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Robert Keyfitz

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  • Keystone fight continues as delay seen through midterm elections [View news story]
    Kill it.
    Aug 26 07:51 PM | 1 Like Like |Link to Comment
  • Show Me The Money: The Perils Of REIT ETF Investing [View article]
    Don: You make good points. The market may not be rational. However, two observations: (1) EMH is a useful benchmark with a powerful logic that doesn't need rationality. If you think you can beat the market, you should be able to explain (at least to yourself) how you’re able to escape EMH's gravitational pull. My point was that being able to distinguish between good and bad companies on the basis of public information isn’t a good explanation. (2) You may be right that HFT and technical trading move prices, but how does that tip the balance in favor of stock selection? Especially for ETFs where risk free arbitrage is quick and easy, there should never be a large and persistent deviation between price and NAV.
    Aug 4 01:11 PM | 1 Like Like |Link to Comment
  • Show Me The Money: The Perils Of REIT ETF Investing [View article]
    Just to elaborate a bit:

    Your thesis is that some firms are better managed, occupy different market niches, have different balance sheets, dividend policies, etc. But,the next step in your logic -- therefore by stock picking or market timing you can earn a better than average return -- is not obvious. If one firm is better managed than another, well informed investors should value its future earnings more highly and therefore be willing to pay more for it. Or, if the market as a whole looks overvalued, we'd expect those same well informed investors to pull some money out driving down all prices, especially cyclical ones.

    The efficient markets hypothesis anticipates prices will adjust to reflect all the available information and therefore differences in quality will be reflected in relative prices, not relative returns. As a result, you can't make money by actively managing your own or others' portfolios unless you're better informed or smarter or faster than other investors. You're playing a game with them, not with the firms who supply assets to the market.

    The argument for ETFs is that nobody can have a persistent advantage over other market participants. You know more about REITs than I do and you come across as honest and trustworthy. You have a lot of credibility. If everyone else in the market was like me, you'd also be very rich because you could easily eat my REIT lunch money. But, dozens or hundreds of them are as sophisticated and knowledgeable as you and those people cause prices to adjust to reflect the best available current knowledge. I'm not convinced you're better able to pick winners than they are.

    That said, I have acted on some of your suggestions. So far, no regrets. But I'm not convinced I'll do better than average over the long run and I don't find the argument in this article very convincing.
    Aug 4 10:44 AM | 8 Likes Like |Link to Comment
  • Announcing SA's First Outstanding Performance Award Winners [View article]
    David: Generalizing a bit, the crowd is what puts the magic in SA and makes this a fun place to hang around. From the comments in this thread, I can see you’re aware of that and have tried to weigh the interests of your loyal members into the balance, perhaps more than I was giving you credit for. Thanks for the kind words.
    Jul 30 09:42 PM | 2 Likes Like |Link to Comment
  • Announcing SA's First Outstanding Performance Award Winners [View article]
    David Jackson: The issue isn’t sincerity or good intentions. Any selection process that takes into account ex post results is inherently biased. AlphaBetaWorks is right: what matters is the risk adjusted return is on these investments. Did you estimate that? Besides, why look for a big positive number at all? The most valuable call on SA during this period might have been a warning about a possible negative return.

    You claim to have taken into account the overall quality of the authors’ work, but nevertheless these are the specific recommendations you singled out for the awards. What brought them to your attention was outsize returns due to the value of patents and takeover offers, and Florida weather. What could be more speculative? A bad storm or an adverse FDA ruling might have put these companies in Chapter 11. A less generous offer from Merck might have given IDIX investors a return of 59% rather than 597%.

    Whatever your outstanding performance award signifies, I’m not convinced that it’s outstanding performance.
    Jul 29 02:13 PM | 4 Likes Like |Link to Comment
  • Announcing SA's First Outstanding Performance Award Winners [View article]
    Both sides make good points, though Daniel yours is not among them. The assertion that PRO has improved the quality of the site to the benefit of all is humbug. Where's your evidence? The economist Jack Hirschleifer (I think it was) pointed out that while the money in horseracing may marginally improve the breed, what horseracing is primarily about is redistribution.

