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Augustus

Augustus
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  • Beating The Market Is Simple, But Not Easy [View article]
    Another important reason RSP has outperformed is that the top tow or three largest cap stocks are greatly underweighted, compared to market cap method. Several studies have reported that the largest companies become underperformers. All on the tickers in the RSP would have pretty large capitalizations.
    May 2, 2015. 08:31 AM | 1 Like Like |Link to Comment
  • Beating The Market Is Simple, But Not Easy [View article]
    The real advance has been the relatively inexpensive availability of the numbers in the annual and quarterly reports. Ben Graham had to actually read all of those and understand the balance sheets. Valueline and a computer can scan that data quickly.
    May 1, 2015. 10:29 AM | 1 Like Like |Link to Comment
  • Beating The Market Is Simple, But Not Easy [View article]
    Equal weight rebalancing also requires buying more of Enron on the way to zero.
    May 1, 2015. 10:23 AM | Likes Like |Link to Comment
  • Tactical Asset Allocation - May 2015 Update [View article]
    Thanks for the continuing monthly reports.
    May 1, 2015. 10:11 AM | Likes Like |Link to Comment
  • Dreyfus Mutual Fund Portfolio With Adaptive Allocation [View article]
    This article illustrates how the adaptive allocation, even when using a basket of largely lower return assets, can achieve excellent portfolio returns. It would be very helpful in all of these articles if the author would provide a link to a source for the software to perform the calcs for the allocations. currently, the article amounts to just stating that there is some mystery box that I use and here are the results. That is not very helpful for the reader trying to implement this strategy.
    Apr 29, 2015. 01:39 PM | Likes Like |Link to Comment
  • SPY/TLT And SPXL/TMF Strategies Work Because Of Positive Alpha, Not Negative Correlation [View article]
    I believe it was the Russian default that created the crisis and destroyed the correlations. There was not enough equity at LTCM to meet the margin calls.
    Apr 22, 2015. 09:49 AM | Likes Like |Link to Comment
  • SPY/TLT And SPXL/TMF Strategies Work Because Of Positive Alpha, Not Negative Correlation [View article]
    I believe it was the Russian default that blew up the correlations and triggered the cirsis.
    Apr 22, 2015. 09:47 AM | Likes Like |Link to Comment
  • If You Could Buy Only 2... [View article]
    One factor that will mitigate some of the fees charged is the cost of rebalancing and reinvesting on an individual basis. Online brokerage costs are indeed low, but not free for trading the individual stocks. An ETF with fees in the 0.25% range can easily be be much less expensive for the individual.
    Apr 20, 2015. 04:55 PM | Likes Like |Link to Comment
  • SPY/TLT And SPXL/TMF Strategies Work Because Of Positive Alpha, Not Negative Correlation [View article]
    "Unfortunately, it doesn't work in the real world, as they found out at LTCM. "

    LTCM only proved that the tail risk was greater than projected. That combined with maybe 10X leverage or more cratered the portfolio. It was the leverage that was the cause of the problem, not so much the temporary failure of the correlation models under great stress. These leveraged ETFs are at most 3X. That is enough without trying to increase it. No one has claimed that there will not be drawdowns.
    Apr 20, 2015. 03:07 PM | 1 Like Like |Link to Comment
  • Google's Slow-Motion Strangulation [View article]
    The current occupant of the White House is there with substantial help from Google. It was the Google team which did the voter identification and followup, based upon Google identification data.

    Another Google team has been signed up by HRC for her campaign. Google seems to have quite a devotion to the domocrat party. The Romney tech team had failure on voting day. Nothing worked and it all crashed.

    It really is too bad for all of us that individual companies are being hired as political tools, probably earning political favors from the winners. We're long past the time when the candidate had the yard signs printed by the "connected" print shop.
    Apr 15, 2015. 12:18 AM | 1 Like Like |Link to Comment
  • SPY/TLT And SPXL/TMF Strategies Work Because Of Positive Alpha, Not Negative Correlation [View article]
    Economic Analyst,

    The comment was really related to the idea that gains came from positive alpha from the bond investment. The convesity capture will always be there and is a certain and important source of the gains. The positive alpha contributed by the bond underlying the 3X convexity capture does have limits.

    People buy bonds with negative rates expecting the trend to continue with higher bond prices. Would you buy something that you expected to sell later at a lower price? It is somewhat the same as buying gold which has no return from holding it. Purchase is made because it is expected to appreciate in some economic conditions.
    Apr 14, 2015. 07:45 PM | 1 Like Like |Link to Comment
  • Understanding Dual, Relative, And Absolute Momentum [View article]
    Your series of articles demonstrating the superior performance of momentum based strategies should be read by every DIY investor. As you have presented the rules, they are simple to implement and easy to use. Thanks for continuing to provide education.
    Apr 14, 2015. 07:36 PM | 2 Likes Like |Link to Comment
  • Ride This 15-Year Trend With Brookfield Infrastructure Partners [View article]
    David Backer,

    Thanks for reminding me of BIP. I looked at it some time ago but unfortunately passed.
    Apr 13, 2015. 10:46 PM | 1 Like Like |Link to Comment
  • SPY/TLT And SPXL/TMF Strategies Work Because Of Positive Alpha, Not Negative Correlation [View article]
    Dane Van Domelen,

    Thanks for the nice article comparing the strategy approaches. One should consider whether there will continue to positive alpha on TMF if there is a general reset in interest rates higher. There should continue to be a negative correlation between the stocks and bonds, so that there can continue to be a "hedge" in times of economic stress. But in general bond prices cannot increase forever while company earnings have no necessary cap and that should be positive for the equity prices over indefinite periods.
    Apr 13, 2015. 10:31 PM | 2 Likes Like |Link to Comment
  • Crude Oil: The Fundamental Bottom Is In [View article]
    The Saudi wealth fund has $750 billion in reserves. that generates some investment income. They can run a deficit for a long time.
    Likely they are trying to borrow some funds at the low rates of today.
    Apr 10, 2015. 09:03 AM | 2 Likes Like |Link to Comment
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