Young Pup looking for wisdom

[Cool Dood]

Quote:

Originally Posted by Cute Fuzzy Bunny Oh heck, CANSLIM's that old Investors Business Daily strategy. I used to fiddle with that in the late 90's. Its a data mining product from looking at stocks since 1973, and its a momentum strategy using technical analysis that stresses bailing out when prices start dropping. Works great when theres good momentum in growth stocks. Stops working when most of the stuff you buy all drops to your stop loss, and then the next stuff does too, and the next, and the next. Then by the time the signals go off to get back in, you've missed a big chunk of the upward movement. It'll work for a couple of years, maybe 5, maybe 10. GREAT strategy for the late 90's. Really lousy strategy when Growth is out of favor or the markets 'drunk'...which is pretty often.

Ding ding ding!

Oh wait, that one's yours

[cute fuzzy bunny]

You're in luck...on hollidays I only charge 50c to use one of my trademarks.

Uh oh...no you arent...you're Canadian...its not Independence Day for you...

That'll be five bucks.

[PsyopRanger]

Quote:

Originally Posted by eyetri2 Wow! A long cabin that will cost you 2 million bucks to build? How many of us can fit in that? From one (soon to be former) military person to another, you are doing well, very well. Just a couple of things: I am overseas as well in Asia. What time are the markets open for you that you can do your trading and not interfere with work? I would have to be up at 2 AM. I do systematic trading as well both in taxed and tax-deferred accounts. It has done well up until the last few months of slaughter. Will I stick with it? Yes. Has it been hard recently? Yes. But I am 30 and I can live with the volatility. Having said that, is most of my taxable account money in dividend paying stocks where I currently make 8%/yr (not all qualified) no matter what the market does? Yes. You have to know where you can take your risks and sleep at night. I do commend you for the success that you have had over the last decade. But are you looking for wisdom or are you tooting your own horn? It seems more like the latter. Finally, I'll take you up on your stock game. In fact, I will only pick one stock, dividends reinvested to be fair. We can start the game on any day you want. My pick (as much as some people will start screaming at me): NFI. eyetri2

I am not a day trader so I don't watch the markets daily. I really only check my investments, once a week.

I’ll take one from my own holdings:
Dow Jones Global Titans Euro (Ticker EXI2.SG) - Purchase Price - €21.49
It closed today at €21.59, so I will start there.

NFI closed at $32.42

Let’s start there.

Glad to meet you, why do you like NFI?

[Nords]

Quote:

Originally Posted by PsyopRanger The retirement is based on your base pay when you retire, if someone retired 5-10 years ago, they do not make as much as today, though they are adjusted for inflation.* See the calculator here:* http://www.dod.mil/militarypay/retir..._finalpay.html

Psyop, I hope you made a typo, because otherwise I hate breaking this news from that link: *"Remember, the Final Pay retirement system only applies to members who first entered Service before September 8, 1980."

If you're 29 today (born in 1975/6?) then you're looking at REDUX or High Three. *And I sure hope you're looking at High Three.

You mentioned "O-6 at 20" but to retire at that paygrade you'd have to have a minimum of two years' service at that rank, and perhaps three depending on the rules in effect when you apply for retirement. *Frankly I'd hate to be a member of a service where mortality rates are so high that they're selecting O-6s at 18 years of service, and perhaps DOPMA is still mandating O-6 selection at around the 20-21 year point. *Of course I may have missed a rule change and your community may be moving up the ranks a little faster.

For the rest of the board, military pay has improved dramatically over the last 10 years. *Recently it's been linked to the ECI, although Congress may change their mind at any time about that, so for now it's actually keeping pace with the wage growth at McDonald's. *(Maybe not GM or Silicon Valley, but at least it's linked to something that might go up every year.) *Some ranks are also targeted for higher pay raises to account for understaffed ratings or critical skills. *And I sure hope the Rangers are pulling down as much bonus/retention money as the SEALs...

Of course my spouse is still fuming that my military COLA increase (tied to CPI) this year was higher than her ECI-linked military pay raise. *It seems that I got more money for sitting on my butt than she got for working hers off.

