vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"a link to this article grabbed my Interest as I was browsing the site for something totally unrelated to finance. Your question is not silly - I'm not a financial expert, but I've been in your situation several times with Carmax Auto Finance (CAF) in particular. A lot of people probably thought you don't understand how financing works - but your Car Loan set up is EXACTLY how CAF Financing works, which I've used several times. Just some background info to anyone else reading this - unlike most other Simple Interest Car Financing, with CAF, they calculate per-diem based on your principal balance, and recalculate it every time you make a payment, regardless of when your actual due date was. But here's what makes CAF financing particularly fair - when you do make a payment, your per-diem since your last payment accrued X dollars, and that's your interest portion that is subtracted first from your payment (and obviously per-diem goes down faster the more you pay in a payment), and then EVerything else, including Any extra payments you make - goes to Principal. You do not have to specify that the extra payment(S) are principal only. If your payment amount per month is $500 and you give them 11 payments of $500 - the first $500 will have a small portion go to interest accrued since the last payment - depending on the per-diem that was recalculated, and then EVERYTHING ELSE goes to principal and STILL PUSHES YOUR NEXT DUE DATE (I prefer to break up extra payments as precisely the amount due per month, so that my intention is clear - pay the extra as a payment for the next month, and the one after that, etc, and keep pushing my next due date). That last point of pushing your next due date is the key - not all car financing companies do that. A lot of them will let you pay to principal yes, but you're still due next month. With CAF, you can have your cake, and eat it too. I worked for them in College - I know their financing system in and out, and I've always financed with them for that very reason. So, back to the question - should you keep the loan alive, albeit for a small amount. My unprofessional answer is yes!
This is of course using 'new math'.  Namely, if I lend you $100 and you keep it for a month, I've lent you $100.  In fact, if I loan you $100 for a year I've loaned you $100.  But if I lend you $100 overnight, you pay me back in the morning, I lend you $100 overnight, you pay me back in the morning and we repeat that for a month, I've supposedly lent you $3,000.    That's some interesting math for sure.
"There are a number of ways to measure such things and they are generally called ""sentiment indicators"".  The ones that I have seen ""work"", in the sense that they show relatively high readings near market tops and relatively low readings near market bottoms.  The problem is that there are no thresholds that work consistently.  For example, at one market top a sentiment indicator may read 62.  At the next market top that same indicator might read 55.  So what threshold do you use next time?  Maybe the top will come at 53, or maybe it will not come until 65. There was a time when I could have listed examples for you with the names of the indicators and what they signaled and when.  But I gave up on such things years ago after seeing such wide variation.  I have been at this a long time (30+ years), and I have not found anything that works as well as we would like at identifying a top in real time.  The best I have found (although it does give false signals) is a drop in price coupled with a bearish divergence in breadth.  The latter is described in ""Stan Weinstein's Secrets For Profiting in Bull and Bear Markets"". Market bottoms are a little less difficult to identify in real time.  One thing I would suggest if you think that there is some way to get a significant edge in investing, is to look at the results of Mark Hulbert's monitoring of newsletters.  Virtually all of them rise and fall with the market and almost none are able to beat buy and hold of the Wilshire 5000 over the long term."
This is a useful metric in that it gives you a trust factor on how reliable the beta is for future expectations   It is akin to velocity and acceleration  First  and second order derivatives of distance / time.  Erratic acceleration implies the velocity is less trustworthy  Same idea for beta
That is an opinion.  I don't think so.  Here are some differences: If you use credit responsibly and take the time to make sure the reporting agencies are being accurate, a good report can benefit you.  So that isn't like a criminal record. What is also important to know is that in the United States, a credit report is about you, not for you.  You are the product being sold.  This is, in my opinion, and unfortunate situation but it is what it is.  You will more than likely benefit for keeping a good report, even if you never use credit. There are many credit scores that can be calculated from your report; the score is just a number used to compare and evaluate you on a common set of criteria. If you think about it, that doesn't make sense.  The score is a reflection of how you use credit.  Having and using credit is a commitment.  Your are committing to the lender that you will repay them as agreed. Your choice is who you decide to make agreements with.  I personally find the business practices of my local credit union to be more palatable than the business practices of the national bank I was with.  I chose to use credit provided by the credit union rather than by the bank.  I am careful about where I take auto loans from, and to what extent I can control it, where I take home loans from. Since it is absolutely a commitment, you are personally responsible for making sure that you like who you are making commitments with.
Is it just -34*4.58= -$155.72 for CCC and -11*0.41= -$4.51 for DDD? Yes it needs to be recorded as negative because at some point in time, the investor will have to spend money to buy these shares [cover the short sell and return the borrowed shares]. Whether the investor made profit or loss will not be reflected as you are only reflecting the current share inventory.
