people to save and invest their money. I must say, I wish I had a dollar for every time I heard him say "small cap value".
whereskyle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by whereskyle »

index245 wrote: Tue May 04, 2021 3:58 pm
whereskyle wrote: Tue May 04, 2021 2:39 pm
vineviz wrote: Tue May 04, 2021 2:04 pm
whereskyle wrote: Tue May 04, 2021 1:53 pm Again, I'm not trying to be dismissive, but anyone thinking about starting a SCV tilt should know that if they started investing in scv in

;;;;;

they would currently have less money than if they had just invested in a total market fund.
A) That is dismissive.

B) That's some next-level rearview mirror driving.

C) It's partly incorrect (anyone initiating a tilt before September 2003 or after August 2019 has come out ahead)
Thank you for your input, Vineviz. Isn't tilting rear view mirror driving? "Based on past performance, we can tell that SCV outperforms over the long haul" is pretty much the factor model in a nutshell, no?

I think Jack's point in the tell-tale chart that the outperformance over long time periods of any particular asset class is typically due to extreme outperformance over very brief timespans that we cannot reliably predict either will recur or when it will recur is a pretty strong point.

Also, your 2003 and 2019 data seems to rely on a SCV fund that is different from the one under discussion before your contribution to the discussion. Another risk of tilting SCV is that u have to choose the right SCV fund to tilt to.
You are certainly being dismissive, but my point stands regarding any 20 year time period. 10 or 15 years may seem like a long time period to you, but in investing terms it isn't. Also, small cap value has outperformed recently, why is that being overlooked if we are focusing on shorter timelines as a basis to assume the value premium is dead?

In the early-ish to mid 2000's, I remember reading articles that investing directly in the S&P500 was a "loser's bet" as emerging markets were going wild. Glad I didn't take their advice that time as well.

I just prefer to own all (not necessarily at market cap weight) because I don't know exactly how it will turn out. Invest as you wish, I just thought it was odd that Paul Merriman would be flamed for including small cap value as a recommendation (and people were using incorrect data to back such assertions). I think his portfolios are personal preference of course, but he's ultimately trying to encourage a diversified portfolio (his target date + small cap value is a little weird, but certainly works to that effect).
As for the dismissive point, I said in a previous post, "I'm not anti-SCV or anything. We should just be open about long periods of underperformance."

You responded that the premium existed for your chosen fund nonetheless if you started the period at 2001. I felt like you were being dismissive of the reality that many people who picked up your SCV fund between 2003 and 2020, a not-that-short period, decided that they had made the wrong decision and capitulated, losing money forever.

The risks are real, and people touting SCV should not hide from them if they hope to help other investors. To downplay the risks is to do a disservice to other investors.
"I am better off than he is – for he knows nothing and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle
mr_guns
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Re: Why Does Anyone Listen To Paul Merriman?

Post by mr_guns »

Because I follow his 10 fund strategy and I’m going way better than I would have been. I got my daughter to follow the 2 fund, because she has no interest in digging deep into the workings. His team is way smarter than me. That’s why.
jginseattle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by jginseattle »

Soon2BXProgrammer wrote: Wed Apr 14, 2021 10:24 pm
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been [taking a beating --admin LadyGeek] since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
Small and Value in the past outperformed over the very long run, and its outperformance are "bunched" typically into a few years.

I'm not saying that the strategy will or will not work. just if you go that way, you need to commit for 20+ years.
The shorter your investment horizon, the greater the need for diversification across asset classes.
YRT70
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Re: Why Does Anyone Listen To Paul Merriman?

Post by YRT70 »

"Paul addresses a long thread on Bogleheads.org forum asking, “Why does anyone listen to Paul Merriman?” "

https://paulmerriman.com/why-does-anyon ... -merriman/
GoneOnTilt
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Re: Why Does Anyone Listen To Paul Merriman?

