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Dave Nadig
3:13
Some stats suggest this is in fact a kind of "factor" but mostly, it makes people feel comfortable that their buying old school blue chips.
SO really, ask what your trying to get -- regular checks? out performance? a smoother ride?  And base your decision on that, not just the % yield number.
M. Darcy
3:13
Bill Gates said losing the mobile race to Android was his greatest mistake. Is there an investing mistake, or a “guru call” you’ve made that you’d say is your greatest? Conversely, what do you think was your “best” financial decision?
Dave Nadig
3:14
Oh man. I guess career wise: I left BGI to become an active mutual fund manager right at the top of the tech boom.
While that was a very entertaining time to be alive, it was a disasterous decision both to jump the fence to stock picking, and to have the hubris that went along with it.
3:15
I definitely got my fingers burned.  But hey, those things make us who we are.  It was valuable.  I learned a ton.
As for best decision?  Forgetting my portfolio.  I commented on this in my Jack Bogle Eulogy.
"Sometimes boring and forgetful is the best thing you can be."
in his words.
Steffen
3:16
Hi Dave. How are the global index-tracking products rebalanced? The indexes just divide the closing value of the index times weight by the closing share price, but this cannot be done in real life if the different time zones are involved. Thank you!
Dave Nadig
3:17
Super great question.  The short answer is: the index companies know this, and they tend to roll the index changes to the close.  What I mean is, if the re-balance calls for getting rid of Apple and adding Toyota, they don't dictate the how, they dictate the end state.
So for example, when the value is struck (say, at 4PM Eastern, which is pretty standard) tomorrow, the index will have no apple and will ahve toyota.  This move gets broadcast.  So the funds KNOW thats the end state.
3:18
so they know, yesterday, that they need to buy a lot of toyota.  So they buy what they need as close to YESTERDAYS closing price as they can.
THey will also sell the apple at yesterdays US close, if the can.
3:19
Not sure if I can really communicate it without a white board. but in short, they focus on the known end state: today i have to have no apple and a lot of toyota when I strike my NAV.
Owen McPherson
3:19
Lately I’ve seen headlines that “value investing” is dead. Also, that it might be making a comeback. Which is it?
Dave Nadig
3:19
Hah!  Well, if you can get it precisely right, you should run a hedge fund!
3:20
The biggest argument for Value is Dead is one I don't often hear.  We live in a radically different information environment than we did when Ben Graham was born.
I mean he was literally born in the 1800s
One of (not all) the ideas behind value investing is an information mismatch.  The value investor finds prices that are "wrong" because they do work to understand true intrisnic value that public documents obscure.
3:21
I don't believe those kind of information edges are really productive anymore.  Information is too available, and moves WAY to fast to generate a persistent edge by simply looking harder than the guy next to you.
3:22
That said, there are different kinds of Value well beyond classic Ben Graham.  Research Affiliates would suggest that buying "cheap" factors, for instance, puts mean reversion in your pocket.
That's a very different kind of value, of course.
But in general, I think traditional, work the balance sheet value isn't that useful a methodology any more.  I think you need something beyond that.
whether thats incorporating momentum, screaning for quality signals, etc... something.
Beau
3:22
How is it possible Vanguard doesn’t have even one ETF in the top performing ones so far in 2019?
Dave Nadig
3:23
Simple: the highest performing ETF on ANY day, week or month will be something that has enormous leverage.
The recent BB article your referencing:
3:24
Shouldn't be seen as an indictment of vanguard. If anything, it's a celebration of how boring Vanguard's product development process is.  They only launch products they think investors actually need in the tool box.  Investors. Not day traders.
It's really that simple.
3:25
Also: since vanguard is mostly (not totally) passive in their products, you wouldn't expect them to somehow be better than everyone over any period of time.  YOu might expect them to be better than other PASSIVE products in a given segment, because they run them well and they're cheap
but I'd actually be shocked to see them on some short-term performance leaderboard.
Chandra
3:25
Exactly how does “trend following” work regarding ETFs?
Dave Nadig
3:26
So trend following is a word that gets kicked around a lot, and means different things to different people.
Most often, this refers to a specific kind of managed futures strategy, which there is at least one ETF for.
3:27
However, the phrase also gets used for just raw momentum investing:  buy whats working, sell or short what's not.
THere are a lot of variations on that, from "flipper" products that go in and out of treasuries and stocks based on signals, to just raw momentum ETFs that buy stocks with consistent recent historical price moves.
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