2008 August | WhereDoesAllMyMoneyGo.com

A Lap Of The Blogs

Posted by Preet on Aug 28, 2008 | 5 comments

If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world. There is a Lindt Chocolate Outlet store near my office so tomorrow I’m going...

Dimensional Fund Advisors Part VIII

Posted by Preet on Aug 28, 2008 | 3 comments

This article is one in a long series which I hope will help explain the ins and outs of DFA – Dimensional Fund Advisors. NOTE: This is my interpretation and explanation only. For the final word, please refer to the DFA Canada Website. To read other parts in this series, please CLICK HERE for a listing of all articles. The Problem With CAPM A quote taken from a piece written by Eugene F. Fama, Jr (son of the researcher Dr. Eugene Fama, Sr): “The single-factor model (CAPM) is grounded in an elegant theory. The rationale is sensible. It’s a great model in every respect except for the fact that it doesn’t work. It did a decent job when the world of...

Does Buy And Hold Work?

Posted by Preet on Aug 26, 2008 | 7 comments

Question From A Reader A reader has asked me to comment specifically on an article that recently appeared in The Globe and Mail titled, ‘With funds, buy and hold doesn’t always pay off’ written by Mr. Rob Carrick. You’ll probably need to read the article to put my answers in context. (I don’t really have anything negative to say about it, but if you read through the comments at the bottom of the Globe article there are some readers of the Globe who took issue with it.) Specifically, the reader mentioned that her advisor always touts the buy and hold philosophy and she was beginning to question the blind practice of this strategy. The Quick...

Dimensional Fund Advisors Part VII

Posted by Preet on Aug 25, 2008 | 3 comments

This article is one in a long series which I hope will help explain the ins and outs of DFA – Dimensional Fund Advisors. NOTE: This is my interpretation and explanation only. For the final word, please refer to the DFA Canada Website. To read other parts in this series, please CLICK HERE for a listing of all articles. Continuing from Part VI, where we saw the formula for CAPM (the Capital Asset Pricing Model), we found that the model suggests that, given a diversified portfolio, your sensitivity (β, or “beta”) to the market factor (also known as the “equity factor”) should explain your expected return. As a refresher, here is the...

Visualizing Walmart's Growth Over Five Decades

Posted by Preet on Aug 24, 2008 | 2 comments

My brother sent me this link a few weeks ago and I’ve watched it about 10 times since because I’m just in awe of it. Someone took the time to graphically plot the growth of Walmart in the United States from 1965 to 2007. It takes about 5 seconds to load up once you see the map, but once it starts going – hold on to your hats. A few stores pop up per year in the 60′s, but by the time you get to the 80′s there are hundreds of stores popping up per year and by 2007 you have over 3,000 points showing up on the map. You don’t have to do anything other than click this link and sit back and watch. The whole thing takes about one...

A Lap Of The Blogs

Posted by Preet on Aug 21, 2008 | 4 comments

If you are new to WhereDoesAllMyMoneyGo.com, every Friday I run a post called “A Lap Of The Blogs” which provides links to articles I found interesting and think that others may want to read for themselves. I also include some commentary on what’s going on in my personal life and a weekly “racing video” since my former life was in the auto-racing industry. The name “Lap of the Blogs” is in reference to “A Lap Of The Gods” which is an old video series which chronicled on-board footage of the world’s greatest F1 drivers lapping various racetracks from around the world. I had the pleasure of having dinner with John Chow tonight who is in town for a...

Dimensional Fund Advisors Part VI

Posted by Preet on Aug 20, 2008 | 4 comments

This article is one in a long series which I hope will help explain the ins and outs of DFA – Dimensional Fund Advisors. NOTE: This is my interpretation and explanation only. For the final word, please refer to the DFA Canada Website. To read other parts in this series, please CLICK HERE for a listing of all articles. The Capital Asset Pricing Model (CAPM) As I mentioned before, this series on DFA is going to be long if you really want to understand what they are about. Further, there is some background knowledge that is required before we can truly make sense of what is going on. At the same time, I don’t want to go too far down some tangents so I am going...