Gold / Stock / Bonds at highs or near highs?

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Tyler
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Re: Gold / Stock / Bonds at highs or near highs?

Post by Tyler » Wed Sep 25, 2019 11:49 am

mathjak107 wrote:
Tue Sep 24, 2019 2:36 am

for most of the pp history , except for some speed pumps along the way , the trend was for rates to fall .
The 1970's were one helluva speed bump. ;)

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FWIW, the PP did just fine then as well. Surviving terrible situations for individual components is one of the great benefis of the built-in firewalls. They protect the portfolio when rates rise in the same way they do when stocks crash or gold tanks.
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Re: Gold / Stock / Bonds at highs or near highs?

Post by Tortoise » Wed Sep 25, 2019 12:59 pm

mathjak107 wrote:
Wed Sep 25, 2019 11:12 am
Nasty day today for gold and long term treasuries....this is what scares me about the way they seem to be joined at the hip...the supposed yin and yang can be quite powerful and nasty when things that are supposedly uncorrelated stay bedfellows
Does anyone here know if an analysis has been done of the price correlation between gold and LTTs over at least the past few decades?

I'd be interested to see if the correlation has always been high or if it's increased in recent years.

Lately, based on my own observations of daily closing prices, gold and LTTs move in the same direction probably at least 90% of the time.
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Re: Gold / Stock / Bonds at highs or near highs?

Post by Cortopassi » Wed Sep 25, 2019 1:54 pm

Tortoise wrote:
Wed Sep 25, 2019 12:59 pm
mathjak107 wrote:
Wed Sep 25, 2019 11:12 am
Nasty day today for gold and long term treasuries....this is what scares me about the way they seem to be joined at the hip...the supposed yin and yang can be quite powerful and nasty when things that are supposedly uncorrelated stay bedfellows
Does anyone here know if an analysis has been done of the price correlation between gold and LTTs over at least the past few decades?

I'd be interested to see if the correlation has always been high or if it's increased in recent years.

Lately, based on my own observations of daily closing prices, gold and LTTs move in the same direction probably at least 90% of the time.
This is from 2017

Image
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Re: Gold / Stock / Bonds at highs or near highs?

Post by mathjak107 » Wed Sep 25, 2019 4:21 pm

Tyler wrote:
Wed Sep 25, 2019 11:49 am
mathjak107 wrote:
Tue Sep 24, 2019 2:36 am

for most of the pp history , except for some speed pumps along the way , the trend was for rates to fall .
The 1970's were one helluva speed bump. ;)

Image

FWIW, the PP did just fine then as well. Surviving terrible situations for individual components is one of the great benefis of the built-in firewalls. They protect the portfolio when rates rise in the same way they do when stocks crash or gold tanks.

since 1980 the trend has been down . that is 40 years of pp history ,.

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Re: Gold / Stock / Bonds at highs or near highs?

Post by Pet Hog » Wed Sep 25, 2019 6:32 pm

Tortoise wrote:
Wed Sep 25, 2019 12:59 pm
Does anyone here know if an analysis has been done of the price correlation between gold and LTTs over at least the past few decades?

I'd be interested to see if the correlation has always been high or if it's increased in recent years.

Lately, based on my own observations of daily closing prices, gold and LTTs move in the same direction probably at least 90% of the time.
Tortoise, portfoliovisualizer provides correlations. I got this graph for TLT and GLD for the last 15 years. Looks like the correlation these days is about as high as ever.

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Re: Gold / Stock / Bonds at highs or near highs?

Post by InsuranceGuy » Wed Sep 25, 2019 9:06 pm

Pet Hog wrote:
Wed Sep 25, 2019 6:32 pm
I got this graph for TLT and GLD for the last 15 years. Looks like the correlation these days is about as high as ever.
Extending the data back to 1969 confirms that the correlation is as high as ever.

1969-2018 Rolling 252-day Correlation of LTT and GLD.JPG
1969-2018 Rolling 252-day Correlation of LTT and GLD.JPG (75.94 KiB) Viewed 1885 times
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Re: Gold / Stock / Bonds at highs or near highs?