Post by GoneOnTilt »

Mr. Merriman is a good, decent man, giving away his knowledge for free, trying to help others. In addition, I don't think you can go wrong taking his advice. It might not be for everyone, but nothing is.
VSNF
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Re: Why Does Anyone Listen To Paul Merriman?

Post by VSNF »

1. Paul's a great guy. I've read most of his explanations and looked at the data, and he makes sense. Add some funds and exceed or keep the same performance but with lower volatility. I've talked to him too, and he's a genuinely nice guy who isn't out to rip anyone off.

2. Small cap value is volatile, can underperform for long periods, but when it pops it pops big. Hardest asset class to time IMO. As has been pointed out, 5 years is a blip in history. If you've got only 5 years left and you're on the line, you shouldn't be in risky assets at all.

3. Don't test on a short-term analyzer, go to firecalc and test over long time frames. I test out, e.g., 10 years out before I draw down (I have other assets than my IRA) for 35 years total till I'm likely to be in the great beyond. Without small cap value I lose, but with it I come out 100%. Try it out and see how it does over LONG periods of time. Small cap value blows everything else away historically. IMO not having some of your portfolio in it is ignoring history.

Objections: Yes, past is not always future. But Bogel relies on the past too. Every investment advisor bases the advice on the past.

It has underperformed for almost 20 years. Yes, but once you get beyond that there is a premium. And if asset classes go out of sample for long periods, they tend to revert. That means it's time to buy SCV. (See my signature)
"What's that? Then sell sell sell! They're all selling? Then buy buy buy!" - Al Czervik
palaheel
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Re: Why Does Anyone Listen To Paul Merriman?

Post by palaheel »

Tenish years ago, Merriman was the only place I found data going back to the Carter years. For those that don't know, the Carter years were Really Bad. I was impressed. For those who think that 15 years is a long history and justifies investment decisions, we'll just have to agree to disagree.
Nothing to say, really.
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NewTimes
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Re: Why Does Anyone Listen To Paul Merriman?

Post by NewTimes »

Metsfan91 wrote: Wed Apr 14, 2021 11:13 pm
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been [taking a beating --admin LadyGeek] since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
When you listen to Mr. Merriman, what do you hear? Is he promoting Ultimate Buy and Hold for new investors? Or, is he recommending Target Date Fund with a small value tilt?

Why do I listen to Mr. Merriman's podcast? He reminds again and again to
  • Tune out the noise
  • Have and follow an investment strategy (be it 100% equity or 60/40 or target date fund)
  • Not time the market
  • Buy and Hold
  • Not panic sell
These few come to mind. I am sure there are more.
Another reason why some listen to him, he's 77 years old, He speaks many times to folks like myself in retirement. I watched a YouTube video where a CCRC had him do a recent Zoom program for the residents. He runs a non profit foundation to educate people on how to save fees and invest themselves rather than pay brokerage fees. True his "Ultimate..." may be less than stellar and his insistence on small caps seems a little dated. And, he's not trying to make a buck or steer you or I towards a company. He also stresses to do your own homework and read and research. I may be foolish but he seems to be sincere and I believe, he believes, he is giving us valid advice. And like all who advise/manage/recommend/control us, on in and beyond investing, always use discernment when making one's own important decisions.
Reading one book a 100 times that challenges and stretches is better than reading a 100 books one time.
VSNF
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Re: Why Does Anyone Listen To Paul Merriman?

Post by VSNF »

NewTimes wrote: Thu Aug 26, 2021 8:12 pm ... True his "Ultimate..." may be less than stellar and his insistence on small caps seems a little dated....
His rec to have some small cap value (as well as other value funds) seems dated only in that it hasn't performed as well recently. Meanwhile tech and the SPX have shot to the moon. So what does that mean?

