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Old 10-31-2010, 08:28 AM   #41
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Are the returns cited in the article also applicable for alternative investments such as natural resources, commodities, precious metals, timber, real estate?
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Old 10-31-2010, 08:44 AM   #42
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Originally Posted by Spanky View Post
Are the returns cited in the article also applicable for alternative investments such as natural resources, commodities, precious metals, timber, real estate?
They discuss it very briefly in the underlying newsletter article (link--it's free, no registration req.) on which the WSJ article is based. In part:

Quote:
AlternativesóMany investors, keenly aware
that returns will be lower than the past 30 years,
have turned to alternative categories like hedge
funds, private equity, infrastructure, emerging
markets, timberland, and so forth, in a quest for
equity-like returns and diversification of risk.
This eclectic group has a relatively short history,
dubious data (i.e. survivorship bias), and a
heavy reliance on the most difficult metric of all
to forecastómanager alpha.
But, they don't include a chart or any substantive analysis of these. I'm sure it will be possible to make huge returns by making sector bets--but which ones?
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Old 10-31-2010, 09:36 AM   #43
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Here's the info from one of my local library systems.

About this Resource - NetLibrary eBooks : Libraries : Arlington, Virginia
Those are available to read on-line using your web browser - not an e-reader. So it's not like you can download them and take them with you on a trip where you have no internet access.

There are at least that many titles public domain free (or virtually so) to download to an e-reader without needing to log in to a library.

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Old 10-31-2010, 11:12 AM   #44
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You can check out ebooks from the library? Download to your own personal reader? Restrictions on ebook sharing are pretty severe.

Of course there is quite a bit of public domain available for next to nothing or free on e-readers.

Audrey
Yes. The restrictions are that the library has a finite, small number available to check out and they expire after some predetermined time (2 weeks?).

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Old 10-31-2010, 11:59 AM   #45
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They discuss it very briefly in the underlying newsletter article (link--it's free, no registration req.) on which the WSJ article is based. In part:


But, they don't include a chart or any substantive analysis of these. I'm sure it will be possible to make huge returns by making sector bets--but which ones?
Thanks for the link. Since no one can accurately predict the future, the permanent portfolio approach is very appealing.
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Old 10-31-2010, 10:59 PM   #46
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Those are available to read on-line using your web browser - not an e-reader. So it's not like you can download them and take them with you on a trip where you have no internet access.

There are at least that many titles public domain free (or virtually so) to download to an e-reader without needing to log in to a library.

Audrey
You're right, I linked to the ones you can read on your PC, but they have hundreds available that you can download to an e-reader too. As DblDoc says, they are set to expire after a couple of weeks. But they are relatively current books, not the Mark Twain and Charles Dickens stories you get off Gutenburg.org. Not that there's anything wrong with those, but it's nice to read stuff written in this centurey. I just looked at Loudoun County's list (another system I belong too), and they have books like Ken Follett's Fall of the Giants, I, Alex Cross by James Patterson, Deep Shadow by Randy Wayne White, all books published in 2010. It's a great resource, and all you need is a reader that can have Adobe Digital Editions installed on it. My Sony eReader does, and I know a number of others can too. I don't think the Kindle handles it yet, though.

I just checked and it looks like the iPad doesn't support Digital Editions either.
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Old 10-31-2010, 11:59 PM   #47
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I just returned from a two year assignment in India. While there I purchased consecutive fixed income securities paying 10.5% and 11% annually. It was a killing and, when you live and work there, you realize it is just as it appears....easy money.
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Old 11-01-2010, 03:20 AM   #48
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I just returned from a two year assignment in India. While there I purchased consecutive fixed income securities paying 10.5% and 11% annually. It was a killing and, when you live and work there, you realize it is just as it appears....easy money.
Sounds impressive. If you don't mind my asking:

1. what was the credit quality/rating(s) of the issuer(s)?

2. what were the tax rates?

3. what was the prevailing inflation rate?

4. what was the term(s)?

