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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • Nontraded-Funds - NT-REITs, NT-BDCs, IFs
    PIMCO recently launched a new interval fund, the PIMCO Flexible Real Estate Income Fund (REFLX).
    Q: Why is PIMCO launching REFLX now?
    Donner: Private real estate markets are repricing and yields have risen, amplifying opportunities for both income and total return. Asset repricing has not been uniform across the real estate asset landscape: Valuations in public real estate markets have tumbled, while private market assets are in earlier stages of repricing. Flexible real estate funds like REFLX can capitalize on this dislocation, focusing on segments of the market that offer the most attractive return profile. As a new portfolio, REFLX does not have the burden of legacy holdings weighing on its earnings and return potential, providing the managers even more investment flexibility.
    Link
    Note: This should not be construed as a recommendation.
  • RPHIX vs US Treasuries vs CDs
    @dtconroe - I appreciate your sharing your thoughts. There is indeed a risk/reward tradeoff. I tend to view RPHIX as something between a MMF and a CD, in that I expect it to have a higher total return, even quarter by quarter, than a MMF, but without the certainty (or commitment) of a CD.
    (I don't view MMF returns as guaranteed since they are not locked in. Though it is hard to imagine a scenario where their yields decline in the short term.)
    Because of the (short term) volatility in RPHIX I wouldn't put 100% of my cash there, but would still consider holding a sizeable position. I likely place a higher value on liquidity than you, as I'm more hesitant to lock money into a CD without a reasonable escape clause (not just a thinly traded market). Two reasons for my interest in liquidity: helping out relatives (which has been erratic) and potentially higher returns in the near term (opportunity cost).
    As you wrote, each person can decide for themselves.
  • Crypto Crash. 11/8/22
    Maybe SBF gave someone a master key to steal some funds for him while he was planning his escape to Argentina?
  • new deep-dive swr math
    https://earlyretirementnow.com/2022/10/12/dynamic-withdrawal-rates-based-on-the-shiller-cape-swr-series-part-54/
    plus the comments
    site is in need of proofing, also dummies' summaries, plus fixes of what appears to be some sketchy java/html (?) coding; but possibly of interest to crunchers here
  • Investor places options bet on massive stock market collapse - Steven M. Sears
    Near the end of that song: “When the air becomes Urania …” - I was waiting for him to rhyme that with “Crimea” which would have worked lyrically. Missed opportunity.
    May be nuclear attack by Russia.
    That rich investor may be Elon Musk> Elon Musk supports Russia keeping Crimea—because he’s worried about nuclear escalation and World War III ('Fortune.com'.)
    Could be. Musk could than use his “winnings” to hasten completion of his Mars spaceship. With some incredibly good luck, he just might escape this planet in the nick o’ time.
  • Nikola: CRIME
    Remember Arthur Andersen who was the auditing firm for Enron.
    https://hg.org/legal-articles/the-fallout-of-arthur-andersen-and-enron-on-the-legal-landscape-of-american-accounting-31277
    Will Ernst & Young face discipline from SEC?
  • What is a “Blood in the Streets” Moment?
    And, with respect to energy, I just came across this:
    Leading economies sliding into recession as Ukraine war cuts growth –

    Impact of energy and inflation crises worse than forecast, with Europe most directly exposed to fallout of Russian invasion

    Following are edited excerpts from an article in The Guardian:
    The world’s leading economies are sliding into recession as the global energy and inflation crises sparked by Russia’s invasion of Ukraine cuts growth by more than previously forecast, according to the Organisation for Economic Co-operation and Development (OECD).
    A heavy dependency on expensive gas for heavy industry and home heating will plunge Germany, Italy and the UK into a long period of recession after global growth was projected by the OECD to slow to 2.2% in 2023 from a forecast in June of 2.8%.
    With the global economy needing to grow by about 4% to keep pace with rising populations, the OECD said incomes per head would be lower in many countries.
    China’s growth rate is expected to drop this year to 3.2% – its lowest since the 1970s – causing a large decrease in trade with neighbours South Korea, Vietnam and Japan, dragging down their capacity to grow.
    A recovery in China next year to 4.7% will be weaker than expected, the OECD said, as Beijing wrestles with a property market and banking sector weighed down by huge debts.
    However, the Paris-based policy forum was most alarmed by the outlook across Europe, which is most directly exposed to the fallout from Russia’s war in Ukraine.