I say buy more tech and SPX. Let's party like it's 1999. :wink:
"What's that? Then sell sell sell! They're all selling? Then buy buy buy!" - Al Czervik
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Elsebet
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Elsebet »

Paul came to one of our Seattle bogleheads lunch meetings which was really awesome of him. He was kind, unpretentious, and we had a great discussion. He came of his own volition, I didn't set it up. In my book he is worth a listen just for that reason.
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca
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One Ping
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Re: Why Does Anyone Listen To Paul Merriman?

Post by One Ping »

Why does anyone listen to Paul Merriman?

Because he is a decent guy who has an incredible wealth of investment knowledge and experience (built over 50 years) and is only interested in helping you, and others, through his foundation to find an investment plan/approach that you can stick.with and that gives you a good chance of reaching your financial goals.

Most of investing is basically doing a few things "ok" and not doing too many things drastically wrong. Paul gives you information for you to decide on the "ok" things and how to avoid the wrong things.
"Re-verify our range to target ... one ping only."
whyme
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Re: Why Does Anyone Listen To Paul Merriman?

Post by whyme »

I've listened to Merriman for years and my own portfolio reflects a tilt roughly consistent with his recommendations. Overall, I think he's made a positive contribution to the lives of DIY investors and deserves kudos for his efforts. The wheels on his project have come a bit loose in the last couple of years, though, despite his good intentions.

Some good things:
• Years ago, he was one of very few media sources of factor-based and low-cost investing info. He had a radio show (he interviewed John Bogle on that show). I'm sure I'm not alone in having learned a lot from that show and his Marketwatch articles.
• His "ultimate" portfolio articles are very good in presenting the reasoning for portfolio decisions, whether or not one adopts that portfolio.
* His "Fine Tuning" tables are an excellent resource when making the most important portfolio decision, the allocation between stocks and bonds.
* His podcast provides a platform for extended discussions with financial planning experts, such as Larry Swedroe, Christine Benz and Rick Ferri.

The loose wheels:
* As he's brought in collaborators and shifted his emphasis toward young investors, his message has become muddled and may even encourage bad behavior, i.e. constant fiddling with one's portfolio.
* Paul Merriman and his team of volunteers remind me of enthusiastic amateur audiophiles huddled in a man-cave, endlessly tweaking turntables and swapping amplifier tubes. They are in love with portfolio variations and tables and charts and calculators, which strikes me as a rather poor model for most investors, young or old. Audiophiles can become so enthusiastic about the equipment that they ignore the music.
* Teaching investors about the value of compounding over time is crucial, of course, but many of the long-term scenarios that Paul promotes--with an emphasis on building 8-figure legacies--seem disconnected from the lives most of us lead.

While he's taken on the entirely admirable project of a foundation devoted to financial education, I think he's making a mistake by confining it to the small value portfolio building that he's devoted himself to for the past decades. I hope he will eventually bring in others to educate about important aspects of personal finance that are not his specialty, such as tax planning, or decision making about insurance, pensions, Medicare and social security.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by pkcrafter »

livesoft wrote: Thu Apr 15, 2021 7:46 am Small-cap value is a top performing asset class for 2021 so far. SCV funds have been up more the 30% in the first 3 months of 2021.

Perhaps it is time to rebalance OUT of SCV? :twisted:
Rebalance out now? Oh no, now is when all those investors will jump into small value. The train car is still there, but the engine has left the station. :confused


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Premier
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Premier »

In short, Paul is one of the good ones. I started listening to his podcasts because I was wanting to learn more about small cap value. He doesn't completely disagree with the boglehead philosophy, he is all about buy and hold; he just believes that your portfolio should be equally spread out in what he calls more diverse asset classes (i.e. value, reits, emerging mkts, intl, etc), this is better explained in episode 18 of the boglehead podcast where Ferri and Merriman have a good discussion about it. He's retired now and so he's dedicating his retirement years to teaching people about personal investing and although I don't follow Merriman's ultimate buy and hold strategy I still listen to him when I can and I appreciate what he does now as an educator.
Own stocks, the course to stay; Hold bonds, for they will pay; Keep cash reserves for a rainy day.
Stubbie
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Stubbie »