I'm assuming that they were denominated in rupees?
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Old 11-01-2010, 08:29 PM   #49
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I just returned from a two year assignment in India. While there I purchased consecutive fixed income securities paying 10.5% and 11% annually. It was a killing and, when you live and work there, you realize it is just as it appears....easy money.
"Easy money" seems a little strong. Inflation in India is running 8.5% currently and was as high as 11% six months ago.
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Old 11-01-2010, 10:20 PM   #50
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Indian Inflation Index is a little outdated so does not really represent ground reality for middle+ class consumption. Having said that Food inflation is crazy (may be as high as 15-20%) , Education, Eat-outs are high but services, power, water, appliances, internet/TV/Phone etc. are quite stable and may even be slidind down a little so Personal Inflation for people would vary according to consumption. (My budget for last 4 years has almost remained stable other than Education - 30% increase in 4 years). Now I have upped groceries by 20%. Currently best rates are 9.5% tax-free guaranteed by Gov of India (but for Indian residents only
:-) General CD rates are 8-8.5% about to increase though.
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Old 11-02-2010, 02:10 AM   #51
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The issuer was ICICI Bank, the largest private bank in India.
The tax rates were comparable. I dont recall the rate.
The prevailing inflation rate was about 5+ percent.
The terms were 12 months for $10K USD...in rupees.

The only real risk was exchange rate risk since I converted USD to purchase the deposits. Fortunately, the rate moved 8 percent stronger. It was really amazing as I discussed the comparable rates in the US with my Indian colleagues.

You have to have an ICICI account to purchase the deposits.

The point to my comments was that there is real money to be made in EM, far and away more than in the EU and USA but most are not aware of how to make it work living abroad.

I also lived in Vietnam from 2004 and 2007 and made moeny purely on currency. I had many expat friends who have/ had lived in VN for years and had Western investors living and working there as well....and making money hand over foot. No exaggeration.

My advice is simple. Spend just 20% of the time that you are now devoting on how to improve from 2-4% returns in the US to how to generate multiples of that amount in very safe environments.

I am currently living in Japan and I can tell you...Asia is the future, and it's now.

I have been reading these posts for many months now. I am 54 and ER next year with megacorp. It's a bit amusing (and sad) to see the anxiety on how to survive in the US when it's all about being global. Forget mutual funds. Find people who live and work abroad. They know.

Good luck.
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Old 11-02-2010, 03:35 AM   #52
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Originally Posted by lovinglife1 View Post
The issuer was ICICI Bank, the largest private bank in India.
The tax rates were comparable. I dont recall the rate.
The prevailing inflation rate was about 5+ percent.
The terms were 12 months for $10K USD...in rupees.

The only real risk was exchange rate risk since I converted USD to purchase the deposits. Fortunately, the rate moved 8 percent stronger. It was really amazing as I discussed the comparable rates in the US with my Indian colleagues.

You have to have an ICICI account to purchase the deposits.

The point to my comments was that there is real money to be made in EM, far and away more than in the EU and USA but most are not aware of how to make it work living abroad.

I also lived in Vietnam from 2004 and 2007 and made moeny purely on currency. I had many expat friends who have/ had lived in VN for years and had Western investors living and working there as well....and making money hand over foot. No exaggeration.

My advice is simple. Spend just 20% of the time that you are now devoting on how to improve from 2-4% returns in the US to how to generate multiples of that amount in very safe environments.

I am currently living in Japan and I can tell you...Asia is the future, and it's now.

I have been reading these posts for many months now. I am 54 and ER next year with megacorp. It's a bit amusing (and sad) to see the anxiety on how to survive in the US when it's all about being global. Forget mutual funds. Find people who live and work abroad. They know.

Good luck.
Thanks for the detail. Having lived in Hong Kong for 18 years, I agree with you that Asia offers some great opportunities to get ahead financially. Of course, it also offers some great opportunities to damage your finances, and I've been here long enough to accept that the (financial) ride can be pretty bumpy at times. That said, so far Asia has been good to me.
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Old 11-02-2010, 01:08 PM   #53
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Quote:
Originally Posted by lovinglife1 View Post
The issuer was ICICI Bank, the largest private bank in India.
The tax rates were comparable. I dont recall the rate.
The prevailing inflation rate was about 5+ percent.
The terms were 12 months for $10K USD...in rupees.

The only real risk was exchange rate risk since I converted USD to purchase the deposits. Fortunately, the rate moved 8 percent stronger. It was really amazing as I discussed the comparable rates in the US with my Indian colleagues.

You have to have an ICICI account to purchase the deposits.

The point to my comments was that there is real money to be made in EM, far and away more than in the EU and USA but most are not aware of how to make it work living abroad.

