Down goes the Dow

Hey thanks genie, but he's better dressed and better groomed than I am at the moment

Retireded!

Good to see you're still around.

Lurking, no--why, has somebody been using my handle? Maybe that is why it isn't working.

Good to hear that all is well. 6 weeks is a good stretch away from home. Mrs. Maser is wanting to go for 3 months this summer, but I'm lobbying for 2 or 2-1/2. 3 months seems like a long time to leave some things.

Speaking of which, we just passed on a house on which we had first dibs, right on the lake, immediately in front of a chateau that is being completely re-done under a state grant. We decided to keep the income stream instead, as that fuels the travel budget.

And, the TAX implications would have been horrendous! Unbelievable. I'm now reviewing tax law in some other jurisdictions, and it can get complicated as we have some structures such as trusts which are not universally well-understood or recognized. I thought about Cayman, but you have to invest something like 1.2M locally, which produces not much return at all. Again that's an income stream I would like to preserve. If I was really loaded, I would consider it strongly.

Hoist a Guinness for me in the homeland!

Wow, "cured"! That's good to hear, but I would be uneasy. My father-in-law has been battling multiple myeloma, and now has a clean bill of health, so to speak. He still has to take some concoction once a month, but he's functioning, although not skiing anymore. He's coming down to Mayo next month for a blood draw to assay the level of circulating cancerous cells, which he's hoping will give him an idea of "how much time he has left". I don't know if it will meaningfully provide such information, but he seems dead set on really living it up. Right now he's in Japan, before that it was Fiji, before that it was Switzerland, etc. I wonder how much debt he will have when he kicks off.

He's traveling with his "skank", as my wife puts it--some arm candy he picked up around 60, and actually married. Of course that's a sore spot with my wife, the fact that he is taking her to all these places around the world. Good thing you have your wife to keep you in check!

Really though, it's great to hear that you're up and at 'em. Swimming is great, but check this out: somehow I just got bursitis in my left medial epicondyle, and I think it was from swimming! It's colloquially known as "golfer's elbow", among other things, and it's too bad that I didn't earn it as a result of too much time on the golf course. I'm doing pretty well managing it, but I haven't been back in the pool yet since having gotten it.

Does Mrs. Igloi swim with you? We find it's a great thing to do together, largely because after 50m my wife absolutely destroys me (ok maybe actually after 25m). I use it as cardio rehab and spa time. I'm always threatening my wife that I'm going to buy a white gold Rolex with a blue face, just to swim in because I've become fond of the blue color in the pool. Unfortunately it's 30-40k and so she launches into the overcompensating loser attack, against which I really have no good defense. Apologies if you own one :^). And I just KNOW that it would leak, anyway.

EMD and FAX take me back. I bought some while I was still on here. I made a very little bit of money on the FAX, and even less on the EMD. I ended up selling it all, but have never bought back in, having considered myself lucky to have gotten out when I did. I didn't have enough time to pay the attention that I think those CEF's require, to play properly (or at least well). It's good that you can make them work.

Flat on the year, well don't feel bad, the year is far from over. I'm up now maybe just shy of 2% overall, but am now sitting with almost "zero" risk, not fretting about the prospect of a recession, earnings slump, selloff, etc. My biggest issue will be whether to buy a decent drawdown after May, or wait and see what will happen with the election cycle. My knee-jerk ill-considered initial prediction is that the markets will see a bump, no matter who wins an election between Biden and Trump: If Biden wins, then "the gravy train continues as usual", and if Trump wins then "business conditions improve". Either way, I think it will be pitched as a win, and that markets will act accordingly.

If somebody other than Biden runs, or of Kennedy somehow wins, then who the hell knows what would happen.

I looked through about 3 pages of posts and decided to let you know my strategy. I’m in no way connected to the market or trading or finance, but an engineer (EE).

I invest for the long hall and rarely do short term trading. As I only know the tech market, I pretty much stay in that sector until recently (the past 2-3 years), I started buying some dividend stocks.

Most of my portfolio is msft, apple, amd, nvda, and WDC. And then some fidelity funds, but also more tech weighted. no bonds or tbills. I hardly diversify and I have only 1% intl, but with such portfolio I easily beat the Dow and beat the s&p by a bit.

I’ve found money managers are interested in crappy funds that have front or back end fees, or a management fee, and those types of funds rarely beat the market because they’re interested in diversifying and international.

maybe when I finally retire I’ll play it a little safer, but maybe not. I own a home, so that’s sorted too.

lmao! You must have gotten scorched two years ago, but then crushed last year and be killing it this year, given your articulated strategy. Although I have done well over the years, it has required a lot of attention, and to be frank, luck because my biggest gains have come from somewhat opaque markets other than the financial markets. At this point, in hindsight, I wish I had done what you have done.