"I'm not the same guy who you were replying to. I don't know why you're being so defensive. I just recognized you from the other thread, saw this, and thought I'd ask as that wouldn't be my expectation. I don't work in wealth management, so I was hoping to learn something new. I know people in WM with nothing near a physics degree, which is why I question the ""B could not have occurred"" statement."
The stable equilibrium is probably either just before or just after the threshold where the settlement pays off, depending on how reliably arbitrageurs can predict the movement of GOOG and GOOGL. If I can buy a given stock for X but know that it's worth X+1, then I'm willing to pay up to X+1. In the google case, the GOOG stock is worth X+S, where S is an uncertain settlement payment that could be zero or could be substantial. We have six tiers of S (counting zero payoff), so that the price is likely to follow a pattern from X to X+S5 to X-S5+S4 to X-S4+S3, and climbing the tier ladder until it lands in the frontier between X+S1 and X+S0. Every time it jumps into X+S1, people should be willing to pay that new amount for GOOG, so the price moves out of payoff range and into X+S0, where people will only pay X. I'm actually simplifying here, since technically this is all based on future expectations. So the actual price you'd pay is expressed thus: {resale value of GOOG before settlement payoff = X} + ( {expectation that settlement payoff will pay 100% of difference = S5} * {expected nominal difference between GOOG and GOOGL = D} ) + ({S4} * {80% D}) + ({S3} * {60% D}) + ({S2} * {40% D}) + ({S1} * {20% D}) + ({S0} * {0% D}) = {price willing to pay for Class C GOOG = P} Plus you'd technically have to present value the whole thing for the time horizon, since the payoff is in a year. Note that I've shunted any voting/dividend analysis into X. It's reasonable to thing that S5, S4, S3, and maybe S2 are nearly zero, given the open arbitrage opportunity. And we know that S0 times 0% of D is zero.
So I did some queries on Google Scholar, and the term of art academics seem to use is target date fund. I notice divided opinions among academics on the matter. W. Pfau gave a nice set of citations of papers with which he disagrees, so I'll start with them. In 1969, Paul Sameulson published the paper Lifetime Portfolio Selection By Dynamic Stochaistic Programming, which found that there's no mathematical foundation for an age based risk tolerance. There seems to be a fundamental quibble relating to present value of future wages; if they are stable and uncorrelated with the market, one analysis suggests the optimal lifecycle investment should start at roughly 300 percent of your portfolio in stocks (via crazy borrowing). Other people point out that if your wages are correlated with stock returns, allocations to stock as low as 20 percent might be optimal. So theory isn't helping much. Perhaps with the advent of computers we can find some kind of empirical data. Robert Shiller authored a study on lifecycle funds when they were proposed for personal Social Security accounts. Lifecycle strategies fare poorly in his historical simulation: Moreover, with these life cycle portfolios, relatively little is contributed when the allocation to stocks is high, since earnings are relatively low in the younger years. Workers contribute only a little to stocks, and do not enjoy a strong effect of compounding, since the proceeds of the early investments are taken out of the stock market as time goes on. Basu and Drew follow up on that assertion with a set of lifecycle strategies and their contrarian counterparts: whereas a the lifecycle plan starts high stock exposure and trails off near retirement, the contrarian ones will invest in bonds and cash early in life and move to stocks after a few years. They show that contrarian strategies have higher average returns, even at the low 25th percentile of returns. It's only at the bottom 5 or 10 percent where this is reversed. One problem with these empirical studies is isolating the effect of the glide path from rebalancing. It could be that a simple fixed allocation works plenty fine, and that selling winners and doubling down on losers is the fundamental driver of returns.
No worries. So I suppose it depends on your current excel experience. I never had a ton which is why I picked it up. I'm almost through section 4 of the course, and learning conditional formatting, dynamic names in cells, and other shortcuts. I haven't touched anything finance related necessarily. Section 5 looks to be where the advanced formula lessons start, and Section starts P&amp;L construction. As someone with limited experience beforehand it's been great
VaR does not capture overall risk, it allows you to say a statement, based on our model, K% of the time, losses will not exceed X.  The problem is,   1. How accurate is the statement out of sample?  2. What is the marginal value of this number? Are the choices I make better or worse?  3. Even with a 99.999% confidence level what is the cost to the organization if a decision is made when the model is wrong?  Personally when running multiple strategies, you always need to factor in model risk in your asset allocation/trading, i.e. either shut down or reduce exposure when assumptions are violated or run something else, for example when correlations between strategies increases, it is logical to downsize exposure to those strategies as the risk factor to equity has increased.  1. in the grand context of a bank/financial institution, if the VaR is wrong we can bankrupt or negative, so we may want to diversify revenue streams by avoiding that risk, for example correlations increase across asset classes.  2. Sizing is a key problem for banks, as the question is does model error across various platforms (FI, EQ, FICC, Transactions etc), happen at the same time?
