Comments on: Invest to hedge for inflation http://www.1stMillionAt33.com/2006/04/invest-to-hedge-for-inflation/ A site to share my tips, tools, and humble thoughts on the journey to wealth Sun, 02 Oct 2011 19:26:45 +0000 hourly 1 http://wordpress.org/?v=abc By: frugal http://www.1stMillionAt33.com/2006/04/invest-to-hedge-for-inflation/comment-page-1/#comment-131 frugal Thu, 11 May 2006 18:57:23 +0000 http://www.1stmillionat33.com/2006/04/invest-to-hedge-for-inflation/#comment-131 Thanks for your warning. I'm going to remove his link. I just started reading his stuffs, and it seems to make sense. But historical record is the best for judging one's performance. Thanks for your warning. I’m going to remove his link. I just started reading his stuffs, and it seems to make sense. But historical record is the best for judging one’s performance.

]]> By: Rags 2 Riches http://www.1stMillionAt33.com/2006/04/invest-to-hedge-for-inflation/comment-page-1/#comment-115 Rags 2 Riches Thu, 11 May 2006 07:47:03 +0000 http://www.1stmillionat33.com/2006/04/invest-to-hedge-for-inflation/#comment-115 I would be very careful of Jim Jubak's advice. I'm surprised he wasn't fired. Most of his recommendations lost 90+% during the last mini-recession. He doesn't invest real money, or he would have been broke long ago, haha... I would be very careful of Jim Jubak’s advice. I’m surprised he wasn’t fired. Most of his recommendations lost 90+% during the last mini-recession. He doesn’t invest real money, or he would have been broke long ago, haha…

]]> By: frugal http://www.1stMillionAt33.com/2006/04/invest-to-hedge-for-inflation/comment-page-1/#comment-37 frugal Tue, 25 Apr 2006 20:59:17 +0000 http://www.1stmillionat33.com/2006/04/invest-to-hedge-for-inflation/#comment-37 I don't subscribe to Efficient Market Hypothesis fully either. I'm only borrowing the ideas derived from it, for indexing in a similar fashion for investing to hedge for inflation. The debate of whether Efficient Market Hypothesis is correct is not the focus of this post. But if you invest in any of the market index fund, then your money, if not your mind, is in that camp. To answer your question from my understanding, cisco is priced fairly now, and was priced fairly back in 2000 too. In the Efficient Market Hypothesis, there is really no place for future or past. It's always NOW. Essentially the current market capitalization is the current opinion of all participants who have all available news and information. And yes, it's completely useless for valuation. I don’t subscribe to Efficient Market Hypothesis fully either. I’m only borrowing the ideas derived from it, for indexing in a similar fashion for investing to hedge for inflation. The debate of whether Efficient Market Hypothesis is correct is not the focus of this post. But if you invest in any of the market index fund, then your money, if not your mind, is in that camp. To answer your question from my understanding, cisco is priced fairly now, and was priced fairly back in 2000 too. In the Efficient Market Hypothesis, there is really no place for future or past. It’s always NOW. Essentially the current market capitalization is the current opinion of all participants who have all available news and information. And yes, it’s completely useless for valuation.

]]> By: Jim http://www.1stMillionAt33.com/2006/04/invest-to-hedge-for-inflation/comment-page-1/#comment-32 Jim Tue, 25 Apr 2006 16:09:46 +0000 http://www.1stmillionat33.com/2006/04/invest-to-hedge-for-inflation/#comment-32 I disagree with what you wrote about the Efficient Market Theory. If what you wrote is correct and "stocks are always fairly priced," how does one explain the occurrence of market crashes? I don't see how Cisco could have fairly priced at $69/share with a trailing P/E ratio of over 100 in April 2000 and currrently fairly priced at about $20/share with a trailing P/E ratio of about 23 today. The Efficient Market Theory may tell us that, on average, stocks are fairly priced. However, as a theory of current valuations, it isn't very helpful. I disagree with what you wrote about the Efficient Market Theory. If what you wrote is correct and “stocks are always fairly priced,” how does one explain the occurrence of market crashes? I don’t see how Cisco could have fairly priced at $69/share with a trailing P/E ratio of over 100 in April 2000 and currrently fairly priced at about $20/share with a trailing P/E ratio of about 23 today.

The Efficient Market Theory may tell us that, on average, stocks are fairly priced. However, as a theory of current valuations, it isn’t very helpful.

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