Some of you guys might want to keep tabs on your 401Ks.

#76
#76
shootermcgavin7 said:
I will never count on Congress to do anything smart.

However, SSI is invested in government bonds. They tend to do very well in a crash.
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and they do really crappy in an expansion. i wouldn't touch gov't bonds right now. what happens if our pension plan owns 100% gov't bonds and inflation goes to 10% like it did in the 80s? who is going to make up that lost income?
 
#77
#77
Timing in the market will never change. What also doesn't change is the long term average increase in broad based portfolio valuations, which hint that market timing impacts returns far more than outliers.
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#78
#78
droski said:
and you get to decide how much risk i get to take?
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No. But the government gets to decide how much risk stupid people take. That's a fair trade, right?

Not everyone has an undergrad from Berkeley. As someone who grew up in the middle of nowhere in the Appalachians, I plead that you have to stop projecting your intelligence to everyone.
 
#79
#79
BigPapaVol said:
Timing in the market will never change. What also doesn't change is the long term average increase in broad based portfolio valuations, which hint that market timing impacts returns far more than outliers.
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LOL - if you really think your fund manager has any stock-picking ability, you can mail me a check.

My dog will outperform him/her over the "long-run".

I promise. Notice that "long-run" is in quotes. Greatest concept(scam) for fund managers ever.
 
#80
#80
shootermcgavin7 said:
No. But the government gets to decide how much risk stupid people take. That's a fair trade, right?

Not everyone has an undergrad from Berkeley. As someone who grew up in the middle of nowhere in the Appalachians, I plead that you have to stop projecting your intelligence to everyone.
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the overwelming majority of americans set an allocation on their 401k and don't look at it for the next 20 years and don't reallocate till around 5 years before retirement. that is actually not a bad thing. i'm already paying for stupid people. the bill is already too high.
 
#81
#81
droski said:
and they do really crappy in an expansion.
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They should.

I promise I am not being condescending. But isn't it intuitive, especially to a Haas kid, that low volatility portfolios do better in a downturn and worse in an expansion? Did they at least teach you the risk/return trade-off?


And aren't such portfolios "better" for risk-averse investors?
 
#82
#82
droski said:
the overwelming majority of americans set an allocation on their 401k and don't look at it for the next 20 years. that is actually not a bad thing. i'm already paying for stupid people. the bill is already too high.
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It is if the money is being shuttled, by default, into poorly-managed mutual funds.

(hint: it is: the target-date funds that are the default option horribly underperform any index you want to choose).
 
#83
#83
shootermcgavin7 said:
LOL - if you really think your fund manager has any stock-picking ability, you can mail me a check.

My dog will outperform him/her over the "long-run".

I promise. Notice that "long-run" is in quotes. Greatest concept(scam) for fund managers ever.
Click to expand...
You being a student, I'm sure I could mail you a check, but who was talking about fund managers?
Posted via VolNation Mobile
 
#84
#84
shootermcgavin7 said:
LOL - if you really think your fund manager has any stock-picking ability, you can mail me a check.

My dog will outperform him/her over the "long-run".

I promise. Notice that "long-run" is in quotes. Greatest concept(scam) for fund managers ever.
Click to expand...

you aren't telling me that a guy who has spent 5 pages arguing that outliers are extremely important is a firm believer in efficient market theory?
 
#85
#85
shootermcgavin7 said:
They should.

I promise I am not being condescending. But isn't it intuitive, especially to a Haas kid, that low volatility portfolios do better in a downturn and worse in an expansion? Did they at least teach you the risk/return trade-off?


And aren't such portfolios "better" for risk-averse investors?
Click to expand...
At least it wasn't condescending. Have you worked with CFOs before? Maybe you know derivatives? Don't tell me, you were buying strips before they were cool?
Posted via VolNation Mobile
 
#86
#86
shootermcgavin7 said:
They should.

I promise I am not being condescending. But isn't it intuitive, especially to a Haas kid, that low volatility portfolios do better in a downturn and worse in an expansion? Did they at least teach you the risk/return trade-off?


And aren't such portfolios "better" for risk-averse investors?
Click to expand...

of course it's intuitive which is precisely why ONE type of investment is not appropriate for a retirement vehicle. particurally a type of investment that could potentially have millions of americans have a locked in return at 4% when inflation is in double digits.

shootermcgavin7 said:
It is if the money is being shuttled, by default, into poorly-managed mutual funds.

(hint: it is: the target-date funds that are the default option horribly underperform any index you want to choose).
Click to expand...

virtually every 401k plan has an etf option these days.
 
#87
#87
droski said:
you aren't telling me that a guy who has spent 5 pages arguing that outliers are extremely important is a firm believer in efficient market theory?
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While it entertains me that you skipped my two replies to YOU, I think this is worth answering.

I believe that markets are relatively efficient. When transactions costs enter the picture, they are not efficient at all. This is when the "free-marketz iz good" story breaks down.