“CLOs have been an absolute home run,” said Mr. Ahluwalia, though he added such chunky returns aren’t repeatable. Analysts say CLOs got beaten down last year following a series of troubles in the underlying loan market, including distress in the energy sector. Some analysts think the strong rally in CLO tranches since then should give investors pause; others think the market has further to run. Renaud Champion, head of credit strategies at Paris-based hedge fund La Française Investment Solutions, likes AAA-rated CLO tranches but with a twist: leverage. Mr. Champion says he buys senior European CLO tranches and borrows money against them to increase the size of his position between five and 10 times. That can amplify gains—and losses—significantly. “The difference between now and a year ago is the availability of leverage,” he said. Bankers say only a small proportion of CLO buyers use leverage and emphasize that trades are subject to daily margin calls. That means investors have to post cash to cover mark-to-market losses on a position, which in turn limits how much they are willing to borrow. “The leverage in the system today is a fraction compared to precrisis,” said J.P. Morgan’s Mr. Ahluwalia. Write to Christopher Whittall at christopher.whittall@wsj.com Appeared in the October 23, 2017, print edition as 'Crisis-Era Securities Regain Investors’ Favor.'
"Past work, while certainly an important component, is not a *necessary* component.  As otherwiseyep stated before, it is credibility that is important. A farmer can promise a million bushels, and yes, it certainly could be fantasy; but his ""fantastical"" promise nevertheless has value if the other parties involved believes his promise.   Actual production has little relevance when it comes to worth, at least until someone actually tries to collect on said promises. This would create problems in a small, closed world, where the breaking of a promise would have huge ramifications on the economy as a whole; but, in the real world, broken promises are countered by the their naturally occurring opposite: under-valued promises.   The upset of this balance is, in fact, the essence of every financial crisis/boom. The vastness of the world economy means that money can never be truly representative of actual production.   Regarding the complaints about the high cost of higher education; the complaints are that the price of a degree is not indicative of its true worth. The widespread availability of a college education is one of the main factors as to why people believe college educations are too expensive. If there was an actually perceived limited supply of seats at schools, as you suggest, then the general public would value the seats more, and maybe wouldn't complain about the costs as much."
The Government sponsored website will give you one free report from each of the 3 bureaus every year. No subscription or anything of the sort and no ding (that I've seen). Most people check it 3 times, every 4 months. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm
I've spent enough time researching this question where I feel  comfortable enough providing an answer.  I'll start with the high level fundamentals and work my way down to the specific question that I had. So point #5 is really the starting point for my answer. We want to find companies that are investing their money.  A good company should be reinvesting most of its excess assets so that it can make more money off of them. If a company has too much working capital, then it is not being efficiently reinvested.  That explains why excess working capital can have a negative impact on Return on Capital. But what about the fact that current liabilities in excess of current assets has a positive impact on the Return on Capital calculation?  That is a problem, period.  If current liabilities exceed current assets then the company may have a hard time meeting their short term financial obligations. This could mean borrowing more money, or it could mean something worse - like bankruptcy.  If the company borrows money, then it will have to repay it in the future at higher costs.  This approach could be fine if the company can invest money at a rate of return exceeding the cost of their debt, but to favor debt in the Return on Capital calculation is wrong. That scenario would skew the metric. The company has to overcome this debt. Anyways, this is my understanding, as the amateur investor. My credibility is not even comparable to Greenblatt's credibility, so I have no business calling any part of his calculation wrong. But, in defense of my explanation, Greenblatt doesn't get into these gritty details so I don't know that he allowed current liabilities in excess of current assets to have a positive impact on his Return on Capital calculation.
If you're able to pop this data into excel you can quickly calculate the solution. Every one of these problems boils down to 'Interest Rate', 'Term', 'Payment', 'Present Value', and 'Future Value' (FV will typically be zero). Excel has a formula to calculate any of these components based off of the other inputs.   In this case, the given information is: Interest Rate: 7.56%  Term: 36 Months Monthly PMT: $350 Present Value: ?   You can use the =PV() formula and input the other known values. One caveat is that you'll need to adjust the interest rate to account for the monthly compounding. So, the formula would be =PV(.0063,36,-350). This gives a result of $11,242, which is the amount you'd be able to borrow. [All of these can also be solved on the TI-84+, but I don't have my old calculator on me to walk through the steps]  To calculate the total interest paid, you would then find out how much you'll be paying over the life of the loan. If your monthly payment is $350 for 36 months, the total amount you'd pay is $12,600 ($350*36). Subtract the $11,242 calculated in step one, and you are left with $1,358 worth of interest.   Hope that makes sense. Let me know if you want me to go over any of the steps in more detail. As a former finance student, I would highly recommend locking down the TVM functions, as they will pop up quite often throughout your schooling/career.   Best of luck!
