hmorgan

http://www.efficient-portfolios.com

16 Comments

    • Five Opportunities To Consider Amidst This Selloff [view article]
      In structured finance, the word tranche (sometimes traunche) refers to...... Aug 07 12:11 AM
    • I Believe in ETFs. Do You? [view article]
      I rarely get such a good laugh this early in the morning. Your opening paragraph was great!
      Thanks for making my day.

      Herb Morgan
      Efficient Market Advisors, LLC       Jun 08 10:53 AM
    • Dow 15,000? (ETFs: IVV, IWV, IYY, SPY, VTI) [view article]
      Dear WC:
      I hope you had a change of heart somewhere along the way. From our perspective, the argument still holds. Wishing you the best.

      Herb       Jun 01 02:11 PM
    • Private Equity ETF - Sign of a Top? [view article]
      Its nice to have another San Diego Herb on the site. Welcome!

      Herb Morgan       Sep 23 10:31 AM
    • Get Your Rally Shoes On Because This Rally's Got Legs [view article]
      Excellent Comment Daniel. There is quite often confusion about the name of my firm. My belief in the Efficient Market Hypothesis relates to individual stock selection. (Hence the use of index based ETFs)
      Having spent a long time in the actively managed world I make this statement from more than just academic theory. I do believe that Asset Allocation determines 94+% of a portfolios total return. For this reason we put the lion's share of our effort into the strategic and tactical elements of Asset Allocation, and hence the interest in fundamental data.

      I hope that clarifies things. Again, thank you for your question.

      Herb       Sep 15 01:01 PM
    • John Hussman: Don't Bet on the Markets Until They Outpace T-bills [view article]
      John,
      Well articulated commentary. You intimate throughout that the market collectively has it wrong. Have you don any work related to the markets ability to act as a leading indicator in these matters, or have any specific academic work you could site. Thanks in advance, and congrats on a nice article.       Sep 14 05:39 AM
    • Where's the Traditional Gold/Inflation Link? (ETF: GLD) [view article]
      You have got me wanting more here. Can you elaborate more on the last chart? Dec 05 11:54 AM
    • ETFs: An Approaching Paradigm Shift For Wealth Management [view article]
      Outstanding Article, Well Done Mr. Mordy.

      Herb Morgan
      Efficient Market Advisors, LLC
      Chief Investment Officer
      efficient-portfolios.c...       Nov 29 12:33 PM
    • How ETF Investing Has Changed in the Last Three Years [view article]
      David,
      I normally caution investors against rebalancing at yearly intervals as you suggest above. For that matter I caution against rebalancing at quarterly or semi-annual intervals as well. The "optimal" frequency for rebalancing is not actually a frequency at all. Rather, one should periodically (at least quarterly) review their portfolio for statistically relevant deviation from their target asset allocation. If the deviation from the target is found to be statistically relevant, it can be assumed that the risk level of the portfolio has risen beyond its intended level and rebalancing should occur.

      There is also one mistake in your comments about ETF Managed Accounts. Ameritrade's product "Amerivest" was second to market after my own firm's launch of the Efficient Market Portfolios accounts in August of 2004.

      Amerivest is more a tool of convenience for the do it yourself investor rather than an actively managed ETF account. Investors can use Amerivest to create asset allocation models, invest, and rebalance. One should note the distinction between hiring a money management firm vs. employing a web based service.

      Best Regards,

      Herb Morgan
      etfaccount.com



      in August of 2004.       Oct 24 12:55 AM
    • Clear and Present Danger for Owners of Leveraged Closed-End Muni Funds [view article]
      David,
      Thank you for your questions. I don't think a reasonable short opportunity exists for a couple of reasons.
      1. Limited share availability
      2. High borrowing costs (You must pay the dividends on shorted shares)
      3. The inversion of the yield curve is not highly likely in my opinion.

      The liquidity issue I speak of is a combination of small market capitalization and the fact that most investors tend to buy and hold these vehicles. These bond products are mostly held by full service brokerage firms on behalf of retail customers. These retail brokers are transaction driven and are historically quick to respond to any event that could justify such transactions. My view is that in the event of a dividend cut or omission these owners will be pressured into a sale resulting in a supply shift scenario.

