William J. Bernstein's Post 2009 Thoughts

[NW-Bound]

Gee, I dunno.

You can train soldiers all you can in a bootcamp, but it is not the same as when they are right at the battle front, with mortars dropped on them and machine guns firing rounds above head, and grenades thrown at them.

There's theory, and there's actual real life. So far, the market has not dropped as much as it did in 2000-2003 and 2007-2009. People are already running scared.

I thought most people here were already of adult age during the above periods. Y'all forget about all that already?

[audreyh1]

Quote:

Originally Posted by NW-Bound So far, the market has not dropped as much as it did in 2000-2003 and 2007-2009. People are already running scared. I thought most people here were already of adult age during the above periods. Y'all forget about all that already?

This drop was far, far faster than the other periods which took many months if not years to reach the down 30% from peak, so I get the running scared part.

Many ER folks here retired after 2008 as that is already 12 years ago!

[pb4uski]

Quote:

Originally Posted by Midpack ... Also from the book: Quote: ...It never would have occurred to them, by 2008, the long-term survival of most of the insurance companies offering these products might be at risk. ...

That is just patently untrue... he clearly doesn't know a lick of what he is writing about. I worked in the industry in 2008.... while it was a challenging and stressful time and a handful of insurance groups were stressed... no significant insurers failed or even went into receivership.

Some will mention AIG and that is a false narrative... all of AIG's insurance companies were fine... the problems were with a non-insurance operation at the parent level. In fact, the insurance operations is what ultimately saved AIG as they were able to sell some of their insurance operations that did business outside the US and the proceeds from those sales was a big chunck of what was used to repay the feds for the money they used to prop up AIG.

[NW-Bound]

Quote:

Originally Posted by audreyh1 This drop was far, far faster than the other periods which took many months if not years to reach the down 30% from peak, so I get the running scared part. Many ER folks here retired after 2008 as that is already 12 years ago!

Yes, the virus infection spreads a heck of a lot faster than previous economic malaise.

I fully retired in 2012, but was doing part-time consulting and contracting work with iffy income since 2000. Erratic income, decimated portfolio, with children in college... A lot scarier than now. And I had been through tougher times than that earlier in life.

I followed the market and looked at my portfolio daily, through thick and thin. I still maintained a diary which logged the total value of my investable assets going back to 1999, along with some notes on "historical days".

[Running_Man]

Quote:

Originally Posted by NW-Bound Yes, the virus infection spreads a heck of a lot faster than previous economic malaise. I fully retired in 2012, but was doing part-time consulting and contracting work with iffy income since 2000. Erratic income, decimated portfolio, with children in college... A lot scarier than now. And I had been through tougher times than that earlier in life. I followed the market and looked at my portfolio daily, through thick and thin. I still maintained a diary which logged the total value of my investable assets going back to 1999, along with some notes on "historical days".

Keep your pen handy for the next few weeks, I suspect activity in the next couple weeks will lend itself to some more good notes.

[pb4uski]

Quote:

Originally Posted by audreyh1 This drop was far, far faster than the other periods which took many months if not years to reach the down 30% from peak, so I get the running scared part. Many ER folks here retired after 2008 as that is already 12 years ago!

Yes, this drop was much faster... and that is what has rattled people, along with the uncertainty as to what will happen.

Quote:

Here is the S&P 500 since it peaked back on February 19 of this year. This is through Thursday’s close. It is down about 29% in 4 weeks. Now, here is the S&P 500 from back in the Global Financial Crisis. This was the last time the world’s economy was in total panic mode. The headline reasons were different. There was not a global health crisis. It was the reckoning of years of leverage in the financial system, and the bubble popped. This is just about the same point in the down-cycle for stocks. It just took a month this time, versus about a year last time.

https://www.forbes.com/sites/robisbi.../#68eabe794b62

[Running_Man]

In addition, Bill Bernstein's constructed portfolio's over the last 10 years since 2009 have under performed by quite a bit, earning no quite 6 percent per annum despite the heavy stock allocation in the biggest bull market in history.)
Both his No-Brainer portfolio (still the base 75% stocks he basically believes is best investment for the average investor) and the Coward's portfolio (60% stocks not 75 hence the name Cowards) are both behind a basic 40/60 Blend portfolio with VTI/BND and almost 2.2 percent per annum behind a 60/40 blend.

And for this under performance you can have Billy run your portfolio too for only a 0.35% fee over the fees of funds you get entered into and a 7 million dollar portfolio on average (that's 25K per year per portfolio for Billy to balance for you and have an annual portfolio review - preferred long term comparison is for portfolio's to start with 2004 but in most cases each portfolio has an index that directly matches the portfolio for comparison with small variances and from 2004 they tend to just ever so slightly over perform--- though most are 2.2% below the basic 60/40 VTI/BND.

Lazy Portfolios and ETF composition

[Elbata]

Bernstein: "As in the depths of the Great Depression, there are now generous returns to be had for the brave, the disciplined, the liquid. If there was ever a time to own a prudent portfolio that includes equities for the long term, it is now."

The market falls like this rarely. Over the long term, I'm betting on America.