KCLarkin

Forex is the most liquid market in the world. The commissions should be lower than stocks. So $10 might be fair for a Big Bank? Instead, banks charge you hundreds of dollars in "spread" for even modest transactions. Then you get to pay the spread again when you sell. And on every dividend payment. But because the brokers hide the "spread" investors don't realize how much wealth is being stolen. At IBKR, it costs $2 for up to $100k. At RBC, it would cost $600*. Each way. So your 1% signing bonus would be wasted just with one round trip trade. * My math could be wrong... but that seems correct based on my experience at Investorline. --- And it is like this from top-to-bottom at the Big Brokerages. The top-line trading commissions are okay but they kill you on any hidden fees (interest paid, margin, etc) It was mentioned up-thread that IBKR is the Costco of brokerages. And that is true in many ways. But most importantly, you just know that whatever fees they charge are fair and reasonable. For any Canadian who trades foreign stocks, IBKR is a no-brainer. If you use any of the other big ones, you absolutely need to use Norbert's Gambit. And then everything is just unnecessarily complicated and annoying. The fact that Norbert's Gambit even exists is proof of how extortionate the spreads are at most brokers. -- END RANT.

Sure. Or just use a broker that isn't trying to rip you off.

Or just use a broker with reasonable foreign exchange fees.

When I ran the math, the cash back was tiny compared to the excess fees charged (vs IBKR). Especially the hidden fees like interest paid, margin interest, and Forex.

If you ignore the 95% of the stuff you don't need, the web interface is pretty simple.

Pretty sure IBKR is the best for a, b, and c, so seems like the obvious choice? Plus you get paid interest on any cash balance. Seems like a no-brainer? I don't find IBKR complicated but there are several different user interfaces. Web interface meets my needs just fine. Disclosure: I'm Canadian so not familiar with Schwab. But definitely prefer IBKR to any of the Canadian brokers I've tried. I also own a bunch of IBKR shares.

First, this method is only valid for CSU (and spins). This is not a general truth for VMS. You seem to be missing what happens to the "R" in ROIC. Try running the numbers again in a situation where the organic revenue growth requires zero additional capital. And 100% of the FCF is "reinvested" in M&A.

FASTGraphs? This is probably my most frequently used tool. It's a good way to quickly get a long-term perspective on price and earnings growth over the long term. And to see if there is a divergence between earnings and price. I think you can use Koyfin and others to generate a similar graph. But FASTGraphs is tuned for this single use-case.

Another option, is to dynamically adjust your withdrawals based on the sequence of returns: https://cornerstonewealthadvisors.com/wp-content/uploads/2014/09/08-06_WebsiteArticle.pdf Rather than retiring with a given lifestyle and hoping your capital lasts. You adjust your lifestyle to guarantee your capital lasts.

This is a bit of a nightmare, especially if you have your assets split between a variety of taxable and tax-free accounts. General advice would be to keep a "cash bucket" of say 1 year worth of expenses and top it up regularly (say quarterly). This keeps you from needing to sell assets in the middle of a drawdown. If I don't want to sell something, I sometimes use IBKR margin for cash management. You should also budget for a safe withdrawal rate. $100k on a $2M portfolio would be extremely risky unless you are willing to slash your spending during bear markets.

One criticism: this is a short list, so it is very hard to make any generalizations. The cutoff is 2.4M%. So there are some very interesting companies that didn’t make the cut. I’d like to see a list with at least the top 100.

I get that this can work when Mr. Market goes crazy. But intellectually, it makes no sense.

With this approach, you are systematically undervaluing the best businesses. Here is an example from my own "mistake" in using this normalized approach: MSC (industrial distributor) YE 2015: Trailing earnings: $3.79 Foward earnings (actual): $3.77 Normalized Earnings: ~$4.00 Cheapest Price 2015: $55 Normalized PE: 13.75 FASTENAL YE 2015: Trailing earnings: $0.89 Foward earnings (actual): $0.87 Normalized Earnings: ~$0.75 Cheapest Price 2015: $19 Normalized PE: 25 On normalized PE, MSM was almost half the price of Fastenal! But which was cheaper? Over the next 9 years, performance was: MSC EPS CAGR: 5.3% Annualized Return: 7.6% FAST EPS CAGR: 10.6% Annualized Return: 17.2% MSC was pretty close to fairly priced in 2015. Fastenal was the real bargain. But that is easy to say in hindsight. How could you have known at the time? There were a couple pretty strong clues: MSC ROE 17% 10yr EPS Growth: 9% FAST ROE 29% 10yr EPS Growth: 12% Fastenal was clearly the better business. If you asked 100 investors in 2015 which was the better business, 100 (including me) would have said Fastenal. But then fools, like me, bought MSC because it was "cheaper".

Trying to be "conservative" is a mistake. You should try to be accurate. How many great and very reasonably priced companies have value investors missed because they were too "conservative". I agree with Gregmal, you should be looking out at least 3-5 years. Trailing earnings are already priced into the stock. Forward earnings are usually too (though Meta is an example of "conservative" investors missing forward earnings by a mile). If you look at only forward earnings, every great company will look expensive. If you use trailing earnings, every value trap will look cheap. Nvidia is a great cautionary tale. In January 2022, TTM (2022) was $4.44. actual fwd (2023) was $3.34. You could have been conservative and estimated 2024 earnings at $3 or $4 or $5. But actual 2024 earnings were $12.96. Sure, you might have missed the drawdown from $300 to $100. But you would also miss the run from $100 to $900. Conservatism comes at a price. --- This also depends on your strategy. If you are buying a cyclical, you should be looking at the past 10-20 years. And then maybe overlay some thoughts on forward earnings. For a real growth stock, you should be looking out 5-10 years.

Agree that it is unlikely a no-brainer and very likely a bad deal. But... This is an insurance product not an investment, so you should be expecting to only get principal back..at best. You are insuring against the "risk" of her living longer than four years (or whatever the insurer's actuarial tables say). Given her age and current principal drawdown, I'm not sure the insurance is necessary. She can probably afford to self-insure. I'd be worried about her burn rate rising if she needs more intensive LTC.