TSP board to limit interfund transfers

[James48843]

James,

I also have another question. When using the sample letter to one's congressman and senators, should we email the letter or send the letter certified or should we do both? I'm thinking we should do both but maybe that recommendation should also be included in the instructions for consistency.

Oreo

Congressmen have always told me that a hand-written letter is worth 10 type-written letters, a typewritten letter is worth 100 faxes, and 100 faxes is worth 1,000 e-mails.

Make it a hand-written letter, posted with a real stamp, and it has MORE INFLUENCE THAN 1,000 E-MAILS.

And, follow up with a phone call- a personal, touching, phone call.

 

[Talltimber]

James, you are right on target：

Run them into to the ground by making them generate reams of paperwork.
Beat them senseless with the paperwork.
Repeat.

 

[Desperado]

Do you really not understand the definition of a "learning curve"? or "education" or "training"? I have learned a tremendous amount and currently have a pretty good strategy as reflected in some back testing (doesn't show yet, takes time to have a good record).

Don't you realize that most of us (though not all) are new to trading? When developing strategies, there are going to be mistakes of course. I hope you don't have any children. If you do, they will grow up to be cripples because of your philosophy that if one makes a mistake, they should immediately put themselves in the hands of experts without trying to figure out how to solve the problem themselves.

My signature says it all.

Thank you for being concerned about my children. I worry about them being cripples from getting hit by a car, not from learning a sensible investing philosophy. Only a fool would believe that buying and holding a set allocation of non-correlating asset classes using low cost index funds is a bad strategy. Some may justifiably believe it is not the best strategy, but to suggest it isn't a good one shows an ignorance of the investing literature.

I do understand that many people on this board are new to market-timing. However, it is unlikely that this is the explanation for the lack of the average user on this site to beat a know-nothing buy and hold asset allocation. The best way to test this is to look at persistence. Look at the top 10 traders from last year. How many of those ten are in the top 25% this year? Do you know? Here's the top ten from 2006 and their current rank (out of 87 total):

Fundsurfer #65
Griffin #10
Mayday #72
Show-me #62
Georgiagal Lost to follow-up (correct me if I missed it)
Aslan #34
Pyriel #7
Beavis #24
andy Lost to follow-up (correct me if I missed it)
Pill #49

Now I'm not a professional statistician, but it seems to me that the lack of persistence is pretty damn good evidence against there being a learning curve. Aren't these supposed to be the people who already traveled the learning curve? Yet their returns seem pretty randomly distributed.

The average of their ranks is rank 40.4 (the 53rd%). Not much persistence there, in fact I'll bet it isn't even statistically significant, and that is without even correcting for the two lost to follow-up (with the obvious assumption that they're more likely to quit being tracked if they're doing poorly.)

The average of these tsptalk.com all-stars this year (again, not correcting for the two drop-outs) is 7.59%, which would have earned 34th place out of 92. Is there some persistence there? Yes, a little, but I wouldn't get your hopes up that once you get over the learning curve you'll be earning high returns the rest of your life. 3 of them are performing no better than the G fund and 2 more may have been doing so poorly they quit being tracked!

Do yourself a favor, learn to tune out the noise, set yourself up a sensible investing plan, sock away as much moola as possible into it and get out and live life.

P.S. I in no way, shape, or form advocate an investor "puts himself in the hands of experts." Most "experts" spend their time trying to devise ways to legally transfer money from your account to theirs. And yes, I'm quite familiar with the terms "learning curve," "education," and "training."

 

[Talltimber]

TSP has 100 FTE employees.
If 1,000 people ask for FOIA information that takes 24 manhours to collect, that would be 24,000 manhours.
or 240 manhours for each TSP employee.
That should keep them gainfully employed.

 

[James48843]

TSP Board Member Tracey Ray talks about why they are limiting trades:


Some changes are coming to yourThrift Savings Plan! Tracey Ray, the Director of Investments at the TSP, tells us about the board's decision to limit the number of interfund trades that people can make per month. Click here for the interview.

The interview:
http://www.federalnewsradio.com/emedia/99888.wma



Reason given:
“Mainly due to Market Impacts (Fair Values) when the market trades cost different from what we priced it at.”



Extracts:

Q: If you are limited to two (IFT’s) - what kind of pros and cons will there be?

Ans: “Long term investing is the best way to make a market return. …. There have been numerous studies that show that it’s pretty much impossible to do outperform the market by trying to do market timing, or frequent trading.”

Q: Why not just have fees?

A: “First of all, Expenses come from market impact, and we really can’t judge what that is going to be in advance, so we cant’ figure out what the fee should be. Second of all, we have those expenses on the buy side and the sell side. You know, you usually only see redemption fees on the sell side, so that would be a vcry unusual thing to do. “

In short- she says they can’t figure out what the fees would be,


Noteable quotes:

“We’re protecting them from themselves, nobody can time the market”.

