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About Iowa Life

Experiencing life in Iowa.

“Exchange-Traded Funds for Dummies” – Russell Wild

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This has been an interesting book. Wall Street has invented many ways to rip people off over the years, it’s my belief ETFs lesson those chances. Mutual funds have 2 inherent disadvantages. You buy them after the trading day not knowing at what price you are buying them. A lot can happen between noon and 3 pm. Their other downfall is their expense ratio. It averages around 1.6%. An ETF has an expense ratio around .06%. There’s no contest.

Wild’s book as per the title skips the mumbo jumbo of most financial books and cuts to the chase. He runs through all the ETFs that were available in 2007 and the most common investing styles. He covers diversification and portfolio mix of stocks versus bonds. He covers the domestic market as well as the international. Large cap versus small. Sector investing. All the basic need to knows.

The trouble is, the 10 plus years of hindsight we have since the book was written in 2007. In the same way the financial shows on TV do perfectly at predicting yesterday, I get to do the same with Wild’s book. A lot of his advice was based on the investor being forced to pay commissions for the trading he would do. That went out the window several years ago with Vanguard and their commission free trading. That changed everything.

Another glaring example was a sample portfolio he had on page 234 for ‘Richard and Maria’, age 65 and 58. Richard at age 65 is “at” retirement. And the portfolio Wild developed for Richard has him with a 42% exposure to the stock market. In the fall of 2007 the warning signs were there of the coming collapse of the market in 2008. Unless you were comatose then you’ll remember the equity market lost 45% of its value. If anyone saw that train wreck coming, they didn’t tell me.

That means Richard would have lost roughly 1/5th of his portfolio virtually overnight.

That’s a lot. Using the conventional ratio, the maximum market exposure for Richard at age 65 would have been 35%. The global financial crisis lesson of 2008 gives credence to a much more conservative stance going into retirement. The stock market doesn’t always go up! 20/80 isn’t unreasonable. Neither is 10/90 out of the question when approaching age 65. Some even go so far as 0% exposure to the stock market at that age, preferring to keep their money in bonds, CDs and Treasuries.

The important thing to remember is that in the end, no one is looking out for your interests. Their only interest in you is seeing how much money they can get out of you. No one was warning the small investor in 2007/2008 of the coming calamity. No one was warning that once the market hit bottom, that it was definitely not the time to get out. It was actually the time to plow every red cent you had into the market.

What we did learn from 2008 was that unless you were 100% into bonds, everyone got hosed. Small caps, large caps, value, growth, dividend funds, they all took a bath. International, domestic, they all tumbled. We found out from 2008 that with very, very few exceptions, the market moves in unison. You can take your grid, style and sector theories and toss them out the window. There are only 2 things that are going to help the small investor: Time (having 3 or 4 decades to let your money work for you). And buying low. Not buying the peaks. Scaling back when the markets are high, and plowing everything you have into them when they are low. Buy low – sell high.

That’s all it comes down to. You can take all your fancy business channel advice, magazine articles, books, experts and everything else and toss them out the window. Your portfolio isn’t going to go up unless the whole market is going up. And if the market is going down, everything is going down. Buy the dips and don’t get within 10 years of retirement without knowing exactly what you’re doing. Stay away from the dogs like American Century, and stay with the winners like Vanguard and T. Rowe Price.

Stock-Market-Crash-4

This graph illustrates the history of the stock market perfectly. In 1929 everyone was investing in the market (that should make you nervous). They were buying the peak. When it crashed and hit bottom in 1932/33, everyone got out! They had put in all their money at the top, and had nothing to put in at the bottom (when they should have been buying). ’32 and ’33 were buying opportunities! Not to be feared, but embraced! Just like 2008 and 2009. That’s the time to buy, not sell. Those opportunities only come once or twice in a lifetime. If you had listened to the experts, you missed it. In fact some people believe the sharks manipulated events then for the exact purpose of fleecing the flock.

 

Meals from the Heartland

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Being somewhat jaded to bigtime charities who manage to soak up millions of dollars in “administrative” costs, I was pleased to discover Meals from the Heartland . They hold “packaging events” where volunteers put rice and beans into bags and then ship them overseas to hungry people. That really appeals to those of us who believe in KISS (“keeping it simple”).