[PsyopRanger]

Quote:

Originally Posted by macdaddy I put in an 06 with 20 years service and it came out to 4k/month... I don't see how this would increase over time since the active duty raises are probably the same as (or less than?) the mandated CPI pension raises. 4k/month + healthcare is a really nice pension at 45. If you consistently save 50% of your pre tax income (so 35k this year and increase it as your pay increases) and earn a 10% + inflation return (the hard part... but maybe you have that covered) then you'll have (combined with your Roth account) a little over 2 million in liquid cash. If you add in your rental properties, any windfalls, and any money from your wife then you could have a shot at 4 million in assets plus the pension when you retire at 45. I see it as possible... the pitfalls are expensive kids (tuition for school?) and a less than 10% return, especially in the early years. Even if you don't hit it exactly I think you will come close, if you really can save 50% of pre tax income. Property tax on a 2 million dollar cabin, if the money is in the cabin and not the land, is probably a minimum of 10k or 15k a year... (1% of the structure cost).

Year of Retirement: 2020
Years of Service at Retirement: 25 (I have some reserve time)
Grade at Retirement: W-4

Economic Factors

Inflation Rate: 3%
Annual Active Duty Pay Raise: 2.5%
Tax Rate: 25%

Monthly Pay = $4,973

What if I simply invested in one of these investments with 10% of my holdings once per year and stayed in index funds the rest?

MLIIF World Gold, posted 116% returns in the first three years of the bear market.
Value Partners A, gained 113%.
Parvest China C, meanwhile, is up 440% in the last five years.
Baring Korea Trust is up 320%.
57% in the last three months from UBS EF-Asian Technology
85% in the last six months from RP Selection Europe
141% in the last two years from CA Funds Thailand Cla

This would put me at least around 15% gains per annum.

[PsyopRanger]

Quote:

Originally Posted by Nords Psyop, I hope you made a typo, because otherwise I hate breaking this news from that link: "Remember, the Final Pay retirement system only applies to members who first entered Service before September 8, 1980." If you're 29 today (born in 1975/6?) then you're looking at REDUX or High Three. And I sure hope you're looking at High Three. You mentioned "O-6 at 20" but to retire at that paygrade you'd have to have a minimum of two years' service at that rank, and perhaps three depending on the rules in effect when you apply for retirement. Frankly I'd hate to be a member of a service where mortality rates are so high that they're selecting O-6s at 18 years of service, and perhaps DOPMA is still mandating O-6 selection at around the 20-21 year point. Of course I may have missed a rule change and your community may be moving up the ranks a little faster. For the rest of the board, military pay has improved dramatically over the last 10 years. Recently it's been linked to the ECI, although Congress may change their mind at any time about that, so for now it's actually keeping pace with the wage growth at McDonald's. (Maybe not GM or Silicon Valley, but at least it's linked to something that might go up every year.) Some ranks are also targeted for higher pay raises to account for understaffed ratings or critical skills. And I sure hope the Rangers are pulling down as much bonus/retention money as the SEALs... Of course my spouse is still fuming that my military COLA increase (tied to CPI) this year was higher than her ECI-linked military pay raise. It seems that I got more money for sitting on my butt than she got for working hers off.

We have finally started to keep up with inflation. I got $20K for re-enlisting (tax-free), $20K for going warrant and the last three years, I haven't made any taxable income but got an extra $800 per month while being in Iraq.

They are finally starting to give bonuses to the experience rather than the newbees.


P.S. Not a Ranger anymore, when I was younger.

[cute fuzzy bunny]

Let me see if I can put this as simply as possible.

If you're pulling in more than about 6% before taxes, you're taking on some risk. The trick is finding out what it is.

If you're pulling in more than 10-11% before taxes, you're taking on a shitload of risk. It should be pretty obvious what it is.

Its not going to be a single drop thats going to kill you, your stop losses will protect you from that.

Its serial ongoing year after year sequential drops up to your stop loss limits, or sitting in cash for the couple of days that the market has a major movement upwards that'll kill you. Slowly.

Or its the day your stop loss kicks in and theres a liquidity problem and your order just doesnt sell for a while.

You do know about liquidity and stop loss problems, yes? There are probably far more investors than you with 6-9% stop losses, and their stop loss sells will accellerate the downward drop and the selling. I've heard of some people see a sale at a 35% loss due to sudden loss of liquidity. If it sells at all. Oh yeah, and within an hour after the sale the rebound kicked in and the issue closed flat or up, and there they were, holding their d--k in their hands...

[Nords]

Quote:

Originally Posted by PsyopRanger Year of Retirement: 2020 Years of Service at Retirement: 25 (I have some reserve time) Grade at Retirement: W-4 Economic Factors Inflation Rate: 3% Annual Active Duty Pay Raise: 2.5% Tax Rate: 25% Monthly Pay = $4,973

Or, in today's High-3 dollars, $3446/month.

BTW two other recent changes may affect your investment options.

