ERE guilt!  Does anyone else suffer from this?  Do you need to become a bit of an asshole to counteract the "normal people"?

Keep in mind that rebalancing into cash also causes you to occasionally sell early, so overall it is a wash.  Rebalancing primarily keeps your risks in check.

Best mash-up ever - awesome, catchy, creepy, yin/yang...Taylor Swift vs. Nine Inch Nails - https://youtu.be/DhvXST1Rc3g

In honour of the summer festival season - Charles Bradley "Why Is It So Hard" -  https://youtu.be/yBdTVmSVq14

Think of gold as just another currency.  Except it isn't backed by a central bank, government, economy, military, etc., which makes it a very unique currency.

Hi Gosso! - The emotional part of making automatic is a huge benefit for me.  Also its $40 for all your accounts as long as you use the etf model portfolio's.  I also like the idea of the buying and selling being done for me on a monthly basis.  I am a minimalist (aka lazy!).  In all seriousness I ...

Welcome to the forum! I've never heard of ShareOwner before, so I don't know much about them, although I get a bit nervous when pulled away from the teat of the big banks.  Do you know if the $40/month covers all your accounts, or is it charged for each account?  If it is per account then that could...

A very interesting read, and a nice break from ISIS http://www.nytimes.com/2015/02/15/magazine/how-one-stupid-tweet-ruined-justine-saccos-life.html Scary!  And exactly why I avoid social media like the plaque .  Cyberbullying has morphed. Dude, I already bitch-slapped you in another thread over thi...

MachineGhost wrote: To quote Bill and Ted, "Excellent!"

Ha!  I figured Mr. Livermore's work would be right up your alley.

babysquirrel wrote: To quote Bill and Ted, "Excellent!"
Actually that was Wayne and Garth there Mr. Know-It-All...

Uh oh, I smell another flame war coming on. 

I'll suggest the work by Jesse Livermore (this is a pseudonym to protect his day job) who dives deep into the reliability of valuation models.  His general conclusions are that valuation models are curve-fitted and of little value. Here is one graph that shows out-of-sample data for the Hussman mode...

http://cdn1.valuewalk.com/wp-content/uploads/2014/10/klarman-seth.png http://www.ritholtz.com/blog/2015/01/asset-class-returns-vs-the-average-investor/?utm_source=dlvr.it&utm_medium=twitter I doubt there is much hope for the average investor.  Their emotions (and reason) will continue to place ...

Yes, I saw the spicy language but I've seen it from plenty other people on the board too.  OK point taken...MG AND OTHERS please tone down the criticisms. I thought the issue was settled by Gosso's charts, posted in another thread?  It showed at least one 25% drawdown.  I believe daily data was req...

edit: finished the "article"... is about way more than stocks.  Really interesting for the whole PP on a macro level I always enjoy Gundlach's presentations, lots of great research. *** Although the above chart showing that the total returns of the S&P500 never gaining more than six y...

[img width=600]http://static3.businessinsider.com/imag ... 6%20pm.png[/img]

An interesting presentation by Jeffery Gundlach: http://www.businessinsider.com/jeff-gun ... -13-2015-1

So if annual rebalancing was done on May 31 rather than Dec 31 then the PP did indeed experience a -25% nominal drawdown.  However it was extremely brief and was mainly the result of gold spiking 38% in only 6 days at the parabolic top in January 1980. So the draw down was due to a blow off spike u...

I have some old daily data (it is complete up to May 2013), but it should shed some more light on the PP drawdowns: [img width=600]http://i57.tinypic.com/6pycfc.png[/img] So if annual rebalancing was done on May 31 rather than Dec 31 then the PP did indeed experience a -25% nominal drawdown.  Howeve...

Here are my results for the real and nominal drawdowns for the PP and 60/40: [img width=600]http://i62.tinypic.com/2ez1vet.png[/img] (Click to enlarge) So drawdowns measured at the end of month in nominal terms hasn't dropped below -13% since April 1, 1968 (assuming my data is correct, it might not ...

Congrats, Adam! One thing to keep in mind is that the leverage for at-the-money Jan '17 options on SPY, GLD, and TLT is roughly 5.0x, 4.6x, and 8.1x, respectively.  So to balance the leverage you'd need to go in-the-money a bit for TLT, or lower your weighting of TLT options.  Otherwise the LEAP PP...

MachineGhost wrote: Besides Gosso's chart shows 1980 is almost -25% in real terms which blows away -25% in nominal.

I think you got that flipped around, if inflation is 5% and the nominal drawdown is -25% then the real drawdown would be -30%.  So drawdowns in real terms look worse.

Here are my results for the inflation-adjusted drawdowns of the PP and 60/40:



It's interesting that the drawdown for the PP exceeded the 60/40 drawdown in 2013, which is a rare event.

And also, welcome back MT!

This multiple changes, correct? Yep, it is dependent on the implied volatility (IV), but in general TLT will have a lower IV so it will provide more leverage per dollar invested. Do you think that in 2013 (the numbers are a few posts back) if I would have adjusted the weightings, I would have had a...

Congrats, Adam! One thing to keep in mind is that the leverage for at-the-money Jan '17 options on SPY, GLD, and TLT is roughly 5.0x, 4.6x, and 8.1x, respectively.  So to balance the leverage you'd need to go in-the-money a bit for TLT, or lower your weighting of TLT options.  Otherwise the LEAP PP ...

Many of Direxion's levered ETFs began trading in November 2008, and continued to perform as expected (3x the daily return) during the financial crisis.  So they have been battle-tested.

Hmmm, my numbers are quite different.  Using the adjusted closing prices (includes dividends) from Yahoo! Finance I get the following: Stocks (XIU) +11.9%    ((21.47 / 19.18) - 1) Gold (IGT)    +7.8% Bonds (ZFL) +17.4% Cash (ZFS)  +2.3% Canadian 4x25 PP +9.85% (includes dividends and interest) Unhe...

Since I hold the Canadian PP, I thought I'd share how our results differ from what you guys had in 2014. Stocks: +8.1% Bonds: +11.5% Gold: +4.4% Cash: +0.1% Total: +6.0% As you can see the resource heavy Canadian stock market got hit hard by the pull back in oil price. However that exit of foreign ...

Gosso - I must just be really really bad at math?  I'm calculating by subtracting my overall portfolio's ending value from teh starting value - dividing the difference by the starting value and multiplying by 100.  I'm getting 8.53% for my return.  I know there's differences between FSTVX vs SPY an...