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<title><![CDATA[Comments for entry "Replicating the S&P 500" at Dilbert.com Blog]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/148]]></link>
<description><![CDATA[Regular thoughts and updates from Dilbert.com]]></description>
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<title><![CDATA[Comment  from tragicmishap]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13776]]></link>
<description><![CDATA[&quot;And feel free to tell me why this modified approach is defective. That's always the point of anything you see on this blog.&quot;

Bravo, Scott.  You are willing to put yourself out there for the public to criticize.  Not only that, but you are willing to change your beliefs if presented with convincing arguments that you are wrong.  That is admirable, and I applaud you.  After all, nobody can really learn anything new without first accepting that something they know is wrong or incomplete.]]></description>
<pubDate><![CDATA[FriAMPDTE_Rstst]]></pubDate>
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<title><![CDATA[Comment  from ark]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13732]]></link>
<description><![CDATA[You are mistaken about the cost of investing in the S&amp;P 500.

If you have $350,000 that you want to invest in the S&amp;P 500, you can buy VFIAX, the Vanguard S&amp;P 500 index fund, Admiral shares (minimum investment $100,000).  The expense ratio of that fund is 0.07%, which means that the annual expenses are about $250, not $1,000.

Good luck trying to track the S&amp;P on your own for that price.

Oh yeah, VFIAX doesn't have buy/sell spreads, NAV/selling price premiums or discounts, or any other hidden fees.]]></description>
<pubDate><![CDATA[ThuPMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from jbecke2]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13704]]></link>
<description><![CDATA[Scott, you're closing in on a strategy that used to be very popular.  It was called &quot;Dogs of the Dow&quot; where once a year, you shuffled your portfolio to have an equal dollar amount of each of the 10 highest yielding stocks in the Dow 30.  The reasoning was that the Dow is comprised of all large, reliable stocks.  The 10 highest yielding ones are likely to be out of favor and stand to rebound when &quot;irrational panic&quot; goes away and buyers realize a stock is beaten down because of guilt by association.  The beauty of the strategy was that it only required about 5 minutes of your time, once a year.  Even your friends at Motley Fool came up with a variation on that strategy (although, they later decided it wasn't all it was cracked up to be).
Keep up the good fight, and have a good day.]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from ReductiMat]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13700]]></link>
<description><![CDATA[Scott, when you say, &quot;The stock has one of the highest ratings of the stocks you don't already own&quot;, what units are you using for the rating?  SAP (Stock Awesomeness Potential)?

If you haven't noticed, anyone rating stocks is rarely doing it for your benefit.

Unfortunately, your two posts on this topic are worth as much as one saying, &quot;You should buy stocks that are going up&quot;.]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from Zowie]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13694]]></link>
<description><![CDATA[&gt; Full disclosure: That's mostly how I invest in stocks.

As you tend to have interesting ideas, I'm wondering what else you invest in. Any chance of more disclosure? ;-)]]></description>
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<title><![CDATA[Comment  from tartanmarine]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13690]]></link>
<description><![CDATA[Doing well in the market is hopeless if the government is pushing policies that are anti-growth and anti-investment. I'm talking to smart guys who moved everything from the market to cash months ago (wish I was one of them!). Some are talking about shifting out of US currancy, in anticipation that the Obama administration will block the free flow of capital, and there will be hyperinflation of the dollar.

I don't think anything in the market will be hot as the Obama administration tries to pay for all the votes it bought by taking money from those who earned it and giving to those who didn't pay taxes, in &quot;tax credits.&quot;

To get an interesting free daily e-mail of short articles that affect economic and health care policy, go to www.ncpa.org &amp; sign up. The National Center for Policy Analysis is a pro-market think tank. Below is one of today's short blurbs:

DYNAMIC EFFECTS OF PRESIDENTIAL CANDIDATES' TAX PLANS
Sens. John McCain and Barack Obama have sharply different visions of how taxes affect economic activity and what modifications to the current system should be made, say economists Stephen J. Entin and Michael Schuyler.

Sen. McCain's tax plan focuses mainly on enhancing economic growth and job creation by reducing marginal tax rates on labor and capital income and by improving economic efficiency.  Sen. Obama's tax plan focuses mainly on income redistribution by raising marginal tax rates.

When fully phased in, and all economic adjustments are made:

The McCain tax plan would increase the private sector portion of gross domestic product (GDP) by about 2.7 percent, and the Obama tax plan would reduce it by about 3.5 percent. 
The difference in private sector capital accumulation would be 15.8 percent or $4.1 trillion in favor of McCain. 
Hourly wages before-tax would be up 2.2 percent under McCain, down 2.6 percent under Obama. 
Hours worked would be 0.5 percent higher under McCain, and 1 percent lower under Obama.
The dynamic economic response to the McCain proposals would fully offset the cost of his four major tax elements: the lower corporate and estate tax rates, partial expensing, and the rise in the dependents exemption, for a net revenue gain of about $16 billion. 