First, the Roth contribution on earned income has just been waived. *Even if you didn't have any earned income for 2006 (due to combat tax-free pay) you can still contribute to an IRA.

Second, you can contribute up to $15K to the TSP. *That may not be much help when you're in a combat zone but it'll sure boost your TSP balance and lower your taxable income when you get back. *Of course the TSP funds may not be the type of asset allocation you have in mind...

[Nords]

Quote:

Originally Posted by Cute Fuzzy Bunny Let me see if I can put this as simply as possible.

Geez, fellas, what if it turns out that PsyopsRanger really is the next Nicolas Darvas, Gary "How I Trade For A Living" Smith, Jesse Livermore, or Warren Buffett? Just because the odds are stacked high against him is no reason to give up!

My research indicates that I'm not the successor to those guys, so I'm pretty sure that the job is open...

[PsyopRanger]

Quote:

Originally Posted by Cute Fuzzy Bunny Let me see if I can put this as simply as possible. If you're pulling in more than about 6% before taxes, you're taking on some risk. The trick is finding out what it is. If you're pulling in more than 10-11% before taxes, you're taking on a ****load of risk. It should be pretty obvious what it is. Its not going to be a single drop thats going to kill you, your stop losses will protect you from that. Its serial ongoing year after year sequential drops up to your stop loss limits, or sitting in cash for the couple of days that the market has a major movement upwards that'll kill you. Slowly. Or its the day your stop loss kicks in and theres a liquidity problem and your order just doesnt sell for a while. You do know about liquidity and stop loss problems, yes? There are probably far more investors than you with 6-9% stop losses, and their stop loss sells will accellerate the downward drop and the selling. I've heard of some people see a sale at a 35% loss due to sudden loss of liquidity. If it sells at all. Oh yeah, and within an hour after the sale the rebound kicked in and the issue closed flat or up, and there they were, holding their d--k in their hands...

You keep insinuating that I am some sort of day trader, I buy and hold for 6 months – 3 years sometimes. If an investment drops below -10%, I replace it with another.

I also invest globally and get help from the rising Euro, Franc, etc. and I am also now investing in Canada.

I do not jump from cash to investments at the drop of a hat. I haven’t been in all cash ever. Out of 10 of my investments, normally 6 go up, 3 go down and get stop lossed, 1 goes sideways.

The six that go up, outweigh the 3 that go down by 30% or more. It’s that simple?

I buy stocks, mutual funds, sometimes options and CTA’s.
Look at my holdings I posted, what is risky in this?

[brewer12345]

Quote:

Originally Posted by PsyopRanger Look at my holdings I posted, what is risky in this?*

At some point, you will find out, I suspect.

I think you are advocating chasing return, but I'm not sure you are also paying adequate attention to risk-adjusted return.

[cute fuzzy bunny]

Hey, if you're happy, i'm happy.

[PsyopRanger]

I just read one of the Mod's quotes

"Live like you're dying, invest like you're immortal."

That's all I am trying to do

[PsyopRanger]

Did I make a first impression as "Billy the Kid" investment risk slinger yet? :

Seriously, thank you all for your comments and critiques, it makes me think and challenges me to think of other options.

[Nords]

Quote:

Originally Posted by PsyopRanger "Live like you're dying, invest like you're immortal." That's all I am trying to do

The first part of the phrase you seem to have down.

The second part reflects that you can't predict your lifespan and so you shouldn't try to make your portfolio run out during your funeral procession. Maybe it's not such a bad idea to be able to live on a pension/annuity or dividends instead of consuming principal.

As for risk-adjusted return, have you run your asset allocation through some sort of volatility or risk-adjusted analysis like Financial Engines? "Six up, three down, one sideways" doesn't describe whether you're getting compensated for additional volatility or single-stock or single-asset risk...

OTOH if you're able to beat the losses with your cash flow (before retirement) or live within your pension (after retirement) then you should do anything you want with your retirement portfolio.

[unclemick]

Hmmmm

Here are some random 4th of July musings:

Be glad of your male hormones - both you and the Rangers need them. I too did well starting out - at about 15 years in investing I'm guessing here - my long term average begin to approach that of the market.

With the great benefit of hindsight - here's what I did (truth told, entirely by accident) - maxed my 401k every year - plunka, plunka boring DCA S&P 500 index fund - while I invested my real money(that was going to make me well off) - in rental RE, timberland, gold, foriegn stocks/mutual funds, even some raw semi precious stones and collector coins - missed commodities somehow - skipping a list of some boring VG funds like Wellesley(forum joke). 1966-1993 at the end of the period 'da benchmark' boring DCA Index fund was 80% plus of my ER stash - 200k, not a million. That came after in ER by doing mostly nothing except sitting in balanced index during the 90's. I'm oversimplifying here - but the point is - in my case the benchmark won.

