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  • Simple GMR  [View instapost]
    Have you considered adding IWC (micro-caps)? My thinking is that if you believe in high-beta, it is like IWM (Russell 2000) on steroids. If IWC was in the mix, it would be selected for July over ILF and QQQ.
    Jul 1, 2015. 03:08 AM | Likes Like |Link to Comment
  • The Short Case For SPDR S&P 500 Trust ETF  [View instapost]
    Does it surprise you that indicators on the S&P 500 suggest a short-term top is near, but AAPL indicators suggest bullishness? I suppose it isn't impossible for AAPL to go up if the S&P 500 is going down (in fact, they've traded reverse since the start of the year), but doesn't that seem a bit suspicious?
    Feb 8, 2013. 03:42 AM | Likes Like |Link to Comment
  • Long Live The Queen  [View instapost]
    To try to fix the SA weblink problem, try using URLs like http://img38... instead of just img38... Hope this helps.
    Feb 27, 2012. 07:02 PM | Likes Like |Link to Comment
  • Buy Or Hold, But Never Sell  [View article]
    varan, so it was basically a trailing stop based on the max PROFIT of the position instead of the max PRICE of the security?
    Feb 15, 2012. 10:11 PM | Likes Like |Link to Comment
  • Performance of an MPT based yearly rebalanced portfolio during 2000-2011  [View instapost]
    Thanks for the fast reply.

    1. I was just curious what your rationale was. For instance, similarly, why not let MPT decide the allocation of sectors within the cap-weighted stock indices?

    2. Right, my expectation is that the removal of VUSTX/TLT will hurt the performance, but I'm wondering how much. i.e. once VUSTX/TLT is removed, does it start performing as bad as typical funds?

    4. Thanks for investigating this so fast. I guess the question for a strategy like this is, how do we convince ourselves what time frame to use for the lookback?

    Thanks again.
    Jan 17, 2012. 12:12 AM | Likes Like |Link to Comment
  • Performance of an MPT based yearly rebalanced portfolio during 2000-2011  [View instapost]
    This is really good work, varan, thanks. It really calls into question a lot of traditional mutual funds / money management.

    I have some questions whose answers may shed light on ‘why’ this works well:

    1) What process does one use to decide what asset classes to use, and how much to slice things up? For example, why doesn’t this include the Russell 2000, or why wasn’t a Total Bond Market fund used instead of splitting it into FBNDX+VUSTX? My guess is that assets with significantly different correlations & volatility should be separated from each other.

    2) What happens if VUSTX is not included in the set of assets? It seems that this is not a popular investment for most portfolios unless it is part of a Total Bond Market component.

    3) What happens if a short-term bond fund is added to the set of assets?

    4) What happens if the lookback period is always 10 years instead of from 1990 to the preceding year? In other words, by keeping the start of the lookback fixed at 1990, it feels like there is a persistent preference for weighing those old years.

    You may be wondering why no Morningstar funds have returns (or strategies) like this. Here’s my guess:

    Mutual funds seem to be all about convincing investors to buy a product. It’s probably harder to convince an investor to pay high fees for a simpler strategy (with fewer asset classes). Investors probably feel better with more years in the lookback, even if that is detrimental to performance. Many lazy portfolios have no trading which enables managers to tell investors “just don’t touch things and keep holding & hoping” whereas with trading strategies, there is the risk (to the manager) that the investor will be ‘mad’ that a recent trade ‘went bad’ and they’ll leave the fund.
    Jan 16, 2012. 10:56 PM | 1 Like Like |Link to Comment
  • Every Bear Market Has A Rally  [View article]
    Ok, thanks Matthew.
    Oct 18, 2011. 11:50 PM | Likes Like |Link to Comment
  • Every Bear Market Has A Rally  [View article]
    On 10/6/2011, the Bank of England announced a "QE2" program to purchase 75B pounds (GPB) of assets over the next 4 months (

    Might this liquidity injection help a potential rally, similar to how the US Fed's liquidity injections helped during Y2K, 9/11, the credit crisis, etc.? (

    Oct 16, 2011. 08:04 PM | Likes Like |Link to Comment
  • Barron's takes a look at Ron Paul's portfolio. Not surprisingly, he's uber-bearish on the U.S. economy - with significant stakes in gold mining stocks (GG, ABX, NEM, AEM, AU, IAG) and holdings in three bear-market funds.   [View news story]
    The fulltext of the article says that Paul "owns stakes valued at $1,001 to $15,000 apiece in three contrarian mutual funds: BEARX, RYVYX, RYURX" and "He [...] has a stake in three bear-market funds-- and has for many years". The article also said that "Paul had $1.6 million to $3.5 million in gold-mining stocks". So although bear funds may have problems, due to Paul's relative allocations, it doesn't appear to be critically harming his overall wealth.
    Aug 20, 2011. 08:26 PM | 3 Likes Like |Link to Comment
  • Here's How to Take 20 Years to Build a Retirement Fund That Lasts Forever  [View article]
    One might be able to do 14% a year selling options on the S&P500, paying attention to the Golden Cross/Black Cross, according to this paper:
    Jan 24, 2011. 03:09 AM | 1 Like Like |Link to Comment
  • Do Dividend Payouts Reduce Share Prices?  [View article]
    For an example, see MSFT around 11/15/2004: Previous close at 29.97, next day open at 27.34 (2.63 lower), special dividend of 3.08.
    Apr 29, 2010. 09:40 PM | 2 Likes Like |Link to Comment