The dynamic economic response to the Obama plan would be to reduce tax revenues.  However, his business tax increases (&quot;loophole&quot; closings) would result in higher corporate tax revenues, but not as much as a static revenue forecast would indicate. His increases in the two top marginal income tax rates, in the tax rates on capital gains and dividends, and other marginal work disincentives, would depress revenues, resulting in a net revenue loss of about $53 billion a year.

Source:   Stephen J. Entin and Michael Schuyler, &quot;The Candidates' Tax Proposals: Their Impact on Taxpayers and the Economy,&quot; Institute For Research on the Economics of Taxation, Policy Bulletin No. 92, October 20, 2008.

For text: 

http://iret.org/pub/BLTN-92.PDF

For more on Taxes: 

http://www.ncpa.org/sub/dpd/index.php?Article_Category=20

]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from tartanmarine]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13689]]></link>
<description><![CDATA[Doing well in the market is hopeless if the government is pushing policies that are anti-growth and anti-investment. I'm talking to smart guys who moved everything from the market to cash months ago (wish I was one of them!). Some are talking about shifting out of US currancy, in anticipation that the Obama administration will block the free flow of capital, and there will be hyperinflation of the dollar.

I don't think anything in the market will be hot as the Obama administration tries to pay for all the votes it bought by taking money from those who earned it and giving to those who didn't pay taxes, in &quot;tax credits.&quot;

To get an interesting free daily e-mail of short articles that affect economic and health care policy, go to www.ncpa.org &amp; sign up. The National Center for Policy Analysis is a pro-market think tank. Below is one of today's short blurbs:

DYNAMIC EFFECTS OF PRESIDENTIAL CANDIDATES' TAX PLANS
Sens. John McCain and Barack Obama have sharply different visions of how taxes affect economic activity and what modifications to the current system should be made, say economists Stephen J. Entin and Michael Schuyler.

Sen. McCain's tax plan focuses mainly on enhancing economic growth and job creation by reducing marginal tax rates on labor and capital income and by improving economic efficiency.  Sen. Obama's tax plan focuses mainly on income redistribution by raising marginal tax rates.

When fully phased in, and all economic adjustments are made:

The McCain tax plan would increase the private sector portion of gross domestic product (GDP) by about 2.7 percent, and the Obama tax plan would reduce it by about 3.5 percent. 
The difference in private sector capital accumulation would be 15.8 percent or $4.1 trillion in favor of McCain. 
Hourly wages before-tax would be up 2.2 percent under McCain, down 2.6 percent under Obama. 
Hours worked would be 0.5 percent higher under McCain, and 1 percent lower under Obama.
The dynamic economic response to the McCain proposals would fully offset the cost of his four major tax elements: the lower corporate and estate tax rates, partial expensing, and the rise in the dependents exemption, for a net revenue gain of about $16 billion. 

The dynamic economic response to the Obama plan would be to reduce tax revenues.  However, his business tax increases (&quot;loophole&quot; closings) would result in higher corporate tax revenues, but not as much as a static revenue forecast would indicate. His increases in the two top marginal income tax rates, in the tax rates on capital gains and dividends, and other marginal work disincentives, would depress revenues, resulting in a net revenue loss of about $53 billion a year.

Source:   Stephen J. Entin and Michael Schuyler, &quot;The Candidates' Tax Proposals: Their Impact on Taxpayers and the Economy,&quot; Institute For Research on the Economics of Taxation, Policy Bulletin No. 92, October 20, 2008.

For text: 

http://iret.org/pub/BLTN-92.PDF

For more on Taxes: 

http://www.ncpa.org/sub/dpd/index.php?Article_Category=20

]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from smokefoot]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13682]]></link>
<description><![CDATA[Buying &quot;hot&quot; stocks (trying to pick up the next Dell) is a poor strategy.  Take a look at this article:
http://www.marketoracle.co.uk/Article7015.html

The money quote: &quot;Yet in the next five years, the hot stocks underperformed the market by a negative -26% on a P/BV basis, and -30% on a P/CF basis. The out-of-favor stocks did 33% and 22% better than the market, respectively. This is a HUGE reversal of trend.&quot;

The hot stocks outperformed the market by 186% in the ten years before they were bought, and underperformed in the 5 years after they were bought.  It's not your imagination!  Stocks do start to go down as soon as you buy them!]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from ThisSucks]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13681]]></link>
<description><![CDATA[RE: Answer to criticism #3. You say buy only when the market has dropped by 10 or 20 percent. That is in keeping with the buy low, sell high strategy that is essential for success but in general you don't want to buy something that is trending downwards, imho.]]></description>
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<title><![CDATA[Comment  from ajobrien223]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13680]]></link>
<description><![CDATA[About 12 years ago, the Bloomberg network approached The Overstreet Comic Book Guide folks to put together a &quot;Blue Chip Portfolio&quot; of 20 key comic book issues (First appearances, short print runs, etc., all in NM condition) for the purposes of comparing an investment in comics to the top 20 S&amp;P stocks.  The results were that after 10 years of monitoring, the comic portfolio was only about 2% less growth than the stock portfolio.  However, as the stocks had ups and downs, key comics basically never decrease in value.  So based on the relative market over the measured time period (whether there are predominantly bull/bear markets), the value of the comic portfolio could easily outstrip the stocks (as it would if the current market was the endpoint of the time period).  I believe this information was printed in Vol 36 of the guide, which may be available in your local library.

