Can we colaborate, e.g, build model portfolio?

[rjohnla]

Brewer - ok, on "ER forum in general is not wild about trade idea like this"

 

[aja8888]

Some time last year it was clear natural gas was at unsustainably low prices. Gluts have a way of being used up and no producer was committing new capital to gas production while every large user of gas you can imagine was opening new plants in the US. It does not take a rocket scientist to figure out what would happen, but the equities were priced as if $2 gas would last forever. It did not and the higher price levels are being priced into the equities. Yee-ha!

Hey Brewer..have you seen this analyst meeting recap? I'm about both gas and crude...


Enterprise Products Partners L.P. (EPD) news: Key Takeaways From Enterprise Products Partners LP's Recent Analyst Day - Seeking Alpha

 

[rjohnla]

Brewer, sorry for jumping in. But my guess is you'll have something to say about what I write: Fracking - maybe. Oil & Gas: No. Look at the Baltic Dry Index, indicator of trade and oil/gas use to move things BDIY Quote - Baltic Dry Index - Bloomberg
Does not look so good. Why? Demand is falling.

 

[brewer12345]

Hey Brewer..have you seen this analyst meeting recap? I'm about both gas and crude...


Enterprise Products Partners L.P. (EPD) news: Key Takeaways From Enterprise Products Partners LP's Recent Analyst Day - Seeking Alpha

Interesting, thanks. I think they are still too down on natural gas, personally.

I am guessing CHK's spin-off oilfield services company will be really, really cheap if the spin actually happens. What do you think?

 

[rjohnla]

Brewer, I heard these Fracking companies are many and small. You heard that?

 

[brewer12345]

Brewer, sorry for jumping in. But my guess is you'll have something to say about what I write: Fracking - maybe. Oil & Gas: No. Look at the Baltic Dry Index, indicator of trade and oil/gas use to move things BDIY Quote - Baltic Dry Index - Bloomberg
Does not look so good. Why? Demand is falling.

1) The BDI is the Baltic DRY Index. It has nothing to do with oil. These are ships that move dry commodities, like coal, iron ore, grain, etc.

2) The BDI is spot rates and can be a misleading indicator. I have seen a 3 year charter of a capsize dry bulk ship for 30k/day in the last week as the spot rates were falling below 20k/day. The people inking 3 year charters aren't stupid.

 

[brewer12345]

Brewer, I heard these Fracking companies are many and small. You heard that?

You mean like Chesapeake Energy, the second largest US producer of natural gas behind Exxon?

 

[rjohnla]

B-yes, but they need oil to run. If BDI is falling, they won't be using as many ships, hence less oil, less demand, prices down. Thoughts?

 

[rjohnla]

B-Ok, the big boys, I don't recall where I heard 'many & small' that's why I asked.

 

[Animorph]

Vanguard Target Retirement 2060 (VTTSX), or your choice of dates to get bonds where you want.

Or the equivalent in Total Stock Market (VTSMX), Total International Stock (VGTSX), Total Bond Market (VTBIX), and Total International Bond (VTIBX). Follow the TR 2060 proportions or roll your own. This would be my preferred approach.

I'd have a hard time recommending anything more complex to a beginner. A slice and dice portfolio has so many choices we'd never agree on it.

 

[brewer12345]

B-yes, but they need oil to run. If BDI is falling, they won't be using as many ships, hence less oil, less demand, prices down. Thoughts?

The ships will still run, they will just get paid less. Rounding error to total oil demand anyway.

 

[aja8888]

I am guessing CHK's spin-off oilfield services company will be really, really cheap if the spin actually happens. What do you think?

Well, a lot of my contacts and some friends are at Chesapeake (Oklahoma City + WV) and word is the company has gone nuts with firing personnel (they needed that anyway). All of Aubry's hand picked Lieutenants are gone and there is a new "A" team n place. I don't know if that's good or bad.

With respect to the services spin off as a shareholder deal, they are going to be late to the party as there are lots of firms trenched in doing drilling, fracturing, tool rental, rig moving, etc. and how the hell did they come up with a name like Seventy Seven Energy, Inc for the new firm?

I can't speculate if the stock will be cheap since it's technically a start up (with a big debt load?) and very few are drilling for new gas which may be the main expertise of this new company. Plus, its biggest customer has been the parent. It's going to be too hot for me as CHK has been. Too many other opportunities in the oil patch these days than to jump into SSE when it becomes available.

 

[brewer12345]

I expect SSE to be very cheap, since spin-offs usually trade at a discount plus everything CHK has hair on it. I will take a loser look if and when the spin happens.

