Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Hi Rforno,
Thanks for your post. Not all professional organizations are smoking the high flier weed. Vanguard is definitely not in that group with a much more subdued projection of market returns.
Here is a Link to a short Vanguard video that br…
Hi Heessafe,
Thanks for the Link to the Meb Faber article. It greatly surprised me in a negative way. The data that Faber referenced in his article summarized surveys of institutional money managers.
I am shocked by their unrealistic forecasted …
HI JoJo26,
Apparently I misunderstood your position, at least in terms of emphasis. We are in substantial agreement.
In investing there is an issue of too much information; some tendency towards paralysis by analysis. There is a famous study of…
Hi JoJo26,
Thanks for your comment.
While I agree with you that the emphasis on multi-year returns performance is sometimes overemphasized when making an investment decision, I believe that it is a contributing factor to that decision and is not a…
Hi Guys,
I sure don't pay as much attention to near term market trends, either stock or bond, as many MFO board participants do. That's my bad. There's both a plus and a minus aspect to my lazy behavior.
I often entirely miss the nuances and oth…
Hi Guys,
Please don't overreact to this headline. It is only a forecast made by the Reseach Affiliates outfit. Maybe they're prescient, but maybe not.
The Reseach Affiliates forecast is grounded on the assumption that a regression-to-the-mean of…
Hi. Hank,
I certainly do agree with much of what has been posted on this exchange, especially your last posting. On this topic, with the same prime time players (Jaffe, Natixis), this is the second time around the horn for you. I'll provide a Lin…
Hi Davidrmoran,
Your post has more than a small touch of bitterness. It also has the feel of desperation; the feel of a violent Kamikaze attack. That's too bad since better investment outcomes are more likely if learning and decisions are made in…
Hi Old Joe,
We seem to be in complete agreement that both investors and their financial advisors are likely overly optimistic with respect to portfolio returns in the next decade. According to the surveys, financial advisors attempt to dampen the …
Hi Guys,
Not only are investors far too optimistic of the level of near term return likelihoods, but their financial advisors are too optimistic also. It is not likely that the average portfolio will deliver the 5.9% returns over inflation that th…
Hi Guys,
This is at least the second time around the pitfalls and shortcomings of Ivy League investment programs. They are complex and have access to investment categories not open to most individual investors. Also, excess returns are never a c…
Hi Hank, Hi msf,
Thanks for your comments, especially those most recently made.
The active vs. passive management debate will remain a hot topic. While the overwhelming academic research concludes that passive is the winner on average and in the …
Hi Guys,
Wow!!! You folks have terrific memories. You remembered a rather modest MFO exchange about a Warren Buffett recommendation that was made over 2 years ago. That's remarkable; especially when contrasted against my many memory shortfalls.
…
Hi Guys,
Chuck Jaffe is an excellent financial analyst and writer. The short referenced article is yet another example that reinforces his solid investment work.
Harry Dent Jr. has been making extreme market forecasts for decades. His analyses a…
Hi Guys,
I glanced at the reference, but I don't plan on reading it in detail.
It's not that it is too detailed although it is. It's because it projects highly unlikely events that are potentially huge in terms of catastrophic impact. Using a sc…
Hi Guys,
I see many of you are also intrigued by the Shiller CAPE work. Initially I gave it more predictive power than it practically warranted. Here is a Link to a paper that explores any relationship in depth:
http://seekingalpha.com/article/3…
Hi Guys,
I had trouble accessing Ted's link, but I did read the article since we get the WSJ daily.
Shiller's CAPE model is really not a powerful signal that forecasts market direction. That's not me talking. A comprehensive study was completed …
Hi Guys,
Carl Richards took a very safe path when writing an article about asking questions. Not many folks would disagree with the importance of doing so.
The article did bring two bits of wisdom that I partially retain to surface. I say partia…
Hi Davidrmoran,
I hesitate to offer any portfolio advice since I am not a financial professional, but given her needs and portfolio size, you are guiding your female friend in the right direction.
How do I reach that provisional conclusion? I mad…
Hi Old Joe,
Yes, I've been touting the Monte Carlo tool for a long time. It's the right tool for the right job given the uncertainties of market returns and their random sequencing. I talked it way back in FundAlarm days and have been a consistent…
Hi Davidrmoran,
You do a quick and ineffective 2-step.