Two winners I know - one a woman engineer(Home Depot) and an lead engineer(JNJ) knew when they bought right, invested big and just held with some diversifying around their primary winner. Two others I know were real estate - houses(8) in CA and apartment units in greater Denver.

Don't quote me on this - but I think Bernstein's 15 Stock Diversification Myth calculates your odds at 1 in 6. I think there was a Bogle article in the 80's estimating 2 in 5 of beating the then S&P over ten years. Any skill you bring to the party - gets buried in the stats.

So I owe my ER to indexing - lead sled dog is Target Retirement 2015.

However - hormones are incurable. At the ripe old age of 62/63 this month - 15% in individual stocks - I'll be sure to sure to let this forum know when I beat the stuffing out of my balanced index and begin posting from my villa in the Bahamas.

In life you gotta play your offense - but never forget your defense.

heh heh heh heh - 1966-2006 so no big rush - right. Off to see the fireworks.

[Brat]

As the mother of a son who got hooked by me on investing in middle school, I understand your point of view. *It is much easier for folks, other than a parent, to hoist a warning flag. *A lot of the guys who are giving you feedback have been there, done that - both professionally and investing. *We want to save you the hard lessons we have learned.

My Mother (who is pushing 90) used to tell me not to spend all my money in one place. *The lesson there is to parse out your resources. *There is nothing wrong with setting aside a portions of your retirement investments for your approach and another for another investment approach. *Enter more than one horse in this race.

I am at the other end of life's cycle (65+).. retired at 48 with a modest pension annuity, and IRA savings to suplement. *Even there our allocation in the IRAs is 20% international. *The other 80% is in TIPS, cash. and two balanced mutual funds with a Forbes "A" rating for bear markets. *Our IRR for ytd for the portfolio is 8.2%. *Not hot, but in this market where we are withdrawing less than 4%/yr, OK.

You have the advantage of folks who have nothing to gain by their comments.* We want you to win the race to financial independence.* Some will push your buttons, but only out of kindness.* We are your Great Aunts and Uncles who want the best for you and your family.

[spideyrdpd]

I told you its a conservative bunch. Compared to them your like General Custer going to attack the indians at bighorn

[samclem]

spideyrdpd,
Right--Custer had a plan . . .

Quote:

Originally Posted by PsyopRanger I joined the military mainly for the pension after 20 years and the benefits (insurance, LTC, etc) I learned Arabic and have made frequent trips to the Middle East since 9/11.

Lance,

Just to clear things up for others--the military does not provide long term care (or long term care insurance) to retirees. You can buy it if you want (through the federal program administered through OPM), but it is far from free.

And, as you've pointed out--a pension of $6k per month, for a guy who is retiring at 20 years, is not possible. The individual would need to be a O-9 at retirement (and to have held that grade for three years=a pin on at 17 years). Nope. Well, maybe not impossible, but it would involve a lot of luck, bosses who can write like Hemingway, stopping a bullet on the way to the POTUS, devising and implementing a Marshall Plan for Iraq, etc. Your revised number is a lot more realistic.

I'll add myself to those favoring a more "conservative" investment approach. Simple, dull, backed by boring peer-reviewed research, and something that has worked for milions for people without need to validate it in the rear-view mirror. What you are doing seems to be working (for you, to you), so I'll not try to disuade you from doing it. However, if you haven't done so already, I'd urge you to read William Bernstein's "The Intelligent Asset Allocator" or "Four Pillars of Investing." I think you'll find some useful stuff there.

I'm recently retired from the USAF, have spent a lot of time at Ft Bragg among all types of SOF characters. Best of luck to you--you know you'll be in high demand for a long time. The work being done by SOF today (all the SOF disciplines, including Psyops) is tough and incredibly important.

[Cool Dood]

Quote:

Originally Posted by Cute Fuzzy Bunny You're in luck...on hollidays I only charge 50c to use one of my trademarks. Uh oh...no you arent...you're Canadian...its not Independence Day for you... That'll be five bucks.

Heh... that reminds me of the sign a store in a touristy location could use:

Quote:

Milk: fifty pesos Leche: cinco pesos

I guess it works even better in a language that bears little resemblance to English, but then the joke would be less clear