As for CHK itself, I think the replacement management team has a limited amount of time to light the fuse on the rocket. After that, Mr. Icahn will likely try to push for a sale of the company. Firing people works either way.

 

[rjohnla]

B - what are you writing about. It's me just don't understand it?

 

[brewer12345]

B - what are you writing about. It's me just don't understand it?

Chesapeake Energy (CHK) and their planned spin-off SSE, which is currently a wholly-owned oilfield services company.

 

[seraphim]

OP

No such thing as an ideal portfolio and it depends on where you are, etc etc etc. do a search and you'll find every possible variety of portfolios.

Retirement:

VTSAX 52%
VTIAX 8%
VBTLX 38%
Cash 2%

Or

Vanguard Wellington 88% (Wellesly if your too conservative)
Cash 2%

Young investor just beginning:

VTSAX 90%
VTIAX 10%

Using automatic deposits on a monthly basis for DCA

Check portfolio once a quarter, rebalance when needed - otherwise, leave it alone. If you pick at it, it will never heal...

There is no such thing as wealth safety. There is always risk. Life isn't safe. You're overthinking stuff.

 

[LOL!]

More model portfolios in the WSJ today based on a few index funds:
Funds Investing: Make More Money and Worry Less - WSJ.com

 

[rjohnla]

Hi LOL, reading article, like: "Tactical asset allocation is a very tough game to play," says Jeremy Stempien, director of investments at Morningstar Investment Management

You area saying same it seems.

Thanks

 

[Travelwanted]

I am leaving my FA for VG. I'm 42...will retire in 2 years. I came up with the allocation below. Feedback please, thanks!

Equities- 65% Bonds 35%

VTSAX 40% (total stock mkt ind - adm)
VTCLX 20% (tax-managed cap appr -adm)
VTMSX 20% (tax-managed small cap - adm)
VTIAX 10% (total int'l stock - adm)
VFWAX 10% (FTSE all-world ex-us - adm)

VWALX 20% (high yield tax ex)
VMLUX 40% (limited term tax ex)
VWIUX 40% (int-term tax ex)

 

[LOL!]

@Travelwanted, one could do worse. Your portfoilio is fine. I would not bother with tax-managed cap appr myself unless perhaps you already owned it for a long time.

There is also no reason to own VFWAX instead of VTIAX. Every stock in VFWAX is also found in VTIAX, that is there is a 100% overlap. I own VEU (ETF share class of VFWAX), but that was before VTIAX in its current form was available. I would switch all my VEU to VTIAX if I didn't have to pay a boatload of taxes to do so.

But perhaps you wanted to own the small-cap version of VFWAX, namely VFSVX or VSS. That would overweight small-caps in international which is something I do and would match your overweighting of small caps on the US side of things.

Many folks, myself included, believe that high-yield bond funds are much like equity funds, so I would not own VWALX. Instead if I wanted that risk (and return) I would just own more equity funds.

 

[Travelwanted]

@Travelwanted, one could do worse. Your portfoilio is fine. I would not bother with tax-managed cap appr myself unless perhaps you already owned it for a long time.

There is also no reason to own VFWAX instead of VTIAX. Every stock in VFWAX is also found in VTIAX, that is there is a 100% overlap. I own VEU (ETF share class of VFWAX), but that was before VTIAX in its current form was available. I would switch all my VEU to VTIAX if I didn't have to pay a boatload of taxes to do so.

But perhaps you wanted to own the small-cap version of VFWAX, namely VFSVX or VSS. That would overweight small-caps in international which is something I do and would match your overweighting of small caps on the US side of things.

Many folks, myself included, believe that high-yield bond funds are much like equity funds, so I would not own VWALX. Instead if I wanted that risk (and return) I would just own more equity funds.

Thanks, LOL. . .I had the misconception the VFWAX had more emerging markets but I see the holdings are nearly identical as you say. I'll just go VTIAX 20%.

I did not choose Wellington as many suggest as 1-its bond duration is too long for my blood and 2- I want tax exempt bonds. I'm still working and in the highest bracket. I will re-evaluate in a few years.

Would you suggest dropping the High-Yield for Total Bond Fund? Probably a safer call.

Lastly, any advantage of using the ETFs vs the funds? I felt the admiral shares would be the way to go.

 

[LOL!]

If you have this portfolio at Vanguard, then there is no advantage to ETFs over Admiral funds. If you have this portfolio elsewhere, then it is unlikely that you can get Admiral funds, so ETFs would have the advantage.

Hmmm, did you notice how my suggestions to your portfolio pretty much turned it into the portfolio I suggested at the beginning of this thread?

You can also drop by bogleheads.org for more comments on your ideas.