Search found 30 matches
- Sat Jul 26, 2014 9:27 pm
- Forum: Bonds
- Topic: Current LTT Upside?
- Replies: 23
- Views: 11318
Re: Current LTT Upside?
We had a deflationary period from July 2008 through January 2009 when the CPI dropped 3.2%. Stocks dropped 35%, long bonds were up 20%, and gold was flat. So your conclusion sounds valid based on recent history.
- Sat Jul 26, 2014 7:26 pm
- Forum: Bonds
- Topic: Current LTT Upside?
- Replies: 23
- Views: 11318
Re: Current LTT Upside?
barrett, you provided a starting interest rate (3.24%), an ending interest rate (2.5%/2.0%) and a coupon rate (3.75%), but did not provide a time frame. I'll assume 12 months. If my formulas are right, a decline to 2.5% will cause the present value of your bonds to increase 15.2%. Adding to that ...
- Tue Jul 01, 2014 6:30 pm
- Forum: Permanent Portfolio Discussion
- Topic: Financial benefit of reading Ben Graham's book knowing Warren Buffett's alpha?
- Replies: 5
- Views: 4908
Re: Financial benefit of reading Ben Graham's book knowing Warren Buffett's alpha?
Forbes had an article a year or so ago called "Ten Books Every Investor Should Read." I found used copies of each of them for a few bucks apiece. Ben Graham's was the first on the list: The Intelligent Investor by Benjamin Graham The Great Crash of 1929 by John Kenneth Galbraith Common S...
- Fri Jun 27, 2014 10:57 am
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
Shin guards and knee high socks.
- Fri Jun 27, 2014 8:20 am
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
Two words: shin guards.
- Thu Jun 26, 2014 11:59 am
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
Yes, Germany certainly is forcing the action. The USA would too if they could, but Germany is far superior at possessing the ball. Tim Howard is looking sharp in goal and the USA defensive line is doing a great job so far. If things are still tied at the 75 minute mark, kshartle's strategy may em...
- Thu Jun 26, 2014 8:11 am
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
The purpose of my post was to hopefully cause at least one PP'er to watch the match who otherwise might not have Bummer that you're already in the office, kshartle. Should be an extremely interesting match.
- Wed Jun 25, 2014 10:12 pm
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
I don't think you'll see either team in major defensive mode, kshartle, unless a goal gets scored. And then the team that scores might do so since they would have to give up two before things turn disastrous. Playing in defensive mode can really backfire since the best way to prevent a goal is to ...
- Wed Jun 25, 2014 8:43 pm
- Forum: Other Discussions
- Topic: USA vs Germany
- Replies: 39
- Views: 17465
Re: USA vs Germany
The first tie-break is goal differential. A Portugal win would likely advance the U.S. because Portugal lost their first match 0-4. A Ghana win coupled with a U.S. loss would make things dicey.
- Fri May 16, 2014 8:04 pm
- Forum: Bonds
- Topic: At big-ticket dinners, a blunt Bernanke sounds theme of low rates
- Replies: 0
- Views: 1591
At big-ticket dinners, a blunt Bernanke sounds theme of low rates
"At least one guest left a New York restaurant with the impression Bernanke, 60, does not expect the federal funds rate, the Fed's main benchmark interest rate, to rise back to its long-term average of around 4 percent in Bernanke's lifetime, one source who had spoken to the guest said." h...
- Sat Apr 12, 2014 8:20 pm
- Forum: Permanent Portfolio Discussion
- Topic: Why a 60/40 Portfolio isn't Diversified
- Replies: 0
- Views: 1622
Why a 60/40 Portfolio isn't Diversified
This "environmentally balanced" portfolio endorsed by Advisor Perspectives, Inc. in April of 2012 sounds really familiar.
http://www.advisorperspectives.com/news ... sified.pdf
http://www.advisorperspectives.com/news ... sified.pdf
- Tue Apr 01, 2014 10:56 pm
- Forum: Bonds
- Topic: Best way to buy long term treasuries
- Replies: 21
- Views: 11589
Re: Best way to buy long term treasuries
I think I just answered my own question. The year old bonds may now be worth only $23,000, but the 3.60% interest is being paid on $25,000. The new $23,000 bonds will be paying 4.00%, but 4.00% on only $23,000. That must be the "wash" you are referring to.
- Tue Apr 01, 2014 10:36 pm
- Forum: Bonds
- Topic: Best way to buy long term treasuries
- Replies: 21
- Views: 11589
Re: Best way to buy long term treasuries
Still not sure that I follow. The performance of the bond portion of the PP, in a rising interest rate environment, equals the decline in the present value of the bonds, partially offset by interest earned. If interest rates go from 3.60% today to 4.00% in a year, then let's say my $25,000 bonds h...
- Tue Apr 01, 2014 9:53 pm
- Forum: Bonds
- Topic: Best way to buy long term treasuries
- Replies: 21
- Views: 11589
Re: Best way to buy long term treasuries
I understand the concept of re-balancing. I'm referring to the notion of replacing, in a rising interest rate environment, year old bonds paying a lower interest rate with new bonds paying a higher rate. For example, if interest rates increase steadily to 8% in late 2017, I'm calculating a 39% los...
