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Larry Swedroe interview at M*

Transcript.

He confirms many of my biases. ;-)

Comments

  • Commodity dance moves:
    Backwardation

    https://investopedia.com/terms/b/backwardation.asp

    Contango

    https://investopedia.com/terms/c/contango.asp

    Can I find a fund manager who does this for me?
  • bee said:

    Commodity dance moves:
    Backwardation

    https://investopedia.com/terms/b/backwardation.asp

    Contango

    https://investopedia.com/terms/c/contango.asp

    Can I find a fund manager who does this for me?

    I didn't understand any of that. And it came up in context of something he decided he didn't need to be involved in, I think.

    I was more interested in his barbell argument about bonds.
  • edited November 27
    Very good interview! Thanks for posting! Another topic I need to dig into.
    How does one invest in the 5 factors?
    https://www.ishares.com/us/strategies/smart-beta-investing

    What are the 5 factors?….
    Foundations of Factor Investing(https://www.investopedia.com/terms/f/factor-investing.asp)
    Value
    Value aims to capture excess returns from stocks that have low prices relative to their fundamental value. This is commonly tracked by price to book, price to earnings, dividends, and free cash flow.

    Size
    Historically, portfolios consisting of small-cap stocks exhibit greater returns than portfolios with just large-cap stocks. Investors can capture size by looking at the market capitalization of a stock.

    Momentum
    Stocks that have outperformed in the past tend to exhibit strong returns going forward. A momentum strategy is grounded in relative returns from three months to a one-year time frame.

    Quality
    Quality is defined by low debt, stable earnings, consistent asset growth, and strong corporate governance. Investors can identify quality stocks by using common financial metrics like a return to equity, debt to equity and earnings variability.

    Volatility
    Empirical research suggests that stocks with low volatility earn greater risk-adjusted returns than highly volatile assets. Measuring standard deviation from a one- to three-year time frame is a common method of capturing beta.

    Certainly, there isn’t one ETF that would do all this. I assume you would need a number of funds and be prepared to rebalance & never lose faith (!).

    Bee! You could look at commodity funds, such as PCRIX, however, as WABAC says - don’t bother. And that’s what Swedroe said.

  • This is an interesting fund that rotates between factors based on expected future returns but never has more than 35% allocated to any single factor. Read the pospectus carefully before investing.
    DYNF
    BlackRock U.S. Equity Factor Rotation ETF ACTIVE
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