“We got permission to send a letter to these 3,000 people, and if they don’t stop, we’ll make them do trades by mail. “

”Vanguad makes every participant wait sixty days, before they can repurchase the same shares.”

Any feedback yet from those affected?



”Very few phone calls. We haven’t heard anything on our Thrift line yet, so no, we’re not getting any adverse feedback”.

 

[Talltimber]

There have been numerous studies that show that it’s pretty much impossible to do outperform the market by trying to do market timing, or frequent trading.

What studies have been performed on active traders versus buy and hold traders within the TSP funds?

Great FOIA question. I bet the answer is: um, uh do'oh.

 

[Eldritch Flatus]

The interview:
http://www.federalnewsradio.com/emedia/99888.wma

Everyone should listen to this interview as if they were listening to a symphony, or any genre capable of conveying emotion and empathy. Is it just me, or do I hear an enormous ego, great arrogance, precieved power, and perhaps contempt in that voice? I really didn't like the attitude. I dunno, but I'm known for sometimes being overly sensitive and empathatic. Probably just me. :suspicious:

 

[RAE]

I quick look at the Thrift Board shows absolute minimal activity in the way of Freedom of Information Act requests to this board.

http://www.frtib.gov/FOIA/foia-annual-report-2006.pdf

I can see now that we're going to have to FOIA the powerpoint slides, charts, and all hand out material presented at both the October and November Board meetings, as well as copies of the list of the names and addresses of the 3,000 people they are going to send letters to, so that we can begin our process of preparing for a class action.

Can you say FOIA?

What else would someone want in a FOIA request as the first round?

By the way- we need about 100 people to make similar FOIA requests- so perhaps we should also ask for the list of all people who have made or make FOIA requests also within the time period of answering OUR FOIA request, so that we can coordinate the class action suit legal teams.

James, a FOIA request is a good idea, but I think I would put it this way: "please send copies of any and all materials utilized in the process that led to the proposal to limit TSP participants to two interfund transfers per month. This should include materials, including (but not limited to) meetings from Board minutes, handouts, charts, tables, other data, powerpoints, informal discussion notes, e-mails, notes from phone calls, and other materials as appropriate. Also, names and addresses of the approx. 3,000 people being singled-out by TSP as "frequent traders" should be included, as well as any information, data, and discussion notes that led to the identification of these individuals".

Somone might be able to add more language to make it even broader than that, but I think that would be a good start..........

 

[FordMan]

http://www.governmentexecutive.com/story_page.cfm?articleid=31836&ref=rellink



Went from a $20B state fund to our $240B fund, what a waste of oxygen. She must be getting paid $150k a year by now, I guess our TSP is just chump change to her. If they can't get better products out, then this position should be eliminated as a cost saving step. Analyze that.

Remember that guy "Brownie" who ran FEMA? It looks like TSP is full of people less qualified than him.

 

[FordMan]

This is just a suggestion but is there some way to consolidate the things that people can do in one main area, maybe on the tsptalk home page instead of having to sift through this thread? I think maybe people who have not been reading this reading would find it easier to act if it was all in one prominant place with instructions clearly laid out step by step.

Just my 2 cents.

Good idea, i've been linking through Tom's commentary "message board," by scrolling down. As soon as that link is gone then I'm fumbling through the board too.

 

[GGal]

J Also, names and addresses of the approx. 3,000 people being singled-out by TSP as "frequent traders" should be included, as well as any information, data, and discussion notes that led to the identification of these individuals".
..........

Can anyone here spell 'disclosure?'

 

[Show-me]

James, a FOIA request is a good idea, but I think I would put it this way: "please send copies of any and all materials utilized in the process that led to the proposal to limit TSP participants to two interfund transfers per month. This should include materials, including (but not limited to) meetings from Board minutes, handouts, charts, tables, other data, powerpoints, informal discussion notes, e-mails, notes from phone calls, and other materials as appropriate. Also, names and addresses of the approx. 3,000 people being singled-out by TSP as "frequent traders" should be included, as well as any information, data, and discussion notes that led to the identification of these individuals".

Somone might be able to add more language to make it even broader than that, but I think that would be a good start..........

This is what we need guys and gals, networking. This looks good to me. If anyone has anything to add, please do!

Also, for those of us that have never done a FOIA request. Where, how, and to whom do we send it? Is there a form or is it just a written request as above? Help a simpleton like me.

 

[James48843]

James, a FOIA request is a good idea, but I think I would put it this way: "please send copies of any and all materials utilized in the process that led to the proposal to limit TSP participants to two interfund transfers per month. This should include materials, including (but not limited to) meetings from Board minutes, handouts, charts, tables, other data, powerpoints, informal discussion notes, e-mails, notes from phone calls, and other materials as appropriate. Also, names and addresses of the approx. 3,000 people being singled-out by TSP as "frequent traders" should be included, as well as any information, data, and discussion notes that led to the identification of these individuals".