I have read a lot of Boglehead ideas, and the older and lazier (and wiser?) I get, I find myself tempted. But I really still think that things have relied totally on government policy. Look at the inflation while I was gone--and you know that I think that inflation is massively under-reported. Makes me want to buy gold, take out loans against the value, and write off the interest payments. Like THAT market isn't manipulated.

How much longer do you think the system from which you've benefitted will last? That's the question. At this point, I don't want to be the last one in, but with new money coming into the markets every month from wages, I wonder if net flows will be positive or negative, given now QT which will likely switch to QE again, and boomers allegedly selling through retirement.

On that last point, I know more than a few people who have retired in the past while, and I don't know a single one of them who has actually sold anything for cash. Maybe it's just the people I know, some are public sector hacks who live off their pensions, some others have private pensions because they started with big companies 40+ years ago, and some live off the cash-generating portion of their portfolios. I have this completely unsubstantiated feeling that most people who had the money to buy stocks have other money/income to live off, and so don't need to sell.

As for foreign buyers, I have no idea. I know more than a few internationals who constantly want greater/better access to US markets, and who complain incessantly about foreign brokerages and their offerings, and the potential difficulty of establishing and maintaining a US brokerage as a foreign resident and citizen.

But good for you, you must be flying high--and are therefore probably more intolerable than ever! LMAO

BTW what do you own, domestic or world? VOO?

Yeah risk appetite is a funny thing. I'm pretty much all in tbills, something I never could have seen myself doing. Even high-quality corporate bonds, some of which pay 7-9%, I haven't yet touched, although I will take a closer look now that I have more time.

I think you're playing with fire, trying to beat the markets by selective long ownership within those very markets. Trading, I could see, but holding, ugh. If you're going to do that, then you should really diversify--in your case, maybe putting some of your capital to work directly in the sector that you understand, by starting a business or by investing early stage, either via equity or debt. My 2 cents, fwiw

After all of this, I hope I have enough energy left for my workout at noon! I should probably stop now, but it's fun to be back. I am writing from my laptop, and hopefully I can continue to use this new handle from my office machine during the week. Yes I still have the office, it's so slick I haven't been able to let it go just yet.

Maserati,

Fortunately lymphoma is one of the cancers that has a good success rate in treatment. There are over 60 sub-types of lymphoma, and my disease follicular lymphoma grade 3a has a cure rate of 80%, with the death rate likely tied to co-morbidities. If you can handle the chemotherapy you have a better than even chance. As the oncologist noted I did well because “I was fit.” Mark Conover the 1996 U.S. Olympic Trials Marathon winner died in recent years of lymphoma related morbidity. Ken Martin, World Championship Marathon medalist and 2:09 American, required a stem cell transplant for lymphoma disease after relapse from a similar variation to mine. I suspect earlier years of intense endurance training does compromise the immune system. At the time of my treatment I wanted another three years, and got six.

Mrs. Igy is genetically a better athlete than I. We were regular downhill skiers, and runners in our 50s and 60s. She, like I, grew up on the beach in Santa Monica, and is a good swimmer. Mrs. rarely uses her gym membership, when she does it is usually elliptical and some weight machines. We will be married 50 years in August; I was 23, and she 19. She maintains the same figure by being a very disciplined housekeeper and cook. We get out together for an hour walk several times a week. I do help her around the house, but she sticks to the routine she has maintained over the years. Mrs. detests traveling and is very happy hanging out with her family, which includes two spoiled cats.

On the EM CEFs I was familiar with both from my years as a financial advisor. I continued to purchase and reinvest income when the prospects were most grim. I am of the belief the Dollar is peaking, U.S. growth is phony, and EM prospects for the future are better. I also like the structure of CEFs where the assets can trade below NAV, fund manager can trade shares, and lever the portfolio. I started taking income this year, and at my cost basis the distribution is 14.39%. On a general market decline or higher relative U.S. inflation I would expect these investments to suffer significant declines, at which point I would be willing to add, but still take income distributions.

As always, I enjoy hearing from you, and missed your posts during your absence.

Igy

This is where I have spent most of my energy recently. To me, quality corporate bonds represent a generational buying opportunity, and got a little better recently. I’m currently completely out of equities and hold a fairly wide range of corporate bonds, mostly on the lower fringe of investment grade, not quite into junk. When the next reversal comes this will get rebalanced to some degree.

