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  • The Happy Truth Behind Dividend-Growth Investing [View article]
    Sorry my bad. I misunderstood 'Average days held: 86'.
    Mar 21 06:49 PM | Likes Like |Link to Comment
  • The Happy Truth Behind Dividend-Growth Investing [View article]
    You are doing too much trading. That may be your problem.

    The main feature of DG stocks is that you don't have to be a hectic trader.
    Mar 21 05:41 PM | 1 Like Like |Link to Comment
  • The Happy Truth Behind Dividend-Growth Investing [View article]
    Try the strategy based on highest dividend growth rate. Does very well without too much trading.
    Mar 21 05:26 PM | Likes Like |Link to Comment
  • Index Investors Are Always Above Average [View article]

    Especially amid all the noise on SA.
    Mar 21 01:37 PM | Likes Like |Link to Comment
  • An Adaptive Asset Allocation Example [View instapost]
    Perhaps we can add IYR, GLD, and SHY. This will encompass all sorts of conditions.

    The main purpose was to show an example of adaptive allocation. As you can see from the first allocation diagram, the strategy works as you would want it to - changing the allocation to equity ETFs according to market conditions, and responding sufficiently rapidly to the dynamics of the market to avoid large drawdowns.
    Mar 21 12:27 PM | 1 Like Like |Link to Comment
  • An Adaptive Asset Allocation Example [View instapost]
    Conceptually, think of this as three separate streams which allocate weights to all the ETFs. For each stream the weights are computed by selecting the top six (not two) during the evaluation period - so allocation will be 1/6 for the selected ETFs, and zeros for the others.

    For one stream the weights change every quarter. For the other the weights change every six months. For the third the weights change every year.

    So at any given time you have three sets of weights. On the first trading day of each quarter average the three sets of the weights for allocation for the quarter.

    The drawdowns are based on monthly data, and only the drawdowns larger than 10% are shown in the figure. In this case there are two drawdowns of 14%. The next highest drawdown (not shown) would be less than 10%.
    Mar 21 12:20 PM | Likes Like |Link to Comment
  • Equity CEFs: Income Strategies For All Market Seasons (Updated) [View article]
    Thank you very much for the very informative articles.

    Since you seem to be saying that it may be necessary to exit positions at some point, I wonder what your thoughts are about some automated methods.

    For example if you pair GAB with TLT, LQD and IYR, and buy the one at the beginning of every quarter that performed the best during the prior quarter, you get a CAGR of 19.7% during 2003-2013, with not a single year of annual loss. This seems to be much better than the CAGR of 10.9% for GAB by itself, not to mention the substantial loss of 54% in 2008. Similar improvement in drawdown occurs going back to 1991 if you use VUSTX, VBMFX, and FRESX instead of TLT. LQD and IYR.
    Mar 20 10:12 PM | 1 Like Like |Link to Comment
  • An Adaptive Asset Allocation Example [View instapost]
    The premise is that if there is a bear market in bonds, there will be a bull market in stocks. For the last three quarters, the amount in bonds has been quite low, in keeping with the recent trend. Perhaps we can add a few assets that appreciate when both bonds and stocks are in a free fall.

    There are two basic ideas: (a) have enough assets that are uncorrelated, and (b) average across multiple holding periods and ranking periods. The latter is not often emphasized.
    Mar 20 08:27 PM | 1 Like Like |Link to Comment
  • Allocating Within The All-Weather Sailboat Portfolio: Part 2 [View article]
    Here is my take on the Asset Allocation problem for a variant of this portfolio.
    Mar 20 03:16 PM | Likes Like |Link to Comment
  • This Is A Very Good Time To HDGE [View article]
    Yes, but the question of low volume still has merit.
    Mar 20 01:10 PM | Likes Like |Link to Comment
  • The 'Too Big To Jail' Red Herring: The Jamie Dimon Edition [View article]
    There are two questions, and they are mostly independent.

    1. Is too big to fail good for our economy?
    2. Do the CEOs of the too big to fail deserve a closer scrutiny and, if found to be guilty of criminal behavior, must they suffer the consequent punishment?

    The first question is a technical one, and even conservatives like Alan Greenspan seem to be on one side that does not appear to be consonant with the views of the author.

    To me the answer to 2 - which is the more interesting one from the perspective of those who do not want the recent financial crises to be repeated - is self evident, and my gripe is not that they are not in jail but that the prosecuting authorities have failed to conduct due diligence in gathering evidence that would clearly indict or exonerate them. My argument with the author is that he (intentionally?) confuses the reluctance of the prosecuting authorities to gather evidence (due to the TBFT argument and its derivatives) with the absence of any evidence of wrongdoing.

    The author seems to be mixing up the two issues perhaps mainly with the intent of excusing any behavior by the CEOs, criminal or unethical, and thereby putting them above the law.
    Mar 20 12:54 PM | Likes Like |Link to Comment
  • This Is A Very Good Time To HDGE [View article]

    If you buy HDGE or SPY depending on which one did better during the prior trading month, you get 30.4% in 2012, and 4.5% YTD. This strategy went to HDGE on 3/1/2013.

    Works with DIA (2012: 22.7%, YTD 5.6%), QQQ( 9.21%, 0.6%), IJJ (16.2%, 6.3%) and IJS ( 11.4%, 4.9%) with varying degrees of success.

    With the HDGE, UPRO pair, you get 81% in 2012, and 19% YTD. Not too shabby. However, with UPRO, there was no switch to HDGE on 3/1/2013.

    With the HDGE, SSO pair, you get 52.9% in 2012, and 8.5% YTD. Not too shabby either. This pair did switch to HDGE on 3/1/2013.

    Obviously, 15 months gives us a very small sample size to have any faith in these results for the long term, but this is definitely worth keeping an eye on.
    Mar 20 02:32 AM | Likes Like |Link to Comment
  • The 'Too Big To Jail' Red Herring: The Jamie Dimon Edition [View article]
    Of course he is ignoring all history by conveniently hiding the fact that the watchdogs themselves have confirmed that they had no intention of prosecuting these CEOs for criminal behavior. If the prosecutors do not want to prosecute, they will have no interest in collecting evidence of criminal wrongdoing. And then the supporters of these CEOs come and have the gall to say that there is in fact no evidence of wrong doing. Of course there is none, for no one bothered to collect it.

    There are other more fair ways to empty our prison system and free up the courts than to ignore the possible criminal wrongdoings of the wealthiest Americans that caused more damage to more people than the harm caused by many other people who are routinely shoved into our prisons for essentially victimless crimes.
    Mar 19 03:16 PM | Likes Like |Link to Comment
  • How To Become A Millionaire Without Really Trying [View article]
    If you are willing to persist even if your portfolio drops by more than 75-80%, DCA will make you rich - putting in $500 per month, for example, would have yielded a cool $2.6M today if you started on Jan. 1, 1980. However, during this time your portfolio would have grown to over $12M at one point.
    Mar 19 03:11 PM | Likes Like |Link to Comment
  • The 'Too Big To Jail' Red Herring: The Jamie Dimon Edition [View article]
    And you forgot Paulson, who engineered the bailout of his brethren in the financial industry, with TBTF as the main argument.

    The author is whitewashing all history in his wet kiss to the bankers.
    Mar 19 02:18 PM | 2 Likes Like |Link to Comment