Standard portfolio management (PM) theory is only working within so called confidence intervals up to 99% - everything else just wouldn't be practical. In other words, if there is not at least a 1% probability a certain outcome will happen, we'll ignore it. In practice, most analysts take even smaller confidence intervals, so they ignore even more. That's the reason, though, why no object that would fall within the realms of this outer limit is an investment in terms of the PM theory. Or at least not a recommendable one. Having said all that, it still might improve your position if you add a lottery ticket to the mix. The Black Swan theory specifically does not only apply to the risk side of things, but also on the chance side. So, while standard PM theory would not consider the lottery ticket an investment, thus not accept it into the asset allocation, the Black Swan theory would appreciate the fact that there is minimal chance of huge success. Still, in terms of valuation, it follows the PM theory. The lottery ticket, while it could be part of some ""investment balance sheet"", would have to be written off to 0 immediately and no expected value would be attached to it. Consequently, such an investment or gamble only makes sense if your other, safe investments give you so much income that you can easily afford it really without having to give up anything else in your life. In other words, you have to consider it money thrown out of the window. So, while from a psychological perspective it makes sense that especially poorer people will buy a lottery ticket, as Eric very well explained, it is actually the wealthier who should consider doing so. If anyone. :)"
You are calculating using different methods.  For example, to obtain 6.45% 6.44647 This is effectively the same as the money-weighted return calculation. In arriving at 6.06% you have calculated the true time-weighted return. Both answers are right, but they are different measures. To use time-weighted returns you need to know the value of the investment at the time of every cash flow. Modified Dietz uses a simple approximation to avoid that requirement.  Money-weighted return gives results that are more accurate for back calculating than Modified Dietz, (also without requiring interim valuations), but the calculation is more complex. See How to Calculate your Portfolio's Rate of Return for a decent reference.
How's it misleading if it's a direct quote? That's quite literally what he said.   And a seven year bubble is not so unusual; bubbles can persist for long periods if there's no obvious catalyst for them to pop/deflate. Calling something a bubble does not equal calling when it will end.
EDIT: After reading one of the comments on the original question, I realized that there is a much more intuitive way to think about this. If you look at it as a standard PV calculation and hold each of the cashflows constant. Really what's happening is that because of inflation the discount rate isn't the full value of the interest rate. Really the discount rate is only the portion of the interest rate above the inflation rate. Hence in the standard perpetuity PV equation PV = A / r r becomes the interest rate less the inflation rate which gives you PV = A / (i - g). That seems like a much better way to get to the answer than all the machinations I was originally trying. Original Answer: I think I finally figured this out. The general term for this type of system in which the payments increase over time is a gradient series annuity. In this specific example since the payment is increasing by a percentage each period (not a constant rate) this would be considered a geometric gradient series. According to this link the formula for the present value of a geometric gradient series of payments is: Where P is the present value of this series of cashflows.   A_1 is the initial payment for period 1 (i.e. the amount you want to withdraw adjusted for inflation).   g is the gradient or growth rate of the periodic payment (in this case this is the inflation rate)   i is the interest rate   n is the number of payments This is almost exactly what I was looking for in my original question. The only problem is this is for a fixed amount of time (i.e. n periods). In order to figure out the formula for a perpetuity we need to find the limit of the right side of this equation as the number of periods (n) approaches infinity. Luckily in this equation n is already well isolated to a single term: (1 + g)^n/(1 + i)^-n}. And since we know that the interest rate, i, has to be greater than the inflation rate, g, the limit of that factor is 0. So after replacing that term with 0 our equation simplifies to the following: Note: I don't do this stuff for a living and honestly don't have a fantastic finance IQ. It's been a while since I've done any calculus or even this much algebra so I may have made an error in the math.
"To keep it simple, let's say that A shares trade at 500 on average between April 2nd 2014 and April 1st 2015 (one year anniversary), then if C shares trade on average: The payment will be made either in cash or in shares within 90 days. The difficulties come from the fact that the formula is based on an average price over a year, which is not directly tradable, and that the spread is only covered between 1% and 5%. In practice, it is unlikely that the market will attribute a large premium to voting shares considering that Page&Brin keep the majority and any discount of Cs vs As above 2-3% (to include cost of trading + borrowing) will probably trigger some arbitrage which will prevent it to extend too much. But there is no guarantee. FYI here is what the spread has looked like since April 3rd:  * details in the section called ""Class C Settlement Agreement"" in the S-3 filing"