Paul has a heart of gold. He did well building up his financial advisory group over the years through education. He was all-in on the DFA philosophy and funds while running his firm. Thus, almost all of his historical stats regarding small cap value are related to what you would have earned had you been invested in DFA funds. Historically this looks great.
Since he sold his firm, he wants to continue his educational mission. I admire that. If people do not like his 10 fund Ultimate Buy and Hold portfolio, he suggests many alternatives. His "2 Funds for Life" strategy is one that any person should be able to follow and will probably do better than most would do on their own.
Paul has found a mission in his retirement and he uses his own resources (lots of time and money) in fulfilling that mission. I wish him the best.
FinancialDave
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Re: Why Does Anyone Listen To Paul Merriman?

Post by FinancialDave »

Metsfan91 wrote: Wed Apr 14, 2021 11:13 pm
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm I'm not sure I understand the allure of this guy. It looks like the "Ultimate Buy and Hold" portfolio has been [taking a beating --admin LadyGeek] since 2015.

"Past performance is not indicative of..." I get it. But the 3-fund portfolio seems infinitely easier to manage and is starting to blow the doors off of Merriman's small cap value strategy.

Why do people still listen to this guy?
When you listen to Mr. Merriman, what do you hear? Is he promoting Ultimate Buy and Hold for new investors? Or, is he recommending Target Date Fund with a small value tilt?

Why do I listen to Mr. Merriman's podcast? He reminds again and again to
  • Tune out the noise
  • Have and follow an investment strategy (be it 100% equity or 60/40 or target date fund)
  • Not time the market
  • Buy and Hold
  • Not panic sell
These few come to mind. I am sure there are more.
Could not have said it better myself.

You can go to Merriman's website and find a two-fund portfolio to a 13 fund portfolio, depending on your preference and risk style, at any number of the major brokers.

Dave
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s35flyer
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Re: Why Does Anyone Listen To Paul Merriman?

Post by s35flyer »

I’ve been listening and doing what he says now for a number of years. I like the balanced risk, have made plenty of money and my portfolio just keeps chugging along. I also adhere to his withdraw strategies, been retired now for 7 years and have doubled my money plus withdraw plenty to live on with two homes, boats, an airplane, and I couldn’t be more satisfied.
s35flyer
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Re: Why Does Anyone Listen To Paul Merriman?

Post by s35flyer »

Oh I do the two fund portfolio, I admit it tried the ten fund, but too much work. The two fund is just fine Thankyou!
jginseattle
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Re: Why Does Anyone Listen To Paul Merriman?

Post by jginseattle »

I have his book Live it Up Without Outliving Your Money! 10 Steps to a Perfect Retirement Portfolio. (2005). It's quite good, and comes with recommendations by Larry Swedroe and William Bernstein, among others.
secondopinion
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Re: Why Does Anyone Listen To Paul Merriman?

Post by secondopinion »

Stubbie wrote: Thu Sep 02, 2021 7:56 am Paul has a heart of gold. He did well building up his financial advisory group over the years through education. He was all-in on the DFA philosophy and funds while running his firm. Thus, almost all of his historical stats regarding small cap value are related to what you would have earned had you been invested in DFA funds. Historically this looks great.
Since he sold his firm, he wants to continue his educational mission. I admire that. If people do not like his 10 fund Ultimate Buy and Hold portfolio, he suggests many alternatives. His "2 Funds for Life" strategy is one that any person should be able to follow and will probably do better than most would do on their own.
Paul has found a mission in his retirement and he uses his own resources (lots of time and money) in fulfilling that mission. I wish him the best.
At least it is good to know that some experts have good intent; not that I will likely change my ways from the person's ideas, but at least I feel better that listers are getting at least decent information. It is much better than listening to those who do not have the investor's best interest...