- Tue Apr 01, 2014 9:25 pm
- Forum: Bonds
- Topic: Best way to buy long term treasuries
- Replies: 21
- Views: 11589
Re: Best way to buy long term treasuries
If my 30 year treasuries have dropped in value after, say, 5 years, (when there are 25 years remaining to maturity) might it make sense to sell the treasuries at that time to lock in a tax loss (this is in a taxable account), and then use the proceeds to buy new 30 year treasuries? Maybe it would ...
- Sun Mar 23, 2014 8:37 pm
- Forum: Permanent Portfolio Discussion
- Topic: Dick Bove Predicts Rampant Inflation and 8% Ten Year Bond By 2017
- Replies: 21
- Views: 12371
Re: Dick Bove Predicts Rampant Inflation and 8% Ten Year Bond By 2017
barrett,
I don't have a calculator, but you're welcome to my Excel spreadsheet. It's tailored to measure the effect of Dick Bove's prediction on LTT's, but you could adapt it to other scenarios. It is at...
https://drive.google.com/file/d/0B041bR ... sp=sharing
I don't have a calculator, but you're welcome to my Excel spreadsheet. It's tailored to measure the effect of Dick Bove's prediction on LTT's, but you could adapt it to other scenarios. It is at...
https://drive.google.com/file/d/0B041bR ... sp=sharing
- Sat Mar 22, 2014 1:47 pm
- Forum: Permanent Portfolio Discussion
- Topic: Dick Bove Predicts Rampant Inflation and 8% Ten Year Bond By 2017
- Replies: 21
- Views: 12371
Re: Dick Bove Predicts Rampant Inflation and 8% Ten Year Bond By 2017
If 10-year treasury yields were to hit 8% in late 2017, then I'm assuming 30-year treasury yields would hit 9%. Based on 9%, I'm calculating a 39% hit to the bond portion of the PP between now and late 2017. A 25% PP allocation to 10-year treasuries instead would only lose 18% over the same time f...
- Tue Mar 11, 2014 12:23 pm
- Forum: Permanent Portfolio Discussion
- Topic: The thing I like best about PP...
- Replies: 37
- Views: 13459
- Wed Jan 01, 2014 8:45 pm
- Forum: Permanent Portfolio Discussion
- Topic: 2014 Predictions (just for fun)
- Replies: 57
- Views: 31711
Re: 2014 Predictions (just for fun)
VTI +12%
TLT -6%
GLD -10%
SHY 0%
HBPP -1%
TLT -6%
GLD -10%
SHY 0%
HBPP -1%
- Sat Nov 23, 2013 11:29 am
- Forum: Permanent Portfolio Discussion
- Topic: Gold to $1050 next year?
- Replies: 58
- Views: 18468
Re: Gold to $1050 next year?
History and statistics tell me that the PP has less than a 2% chance of declining two years in a row, so I see it as a 98% chance of gaining next year, no matter what gold does. Statistically, I would be taking twice the risk with a 60-40 or traditional portfolio. Two thoughts: (1) How can one r...
- Thu Nov 21, 2013 1:25 pm
- Forum: Permanent Portfolio Discussion
- Topic: Gold to $1050 next year?
- Replies: 58
- Views: 18468
Gold to $1050 next year?
Gold ETFs Under Pressure; Banks See More Pain By ETFtrends.com | ETF Trends – 24 minutes ago Gold, once the darling in the investment world, is losing its luster, and exchange traded funds that track the precious metal could continue to weaken, with large banks anticipating further declines in the b...
- Tue Aug 20, 2013 1:05 pm
- Forum: Permanent Portfolio Discussion
- Topic: HBPP during rising interest rates
- Replies: 3
- Views: 2487
HBPP during rising interest rates
I looked at six periods of rising interest rates since 1977 and calculated the performance of the asset classes and the HBPP as a whole. I also looked at where we are today. I realize that HBPP veterans have done this 100 times. I did not factor in any rebalancing. In period one, 6/30/77 to 2/29/...
- Thu Aug 01, 2013 12:22 pm
- Forum: Permanent Portfolio Discussion
- Topic: Converting the 30-Year Interest Rate to an Index
- Replies: 0
- Views: 1126
Converting the 30-Year Interest Rate to an Index
The daily 30-year Treasury bond interest rate is available on yahoo finance going back to 2/15/77. But does anyone know how to convert this series of interest rates into an index that can be used to back test the HBPP?
- Wed Jul 31, 2013 4:14 pm
- Forum: Permanent Portfolio Discussion
- Topic: A Hypothetical
- Replies: 48
- Views: 15004
Re: A Hypothetical
Yes, the present value of the $1000 itself (excluding the interest stream) in 30 years at 15.21% is $12.30.
$12.30 X ((1 + .1521/2) ^ 60) = $1000
Add in the PV of the interest stream, $38.50 twice a year for 30 years, and you get to $512.
$12.30 X ((1 + .1521/2) ^ 60) = $1000
Add in the PV of the interest stream, $38.50 twice a year for 30 years, and you get to $512.
- Wed Jul 31, 2013 3:56 pm
- Forum: Permanent Portfolio Discussion
- Topic: A Hypothetical
- Replies: 48
- Views: 15004
Re: A Hypothetical
We're talking 30 year bonds. So the PV of a $1000 bond with a 7.70% coupon rate when the prevailing rate is 15.21% is $12.30. Add the PV of the interest stream and you get to $512.