    The OECD forecast a drop in growth in the eurozone from 3.1% this year to only 0.3% in 2023, meaning that many countries in the 19-member currency bloc will spend at least part of the year in recession. A recession is defined as two straight quarters of contraction.
    France could escape a recession if it grows by 0.8% next year as predicted by the OECD, but will suffer along with other European countries after the downgrade in GDP growth since June of 1.3 percentage points.
    Russia will shrink by at least 5.5% this year and 4.5% in 2023. Berlin’s dependence on Russian gas before the invasion means the German economy will shrink by 0.7% next year, down from a June estimate of 1.7% growth.
    The OECD warned that further disruptions to energy supplies would hit growth and boost inflation, especially in Europe where they could knock activity back another 1.25 percentage points and increase inflation by 1.5 percentage points, pushing many countries into recession for the full year of 2023.
    Global output next year is projected to be $2.8tn (£2.6tn) lower than the OECD forecast before Russia attacked Ukraine – a loss of global income equivalent to the UK economy.
    “The global economy has lost momentum in the wake of Russia’s unprovoked, unjustifiable and illegal war of aggression against Ukraine. GDP growth has stalled in many economies and economic indicators point to an extended slowdown,” the organisation’s secretary-general, Mathias Cormann, said.
    A review of the outlook for the US found that while it is likely to grow slowly this year and be in recession for part of 2023, it was less dependent than other countries on energy from Russia or other sources, allowing for a strong recovery in 2024.
    The OECD forecast that the world’s biggest economy would slow from 1.5% growth this year to only 0.5% next year, down from June forecasts for 2.5% in 2022 and 1.2% in 2023.
    World Bank officials have called on central banks to refrain from competitive rate hikes that will push the global economy into recession and harm the economies of developing world countries the most.
    Nevertheless, the OECD said further rate hikes were needed to fight inflation, forecasting that most major central banks’ policy rates would reach at least 4% next year.

    "It will be resolved at some point."