We always need more honest people in finance and elsewhere.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by rfrego »

Many of us who listen to Paul Merriman are financially secure, early retirees, sitting on 7 figure portfolios because we followed his advice for so many years. That’s good enough reason to “ listen” to Paul Merriman. Don’t listen to him if you don’t want to but don’t degrade people who have followed his advice and have reached the top of the mountain while you are still looking up. Proof is in the pudding. The question is, why would anyone who followed Paul’s advice for years and have 7 figure portfolios listen to you? That’s the real question.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by rfrego »

One last thing, if you don’t like the sound investment advice Paul gives you can always demand a 100% refund. Of course since all of Paul’s advice is free I hope you don’t spend that refund in one place. He even gives away 4 of his books. I don’t know how anyone can whine about free sound advice. Think their might be a little jealousy going on here. That’s sad because at age 77 Paul is one of the kindest and most generous people I know. I am proud to call him a friend.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by tj »

In his email today, it saysh e recorded a second podcast regarding this thread:
Dear Friends,

This past week I recorded a second podcast responding to an extensive conversation on the Bogleheads forum asking, “Why Does Anyone Listen to Paul Merriman?" The reason I’m making a big deal about it is because it is a great opportunity to both learn and teach, which is what the work of our Financial Education Foundation is all about.

The focus shouldn’t be about listening to me. The focus should be on lessons we share from the academic community, particularly the work of Drs. Eugene Fama and Kenneth French. Plus, it should be what we have learned about Two Funds for Life from Chris Pedersen, as well as the more than 150 tables and graphs illustrating historical data from Daryl Bahls and, most recently, the Lifetime Investment Calculator from the work of Craig Appl. And the list continues as we share the work of Larry Swedroe, Jim Dahle, Craig Israelsen, Christine Benz, and many other very smart people.

When individuals either attack or defend us, they miss the point. Our work isn’t good because, as some kind souls wrote, “Paul’s a nice guy.” It’s good because we believe that the information we offer can be life changing. We’re all at risk of making decisions because we think someone is trustworthy, but that trustworthiness should be based on the best historical knowledge available and stand the test of time in terms of results.
Here is the link to the second podcast:

https://paulmerriman.com/what-can-we-le ... ogleheads/
helloeveryone
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Re: Why Does Anyone Listen To Paul Merriman?

Post by helloeveryone »

AlohaJoe wrote: Thu Apr 15, 2021 12:53 am
FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm Why do people still listen to this guy?
Because asset allocation is one of the least important things in investing for retirement and he talks about things other than asset allocation?
are the more important things savings rate and time invested? a book i read quoted time, yield, savings rate. yield in the sense of appropriate mix of stocks
LittleD
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Re: Why Does Anyone Listen To Paul Merriman?

Post by LittleD »

:wink: If you wish to do more research into what diversification through additional asset classes can buy you over an investment lifetime, go to Paul's website and engage his "brand new free" lifetime investment calculator. Put in your own portfolio and test it against other portfolios over a 50 year time period and marvel how market decade returns change dramatically as time passes. No one, even Paul can see what the future holds and most likely will not repeat but, as some say may rhyme.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by zincTwo »

FIREGuy88 wrote: Wed Apr 14, 2021 10:23 pm Why do people still listen to this guy?
Why? His guidance has not only made me a lot of money over the last 10 years, but has increased my peace & calm through turbulent markets. I have not only enjoyed the benefits of a large-cap growth tilt (i.e. TSM), but have reaped greater benefits during the times when emerging markets, REITs, and especially SCV, were/are surging.