Somone might be able to add more language to make it even broader than that, but I think that would be a good start..........

Under the FOIA, you have to pay for each and every copy they provide. Just asking for what I am going to be asking for is probably going to cost me a few bucks. And it should get the point across. If you ask for an "any and all", you run the chance of them using it in reverse on you, delaying the asnwer to us.

You have to be careful with those "any and all" asks. I know, I deal with them from the flip side, and I like nothing better than to see an "any and all' request. It slows down the answer by months.

By limiting the FOIA requests to only those documents, charts, information provided in the two boad meetings, and the names (or should I say copies of all other FOIA requests by other individiuals received by the FOIA officer in the time period between November 19th, and the date the FOIA officer replies to this FOIA request), you limit your liablity for payment of the fees per page for copies, and make them respond sooner rather than later.

I have a feeling I can get this FOIA through for less than fifty bucks. If I ask for an "any and all", it could be much more. And now that TSP is limiting my trades, I won't have the bucks to pay for it all.

 

[RAE]

Under the FOIA, you have to pay for each and every copy they provide.
I have a feeling I can get this FOIA through for less than fifty bucks.

Actually, you can ask that the fee be waived, and in some cases, they will grant it.........particularly if you can make a case that the information requested is in the public's interest (or in this case, the interest of TSP participants, anyway). I also deal with these things on the flip-side and our agency often waives the fee, particularly if the requestor is familiar with the criteria for fee waivers and makes a strong case that their request qualifies for a waiver. You might want to check out the FOIA reg's and see if the fee could possibly be waived in our case. If so, we should definitely ask for it.......can't hurt to ask.

 

[RAE]

Here are the criteria used in determining if a FOIA request qualifies for a fee waiver: (Note: I think we could make a strong case that our request would "contribute to the public understanding of govt. operations". I also think it is in the public interest to understand how the FRTIB makes decisions. We are not doing this for any "commercial interest", but simply to find out, on behalf of TSP participants, what information this proposal is based on).
_____________________________________________________________

The granting of a fee waiver for one request does not mean that a fee waiver will automatically be granted on a later related request from the same requester. In order to determine whether the statutory requirements are met, the Agency must consider six factors summarized below:

1. The subject matter of the requested records must specifically concern identifiable operations of activities of the government. Request for records for their informational content alone does not satisfy this factor.

2. The disclosure of the requested records must be "likely to contribute" to the public understanding of government operations. The requested records must be meaningfully informative in relation to the subject matter of the request and should not already be in public domain.

3. The disclosure of requested records must contribute to "public understanding of government operations." Disclosure must contribute to the understanding of the public at large, as opposed to the understanding of the requester or a narrow segment of interested persons. One must demonstrate with reasonable specificity the ability to understand, extract and convey the requested information as well as the ability and intent to actively disseminate the information to the general public.

4. The disclosure must contribute "significantly" to public understanding of government operations or activities. On balance, the public's understanding of government operations must be significantly greater after disclosure in comparison to the public's understanding prior to disclosure.

5. The extent to which disclosure will serve the requester's commercial interest, if any. Status as a nonprofit organization or representative of the news media is not alone sufficient to satisfy this requirement.

6. The extent to which the identified public interest in the disclosure outweighs the requester's commercial interest.

 

[Desperado]

What studies have been performed on active traders versus buy and hold traders within the TSP funds?

Great FOIA question. I bet the answer is: um, uh do'oh.

Just mine, far as I know. But there are numerous other ones that can easily be applied to the situation. Over the long run it is time in the market that counts, not timing the market. Glance through one of Bogle's books and you'll get an idea of what the studies say.

 

[Sunnyskies]

It might be informative to request a copy of the calculations used to compute the trading costs of each fund for each of the periods mentioned in their minutes -- maybe by quarter for the 2006 and 2007 years. These are the basis of their decision, you never know they might be comparing apples to oranges.

 

[Talltimber]

Andrew Saul is the Chairman of the TSP board.

He is also the on the board of Cache inc. Cache has lost 41% YTD and had a slight dead cat bounce the day after Thanksgiving, the stock shows a definite head and shoulders last December, January. This is a good time to disinvest holdings in this company due to an apparent credit bubble burst and market conditions not conducive to businesses dependent on discretionary consumer spending.

. Seasons Greetings.
http://finance.google.com/finance?client=news&q=cache

 

[FUTURESTRADER]

-41%, nice goin, Saul...And he thinks we don't know what WE'RE doin!

 

[FUTURESTRADER]

no wonder he dropped out of the race for public office