Whats your Bernstein index?

[Patrick]

It's our retirement joint venture. There used to be other partners, but they've [-]been banned[/-] lost interest. We're always looking for new blood -- join us.

I just watched Barbarians at the Gate. I don't want to go there!

 

[Nords]

I think a lot of what Bernstein had to say was reasonably well advised to consider, and he had a lot of good data. It changed a few things about how I invest. But I'm open to new approaches that have a reasonable risk/return ratio and are well thought out.

I've read everything that Bernstein has on his website and in his books. (I'm the other guy who's read "The Intelligent Asset Allocator".) I agree with a lot of it, especially his "Retirement Calculator from Hell" series, but he lost a lot of points with me when he dissed the concept of ER.

I also think that his efficient frontier analysis should include more of a discussion on dealing with volatility by including cash in the AA instead of bonds.

I'm not much for get rich quick schemes flogged by bloggers and fund company/newsletter marketeers though.

To be fair, the NoLoadFundX guys and many other momentum investors have found a way to make it work. But it's too much work for me, especially when it comes to filling out Schedule D.

What's the deal between Cute Fuzzy Bunny and Twaddle? They seem to go at it a lot. Is there some history here?

Yup. See also "Wab".

 

[unclemick]

Ok guys - I don't wanna be left out:

can I have pancake/stack? Pretty please.

Can I.

Ah yes shades of the good old days.

heh heh heh - I used my own definition of moderately influenced.

 

[twaddle]

Sorry, UM, CFB ate all the pancakes. And the bacon. All I have left is a stale donut.

 

[cute fuzzy bunny]

Let me warm that back up for ya...

 

[HFWR]

Have read only Four Pillars, plus most of his web articles. Don't follow anyone; I like to learn from my mistakes...

 

[DragoMuseveni]

I read the Four Pillars and the book makes alot of sense to me. I am kind of nervous because the only thing I really know about investing is that no one system is perfect. Are there any good recent book-length critiques of the Boglehead/Bernstein style of investing?

 

[chinaco]

I have read some of his stuff... things available on the internet.


I am going to go to the library and get one of his books. Which one should I begin with? 4 Pillars??

 

[W2R]

I have read some of his stuff... things available on the internet.


I am going to go to the library and get one of his books. Which one should I begin with? 4 Pillars??

Sure, why not? But beware - - it is NOT riveting, fast paced, fascinating reading. It is OK but in some portions it can seem a little tedious. But if you are not on board when you begin reading it, you will be by the time you finish.

 

[cute fuzzy bunny]

You could just sit in a sensory deprivation tank for 4 hours and then read my book report on it

The 4 pillars, like TMND and many other books of this ilk written by a team of phd's, likes to use the standard phd method of approach: pound you with endless streams of data for hours and hours before coming to their inevitable conclusion, which you would likely have understood and bought into without the relentless case making.

I found myself reading the entire first half, then skipping to the chapter summaries for the rest and then back reading into the chapter if I didnt get something or wanted to see a bit of the data.

My prior opinion still stands on this or any other rear view tested strategy...most of it happened before the internet and people being able to run their own investments from their screen at home and everyone having immediate access to 8 brazillion feeds of information along with being able to buy formerly esoteric asset classes by making a free trade of an ETF. I think it all makes the market more transparent, more fluid, and faster responding...all for good and for bad. It may also rob some of the higher returning asset classes by making them more liquid and more available to inexperienced investors.

So asset allocation is important. Not being stupid with investments you dont understand is important. But I wouldnt bet my bacon on a portfolio consisting of half small cap value and half commodities...

 

[W2R]

You could just sit in a sensory deprivation tank for 4 hours and then read my book report on it

The 4 pillars, like TMND and many other books of this ilk written by a team of phd's, likes to use the standard phd method of approach: pound you with endless streams of data for hours and hours before coming to their inevitable conclusion, which you would likely have understood and bought into without the relentless case making.

This is a better description of the book than mine. It would probably be a great book for someone who was absolutely sold on financing his retirement by means of day trading penny stocks or betting on the horses. But most of us are already at least partly sold before we even open the book. It did clarify and solidify some of what I was already thinking.

I found myself reading the entire first half, then skipping to the chapter summaries for the rest and then back reading into the chapter if I didnt get something or wanted to see a bit of the data.

The first time I read it I probably read half the pages, and the other half I flipped while muttering, "yeah, yeah, yeah" under my breath. The second time I forced myself to read almost all of it and it was painful.

But I wouldnt bet my bacon on a portfolio consisting of half small cap value and half commodities...

Yikes! Now there's a portfolio.

 

[cute fuzzy bunny]

IIRC, thats the one that someone came up with that had the highest total long term returns and were the most uncorrelated from each other.