I also lived in Vietnam from 2004 and 2007 and made moeny purely on currency. I had many expat friends who have/ had lived in VN for years and had Western investors living and working there as well....and making money hand over foot. No exaggeration.

My advice is simple. Spend just 20% of the time that you are now devoting on how to improve from 2-4% returns in the US to how to generate multiples of that amount in very safe environments.

I am currently living in Japan and I can tell you...Asia is the future, and it's now.

I have been reading these posts for many months now. I am 54 and ER next year with megacorp. It's a bit amusing (and sad) to see the anxiety on how to survive in the US when it's all about being global. Forget mutual funds. Find people who live and work abroad. They know.

Good luck.
Texas is a whole nuther country...

Not moving to Asia, but I invest there, in, gasp, mutual index funds.
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Old 11-02-2010, 03:30 PM   #54
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Thanks for the link. Since no one can accurately predict the future, the permanent portfolio approach is very appealing.

FYI, William Bernstein posted this commentary about the permanent portfolio last month on his Efficient Frontier site. In summary, he thinks it's good in theory, but difficult to execute.
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Old 11-02-2010, 05:36 PM   #55
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Arends article is interesting and supports Mohamed El-Erian's (PIMCO) concept of the "New Normal" which was profiled in a 16 August, 2010 article in the "money" section of the USA Today: "The Post-financial-crisis world will yield lower investment returns, slower economic growth and higher odds of an out-ot-the-blue financial shock. In short a world where the range of financial outcomes-and risk-is much wider than normal". El-Erian closes out his thoughts with: "Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition. There is lots we don"t know".
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Old 11-02-2010, 05:50 PM   #56
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Arends article is interesting and supports Mohamed El-Erian's (PIMCO) concept of the "New Normal" which was profiled in a 16 August, 2010 article in the "money" section of the USA Today: "The Post-financial-crisis world will yield lower investment returns, slower economic growth and higher odds of an out-ot-the-blue financial shock. In short a world where the range of financial outcomes-and risk-is much wider than normal". El-Erian closes out his thoughts with: "Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition. There is lots we don"t know".
This is how I feel. I posted once in early fall in another thread that if I did not have to pay capital gains taxes I would sell most of my equities. I think they (my stocks) are mostly fair value at best to moderately overpriced. But I am glad I felt locked by taxes, because since then these overpriced securities have gotten about $200,000 more overpriced.

Like they say, better to be lucky than smart.

Ha
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Old 11-02-2010, 09:30 PM   #57
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Arends article is interesting and supports Mohamed El-Erian's (PIMCO) concept of the "New Normal" which was profiled in a 16 August, 2010 article in the "money" section of the USA Today: "The Post-financial-crisis world will yield lower investment returns, slower economic growth and higher odds of an out-ot-the-blue financial shock. In short a world where the range of financial outcomes-and risk-is much wider than normal". El-Erian closes out his thoughts with: "Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition. There is lots we don"t know".
Said the bond guy...

Of course, isn't Pimco currently expanding into equities?
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Old 11-03-2010, 10:47 AM   #58
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Arends article is interesting and supports Mohamed El-Erian's (PIMCO) concept of the "New Normal" which was profiled in a 16 August, 2010 article in the "money" section of the USA Today: "The Post-financial-crisis world will yield lower investment returns, slower economic growth and higher odds of an out-ot-the-blue financial shock. In short a world where the range of financial outcomes-and risk-is much wider than normal". El-Erian closes out his thoughts with: "Simply put, investors should own less equities, more bonds, more global investments, more cash and more dry ammunition. There is lots we don"t know".
Only El-Erian has been pretty wrong for the past year and a half on the whole lower return aspect of his 'New Normal' forecast. How much have domestic equities and fixed income returned since he popularized the phrase? (I just went back and looked. It seems PIMCO's "New Normal" first came out in May 2009 as part of their secular outlook. At that time, the S&P was at 940 and the 10-year treasury was at 3.5%. Over the next year and a half, the S&P is up an annualized 19% including dividends, 10-yr treasuries ~8%, and credit spread products are up far more).

Now after pounding the table for 18 or so months on his "new normal" forecast, he seems to be walking back the concept:

New Normal Odds Stand at 55%

So slightly better odds than a coin flip? Which is kind of funny, because if anything lower future returns seem more probable now after the high returns we've enjoyed since PIMCO first predicted low returns.
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