Hoka lost its focus

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Hoka One One has lost its focus. In the first enumeration of 3 different shoes they made the finest there was. And promptly messed them up. The original Clayton, Clifton and Bondi were truly shoes to behold (the stories say). The one I was able to buy was the original Clayton. It came in at 7.8 ounces and is softer than the Bondi 5 at 12 ounces. The Clifton came in at the same weight and was softer still.

In the Bondi 5 it is firm and responsive. Its supposed to be soft and cushy. They completely forgot what they were supposed to be making. But maybe their mission statement is: “Sell as many shoes as possible at all costs!” And not: “Make the best shoe possible!” 

And that was the problem. With the Clifton being the best shoe ever made, there was no need for the Tracer, the Clayton or the Bondi. It was as light as any of them and softer than all! Hoka had no interest in satisfying the customer, they were about satisfying sales. That one shoe made 3 other models unnecessary. They could have stopped right there as far as neutral road shoes go. Mission accomplished.

Hoka isn’t the only company that goes backward in its shoe development, I saw the same thing with New Balance and the original Zante. In that case it was even more stark. The Zante was the lightest, the softest and the cheapest ($100). I was able to nab that one too on clearance for $60 bucks. New Balance’s 1080, which is supposed to be their “plush” ride, is in reality only their heaviest, and costliest at $150 dollars.

So there we come to it. The problem. The bottom line. You can’t continue to churn profits each quarter just making the lightest, softest, cheapest shoe out there. There’s no marketing buzz in that. You need the “new and improved” model each spring! Even though in reality all they are doing is making shoes harder, heavier and more expensive. 

[The only one who seems to be improving their shoe is Brooks. And that’s only with the Ghost and Glycerin line. The rest of their lineup is screwed up, but the Ghost is a shoe. The 10 is a dramatic improvement over the 6 & 8, and the 11 is supposed to up the game even more.]

(I ran into a review of the original Clifton at Sole Review of original Clifton . You can see from the score box its about the only shoe that hit the highest score for softness. In a men’s size 11 US they said it came in at 7.9 ounces! Unbelievable! The shoe had 3 minor flaws that could have been corrected without adding any weight. The toe box needed to be widened just a smidge. The tongue needed just a bit of padding. The sharp heel bevel needed to be shortened and squared off a hair to make it more stable. That’s it. They would have had the perfect shoe for eternity. Instead they chose to play this “harder and heavier” game. One year its this, the next year its that…)

[On an unrelated note, I was experiencing tight/sore hips and found some great exercises at Runners Connect that really made a difference after just 2 completions (1 day on, 1 day off). Can’t imagine how much better they’ll be after a few weeks.]

Ghost 10 & Bondi 5?

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Did I finally find a shoe rotation with the Brooks and the Hoka? Nobody has wasted more money in the eternal (infernal) shoe search than I have. What an interesting couple of weeks shoe hunting. I think I finally learned my lesson about buying shoes online based on someone else’s review. That is a fool’s errand. Its like most times when someone hands out advice on any subject, the advice is based on their own parameters, not the needs of the one seeking help.

A trip to Scheels shed a lot of light on the subject. The Under Armour HOVR Phantom showed some potential, but walking around the carpeted shoe area tells you nothing about how a shoe is going to run. It just doesn’t have the street cred that the Bondi does, which they were out of. The same went for the Asics Gel Nimbus 20, maybe, but to spend $110 on a maybe? There needs to be an independent and objective scoring system on running shoes. Not based on the reviews of people in the business of selling shoes.

Since they didn’t have the Bondi we came back to JAX in Ames. There was the Golden Shoe, the Bondi 6 for $150! But there was also the Bondi 5 on clearance for $119. Hmm… The 5 felt as good if not better than the 6 and its $31 bucks cheaper so I went with the 5 (I looked it over good to make sure it wasn’t a return). Until you run in a shoe several times you really can’t make much of an assessment. And with the “cheap” shoes at $100 bucks and the pricier ones in the $180 range, its an expensive crapshoot.

