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  • Where Can I Find Safe Income For Retirement? [View article]
    "people with firm handshakes, steady eye contact, reassuringly modulated vocal tones, and utterly vacuous ideas about investing." Love it!
    Sep 2, 2015. 10:28 AM | 3 Likes Like |Link to Comment
  • Intrinsic Valuation Of The S&P 500 [View article]
    How can anyone use those growth rates with a straight face? And then defend them as created ' by the experts'. Dream on.
    Aug 29, 2015. 10:23 AM | Likes Like |Link to Comment
  • Low Blow - Why Low-Volatility ETFs Could Prove Anything But When You Really Need Them To Be [View article]
    Don't know but this effect may have occurred for many ETFs. See the 2-3-4 articles at
    Aug 29, 2015. 10:10 AM | Likes Like |Link to Comment
  • Trading Low Volume Exchange Traded Products [View article]
    Agree with most all of that. Except I would not jump in with any buy order at the Level II ask price. Lots and lots of times there is liquidity in between the bid-ask spread. You don't see it (I presume because it comes from the speed traders that flit in and out at warp speed. But it is there.
    Aug 26, 2015. 10:09 AM | Likes Like |Link to Comment
  • Berkshire For Retirement Income [View article]
    You missed his point. That strategy was one of the list of arguments he was trying to debunk. That argument is commonly heard on this site - "that liquidating shares depletes your capital."
    Aug 25, 2015. 09:44 AM | 3 Likes Like |Link to Comment
  • Berkshire For Retirement Income [View article]
    "...and so on and so forth. Personally, I am of the opinion ..." I could not agree more.
    Aug 25, 2015. 09:34 AM | 1 Like Like |Link to Comment
  • It's Better With Beta [View article]
    The premise here is a strawman..... "What happened to the idea that skilled managers can consistently beat the market?

    No one has ever claimed this
    Aug 16, 2015. 08:24 AM | 1 Like Like |Link to Comment
  • Berkshire Hathaway And The Importance Of Deferred Taxes [View article]
    The effective yearly tax rate that results from delaying capital gains is a necessary input to choices like Asset Location. Everyone can calculate their own effective rate for personal growth assumptions, country tax rates and period of delay, at the tab called "Effective Capital Gains Rate" on the spreadsheet at
    Aug 14, 2015. 10:45 AM | Likes Like |Link to Comment
  • 5 Investments Best Held In An IRA [View article]
    As I said above ..." the two main benefits that apply to both the Canadian RRSP and US IRA, using a comparison to the equivalent US Roth and Cdn TFSA. The error in the model presented here is shown in the last section."

    The Cdn RRSP and US IRA are the same in their basic EET or TaxDeferred structure and benefits. Just like the TFSA and Roth are both TEE or TaxExempt.

    Nobody's mind gets changed from a long-held belief by one word or even two sentences. If you want to consider the possibility read the paper, not the abstract.
    Aug 7, 2015. 08:00 PM | Likes Like |Link to Comment
  • 5 Investments Best Held In An IRA [View article]
    You have to read the link to have it explained.
    Aug 7, 2015. 04:02 PM | Likes Like |Link to Comment
  • 5 Investments Best Held In An IRA [View article]
    I have a lot of problems with that Asset Location AL advice.

    (1) The basic understanding of the benefits of an IRA are shown in the section starting .."Casting the net a little wider.." It says IRA room is wasted for assets taxed at preferred rates like dividends and capital gains --- because profits in the IRA are fully taxed on withdrawal.

    This is a wide-spread mistake. It derives from a conceptual model that says the IRA withdrawal tax is on the full $$ withdrawn, which is the sum of the original contribution plus the profits ... therefore profits are taxed. But that model fails to explain IRA net benefits. This paper evaluates and explains the two main benefits that apply to both the Canadian RRSP and US IRA, using a comparison to the equivalent US Roth and Cdn TFSA. The error in the model presented here is shown in the last section.