We’ve also looked into the tax (and other) implications of foreign residency and are holding off for the time being. We loved living overseas for a few years and would do so again, but there is a lot to think about, many pros and cons. Tax implications in particular vary with jurisdiction and get complicated quickly with any degree of complexity back home. We have a classmate happily settled in Spain where he moved after retirement. He reports that he pays more taxes than he would have otherwise, but that lifestyle costs are lower and that it’s more or less a wash overall. It would be different for us, likely quite a bit more expensive tax-wise, given differences in our situation. The visa situation also varies from place to place. It used to be quite attractive to retire to 0laces like Portugal and Spain, but has become much less so. Portugal, for example, no longer has a golden visa program. One can still get a residency permit, but there are important conditions like staying 183 days continuous in each year, minimum. That would run contrary to our travel plans so they are off the list. Spain has a wealth tax, which varies by state, that can be quite hefty and a big obstacle.

Hmmm, I mentioned them only in passing, as something I was going to look into. That's quite a stratospheric assessment you have of them. I remember having watched a (I think) Gundlach video maybe 6 -9 months ago, in which he considered them a gimme at that point. What is your duration? Funds or individual bonds? Callables? Convertibles? I would like to stock up on things in the 5-10yr range, maybe toward the longer end, but that seems an eternity these days. I would view it as a quasi-trading opportunity, much as you would be re-balancing at some point.

These days are tricky, I feel like they are fraught with peril which is why I'm hiding out in cash. The cynic in me believes that the gravy train will be kept going while Biden is in office, but if Trump wins then finally things will be corrected because it would be of political benefit to inflict pain on his watch.

I hear repeatedly that "the bond markets" absolutely know what they are doing, and also that gold is an excellent leading indicator of inflation, and that the yield curve un-inverting portends recession. Such things make me hesitant to take on duration, but militating against that is my new desire to spend time doing pretty much anything other than paying attention to investments and trading.

I guess if it was easy, everybody would be doing it and winning all the time. Like Flagpole!

We have thought about Spain, but again, the actual taxes would be brutal. My wife's EU passport still hasn't been approved, so that throws a wrench into things. It was submitted under an older regulatory framework, which had no limit on the duration of the examination. Incredible. I am pursuing it closely, and the tribunal has now gone silent. I may have to institute a court action for the equivalent of a declaratory ruling, and I have already been in touch with some foreign lawyers who have variously not been that helpful.

In fact, I have been making the lawyer circuit for a while, investigating various tax regimes, and have discovered that more than a few "highly reputable" shops in Europe are just straight-up bs'ers, who just want a new client. They initially claim to understand everything and be able to provide reasoned opinions if not definitive answers, but a few pointed interrogatories throws them off-balance quickly. The whole process has been like bringing along a bunch of 10th-graders (who know everything) in introductory calculus.

The most experienced tend to be absolute cynics, and are incredulous that I would want to reside in certain places in Europe. Their expert advice often amounts to no more than "give it a good shot, then just keep your head down and hope nobody asks any questions". Not good enough for me, but unfortunately in some civil law jurisdictions, that may be the best that it gets. It may prove best to keep our financial situs in the US.

The good thing about Cayman is that you don't actually have to spend any time there. The bad thing is that it is more expensive than other places.

Talk about a wealth tax, IIRC Norway has a 1 or 1.1% wealth tax, starting at...around $310,000! I think. My memory could be wrong on this, though. I think it rises by 0.1% after something like 1.3M, but that the assessment then begins at around 800k. Something like that. Anyway, that's flat-out ridiculous. I thought about Norway until I actually ran into a Norwegian expat (rich guy) across the lake in Switzerland. He LEFT Norway because of that wealth tax. Since none of our $ were made in Norway or involve Norway in any way, I would consider such a tax morally objectionable and confiscatory. Plus we're not rich, we really can't afford that kid of ridiculousness. It seems not too bad, until it is.

I have a friend who decided to forego the Portugese golden visa, in favor of just staying in the Algarve for 3 months of the year, in a rented house. Beautiful place, he stays Jan-Mar, and the rent is absurdly low. As euro citizens we would have no problems with time of stay, as we would not be on visas; we would just have to make sure to maintain somewhere else as the center of our activities and business/financial affairs.

Since I like being on lakes, Europe is tough. We have the place on the lake already, but another place I have considered is around Lake Balaton in Hungary. Prices have crept northward as Germans have begun buying things, but they are still reasonable. The Hungarians are being priced out, and are now apparently snapping up "investment property" in Spain, which is more affordable. The lake is beautiful, the summers good and hot, and the crime extremely low, but it's getting close to the front, and there is the friction with the US with which to contend (the US recently unilaterally canceled its tax treaty with Hungary, making matters more difficult).