Post by mathjak107 » Thu Sep 26, 2019 2:42 am

plus not only are gold and rates joined at the hip but we have equities at a high at the same time ... that makes for some wild moves in the pp which can be right on par with high equity portfolio volatility wise . yesterday we saw a .70% move in the pp with gold losing almost 2% and bonds losing 1.50%, that .70 % move is almost like a 200 point move in the dow for comparison gain or loss wise on 100% equity .

so we are really in uncharted waters with the pp .. so i can see why those deciding to enter the pp now are looking at this and questioning whether they are guaranteeing themselves losses from here for years to come unless the remote odds of negative interest rates happen .

40 years of pp history since the 1980's having a trending down in rates for the most part may have little in common with the future
once rates bottom and reverse with so much correlation between powerful asset classes .

we are also now uncharted in the instantaneous news world as well as uncharted social media influence on investments.

time will tell but it can be a wild ride if this keeps up .

i think if i was looking to invest a sizable sum today ,which i will be if our closing goes through today on some investment property , i would divide it in 3 . i would only put 1/3 in something like the pp at this stage , 1/3 in my fidelity insight income model which is a more conventional 25% equity model with far shorter duration's and no gold and the last 1/3 in to the insight 60/40 growth and income model which also has far shorter durations on the bond side .
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Re: Gold / Stock / Bonds at highs or near highs?

Post by Kriegsspiel » Thu Sep 26, 2019 7:24 am

mathjak107 wrote:
Thu Sep 26, 2019 2:42 am
plus not only are gold and rates joined at the hip but we have equities at a high at the same time ... that makes for some wild moves in the pp which can be right on par with high equity portfolio volatility wise . yesterday we saw a .70% move in the pp with gold losing almost 2% and bonds losing 1.50%, that .70 % move is almost like a 200 point move in the dow for comparison gain or loss wise on 100% equity .

so we are really in uncharted waters with the pp .. so i can see why those deciding to enter the pp now are looking at this and questioning whether they are guaranteeing themselves losses from here for years to come unless the remote odds of negative interest rates happen .

40 years of pp history since the 1980's having a trending down in rates for the most part may have little in common with the future
once rates bottom and reverse with so much correlation between powerful asset classes .

we are also now uncharted in the instantaneous news world as well as uncharted social media influence on investments.

time will tell but it can be a wild ride if this keeps up .
In uncharted waters, that's when I'd prefer to use something like the PP. I mean, even if people with money to invest stop buying bonds, they're going to put it somewhere. And if there's less money sloshing around overall, everyone is going to lose anyway; and someone is going to lose the hardest, but I don't think it will be the PP. I think the PP's assets are positioned pretty well to do fine in most situations.
i think if i was looking to invest a sizable sum today ,which i will be if our closing goes through today on some investment property , i would divide it in 3 . i would only put 1/3 in something like the pp at this stage , 1/3 in my fidelity insight income model which is a more conventional 25% equity model with far shorter duration's and no gold and the last 1/3 in to the insight 60/40 growth and income model which also has far shorter durations on the bond side .
Do as I say, not as I do, in one paragraph ;D

I'd love to hear more about your investment property.
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Re: Gold / Stock / Bonds at highs or near highs?

Post by mathjak107 » Thu Sep 26, 2019 7:50 am

about 12 years ago we bought a package of 9- co-op apartments over looking central park in a very prestigious building along with the commercial lease rights . we actually bought a business , which is what it amounted to .
. only hitch is they had original rent stabilized tenants in them at break even rents ..they chose not to buy when the building converted to co-op so they remained covered under rent stabilization laws .

all were baby boomers at this stage and we figured many would not be able to live on central park south with no pay checks if they retire .

so we bought this package for cents on the dollar ... we offered 100k to any tenant who wanted to sell us back their lease .

7 out of 9 took advantage over the years and the apartments were sold for 1 to 2.2 million ...so the remaining 2 were at break even rents and had no light for us at the end of the tunnel since they had adult kids living there with succession rights

we finally got an investor group who was interested in buying them . the 2 apartments are worth 2.2 million in total . we are selling both for 350k .... so today is supposed to be the closing ...it was rescheduled from 2 weeks ago .

we also got in the package a 10% stake in the commercial lease rights in the building . we were partners with real estate mogul bernie spitzer in the lease rights ... bernie sold them in 2014 for 18 million dollars .... so the package was an incredible value ... as a real estate investor i was never interested in just collecting rents hoping for appreciation .
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Re: Gold / Stock / Bonds at highs or near highs?