IMO, the most compelling pieces of data that illustrate the benefits of having more than simply an inverted haystack portfolio are these:
  1. callan.com:2020-classic-periodic-table (this was the most compelling piece of data in my entire investment life on the topic of diversification)
  2. SCV vs SP500 Tell-Tale Chart (slide pgs. 8-11), also see podcast&notes on the chart.
Thank you, Paul (and Chris & Daryl)

Disclosure: 85% of my portfolio is UBH (10 fund), and 15% is Two-funds-for-Life. Rebalancing takes me less than 30min, once a year.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by CyclingDuo »

tj wrote: Thu Sep 02, 2021 10:49 pm In his email today, it says he recorded a second podcast regarding this thread:

Here is the link to the second podcast:

https://paulmerriman.com/what-can-we-le ... ogleheads/
Thanks for the links. I enjoyed listening to both episodes this morning dedicated to this thread. Unfortunately, the 35 year old OP has “left the building” - so to speak - as I read that he decided to go with Vanguard’s PAS to handle his windfall and subsequent investments.

That being said, Paul addresses this thread quite well in both podcasts.

CyclingDuo
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Mustang8307 »

CyclingDuo wrote: Fri Sep 03, 2021 4:00 pm
tj wrote: Thu Sep 02, 2021 10:49 pm In his email today, it says he recorded a second podcast regarding this thread:

Here is the link to the second podcast:

https://paulmerriman.com/what-can-we-le ... ogleheads/
Thanks for the links. I enjoyed listening to both episodes this morning dedicated to this thread. Unfortunately, the 35 year old OP has “left the building” - so to speak - as I read that he decided to go with Vanguard’s PAS to handle his windfall and subsequent investments.

That being said, Paul addresses this thread quite well in both podcasts.

CyclingDuo
I’m 38 and listen to Paul regularly. He has a lot of wisdom and backs it up with evidence. Paul brings the receipts, as the kids say.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Grt2bOutdoors »

CyclingDuo wrote: Fri Sep 03, 2021 4:00 pm
tj wrote: Thu Sep 02, 2021 10:49 pm In his email today, it says he recorded a second podcast regarding this thread:

Here is the link to the second podcast:

https://paulmerriman.com/what-can-we-le ... ogleheads/
Thanks for the links. I enjoyed listening to both episodes this morning dedicated to this thread. Unfortunately, the 35 year old OP has “left the building” - so to speak - as I read that he decided to go with Vanguard’s PAS to handle his windfall and subsequent investments.

That being said, Paul addresses this thread quite well in both podcasts.

CyclingDuo
He sure did! :)
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Re: Why Does Anyone Listen To Paul Merriman?

Post by VSNF »

Worth listening to his podcast. Three things to consider:

1. Look at his slides (https://paulmerriman.com/wp-content/upl ... Charts.pdf), particularly slides 10 and 12. When SCV underperforms SPX, it does so for long periods but then roars ahead. It has underperformed for 14 years. It has done so for shorter (11 and 8) and longer (17 and 20) periods, but when it returns it returns big. Look also at slide 11 -- over the decades, SCV outperformed during during 4 in a row from 40-79 and only once in the 4 decades after. If asset classes revert to a mean, SCVs time is about to come again.

2. More evidence that it's time is about to arrive: SCV has gotten cheaper and cheaper (this is from AQR / Cliff Asness, but still useful):
https://www.aqr.com/Insights/Perspectiv ... tal-Reason

3. Marriage is the worst asset class. :wink:

Takeaway - instead of getting married, invest some of your money in SCV.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by chiliagon »

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Re: Why Does Anyone Listen To Paul Merriman?

Post by Mr. Rumples »

I like his clarity and thoughtfulness. Just as I like others like Bogle. For me, it helps me think about money and gasp!! - thank you Suze Orman - my relationship to it and what I want it to do for me. Then I can make my own decisions. When it comes to investing, there is IMHO no right answer for everyone; we all have different needs, skills, knowledge, goals, resources and backgrounds we bring to the table.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by mangorunner »

zincTwo wrote: Fri Sep 03, 2021 12:24 pm IMO, the most compelling pieces of data that illustrate the benefits of having more than simply an inverted haystack portfolio are these:
  1. callan.com:2020-classic-periodic-table (this was the most compelling piece of data in my entire investment life on the topic of diversification)
  2. SCV vs SP500 Tell-Tale Chart (slide pgs. 8-11), also see podcast&notes on the chart.
What is an "inverted haystack portfolio"? (Gave it a shot on both Google and BH - but nothing.)
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Re: Why Does Anyone Listen To Paul Merriman?

