Notes

Updated September 29, 2007.

Managing Downside Risk in Financial Markets

Managing Downside Risk in Financial Markets by Frank Sortino and Stephen Satchell describes methods that are light-years ahead of traditional Mean-Variance Optimization.

It comes with useful software.

Managing Downside Risk in Financial Markets

I have opened up a new area of Current Research about Managing Downside Risk.

Current Research E: Managing Downside Risk in Financial Markets
Introducing the Minimum Acceptable Return (MAR)
Monthly Returns
Ten Valuation Levels
Short Intervals
Longer Sequences
Not There Yet

The 4% Shocker

I have located the original thread with The 4% Shocker. I have placed a copy into a separate folder in my Yahoo Briefcase. This version includes the data tables.

The 4% Shocker was a major finding at the SWR Research Group board.

Yahoo Briefcase
The 4% Shocker

Monthly Returns

Our investigations into Managing Downside Risk in Financial Markets have led us to an unexpected conclusion: Much of academic investment research should be tossed out.

The critical flaw is the use of monthly returns.

Monthly Returns

Refusing to See: Dividends

I read recently that dividend yields have no power to predict stock returns. Ridiculous.

Here are my speculations as to how someone could reach such a conclusion.

Refusing to See: Dividends

A Must Read from Rob Bennett

This is a Must Read. I am impressed. It will take a while for me to take it all in.

Follow the links. Read it all.

December 20, 2005 - The New Buy-and-Hold
Basics of The New Buy-and-Hold
The New Buy-and-Hold

Here is a list of Rob Bennett's Eighteen Tenets of The New Buy-and-Hold investing paradigm.

Eighteen Tenets of the New Buy-and-Hold

Another Must Read from Rob Bennett

There is a high interest item today on Rob Bennett's Financial Freedom Blog: How to Save When There's Not Much Time Left to Save. Read Rob Bennett's Late-Start Retirement Plan.

Financial Freedom Blog
The Late-Start Retirement Plan

Take a Look

Mike sent me this link. It has excerpts from the first three chapters of one of the very best investment books out there: The Single Best Investment.

Excerpts from The Single Best Investment

Updated Calculator

I have updated the data in my Deluxe Calculator V1.1A08. It now includes prices through May 2005 and dividends through June 2004. The calculator uses January values for the CPI and P/E10. The calculator uses updated CPI and P/E10 values through January 2005.

The calculator uses data from Professor Robert Shiller’s database.

I refer to this updated version as my Deluxe Calculator V1.1A08a. I have put it into a self-extracting zip file. You can download it from my Yahoo Briefcase. It is in folder Deluxe V1.1A08a.

I have constructed tables of Professor Robert Shiller's data for individual months. I have put them into my Yahoo Briefcase for download. This includes two Microsoft Word documents and a Spreadsheet in a self-extracting zip file. These documents make it easy for you built single-month calculators with the correct P/E10 and CPI.

The Deluxe V1.1A08a calculator already allows you to select individual months for price and dividend data. You can copy and paste special the P/E10 data onto row 186. You can copy and paste special the CPI data onto row 188. You need to use the Paste Special command to transpose data copied from a column to paste it onto a row.

Yahoo Briefcase

Earlier Notes

Here are our earlier Notes.

Notes through August 21, 2005

Be sure to read A Note about Statistics at the bottom of the following link.

Notes through November 29, 2005