Here is a direct quote from one of your last posts: " ...... and all the Monte Carlo in the world would not show good outcomes for a 70yo retired w/ only 30% equity."
I guess I just did the i…
Hi Davidrmoran,
Gut instincts are usually not a good idea when making any decision, especially investment decisions.
In the closing statement of your most recent harangue, you posited that Monte Carlo simulations would show bad outcomes for a port…
Hi Ron,
I never meant to imply that any tool should replace a human in making a decision. That's always our job.
Monte Carlo is just another tool to help in what could be a daunting decision when complex tradeoffs are present. But it is a powerf…
Hi BobC,
I agree with your comment that equities should just about always be part of a portfolio. I referenced Bogle's rule only as one common investment rule. I do not subscribe to it; I wonder if he still advocates it given current market condi…
Hi Hank,
My wife and I don't mind sharing our ages. I am 82 and my wife is 78 years old.
We are in reasonably good health, and my wife keeps me on a straight road from a health perspective. Your question intrigued me so I visited an age survival…
Hi Davidrmoran,
Thank you for reading my post in such detail and for your meaningful addition.. I wrote the rules I listed from memory. I recognize that all the rules lists are incomplete All these rules are very general guidelines and some inve…
Hi Guys,
Catch22, thanks for the Link that gains access to the Burns article. It is a very disheartening report. It suggests that returns from the standard array of investment options that individual investors can access are not promising.
Near …
Hi Guys,
Always at the top of most lists is the generic advice to pay yourself first, which is nebulous enough to mean different things to different folks.
But the topic is always fun and stimulates a variety of responses, some very controversial.…
Hi Davidrmoran,
Yes, I did read the references you provided.
They represent a viewpoint that is not shared by some other folks. The book was sure to be controversial given the subject matter. I'm sure some reviews were positive, but neither pers…
Hi Davidrmoran,
Indeed"The Bell Cirve" unleashed a firestorm of controversy when released. Actually, that was expected and one of the reasons why my wife and I purchased the book. It did not disappoint. It is still hotly debated, and Murray stil…
Hi Guys,
I don't have much to contribute to this current exchange because I have not devoted much time or thought to UBI (Universal Basic Income). I perceived it as an idea well ahead of its time for anything approaching adoption in one of its man…
Hi Old Joe,
Your recent attempt at subtlety totally escaped me,
indeed it was wasted on the wrong person. I am by training and practice an engineer. A failed design is not an option. Consequently, I attempt to be very direct and linear in my com…
Hi Old Joe,
The term glittering generalities has been with us for a long, long time. Here is a Link that discusses some of its history:
https://en.m.wikipedia.org/wiki/Glittering_generality
I'm surprised that you are not familiar with it. I was…
Hi msf,
Thanks for the heads-up. I indeed misquoted the article by substituting the word average for median. Sorry for the error. I have corrected my original post. I try to be as accurate as possible, but errors do inadvertently happen.
I rea…
Hi Guys,
I'm a sucker for presentations that are in the heavy weight statistical category. I'm often surprised by the survey numbers. That was again true as I read the referenced mutual fund owner report.
Not much to my surprise, I'm doing quite…
Hi Guys,
Sometimes as early as the 1840s, William Henry Harrison said something that approached " the rich get richer and the poor get poorer". The industrial revolution had already started and it was hoped that major poverty would be eliminated. …
Hi Guys,
In a convoluted way, the subpar performance of Harvard's investments as directed by high paid professional teams should make us relatively uninformed amateurs happy. In the investment universe we can compete and win against heavy weight p…
Hi Mark,
A lot of folks have been asking the same question: Given their documented performance successes, why not more females in the financial industry?
Many studies have addressed this issue, and some easy answers have been proposed. Some elem…
Hi Hank,
Like you, I too selected my mutual fund managers without considering gender as one of the selection criteria. But was I missing a pony here?
After some casual reading, I discovered that female investors slightly outperform male investors…
Hi Bee,
I likely am greatly overconfident in my contribution here since I'm running naked now. I did not and do not intend to read the referenced article.
Just as DanHardy implies, the Human Capital chart that you culled from the article is just …