Post by Kriegsspiel » Thu Sep 26, 2019 7:09 pm

mathjak107 wrote:
Thu Sep 26, 2019 7:50 am
about 12 years ago we bought a package of 9- co-op apartments over looking central park in a very prestigious building along with the commercial lease rights . we actually bought a business , which is what it amounted to .
. only hitch is they had original rent stabilized tenants in them at break even rents ..they chose not to buy when the building converted to co-op so they remained covered under rent stabilization laws .

all were baby boomers at this stage and we figured many would not be able to live on central park south with no pay checks if they retire .

so we bought this package for cents on the dollar ... we offered 100k to any tenant who wanted to sell us back their lease .

7 out of 9 took advantage over the years and the apartments were sold for 1 to 2.2 million ...so the remaining 2 were at break even rents and had no light for us at the end of the tunnel since they had adult kids living there with succession rights

we finally got an investor group who was interested in buying them . the 2 apartments are worth 2.2 million in total . we are selling both for 350k .... so today is supposed to be the closing ...it was rescheduled from 2 weeks ago .

we also got in the package a 10% stake in the commercial lease rights in the building . we were partners with real estate mogul bernie spitzer in the lease rights ... bernie sold them in 2014 for 18 million dollars .... so the package was an incredible value ... as a real estate investor i was never interested in just collecting rents hoping for appreciation .
Cool story, looks like I had it backwards.
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Re: Gold / Stock / Bonds at highs or near highs?

Post by mathjak107 » Fri Sep 27, 2019 2:35 am

yep we are selling , not buying ... we were selling everything off since we don't want to be landlords in retirement . we want only liquid , passive investments that can be sold or swapped with the click of a button .

the new rental laws in new york make being a landlord here not desirable as well . in fact if we did not get a buyer the plan was to just walk away and let the remaining apartments default back to the building , our governor really put the screws to landlords with his new laws and changed the rules in mid stream .
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Re: Gold / Stock / Bonds at highs or near highs?

Post by mathjak107 » Sat Sep 28, 2019 5:12 am

Kriegsspiel wrote:
Thu Sep 26, 2019 7:24 am
mathjak107 wrote:
Thu Sep 26, 2019 2:42 am
plus not only are gold and rates joined at the hip but we have equities at a high at the same time ... that makes for some wild moves in the pp which can be right on par with high equity portfolio volatility wise . yesterday we saw a .70% move in the pp with gold losing almost 2% and bonds losing 1.50%, that .70 % move is almost like a 200 point move in the dow for comparison gain or loss wise on 100% equity .

so we are really in uncharted waters with the pp .. so i can see why those deciding to enter the pp now are looking at this and questioning whether they are guaranteeing themselves losses from here for years to come unless the remote odds of negative interest rates happen .

40 years of pp history since the 1980's having a trending down in rates for the most part may have little in common with the future
once rates bottom and reverse with so much correlation between powerful asset classes .

we are also now uncharted in the instantaneous news world as well as uncharted social media influence on investments.

time will tell but it can be a wild ride if this keeps up .
In uncharted waters, that's when I'd prefer to use something like the PP. I mean, even if people with money to invest stop buying bonds, they're going to put it somewhere. And if there's less money sloshing around overall, everyone is going to lose anyway; and someone is going to lose the hardest, but I don't think it will be the PP. I think the PP's assets are positioned pretty well to do fine in most situations.
i think if i was looking to invest a sizable sum today ,which i will be if our closing goes through today on some investment property , i would divide it in 3 . i would only put 1/3 in something like the pp at this stage , 1/3 in my fidelity insight income model which is a more conventional 25% equity model with far shorter duration's and no gold and the last 1/3 in to the insight 60/40 growth and income model which also has far shorter durations on the bond side .
Do as I say, not as I do, in one paragraph ;D

I'd love to hear more about your investment property.

people don't stop buying assets when they head in to a bear market , they just change the prices they are willing to pay to own those assets .. demand for bonds or stocks or even gold will likely always be there but what investors will pay for those bonds , stocks or gold is another story.

you can't have a sale unless every share has a matching buyer .

interest rate cycles can span very long time frames .. so far in my lifetime as an investor which is 30 plus years i have only known down as far as rates except for those speed bumps ...
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