      Herb Morgan
      efficient-portfolios.c...       Sep 12 10:38 AM
    • Designer Index Funds for the Wealthy? [view article]
      When considering the designer index fund concept. (i.e. selling losers) I am curious how the banks maintain consistency with the index after exiting the position.

      I see several problems with the deisigner index:

      1. By selling a loser you are reducing correlation to an index. (Who knows how that name will perform after it has been sold)

      2. 1% to 2% Seems outrageous for one index creation. I would seriously doubt even the most creative statisticians ability to justify the expense for the cap gain savings. After all, considering that they are holding winners what capital gains would be offset with the harvesting strategy? Are we talking about capital gains from another investment, art, or collectibles perhaps? It's not to get a $3,000 loss annually.
      3. Index Funds and expecially ETFs are already tax efficient and have a history of not distributing much in the way of gains. (i.e. when ETFs redeem shares, they distribute their lowest basis shares first)
      4. Almost all asset classes have more than one ETF today. Example if one had a position in large cap stocks represented by the SP Index, he/she could swap if for another large cap ETF of say Russell if they were in a loss on the position.

      In conclusion these products seem like little more than a fee grab by their creators. Buyer beware.

      Herb Morgan
      Chief Investment Officer
      Efficient Market Advisors, LLC
      efficient-portfolios.c...       Aug 28 11:18 PM
    • Alan Abelson on Small-Cap ETFs (IWM, IJR, IWC, PZI) [view article]
      I find the emergence of the two new Microcap ETFs a bit puzzling. On the one hand the two sponsors say "Look at what we have to offer.....liquidity in Micro Caps"
      Liqudity is essentially the main barrier to entry for money managers...we don't like to buy things we can't sell...quickly.
      So now we are offered the liquidity of ETFs with the asset class characteristics of MicroCaps. But I see a problem.

      The problem is that the sponsors (Barclays & Powershares) seem to recognize the illiquidity of the asset class too. Barclays for example has 1/2 of the portfolio in the bottom 1000 securities of their small cap portfolio (Russell 2000 IWM) causing serious overlap. On top of that, they go all the way down to companies with a $50mm market cap.....this could potentially cause extreme price movements in these smallest of companies should investors flock to create or redeem shares.
      This may be a classic case of the fund business creating product where demand exists despite the challenges presented by the market place.

      Herb Morgan       Aug 23 09:22 PM
    • More On All-ETF Portfolios [view article]
      Roger,
      While past performance is no guarantee of future results and investors may lose money, and our accounts ar not guaranteed or FDIC insured......here is what I have for actual net of fees and expenses performance for this year:

      6-10 Year Portfolio Composite +2.78% through 7/31/2005
      11-19 Year Portfolio composite +7.07% through 7/31/2005
      20 + Year Portfolio Composite +7.19% through 7/31/2005

      Thanks for asking.

      Warmest Regards,

      Herb Morgan
      efficient-portfolios.c...       Aug 23 09:04 PM
    • A Comment on All-ETF Portfolios [view article]
      Roger, I am enjoying this & I think we are providing good value to readers so lets keep it up! Aug 23 08:57 PM
    • A Comment on All-ETF Portfolios [view article]
      I sent this reply to David confidentially so as not to appear to be selling my services on this site. However, at your urging I am reposting my comments here for all to read.

      I think that anyone could do OK on their own with basic asset allocation. They need to have the ambition to do it however, and I find most investors are too busy with their daily lives and business to have any interest. We provide robust online reporting capabilities for our clients with dozens of reports, such as drawdown and gain/loss……I find that these are rarely used. Clients tell me that the subject bores them!



      However, I think a manager can earn his/her fees by adding value as follows:

      Execution – Using limit orders (Maybe 20 bps to 60 bps per year)

      Tax Loss Harvesting - Taxable Accounts, swapping one ETF for another in “similar       Aug 22 07:32 PM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»