    For sure you can increase your revenue by differentiating the market and charging some people more. That’s important to the owners of SA who I predict are preparing to sell it off (do I get a prize for that?). And why not, any of us would do the same thing. It’s still a terrific and informative web site, but what gets lost is the sense of community. Like many others I regret that.
    Jul 29 12:40 AM | 4 Likes Like |Link to Comment
  • Announcing SA's First Outstanding Performance Award Winners [View article]
    Congratulations to the winners, but I'm skeptical whether you've identified outstanding research and presentation, or have (more likely) been fooled by randomness. This sort of in-sample testing of ideas is pretty useless. Since I'm not a PRO subscriber I'll never know how these two articles compare to hundreds of others that might have won if things had broken the right way.
    Jul 28 08:02 AM | 17 Likes Like |Link to Comment
  • Finding A Margin Of Safety In Realty Income [View article]
    Brad: Thorough and informative (as always). Many thanks for the update.
    Jul 28 07:50 AM | Likes Like |Link to Comment
  • Boeing Could Yield 4% In 4 Years [View article]
    Thanks for banging all this stuff into excel and making an interesting case. But, you don't consider the possibility that BA could return -4% or 8% or 20%. What's the risk? Also, what would you expect for the broader market and especially the capital goods sector if investment spending continues to grow in line with BA's outlook? You've stopped well short of an actionable recommendation.
    Jul 9 07:06 AM | Likes Like |Link to Comment
  • Consumer Confidence At 6-Year High: Where's The Stock Market Heading? [View article]
    So, let me summarize: People who wanted to say something about macroeconomics or financial markets would use terms like consumer sentiment, unemployment, inflation, growth and stock market. Did I miss something?
    Jun 28 06:56 AM | Likes Like |Link to Comment
  • Asset Allocation And Rebalancing Review: June 19 [View article]
    a4: More specifically, I imagine the evidence shows both that: (1) Assets with lower valuations offer higher returns and (2) Momentum is persistent in the short to medium term. Since these are somewhat contradictory, it's unclear what value there is to a signal that says "do something" but doesn't tell you what. For instance, I don't need the GMI.F to know that my returns have suffered over the past several years because I've been overweight in foreign markets. But, is that a reason to rebalance in or out at this point? Or not to bother with market timing at all (something the evidence really is clear about)?

    What's missing is a demonstration that the GMI.F is useful by testing a strategy that uses it. If you or Mr. Picerno can give one, there's another article waiting to be written. Be sure and let me know when it's posted.
    Jun 22 07:15 AM | Likes Like |Link to Comment
  • Asset Allocation And Rebalancing Review: June 19 [View article]
    a4: Ok thanks, I get it. The Rebalancing Opportunity Index signals that you may want to either double down or hedge on your hunches, but doesn't tell you which. Since your hunches (or rather, the difference between your hunches and Mr. Market's hunches) are the source of 99% of investment risk it wouldn't seem you're all that much the wiser, especially if you suspect the value of more precision about the remaining 1% is offset by the added risk of algorithmic trading. At least for simple folks like me.
    Jun 20 02:59 PM | Likes Like |Link to Comment
  • Asset Allocation And Rebalancing Review: June 19 [View article]
    Intuitively, what's the point here? Is this a momentum strategy? Suppose you'd bought a market weighted (whatever that means) portfolio of all the components of the GMI.F a year ago, what rebalancing would be indicated today? Or if there's a better question to ask, please feel free to answer that instead. I'm just trying to figure out what it is you're doing. It's not obvious, at least not to me. Thanks.
    Jun 19 04:50 PM | 2 Likes Like |Link to Comment
  • Are Dividends A 'Bonus'? - Yet Another View [View article]
    You should try climate change.
    Jun 7 02:15 PM | 1 Like Like |Link to Comment
  • Are Dividends A 'Bonus'? - Yet Another View [View article]
    No, I didn't really check that. But, as I said it flies in the face of reason.
    Jun 6 10:58 AM | Likes Like |Link to Comment