Liechtenstein is beautiful, stable, and safe, but boring. Andorra offers flexibility, but is isolated and, according to my wife, just plain fugly. YMMV. I actually considered Switzerland until I met with a banker who told me he was retiring to Mallorca because Switzerland was just too damn expensive! lol! The small place we have on the lake would cost many millions in Schweiz, which again represents a lot of cash flow.

Sounds like nice problems to have, but the more I think about it, the less time we have left--and for sure, the less GOOD time we have left, where there's nothing wrong. Who knows what lurks around the corner.

The French wealth tax is predicated on the value of only real estate holdings, but there are other issues. I was left researching various countries' debt:gdp levels, per capita public debt, and who holds that debt. Denmark fares well on certain scores, but to me is boring as all heck (I have spent much time in and around Copenhagen), and it comes with its host of nightmare scenarios after a 2-year honeymoon period. I had also considered Panama, Vietnam, Uruguay, Mauritius, Seychelles, Bahamas, and Thailand (even Singapore), but my wife absolutely refuses to live anywhere substantially warm. Greece is now on the radar, but she swears she would only spend winters there. The Amalfi coast in Croatia is also a possibility.

"There are massive leveraged players in this market. Multimanager funds are 20x leveraged. It doesn’t require a great imagination to envision them blowing up on some exogenous shock, they nearly did in 2008 and 2020." - One River Asset Management

mas, the corporate bonds we hold are mainly 5-10 year, some longer (15-30ish). Overall average yield somewhere around 6%, and weighted average maturity around 7-8 years. All individual bonds, no funds. Some (probably 2/3) are callable, none convertible. We are looking to sell investment RE, and the equity would be outside tax sheltered accounts so for tax efficiency we will need to get back to some degree into equities since interest income gets the worst tax treatment, whereas dividends and capital gains are treated better where I live and pay taxes. I really want to see a strong correction in US markets for my own selfish purposes, but at the same time I worry what impact that would have on the upcoming election.

1) I did not do well in 2022. Doesn't really matter at this point, but no, it was not a good year for me as far as my investments go.

2) I did well last year.

3) I am doing ok this year so far.

4) I'm not surprised to hear that you wish you would have done what I have done. Good for you to admit that. My way of investing is the absolute best way...it is extremely passive, you aren't going to invest a lot of TIME into it, it doesn't rely on emotion or hunches or pseudoknowledge at all, and the only thing a person has to do is regularly invest and make those mutual funds (filled with stocks only) as diversified as possible.

5) The system I have benefitted from will last as long as politicians in all parts of the world continue to put their thumb on the scale in favor of wealthy people. People (many here) like to talk about how they don't invest more or at all because the market is artificially high...that's the exact reason TO invest. Politicians around the world help the market go up, and that will ALWAYS be the case...at least I can not foresee a time when it will not be.

6) Retired people do all kinds of things to not pare down their invested money. As you said, some have pensions. Some downsized big time, have some and have some cash reserves and are living off social security as they watch their retirement pile grow. My parents are in their 80s, and my dad has a good pension, they both take social security, and he told me recently that they only take from their retirement invested money when they want to spluge on something (they recenlty bought a $50,000 car for example). I know a woman and her husband who retired at age 61. They built up 3 years of expenses in cash before retiring so that they could not have to take retirement money or social security for that long. Made their health care cost super cheap too as they had (actually still have) no income.

7) I am flying high financially. I have yet to take any of it though because even thought I am retired, my wife still works as a college professor, so we won't take anything from the retirement pile until later. At a minimum I will wait until I am 59.5 to take any of it.

Investing IS easy. People make it more difficult than it needs to be. Investing properly doesn't take any more than just very basic knowledge. It is not an intellectual pursuit. It does not involve machismo. It is simply investing in the most diversified way possible the money you don't need today for when you no longer have an income. That is it. Easy peasy. The REASON more people don't do it as they should is because they want to spend every dime they have. I realize there are poor people out there, but everyone can improve their financial situation unless they are greatly hindered physically or mentally. Today, it is even easier than ever to make extra money (with which you can invest or pay down debt or both) than ever before.

Disparage Copenhagen! Have to admit, it's no country for married men.

If you could come up with $10,000 when you are in your early 20s and invest in the market and keep it there for 50 years you should be set for life. You would only have to pick a few low-fee index funds and would not even have to add to it. But, if you could periodically add to it that would be even better. Put the money into index funds and leave it there for decades.

Does anyone want to purchase a used pair of solar eclipse viewing glasses? Just think how much they will cost in 2044!