    Yes, of course it will "be resolved at some point".
    But with respect to investment at this time, it's not possible to determine when that future point might be, and even more importantly, what the eventual worldwide industrial configuration will look like when it is "resolved".
  • CAPD ending. Sell now or wait?
    A while back I wondered how DoubleLine got the CAPE trading symbol away from Barclays. My guess now is that it was no great loss because Barclays had no future in mind for the ETN, and agreed to use the CAPD symbol for a short time. If I were a fund company, I'd want the more recognizable symbol. @lrwilliams: I no longer own either CAPE or CAPD.
  • CAPD ending. Sell now or wait?
    Anyone else own iPath Shiller CAPE ETN (CAPD)? I got a notice that it is maturing on October 12, 2022. My choices are to sell now or wait and be cashed out (at the price on October 4). Is there any reason to prefer one option over the other?
    Thanks for any advice.
  • PSTL. Postal Realty Trust
    I am reminded of my sister's son in law in Texas who objects paying taxes for AMYTHING!
    What about road maintenance? "I have a 4 wheel drive Tundra and can go off road"
    what about education? " My kids go to private schools. Why should I pay for anyone else's kids?"
    What about police protection? " I have enough guns at home to not need them"
    Of course he is a public University graduate, a stock broker with lots of middle class clients. I can't get an answer from him about where his clients will come from in the next decade or two, if we followed his demands.
    There are serious proposals to eliminate Medicare and Social Security. Who do the rich people think will be around to staff the nursing homes, their landscapers and the grocery stores?
  • Large unplanned LT cap. gain 2022. Should a 1040-ES be filed; to pay taxes now?
    Generally, with lots of exceptions, the IRS expects you to pay your taxes equally in each quarter. That should be pretty obvious, because otherwise everyone would skip their first three estimates and just pay everything on the last estimate.
    For estimated tax purposes, the year is divided into four payment periods. Each period has a specific payment due date. If you don’t pay enough tax by the due date of each of the payment periods, you may be charged a penalty even if you are due a refund when you file your income tax return.
    IRS Pub 505, When to Pay Estimated Taxes
    As Yogi wrote, withholdings are usually considered evenly applied. But if it advantageous to do so (e.g. if your withholdings are front loaded), "you may choose to include your withholding according to the actual dates on which the amounts will be withheld." Pub 505, instructions for Worksheet 2-7, line 31.
    However you choose to allocate withholdings, so long as you've paid in (estimates plus withholdings) of at least 1/4 of the total as of the first estimate deadline, 1/2 as of the 2nd estimate deadline, and 3/4 as of the third, the IRS doesn't care if these payments are even or not. However, if you back load the payments, the IRS does care. Unless your income was correspondingly back loaded.
    If your income was, say $15K in the first quarter, $15K in the second quarter, $15K in the third quarter, and (due to YE divs and cap gains) $45K in the last quarter, the IRS will allow you to pay in roughly half of your taxes in the last quarter.
    See Form 2210 for how the underpayment penalty is calculated, quarter by quarter. It has a Schedule AI (annualized income) where you can document how much income you received in each quarter. Based on those amounts, it adjusts how much you should have paid each quarter.
    This is not the easiest form to fill out and requires fairly detailed bookkeeping (e.g. how much interest did your bank pay you in April and May?). Like Ben, I am not a professional, but I have tried this at home more than a couple of times. I found it something to avoid unless one's income is very uneven.
    Still, it provides an escape in case you wind up with a lot of unexpected income in a quarter.
  • CAPD and CAPE Trading Symbols
    I sold DSEEX likely in 2018, after holding it for 5 yrs. After that I experimented with CAPE during which time I noticed that the published sector allocation of CAPE was somewhat (25%) different from that of DSEEX. DoubleLine had an explanation for the difference, as in the index followed was slightly different. Pl check if the sector allocations / index currently followed by the two is the same.
  • CAPD and CAPE Trading Symbols
    @davidmoran is doing fine.
    There are several discussion threads on CAPE and DE_SX dating back to the market collapse in March of 2020. More than one board member became disenchanted with the DoubleLine versions because the « special bond sauce » proved to exacerbate rather than protect against losses. These days, with the apparent surrender of the symbol CAPE, the strategy pursued by CAPD, the ETN, strikes me as a « purer » application of the Schiller theory, at least because it is an equity allocation, untainted by bond holdings. Were I to buy into the CAPE strategy again, it would certainly be via CAPD.
    I’m not sure who on MFO was first to buy DE_SX, but it could have been @davidmoran.
  • CAPD and CAPE Trading Symbols
    Any time I see a post about DSEEX or CAPE I think of poster @davidmoran, who from my memory was the first to bring attention to these funds years ago. I don't catch everything here, but I haven't seen David post lately. Hope all is ok.
  • CAPD and CAPE Trading Symbols
    Maybe, though recognize that correlation is not causation.
    DoubleLine has not especially impressed with its enhanced version of CAPE (DSEEX). It has generated negative "enhancement" relative to CAPD over the past five years (11.13% vs. 12.50%), three years (11.35% vs. 13.50%), and one year (-8.01% vs. -5.86%).
    No matter, they've both underperformed the S&P 500 over the past five years (13.09% return), three years (14.62%), one year (-1.23%). All figures from M*, through June 8th. At least through the last quarter (March 31st), CAPD has outperformed the S&P 500 over the past five, three, and one year periods, though DSEEX remains the worst of the three.
    http://performance.morningstar.com/fund/performance-return.action?t=DSEEX
    (Add CAPD for performance comparisons)
    FWIW, M* reclassified DSEEX as large cap blend in 2019. Until then it had considered the fund to be a large cap value fund. In contrast, CAPD (formerly CAPE) maintains its classification as large cap value.
    https://www.morningstar.com/etfs/arcx/capd/performance
    DoubleLine could be taking a reputational risk as a bond house by starting a CAPE ETF that might outperform the bond-enhanced DSEEX, just as CAPD has outperformed DSEEX. Or perhaps not, since its CAPE ETF is not going to track the CAPE index (unlike the equity portion of DSEEX).
    The ETF's stated "objective is to seek total return which exceeds the total return of the S&P 500 index." (One might ask why then is it using the Schiller CAPE index as a reference, since that's underperformed the S&P 500 for years; but that's a separate question.)
    The ETF merely "considers the underlying constituents of the Shiller Barclays CAPE® US TR USD index ... Because the Fund is actively managed, the Adviser has the discretion to invest in securities not included in the index and may over or underweight a particular sector as it deems appropriate in seeking the Fund's investment objective."
    In short, "the Fund does not seek to track or replicate the Index."
    CAPE ETF Summary Prospectus
  • CAPD and CAPE Trading Symbols
    It appears that DoubleLine, which manages the CAPE-Shiller strategy in a new ETF, got the desirable trading symbol away from Barclays. From my observations, Barclays ran the ETN under the symbol CAPE for several years, but it had to change its symbol to CAPD when the Gundlach team got into the ETF game. DoubleLine has run the MF versions of the strategy since inception, I believe. No idea how this played out behind the scenes. Maybe Barclays isn’t as big a gorilla as the US firm.
  • Stagflation
    If you lived through it you know what it is. This is not it. The term was coined at the time to describe a uniquely troubled economic landscape.
    Not to beg the question @Sven asks, which is a good one. For what I suspect lies ahead …..
    Good companies reasonably priced is one thing I would want to own. I’d want some exposure to foreign currencies either through my fixed income or equity holdings in case the dollar turns south. I’d want a bit in precious metals (5-7%) as a hedge against the unexpected - but I wouldn’t overdo it because they’re very volatile. And of course, I’d want a cash cushion suitable to my risk appetite (or the equivalent in short to intermediate term high quality bonds).
    The above make sense to me in just about any period, but especially as we come off the huge bubble in many assets that has developed and perhaps enter into the end of years of easy money and stimulative monetary policy.
  • Sell JHQAX?? Buy LCORX?
    After I posted my query, trading volume did step up. When CAPE (now CAPD) began trading a few years ago, watching the volume was like waiting for grass seed to sprout. Now it trades robustly. On another thread, I commented on anemic volume of shares in HAPY. That’s still true. Bid and ask prices often are far apart and can lag the market. I am really surprised at the number of transparent and semi-transparent, apparently active, ETFs on offer these days. It’s surprising because an article I read this AM said most ETF volume are goes into passive strategies.
  • Cathie Wood’s Flagship Fund is Down … Money is Still Flowing. WSJ
    Or in the words of David Clayton-Thomas, what goes up must come down ...

