New Posts Starting from October 2, 2006
Updated: November 30, 2006.
Denial Is Expensive
Ignoring our cutting edge research can be expensive.
Denial Is Expensive
Dollar Cost Averaging at Year 15
Dollar Cost Averaging reduces the effects of fluctuating prices during accumulation. It does not eliminate them entirely. Valuations matter.
Dollar Cost Averaging at Year 15
The Next Recession
When do you expect the next recession? Within 5 years? Within 10 years?
In either case, it is time to hold cash.
The Next Recession
I Saw My Doctor Today
Right off the bat, he told me that he does not understand what I send him.
I Saw My Doctor Today
Capitalization Weighted Stock-Bond Allocations
The Efficient Market Hypothesis leads to a variable stock and bond allocation. [NOTE: I am NOT an advocate of the Efficient Market Hypothesis.]
Capitalization Weighted Stock-Bond Allocations
Explosive Earnings Growth
I have made another attempt to improve upon P/E10. The result: a warning about earnings growth in times of high valuations.
Explosive Earnings Growth
Capitalization Weighting of What?
This exposes the underlying fallacy related to Sharpe’s Theorem that capitalization weighting matches the return of the market as a whole. It incorporates Dr. Hussman’s observation that money can never enter nor leave the market as a whole.
What has been missing? What is the critical oversight? Dividends.
Capitalization Weighting of What?
Mindless Comparisons to Index Funds
How often have you read that actively managed funds underperform a suitably chosen index? It is a lie.
Mindless Comparisons to Index Funds
System Engineering
Most of my professional work was in system engineering. You can see evidence of this throughout this site.
System Engineering
Today’s Skill
Today’s skill is intermediate-term market timing.
Today’s Skill
Short Term Price Fluctuations
I recently realized that I can say a lot more about short-term price fluctuations than I had previously thought. Here it is.
Short Term Price Fluctuations
I have constructed more tables that tell us about short-term price fluctuations. Rob Bennett has written a Letter to the Editor that puts everything into context.
More about Short Term Price Fluctuations
November 7, 2006 Letters to the Editor
I have constructed tables of conditional probabilities. They may be easier to understand. They show what happened to prices when P/E10 fell within specified ranges during the years of 1921 through 1980.
Short Term Price Fluctuations (Continued)
Basic Estimates and Refinements
I talk about refinements separately from estimates. This example may help you understand the distinction.
Basic Estimates and Refinements
One Time Bets
I was offered a bet recently.
It was the kind of thing that would be a real money maker if I could duplicate its essential features again and again. I cannot. It was only a one-time opportunity.
One Time Bets
Dividend Growth to the Rescue
Here is an alternative calculation of the worst case outcome of a 50% stocks-50% TIPS portfolio.
(Nominal) dividend growth rates of 5.0% to 5.5% are sufficient to support younger retirees.
Dividend Growth to the Rescue
New Posts Starting from August 28, 2006
New Posts Starting from August 28, 2006 introduces articles on the following topics:
P/E10 Predictions Revisited, Playing with the Toy, More Fun with the Toy, Why Dividends Are Better, Great Fun with the Improved Retirement Trainer, Accumulation and the Retirement Trainer, Dividends versus Capital Appreciation, E10 or D10?, Type 2A Bull Bear Retirement Trainer, More PE10 Predictions, Retirement Planning Insights, Retirement Trainers and Accumulation, Learning the RIGHT Lessons, The Wrong Lessons.
New Posts Starting from August 28, 2006
New Posts Starting from June 13, 2006
New Posts Starting from June 13, 2006 has links to Earlier New Posts:
New Posts (original)
New Posts (Sept-Oct 2005)
New Posts (Nov 2005-Jan 2006)
New Posts though April 13, 2006
New Posts though June 11, 2006
New Posts Starting from June 13, 2006 introduces articles on the following topics:
The Lower Latch and Hold Threshold, Additional Constraints with Latch and Hold, Idiot Switching, Typical Values of P/E10, Special Note about Mean Reversion, No New Discovery This Time, Looking a Little Bit Harder, Time and the Gordon Model, Orders of Magnitude, Using Stock Return Predictions, Eye Opening Calculations with Compact CVTVR L, New Standards for Financial Reporting, Rational Pessimism and Tobin’s q, Turning Points, A Helpful Theorem, Designing a 45-Year Retirement, P/E10 Predictions, Bulls, Bears and P/E10 Predictions.
New Posts Starting from June 13, 2006