Post by zincTwo »

mangorunner wrote: Sun Jan 30, 2022 2:58 pm
zincTwo wrote: Fri Sep 03, 2021 12:24 pm IMO, the most compelling pieces of data that illustrate the benefits of having more than simply an inverted haystack portfolio are these:
  1. callan.com:2020-classic-periodic-table (this was the most compelling piece of data in my entire investment life on the topic of diversification)
  2. SCV vs SP500 Tell-Tale Chart (slide pgs. 8-11), also see podcast&notes on the chart.
What is an "inverted haystack portfolio"? (Gave it a shot on both Google and BH - but nothing.)
It's a term I've seen, but not on BH.
On BH, many say to "just buy the haystack"... (i.e. the total-stock market). While it does have "everything", it is cap weighted, so the large & growth companies vastly overweight the mid/small/value ones. Plotted on the Morningstar style map, it might look something like this
Image
Thus, if superimposed on the morningstar chart, the haystack is really upside down, .

With a more balanced weighting across market capitalization, you can get more of small and value classes, and take advantage of the benefits from those, and other asset classes over time.
P.S. .... hence my avatar :-) ==>
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Triple digit golfer »

zincTwo wrote: Sun Jan 30, 2022 3:49 pm
mangorunner wrote: Sun Jan 30, 2022 2:58 pm
zincTwo wrote: Fri Sep 03, 2021 12:24 pm IMO, the most compelling pieces of data that illustrate the benefits of having more than simply an inverted haystack portfolio are these:
  1. callan.com:2020-classic-periodic-table (this was the most compelling piece of data in my entire investment life on the topic of diversification)
  2. SCV vs SP500 Tell-Tale Chart (slide pgs. 8-11), also see podcast&notes on the chart.
What is an "inverted haystack portfolio"? (Gave it a shot on both Google and BH - but nothing.)
It's a term I've seen, but not on BH.
On BH, many say to "just buy the haystack"... (i.e. the total-stock market). While it does have "everything", it is cap weighted, so the large & growth companies vastly overweight the mid/small/value ones. Plotted on the Morningstar style map, it might look something like this
Image
Thus, if superimposed on the morningstar chart, the haystack is really upside down, .

With a more balanced weighting across market capitalization, you can get more of small and value classes, and take advantage of the benefits from those, and other asset classes over time.
P.S. .... hence my avatar :-) ==>
The style boxes are arbitrary. Once you accept that, the numbers are irrelevant.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by mangorunner »

Ah, that makes sense. Thanks for the explanation. Amongst investing friends, I call the Morningstar barometer the "Morningstar Rubik's Cube".

Now, if someone would explain the avatar for the member here with a similar (but blue, I think) Rubik's cube full of numbers. I can't find it right now, but every time I see it, I wonder what it means. I'll link it when I come across it again.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by willthrill81 »

averagedude wrote: Tue May 04, 2021 4:10 pm I really like Paul Merriman. I believe he is one of the true greats on educating young people to save and invest their money. I must say, I wish I had a dollar for every time I heard him say "small cap value".
Agreed. He's a real gentleman, one of the few out there who is genuinely concerned about helping others for purely altruistic reasons.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by enad »

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Re: Why Does Anyone Listen To Paul Merriman?

Post by Lawrence of Suburbia »

Re: Paul's 2-fund portfolio ...

Doesn't the total market fund have a fair representation of small-cap value stocks? ... how about the balanced index fund? ... picking brains here ...

