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The Pie is Growing..You're Missing the Boat..Get Off the Sidelines
Old 10-30-2010, 06:11 AM   #1
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The Pie is Growing..You're Missing the Boat..Get Off the Sidelines

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Old 10-30-2010, 08:39 AM   #2
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I watched a bit and then got bored. I don't have a financial adviser and my eyes glaze over when I hear the same old cr*p from dudes in suits. ER to my mind is pretty simple and I've done ok through the downturn by sticking to my plan.

I'm 50/50 bonds/stocks, in index funds across the sectors. I dollar cost average and balance whenever that allocation gets off by 10% (ie at 45/55 or 55/45). I invest 40% of my gross salary and have a rental property to provide more diversity and income. I'm 49 and one year from ER.
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Old 10-30-2010, 08:56 AM   #3
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I watched a bit and then got bored. I don't have a financial adviser and my eyes glaze over when I hear the same old cr*p from dudes in suits. ER to my mind is pretty simple and I've done ok through the downturn by sticking to my plan.

I'm 50/50 bonds/stocks, in index funds across the sectors. I dollar cost average and balance whenever that allocation gets off by 10% (ie at 45/55 or 55/45). I invest 40% of my gross salary and have a rental property to provide more diversity and income. I'm 49 and one year from ER.
We're DINKs and have been saving for retirement for about thirty years with a similar strategy. That's been the easy part so far at least in my view. Neither of us have any background in managing a portfolio but where the heads are lacking the stomachs seem willing.

With retirement 10 years or so away ..I'm feeling the need to get with the program. Consuelo Mack seems to attract many of the movers in the industy. I figure it can't hurt to tune in but man...some of them are real characters.
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Old 10-30-2010, 09:26 AM   #4
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Winters' premise is that there has been a rush away from stocks and towards bonds, and therefore this is a wonderful time to buy stocks and we should all run out and buy stocks. It seems to me that I don't have to evaluate whether this is correct or not, because rebalancing takes care of any such imbalances for me.

He also said that while the U.S. has been in a recession, Asia has not and has been thriving throughout the economic downturn. That is interesting because I didn't really notice my international funds bounding forward during the 2008-2009 crashes. Hmm. Oh well, if they did then that was corrected during rebalancing as well.

I have no idea of Winters' track record as a fund manager, but for some reason after watching and listening to him, I am not impressed (and a little repulsed). I only listened to about half the video and I am inspired to go take a shower.

Anyone with Boglehead-ish tendencies doesn't really have to listen to this video, it seems to me. Buying low cost index funds and rebalancing to ones pre-defined asset allocation seems to work without running out and buying huge amounts of the stock du jour (such as that energy company he recommended while stressing that it was run by a woman and undervalued).
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Old 10-30-2010, 10:43 AM   #5
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...He also said that while the U.S. has been in a recession, Asia has not and has been thriving throughout the economic downturn. That is interesting because I didn't really notice my international funds bounding forward during the 2008-2009 crashes. Hmm. Oh well, if they did then that was corrected during rebalancing as well.

I have no idea of Winters' track record as a fund manager, but for some reason after watching and listening to him, I am not impressed (and a little repulsed). I only listened to about half the video and I am inspired to go take a shower.
He's largely correct about Asia. The emerging markets of Asia escaped the global economic crisis largely unscathed, and have at this point completely recovered. I would guess your I-funds are likely heavily weighted towards Europe (or perhaps Japan), and not so much for China and other emerging markets.

This guy's fund, "Wintergreen", doesn't exactly practice what he preaches--not much in the way of emerging markets that I can see, and it is prohibitively expensive, with a 1.94% ER.
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Old 10-30-2010, 10:56 AM   #6
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Winters' premise is that there has been a rush away from stocks and towards bonds, and therefore this is a wonderful time to buy stocks and we should all run out and buy stocks. It seems to me that I don't have to evaluate whether this is correct or not, because rebalancing takes care of any such imbalances for me.

He also said that while the U.S. has been in a recession, Asia has not and has been thriving throughout the economic downturn. That is interesting because I didn't really notice my international funds bounding forward during the 2008-2009 crashes. Hmm. Oh well, if they did then that was corrected during rebalancing as well.

I have no idea of Winters' track record as a fund manager, but for some reason after watching and listening to him, I am not impressed (and a little repulsed). I only listened to about half the video and I am inspired to go take a shower.

Anyone with Boglehead-ish tendencies doesn't really have to listen to this video, it seems to me. Buying low cost index funds and rebalancing to ones pre-defined asset allocation seems to work without running out and buying huge amounts of the stock du jour (such as that energy company he recommended while stressing that it was run by a woman and undervalued).
Ditto on the international stock portion of our portfolio...

