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Bogleheads

April 17th, 2010 at 12:58 pm

There is a small, local chapter of Bogleheads that formed not too long ago. I always thought that perhaps I should check it out one of these days, but my schedule never seems to quite work out.

That is until today.

Although I've been told that there are many more members than this, today's group consisted of only 5 guys, including myself. I don't mind the size though, because the conversation was very interesting to say the least.

For example, we met at one of the chapter head's house, who turned out to be the economics professor of a nearby state university. He was writing a paper on Islamic investing, and decided to share some of that finding with us.

He didn't go into the more esoteric details, but he did say that, due to cultural/religious differences, the Islamic funds had to make sure that they were not investing into highly leveraged companies. The result was a list of companies that were either net cash positive, or at least carried very little debt. He then ran some backtesting on these companies and found that they are high quality companies that, at least in the short-term, out-performed the market.

Let me just say that it's very interesting to hear one of the head of the local Boglehead chapters talking about out-performing the market. Big Grin But some of the screening parameters isn't too much different from what someone like Warren Buffett would use for himself.

Another guy did an in-depth analysis about all the stuff that's involved in basically becoming a landlord. Although I have a copy of his spreadsheet, I honestly can't tell you what I'm looking at Big Grin except that this is perhaps the most sophisticated analysis of what is involved in physical real estate investing. It's way beyond what's normally found on the internet.

However, his basic conclusion is that, when it's all said and done, your Rate of Return in net worth, between 5 to 20 years, is about 6.3% to 6.7% per year. So, the question to ask ourself is whether this RoR is worth the time and effort involved. Some people may enjoy the process and say yes. Some may say no.

Yet another guy came up with a custom spreadsheet that automatically downloads and updates all your funds, crunches all the numbers for you, and spits out a color-coordinated % relative to your asset allocation. So, if your asset allocation is fine, it's green. If it's around 3% off, it comes back yellow, and if it's 5% or more, it comes back red.

In other words, he wants to actively rebalance his portfolio on his own, but doing that meant having to constantly crunch the same set of numbers over and over again. His spreadsheet does all that for him and he only needs to look at which funds are in yellow and red to figure out what he needs to do.

There were a lot of other stuff that I thought was very interesting, but those were the major highlights.

Normally, spending a few hours with a bunch of guys on a Saturday that doesn't involve laser tag doesn't seem like my idea of fun, but I have to say, I was thoroughly engaged. I came back home with a lot more resources to read and look into.

In fact, I liked it so much that I just might come back again!

4 Responses to “Bogleheads”

  1. KellyB Says:

    Wow, that is interesting. Looks like you just found yourself a very intelligent and proactive little group there! Update us on other meetings if you go.

  2. Petunia Says:

    Sounds very interesting!

  3. baselle Says:

    I'll have to check and see if there's a Boglehead group near me.

  4. frugaltexan75 Says:

    I'm not quite sure what exactly a Boglehead is, but I'm glad you found a group of like minded people to hang out with. Smile

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