While I don't believe financial markets are fully efficient, this has nothing to do with outliers. I really hope you don't work in I-banking - you would be fired.
Distributional properties of stock returns (more skewness and/or kurtosis than the normal dist) have nothing to do with market efficiency.

Just to repeat: market efficiency has nothing to do with distributional properties. Who told you that it did? I am curious, if you feel like answering the question.
 
#89
#89
shootermcgavin7 said:
While I don't believe financial markets are fully efficient, this has nothing to do with outliers. I really hope you don't work in I-banking - you would be fired.
Distributional properties of stock returns (more skewness and/or kurtosis than the normal dist) have nothing to do with market efficiency.

Just to repeat: market efficiency has nothing to do with distributional properties. Who told you that it did? I am curious, if you feel like answering the question.
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you do realize efficient market theory throws out the outliers. Fama couldn't get it to work with the full data.
 
#90
#90
droski said:
you do realize efficient market theory throws out the outliers. Fama couldn't get it to work with the full data.
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You are incredibly confused. Theory doesn't deal with data at all.

Empiricists throw out outliers in practice. Fama does both (although recently empirics). Perhaps you mean that tests of the efficient market theory throw out outliers?

I have to run but I'll try to drop by within a day to see the rest of the answers.
 
#92
#92
shootermcgavin7 said:
You are incredibly confused. Theory doesn't deal with data at all.

Empiricists throw out outliers in practice. Fama does both (although recently empirics). Perhaps you mean that tests of the efficient market theory throw out outliers?

I have to run but I'll try to drop by within a day to see the rest of the answers.
Click to expand...

of course i meant the tests. or do we not care if we can prove something to be true?
 
#93
#93
droski said:
of course i meant the tests. or do we not care if we can prove something to be true?
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You were previously mentioning something about theory discarding outliers. That statement is not correct. Most economic theories don't deal with data at all. "Testing" a theory is not developing a theory. However, I think I understand what you meant. I will base the following discussion on that.



Markets seem to be semi-strong efficient. Market efficiency relies on average returns. Outliers significantly affect average returns.
I fail to see how observing extreme downward movements in stock prices has any impact on a theory which claims stock prices, for the most part, have built in most of the publicly available information.
 
#94
#94
judging by the 74% gain in the stock market from the bottom do you really think the market was efficienctly priced in march 09?
 
#95
#95
droski said:
judging by the 74% gain in the stock market from the bottom do you really think the market was efficienctly priced in march 09?
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oops. Efficient market works reasonably well for fundamental evaluation, but the chartists and psychologists screw that all up.
 
#96
#96
Back to the topic of the thread.

Socialist Argentina siezes private pension funds.

(IMO Obama intends to do the same in America.)

I recommend reading Adam Starchild on the topic.

Starchild was brought to my attention by a man who had personal one on one conferences with FDR, Josef Stalin, Hirohito, Winston Churchill, Harry Truman, Dwight Eisenhower, JFK and Khruchev among many other notables.

If you want to put money away for a rainy day, with a decent return then you can't beat Lichenstein and that was told me by a man who, when visiting the country, the king sent down a limo to have him come out for an evening of conversation and beer drinking.
(After the guy died who mentioned Starchild to me, this guy gave me the name and number of his personal banker.)

A problem with the Starchild recommendation of dual citizenship is that in Lichenstein you can't gain citizenship unless your grandfather owned property there, so if you want to help your grandchildren, buy some property there now.

The only other real safe bet for savings that governments can't sieze control of, there is the coffee can buried in the backyard, which reminds me of the joke told by an old country music entertainer.

There was this rich oil man in Texas who was missing $50,000 from an account and had a deaf mute as his accountant, so he called in someone who could communicate in sign language and had the guy question the accountant.

He said; "ask him where the hell is my $50,000?"

So the guy signed to the accountant and the guy signed back; "I don't know what happened to the $50,000."

When he told the boss he opened his drawer and pulled out a 45, laid it on his desk and said; "tell him he is either going to come up with the $50,000 or I'm going to blow his brains out."

So he signed that to the accountant who signed back; "It's buried in a coffee can in my back yard under the mulberry tree."

Then the guy told the oil man; "he said screw you and your $50,000, you can go to hell."

The first big bailout of any government who had acquired more debt that it could pay was the Argentine government during the Carter administration.

One of the members of the cabinet who opposed using American taxpayers dollars (you might very well say draining our social security funds we had paid in for our own retirement benefits) was met by derision by other cabinet members who lamented they would lose dividends from their wall street investments if Argentina defaulted.

There have been many other bailouts of national debts since, very notable was Mexico, but rest assured of one thing, there will be no one to bail out America and the policies of the present administration will sooner or later place America in the position of having more debt than it can pay, and within the forseeable future we will have more debt than we can even afford to service, even if we have a thriving economy, which is doubtful at this point with our 15% unemployment rate.
 
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