Picking them up on their way out at clearance is really the only way to go. By the end of a shoes model year, the verdict is generally in. The price has come down to make room for the new model. Its a win-win. Out of the box on a Sunday morning I ran 90 almost incident free minutes. There was a slight burning sensation on the ball of my right foot. Was it the untested running socks? Was it the shoe? Was it a quirky one-time issue with my foot? We’ll find out over the weeks and months ahead.

Hopefully I’m through searching for the “perfect” shoe. I have a couple that are quite good enough for me. The Bondi comes it at 11.5 ounces for the right shoe, and 12 ounces for the left shoe. Not close to the advertised 10.4 for the Bondi 5. Which is okay with me. What’s a few ounces in a shoe, when you’re carrying an extra 20 pounds around the midsection? The thing I noticed right off was that your foot feels well supported and protected in the Bondi. Not some gimmicky thing with gel in the heel or a sock like elastic around the ankle.

With any luck next year I’ll be able to pick up the Ghost 11 and the Bondi 6 on clearance and the manufacturers won’t have mucked them up too bad. Its crazy but for me the Ghost 10 is a softer shoe than the pricier Bondi. The Bondi ride isn’t harsh at all, but its nowhere nears the fabled “running on marshmallows” softness some reviewers talk of. The Bondi might have a smoother gait transition (meta-rocker). One thing I noticed immediately in the store is that the Bondi 6 is dramatically more breathable than the 5.

Another interesting aspect of the two shoes is an aspect brought up on a YouTube video by a Connecticut College cross country coach. He was saying that it is best for your feet to rotate between 2 or 3 pairs of shoes during the week as your feet/legs will benefit from the differences. Its all about avoiding repetitive stress injuries by mixing it up for your body. Differences in cushion, arch support and heel to toe drop are among those aspects. He said mixing it up in a drop range of 4 – 12 mm is good. In this case the Hoka has a 4 mm drop, the Brooks a 12 mm.

[The Bondi 5 is a strange shoe. After a week of running in it I’ve decided its not hard, its not soft, it just is. As I noted above its weight coming in at 12 ounces is actually heavier than my leather Hoka Bondi Walker! (The leather walker weighs just 10.9 ounces) How the heck is that possible?? The alleged “softness” of the Bondi is all based on a sustained marketing focus, not reality.]

Also of note is the article on socks in the August Runner’s World. Unbeknownst to me was the premise that you do not want cotton socks for running. They just hold the sweat and keep your foot damp. What you want is the polyester in socks like Balega and Feetures that “wick” the moisture away from your skin. And trying out these new socks this past week I tend to agree. I think I definitely like the thinner socks here in the summer, and will relegate the thicker socks for cool weather. Walmart has less expensive versions that seem to do well as opposed to spending $15 a pair for the name brands.

Who can you trust? Running with wolves…

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Never again! You drop $150 on a couple of pairs of running shoes (last years models on clearance) and find out after the first run they are crap. It wouldn’t be so bad, but you’ve been doing it off and on for 5 years. Ghost 8, Kinvara 6, 1080v6…. the list goes on and on. “Well dummy, you need to do a little research before you buy!” Good God, do you have any idea how many magazine articles I read and how many YouTube reviews I’ve watched?? The bottom line is most running shoes cost between $120 to $180, and they are selling us crap!

Runner’s World ironically just had a list of 6 shoes that were “plush rides” (read cushioned). I know for a fact the New Balance 1080 is at best medium soft like Sole Review said. I bought it! I ran in it! I know! Its not a soft shoe its a joke! If Runner’s World think its a soft shoe they either are lying or need to get in a new line of work! Their original Zante, a lightweight shoe, is softer then the “plush” 1080! Its insane! Never again. I will never buy another Saucony or New Balance. Brooks? Maybe… you’ve stiffed me on so many shoes…. Here’s a list of the absolute dogs:

  1. Brooks Ghost 8
  2. Brooks Glycerin 11
  3. Saucony Kinvara 6
  4. Brooks Pure Flow 6
  5. New Balance 1080v6
  6. New Balance 1080v7
  7. Adidas Supernova M
  8. Hoka One One Bondi 5

Runner’s World reviews are worthless. They push a certain group of manufacturers and leave out the most obvious ones (in the above mentioned list of plush shoes they don’t include a single Hoka). On YouTube there’s a guy called ‘Ginger Runner’ (Ethan Newbury I believe), who seemed to have a fact based point system, but cost me a hundred bucks when he recommended a brick called the Kinvara 6! Fellow YouTuber Jamison Michael isn’t bad, but you have to read between the lines. He’s evidently getting free shoes too and doesn’t want to be overly honest.