    (2) The article also makes the AL decision based on tax %rates. When the %rate is very close to zero, obviously it is the factor of greatest importance. But when the tax rate is hits 10% or 15%, it is the total return of the asset that has the FAR greater importance for determining the benefit of the account's tax sheltering. Faster growth creates bigger profits which create larger $tax bills - not matter how low the tax %rate. You can see this on the first and second graphs at

    So the preferential tax rate of dividends and capital gains is not nearly as important as those assets faster growth - which have great benefits from tax-shelters. And low return Treasury Debt has no place in tax shelters because even a 50% tax rate on 2% returns is a small $$ today and will be a small $$ even after many years of compounding.
    Aug 7, 2015. 11:59 AM | 1 Like Like |Link to Comment
  • Decoding Currency Risk: Pictures Of Global Risk - Part IV [View article]
    All that seems to be an extreme example of a make-work-project.

    And since when is the starting premise correct? ...("different currencies have different expected inflation rates embedded in them"). The PPP theory of after-the-fact changes in FX has been shown to NOT explain FX changes for the investor's time-frame. Is the author claiming this is because the after-the-fact relative inflation was already 'priced into the currency' at each starting point in time? I have never seen that premise argued or proven.
    Jul 31, 2015. 09:52 AM | Likes Like |Link to Comment
  • Interest Rates: REITs Versus Financials [View article]
    * The Fed has repeatedly characterized their anticipated rate increases as 'getting back to normal', and not 'tightening as a result of an over-heating economy'. So the argument that rising rates won't negatively impact RE or bank business because the rising rates are only reflecting a stronger economy is questionable.

    * The Fed's control of very short rates does not extend to long rates. Rising the short end will not expand any bank's spread. It will shrink it Therefore I expect lower bank lending profits. Only when the Fed starts selling all those bonds they own, will long rates take off.
    Jul 28, 2015. 10:50 AM | 2 Likes Like |Link to Comment
  • How Many Stocks Should Be In My Portfolio? [View article]
    If the target audience of this article is the retail investor, I would say to approach the issued from another POV. Assume that you can only commit so much time and effort from your real life to stock-picking. I do try to 'have a life'. For me that means I can only hold a maximum of 10 issues.

    Your weighting for each stock must be big enough so that its performance makes a difference (from passive returns). Otherwise there is no point to spend even that time and effort. But it must not be so big to expose you to idiosyncratic risk. For me weighting must be somewhere between 3% and 8%.

    The rest of my portfolio is passive indexing.
    Jul 22, 2015. 09:15 AM | 2 Likes Like |Link to Comment
  • The Problem With Leverage In A Portfolio [View article]
    I disagree with the characterization ... "The inherent difficulty in using leverage is that the fund manager is essentially passing on another cost to the end investor. That is, leverage reduces the real, real return of a portfolio by the cost of the leverage. In the aggregate we know that all managers are generating the market return minus their costs (taxes, fees, etc.) so if everyone started using leverage then our returns would be reduced by the cost of the leverage. "

    (1) There are some sources of free capital, e.g. student loans that don't start charging interest till after graduation, e.g. the withholding tax not paid by Canadian's HBP draws from an RRSP

    (2) The author seems to be considering the cost of the borrowed additional capital while ignoring the returns earned when that additional capital is invested.

    (3)The whole point of leverage is the presumption that the added income generated by the additional investment will be greater than the cost of borrowing. The net effect is expected to be positive. Everyone could leverage without it having any effect on net returns in general.

    (4) Most everyone with Finance 100 will be aware of the Efficient Frontier of portfolio management - where the optimal portfolio is along the straight line connecting the cost of debt to the tangent point on the EF. Every point on that line beyond the EF is a leveraged position. Every point adds expected returns with lower risk than if 100% long.

    (5) The risk-parity people use the same model only they substitute their own measure of risk for the horizonal axis.

    (6) The problem with leverage is that investment returns are NOT always greater than the cost of borrowing, and that there is no 'long run' when leveraged because your emotions get magnified.
    Jul 19, 2015. 11:08 AM | 3 Likes Like |Link to Comment