    “What goes up, must come down. Right?
    Umm. No. Not necessarily.
    If an object is thrown upward fast enough it will go up and never come down. The minimum speed needed to do this is called the escape velocity.
    No human has ever traveled faster than the escape velocity of the Earth. The Apollo astronauts got very close, but they were headed to the moon, which is trapped by Earth's gravity into a closed orbit. In some sense they didn't really want to escape the Earth. They did manage to travel faster than the escape velocity of the moon, however, which is why they were able to return to the Earth.
    Any spacecraft that has ever traveled to another planet or asteroid has managed to exceed the escape velocity of the Earth. Counting them all is too much work. It's somewhere in the low hundreds. Five space probes are currently on trajectories that will take them out of the solar system, which means they have exceeded the escape velocity of the Sun”

    https://physics.info/gravitation-energy/
  • Proposed HSSA - Health Savings for Seniors Act
    There has to be an escape clause for people putting too much money into HSAs. (Use it or lose it as with FSAs would have made HSAs toxic.) This was always a feature - and always one that came with taxes. Non-medical withdrawals were never triple tax free. The only change being made here is whether a withdrawal penalty is added.
    It's not just Congress saying that IRAs were intended for retirement (though Congress did make that clear in its original legislation). It is the Supreme Court saying the same thing as well, in ruling that inherited IRAs are not retirement accounts deserving of bankruptcy protection.
    In any case, changes involving stretch IRAs did not make formerly tax-free money taxable. They did affect the timing and arguably size of the tax - a quantitative, not qualitative change. Likewise adding a penalty to non-medical withdrawals from HSAs would not make formerly tax-free money taxable since the non-medical withdrawals were never tax-free.