One of the most glaring examples is the toe box on the Clifton 5 and the Bondi 6. Watching the You Tube reviews you’ll hear the reviewer say, “For the longtime buyer of this shoe you’ll be glad to know Hoka widened the toe box…” After 6 years they get the toe box right?? We pay $120 to $180 for most of these running shoes, and it takes them 6 years to get the toe box right?? Saucony is one of the worst for this, with their narrow little torture chambers.

Its too expensive to run with these wolves, they will eat you alive! There’s got to be a cheaper way to find a good shoe.    Sole Review

You gotta wonder what they’re thinking sometimes…

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Brooks Ghost 11

Brooks finally gets it right with the Ghost 10, and what do they do? Muck it up with the Ghost 11! After trying the 6 and 8, the 10 seemed like the first truly cushioned Ghost. A great shoe to run in. Then I read they only continue their DNA BioMoGO Loft foam up to the mid-foot! The forefoot is firmer than the 10! They run into a problem because their Glycerin is their premier neutral cushioned running shoe at $150, so they have to keep it ahead of the Ghost at $120. So make it’s foam a little thicker and call it good. Don’t stop the Loft midway through the shoe!

Hoka One One (it goes back and forth from “oh nay oh nay” to “1 1”) comes out with the Bondi 6 and doesn’t put it in stores! Oh they will eventually, but for now they have some marketing strategy where you can only buy it online from their site. I don’t want to tell them their business, but you gotta think they’d sell more shoes if they put them in stores… me, I’m trying to help the brick and mortar.

New Balance wants me to buy the 1080v8 at $150 bucks. Yeah? The v6 was a dud. I’ll have to think long and hard on that one… (Forget it, the v7 is a hunk a junk, no way I’m buying the v8)

The other thing I can’t figure out is what is 1 company doing with 30 or 40 models of shoes? You need a light, medium and cushy shoe. You need it in road and trail. And you need it for a neutral foot and a support foot. That’s 12 shoes. Not 40. And once you find one that works don’t muck it up! Although I was never lucky enough to try it, from what I hear the original Clifton was the shoe to end all shoes! So very light, so very cushioned, they had to change it and never make it again!


New Balance 1080v8

[One of the best shoe review sites I’ve found is Sole Review . Unlike Runner’s World and some others, these guys don’t worry about offending the shoe manufacturers.]

 

I coulda been somebody, I coulda been a contender!

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Marlon Brando – ‘On the Waterfront’

That Marlon, he was alright. Took me awhile but I really came to appreciate him. He popped into my mind when I was running past a bus stop the other day. The 19 or 20 year old guy there didn’t have his head buried in a device and said “Hi” as I went by. Shocked and stunned I nevertheless returned the greeting. He was a little on the pudgy side and I so wished I could have remarked, “I wish I had taken up running when I was your age!” (No that’s not an insult, I’m a little on the pudgy side too.)

Oh to get 40 years back. What if my 60 year old self was able to talk to me then? Likely not a chance in hell I would listen. 20 year olds without exception know everything. What if instead of hanging out in bars and having my money go up in cigarette smoke, I had taken the healthy path? What if I had taken up running 40 years ago instead of 5? This morning I ran for 90 minutes. Not much for a lot of people, a milestone for someone like me.

What if. How many marathons would I have under me belt by now? What would my body fat percentage be? How great would my virginal lungs feel? How much would my heart be thanking me? What could I have done with the boundless energy of a twenty something? You can’t get it back though, can you? Nope. Dear 20 year old: Do it now.