That isn't to say that you should take out a mortgage to buy Action Comics #1, but I certainly thought it was an interesting study. 

And comic books are a lot cooler looking than stock certificates.]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from boyd]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13675]]></link>
<description><![CDATA[Would you please stop posting about stocks?  They just don't capture a 13 year old's attention the way funnier posts do.]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from EMU]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13673]]></link>
<description><![CDATA[Re ETF fees: &quot;If you could save $1,000 per year and give up nothing, you would do it.&quot;
Yes, but you do give up something. Namely the full index replication, efficiency border and all. If you agree with the advantages of indexes, you'll see the problem of investing differently. If you think you can do better, fine, but that's different from &quot;giving up nothing&quot;.
 If you want to invest in the S&amp;P500 why not do it? If you want to invest in something else, fine, but then you do something different and have different risks and returns. What precisely is your goal? If you want to invest in &quot;the US equity market&quot;, a wilshire total market index ETF or fund would be the better choice anyway.

Greetings from germany, the land where your idea (as realized in the DAX) just went down in flames.]]></description>
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<title><![CDATA[Comment  from Zowie]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13672]]></link>
<description><![CDATA[I make a lot of errors in my comments, which make me look like an idiot.
If this isn't intentional, could one or both of these features be added?
- A preview button
- The possibility to edit your own comment during one or two minutes after posting (this features exists on digg.com and there's also a Wordpress plugin that does it)]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from Zowie]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13671]]></link>
<description><![CDATA[I make a lot of errors in my comments, which make me look like an idiot.
If this isn't intentional, could one or both of these features be added?
- A preview button
- The possibility to edit your own comment during one or two minutes after posting (this features exists on digg.com and there's also a Wordpress plugin that does it)]]></description>
<pubDate><![CDATA[ThuAMPDTE_Rthth]]></pubDate>
<guid isPermaLink="false"><![CDATA[http://dilbert.com/blog/entry/13671]]></guid>
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<title><![CDATA[Comment  from Zowie]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13670]]></link>
<description><![CDATA[William J. Bernstein analysed this idea and concluded that a small number of stocks is insufficiÃ«nt to minimize nonsystematic risk and that the only way to minimize it is by owning the whole market.
http://www.efficientfrontier.com/ef/900/15st.htm

Basically:
The Bernstein solution is to invest in a very broad index fund.
The Adams solution would be to a superior stock picker, ie owning &quot;the most valuable information in the world&quot; as you called it. So i the question is: can you really find a stock picking technique that CONSISTENTLY beats the market? And so we're back to square one, the eternal problem of the stock market investor.
]]></description>
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<title><![CDATA[Comment  from Zowie]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13669]]></link>
<description><![CDATA[Conclusion of an article about this stuff, by William J. Bernstein:

&quot;So, yes, Virginia, you can eliminate nonsytematic portfolio risk, as defined by Modern Portfolio Theory, with a relatively few stocks. Itâ€™s just that nonsystematic risk is only a small part of the puzzle. Fifteen stocks is not enough. Thirty is not enough. Even 200 is not enough. The only way to truly minimize the risks of stock ownership is by owning the whole market.&quot;

Source: http://www.efficientfrontier.com/ef/900/15st.htm
]]></description>
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<title><![CDATA[Comment  from charlesfunnish]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13657]]></link>
<description><![CDATA[I have disgraced my family with my error.]]></description>
<pubDate><![CDATA[WedPMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from charlesfunnish]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13656]]></link>
<description><![CDATA[More importantly, why does your blog masthead have a right hand holding a pen?  Aren't you left-handed?  And if I'm right, what kind of prize do I win?

Maybe I'm thinking of Scott Baio from Charles in Charge.]]></description>
<pubDate><![CDATA[WedPMPDTE_Rthth]]></pubDate>
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<title><![CDATA[Comment  from quantum_flux]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13654]]></link>
<description><![CDATA[You're not interested in my Brownian Motion Stock Picks?  Pay me some money, I'll push a random number generater, then I'll spit out a stock option for you.  That goes for anybody in here, also, I don't discriminate against anybody just so long as they pay me!]]></description>
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<title><![CDATA[Comment  from joelshults]]></title>
<link><![CDATA[http://dilbert.com/blog/entry/13653]]></link>
<description><![CDATA[By buying a &quot;hot&quot; stock and selling your worst performer, aren't you then buying high and selling low. From what I've read, that isn't generally the best way to make money in the stock market.]]></description>
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