I seem to recall, last I checked, there was a fair amount of European equities in the mix for us...not sure whether/how much there's any bearing on performance though.

I think he said she was the CEO of a minerals company Anglo...something...with holdings in South Africa and Brazil. Commodities should be a part of any mix in my view. I think there's a routine bit at the end of each show where the host asks the guest to pick a stock...might have been that part of the show.

As a neophyte ..to me it's all good.. taken of course with a healthy spoonful of caution and skepticism. Remember Louis Rukeyser?
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Old 10-30-2010, 11:32 AM   #7
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Re: International & Emerging Markets Stocks . . . it's not enough to know that EM economies are growing faster than their developed counterparts. To invest confidently you have to know to what extent those higher growth rates are already priced into existing stocks. It is also useful to know how much of that excess growth is a direct result of hot money chasing its tail. Liquidity has a funny way of masquerading as fundamentals. And if there is one thing we know, it is that the world is awash in liquidity. A very large chunk of that liquidity is flowing into EM.

This is not the first time in history where emerging economies were destined to emerge and were therefore, "can't miss investments." It usually ends in tears. But this time . . .
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Old 10-30-2010, 12:17 PM   #8
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It's all quite simple. Little (perhaps nothing) is priced to give a fair deal, a margin of safety. These people who earn their money from other people buying securities therefore must spin and obfuscate. There is an entire media industry that lives off these hawkers of "investments". Therefore there is a salesperson/media conspiracy to obscure reality, which is what is being done.

Drink at your own risk.

There is no doubt but that valuations today are much better than they were during much of the later 90s, a time when many of us were really getting familiar with investment markets. However, that second half of the 90s period was unprecedented in US market history.

Also, did any of you watch CNBC, and see what was going on then? The same large number of liars and thieves were touting “values” in 1999 as now, maybe even more of them. How did it work out that time?

When I see a positive article on current market opportunities derided and ridiculed by our group, I will wake up and have a look.

Ha
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Old 10-30-2010, 01:16 PM   #9
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I found him boring on Wealthtrack, and I don't know if he's right or wrong. What I do know is that his fund charges 1.94% per year for expense fees. Too rich for me. I do use actively traded funds, but they have much lower expense ratios.

Wintergreen Fund Fees (From its prospectus).

Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
Redemption Fee (as a percentage of amount redeemed within 60
calendar days of purchase) 2.00%
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of
your investment)
Management Fees 1.50%
Distribution and/or Service (12b-1) Fees 0.24%
Other Expenses 0.20%
Total Annual Fund Operating Expenses 1.94%
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Old 10-30-2010, 02:00 PM   #10
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I found him boring on Wealthtrack, and I don't know if he's right or wrong. What I do know is that his fund charges 1.94% per year for expense fees. Too rich for me. I do use actively traded funds, but they have much lower expense ratios.
It amazes me that there are still people willing to pay large fees to fund managers. Almost all of my Vanguard funds are now charging 0.07% fee.
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Old 10-30-2010, 02:07 PM   #11
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So if one found some WGRNX in his portfolio (not me) and wanted to replace it with a Vanguard index fund (or even a Vanguard managed fund), can anyone suggest a good candidate? Bonus points: explain how you made the choice.

Edit to add: I guess it wouldn't have to be Vanguard.
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Old 10-30-2010, 06:25 PM   #12
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Vanguard Emerging Markets Index Fund: VEMAX

It seems to be what he is suggesting in the video, but what he doesn't quite have the guts to do in his own fund.


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So if one found some WGRNX in his portfolio (not me) and wanted to replace it with a Vanguard index fund (or even a Vanguard managed fund), can anyone suggest a good candidate? Bonus points: explain how you made the choice.

Edit to add: I guess it wouldn't have to be Vanguard.
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Old 10-30-2010, 07:05 PM   #13
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It amazes me that there are still people willing to pay large fees to fund managers. Almost all of my Vanguard funds are now charging 0.07% fee.
It depends. I am willing to pay fees when there is value offered. For example, I have no problem paying 1% or so fees on the CEFs I own that are trading at 10+% below NAV. I also have no problem paing fees on merger arb funds (MERFX and ARBFX), because they do a complicated specialty type of investing that is hard to do. For everything else...
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Old 10-31-2010, 04:24 PM   #14
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Vanguard Emerging Markets Index Fund: VEMAX

It seems to be what he is suggesting in the video, but what he doesn't quite have the guts to do in his own fund.
I see. Thanks.
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