I'm really trying to move towards an ultimate KISS portfolio because I am, in fact, not the sharpest tool in the shed. :mrgreen:

I like VBIAX a lot for that reason. But also am thinking total stock market/TIPS fund of some sort. However I'm not doing anything at the moment -- just standing here.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Gaston »

Bluce wrote: Thu Apr 15, 2021 8:57 am I have an all-weather portfolio that I mostly ignore.
Care to post your ETF/fund names and your % asset split? Am always keen to see “all weather” portfolios.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by zincTwo »

Lawrence of Suburbia wrote: Fri Aug 12, 2022 5:30 pm Re: Paul's 2-fund portfolio ...

Doesn't the total market fund have a fair representation of small-cap value stocks? ... how about the balanced index fund? ... picking brains here ...
This is where the BH hair-splitting starts... what is fair representation?
From the perspective of SCV's historical growth perspective, I don't think TSM has enough "smallness" or "valueness" to take advantage of them in a meaningful way.
I drank the Merriman kool-aid, and see how SCV does provide some gains without negatively affecting risk-adjusted returns. I had his 10-fund for many years, but found myself too-frequently checking the portfolio. Once two-funds-for-life came out (TDF+SCF), I knew I found something that matched my desire for simplicity, plus SCV. I no longer look at it, and don't rebalance those accounts either.

In my 401K & IRA's I am 80% 2040 TDF (ex. FBIFX), 20% SCV (AVUV)
The TDF date is chosen for when I need the money from the IRA or 401K, (not when I am retiring).

My taxable account is still full UBH, as I don't want to create taxable events on the long-term holdings, until I will use the money in earlier retirement years.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by CyclingDuo »

CyclingDuo wrote: Fri Sep 03, 2021 4:00 pm
tj wrote: Thu Sep 02, 2021 10:49 pm In his email today, it says he recorded a second podcast regarding this thread:

Here is the link to the second podcast:

https://paulmerriman.com/what-can-we-le ... ogleheads/
Thanks for the links. I enjoyed listening to both episodes this morning dedicated to this thread. Unfortunately, the 35 year old OP has “left the building” - so to speak - as I read that he decided to go with Vanguard’s PAS to handle his windfall and subsequent investments.

That being said, Paul addresses this thread quite well in both podcasts.

CyclingDuo
Update: I just read one of the OP's latest August 2022 posts and it appears after switching to Vanguard's PAS, he has now left Vanguard's PAS and moved on to something else. :shock:

Just mentioning it due to the tenor of his posts when he started this old thread.

CyclingDuo
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Re: Why Does Anyone Listen To Paul Merriman?

Post by placeholder »

I don't listen to anyone on portfolio because I developed mine in its basics in 2007 then revised it for overall stock/bond ratio a couple times but when I did create the portfolio he was one of the inputs to the asset allocation.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by enad »

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Re: Why Does Anyone Listen To Paul Merriman?

Post by Northern Flicker »

whereskyle wrote: Thu Apr 15, 2021 3:05 pm Paul makes a good point. Total market index funds are dominated by megacap companies. Sure, they hold all the stocks, but 3000 of the stocks don't really have any effect on performance. Apple, Amazon and Facebook sure as heck do though. I am extremely happy with my 97% total market index portfolio, but I'm slowly building up a 20% mid/small tilt to diversify away from large cap growth and take a bit more risk while I'm young.
While it is true that Apple, Amazon, Facebook are currently about 14% of the portfolio of VTI, I don't believe that Mr. Merriman started calling out the concern about megacap allocation levels recently. That these three stocks grew to be 14% of the fund (and other large stocks appreciated) is why SCV underperformed the market over the last 7 years.

The best market commentators will say that the value premium is cyclical, but it is quite unpredictable how long the cycles will be.
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Re: Why Does Anyone Listen To Paul Merriman?

Post by Zeno »

Yes, or maybe no.
Last edited by Zeno on Wed Dec 28, 2022 6:58 pm, edited 2 times in total.
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