Wee bit of volatility though.

 

[W2R]

IIRC, thats the one that someone came up with that had the highest total long term returns and were the most uncorrelated from each other.

Wee bit of volatility though.

Sounds like condemning oneself to eternal fire and brimstone.

Sort of like serving a casserole for dinner that is 50% salt and 50% pepper.

It might be nice to have some of these asset classes, just to season things, but they will never be my main course (so to speak).

 

[DblDoc]

I read the Four Pillars and the book makes alot of sense to me. I am kind of nervous because the only thing I really know about investing is that no one system is perfect. Are there any good recent book-length critiques of the Boglehead/Bernstein style of investing?

So true but don't fall into the trap of seeking the "perfect plan". Only in hindsight will that be apparent and will depend alot on what you define as "perfect". Given that the poll is running about 60:40 for those that use a Bernstein approach (including me) if that fails you will have lots of company here to commiserate with

DD

 

[clifp]

The local library didn't have a paper copy, but they did have a downloadable audio verison of 4 pillars.

So I listened to it while reading the internet. It was frustrating because of course you can't see all the charts and graphs that I am sure were present in the book.
I actually enjoyed read Siegals Stocks for the Long Run ok I am weird.

 

[Notmuchlonger]

I am certainly not as intelligent as my fellow posters. However the 4 pillars I had to re-read pages several times to make any sense of it. It was a good read In my opinion. I dont follow anything blindly but I feel it had some solid advice.

 

[unclemick]

Hmmm - I voted moderately influenced --- BUT:

I go around nowadays saying don't read books and now(as of Jan 2006) have: 85% Target retirement 2015

and 15% individual stocks(34 of them) - by way of taking the other side of the mythical bet (Google up Bernstein's 15 Stock Diversification Myth).

Lately I have stopped buying a $1 quickpick Powerball ticket when I gas up.

Sooooo - what label does a Vanguard lifecycle have in the land of 'slice and dice' and asset allocation?

heh heh heh - can't be totally passive since somebody picked them out in the first place. Deferred judgement slice and dice?? .

 

[deserat]

I vote moderately - the best part of the four pillars that I remember is to have a broad diversification of assets, know your asset allocation you want and stay the course, beware of bubbles (I loved the tulip sorty) and assuming long term returns of 10% or better is naive (I think he advocated 4-6%).

Yes - he did pound with data and statistics - what else would one expect from a PhD? That's their training......that's OK - I've learned to skim read that type of stuff and grab nuggets where I see them.

I agree with Nords - all comes down to how much work you want to do. Frankly, I'm pretty lazy so I like the 'target' approaches. The investing machinations I read about on this board sometimes scare me - but hey, if that's what you like, that's what you like! I'm sure you'd find lace knitting (or knitting lace) patterns making you cross-eyed, too, if you weren't as interested.

 

[cute fuzzy bunny]

Yep, the pretty pictures were fairly critical.

Oh dear god, I cant imagine listening to someone read me that book. How many times did you lose consciousness?

 

[W2R]

I don't see how he could follow without the graphs.

 

[Patrick]

IIRC, thats the one that someone came up with that had the highest total long term returns and were the most uncorrelated from each other.

Wee bit of volatility though.

That sounds interesting. Have any more info on it? Where can I find a writeup? Thanks.

 

[lswswein]

That sounds interesting. Have any more info on it? Where can I find a writeup? Thanks.

The place to start to do all the experiments is here:
Bogleheads :: View topic - Spreadsheet for backtesting (includes TrevH's data)

The spreadsheet will let you play and generate all kinds of data. Anyway real men own an Asset allocation of 50% EM + 50% Commodities or 50% ScV + 50% Commodities. They both have really low correlations and the Sharpe ratio is comparable to S&D portfolio's that Bernstein et al talk about. The problem with owning that is that little thing called sleep at night factor.

-h
p.s: real men with titanium balls sir....

 

[cute fuzzy bunny]

Besides that one, Portfolio Management Topics for Retirees has some extensive discussion on how formerly rare asset classes performed in combination.

Like momentum, I'd express some caution for the difference between what used to work and what will work in the future when one wanders off the beaten path.

Be advised you may also experience 20% volatility days with such a portfolio.

There may be a sudden loss of cabin pressure as well.

 

[Khan]

Besides that one, Portfolio Management Topics for Retirees has some extensive discussion on how formerly rare asset classes performed in combination.

Like momentum, I'd express some caution for the difference between what used to work and what will work in the future when one wanders off the beaten path.

Be advised you may also experience 20% volatility days with such a portfolio.

There may be a sudden loss of cabin pressure as well.

Roof flies off?

 

[Nords]

Roof flies off?

So to speak...