I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
New PPer needs guidance.
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Re: New PPer needs guidance.
- Pointedstick
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Re: New PPer needs guidance.
Boom. Exactly the right attitude!Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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- buddtholomew
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Re: New PPer needs guidance.
That is the correct perspective and your philosophy aligns well with the composition of the portfolio.Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
- MachineGhost
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Re: New PPer needs guidance.
Are you being sarcastic? Think long-term, not short-term. Nothing is PERFECTLY non-correlated to each other 24/7.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
- MachineGhost
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Re: New PPer needs guidance.
CD's would have an edge in laddering due to the available maturity dates (out to 10-years in some cases). If you can handle remembering to buy a new T-Bill every 90 days, then liquidity is a big concern for you, otherwise just stick to 1-year. There's no autorollover for T-Bills akin to CD's at TreasuryDirect AFAIK but maybe Fidelity has an option like that.Matthew19 wrote: I feel like I understand everything except the cash portion. Is a treasury note ladder a pain to manage and would I be better with a money market fund?
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: New PPer needs guidance.
The best day to start a PP is always the present day! IMHO, you're also in great shape even from a tax perspective, especially if capital losses on the miners would offset any gains in the foreign stocks for tax purposes.Matthew19 wrote: I'm about 70% cash right now with the rest split between miners and foreign stocks. I have about 60k in paper losses on the miners, which absolutely makes me sick considering how hard I have to work for that.
What does everyone use to track their PP as a whole? Iv looked at Google Finance, where you just plug in your buys and get a nice overview.
I personally use Mint to track my net worth and total investment account balances, and the Yahoo Finance app to glance at daily ETF movements. The investment side of Mint isn't that great for detailed tracking, but I kinda like it that way. I prefer to stay out of the weeds as much as possible, and will login to my brokerage when I need to to check the bands occasionally.
Welcome to the forum!
Re: New PPer needs guidance.
Fidelity has a nice tool for building a treasury ladder, and I believe you can even automate repurchasing new treasuries when they expire. That said, I personally went with a simple STT ETF for convenience. When I needed cash for a down payment on a house, selling a chunk of SCHO seemed easier than figuring out how to dissect a ladder.Matthew19 wrote: I feel like I understand everything except the cash portion. Is a treasury note ladder a pain to manage and would I be better with a money market fund?
Re: New PPer needs guidance.
If the PP were a 10 hour international flight, budd would be the guy sitting next to you who turns to you every 30 minutes and says: "I'm pretty sure the plane is about to crash."Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: New PPer needs guidance.
On most brokers it is dead simple. At least it is on Fidelity. They will probably send you notices every single time a rung rolls over, which is a bit silly but not a problem. I have T-Bills and so just a one-rung "ladder", and every few months I get a message about how they're expiring and how I have thousands and thousands of gov't and commercial bond options available that I should roll it into, ha, ha. I think they finally stopped sending me the physical letters in the mail. Maybe. Or maybe I just tune it out now. Set it up and it just automatically does its thing.Matthew19 wrote: I feel like I understand everything except the cash portion. Is a treasury note ladder a pain to manage and would I be better with a money market fund?
- buddtholomew
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Re: New PPer needs guidance.
MediumTex wrote:...and now that the plane has crashed, what do you say Mr. T?Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
If the PP were a 10 hour international flight, budd would be the guy sitting next to you who turns to you every 30 minutes and says: "I'm pretty sure the plane is about to crash."
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
Re: New PPer needs guidance.
See, he was just testing you! You passed.buddtholomew wrote:That is the correct perspective and your philosophy aligns well with the composition of the portfolio.Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
Last edited by LC475 on Fri Jun 05, 2015 1:30 pm, edited 1 time in total.
Re: New PPer needs guidance.
I didn't realize the plane had crashed. What makes you say that?buddtholomew wrote:MediumTex wrote:...and now that the plane has crashed, what do you say Mr. T?Matthew19 wrote: I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.
If the PP were a 10 hour international flight, budd would be the guy sitting next to you who turns to you every 30 minutes and says: "I'm pretty sure the plane is about to crash."
Is there something unusual about the PP's recent performance?
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
- Pointedstick
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Re: New PPer needs guidance.
If your definition of "financial plane crashing" is "portfolio ever declines in value," then I suppose I can see how a YTD 0.5% nominal loss is a plane crash.
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
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Re: New PPer needs guidance.
Since the start of the year, the portfolio is down what, 0.75% this year?
So, the equivalent of flying along at 30,000 feet and plummeting to 29,775.
So, the equivalent of flying along at 30,000 feet and plummeting to 29,775.
Re: New PPer needs guidance.
Budd is the guy next to you during turbulence saying "wow, this jet airliner, often touted for it's extreme stability in flight, is sure rocking a lot! airliner for the lunch you can't afford to lose, my ass!"MediumTex wrote:If the PP were a 10 hour international flight, budd would be the guy sitting next to you who turns to you every 30 minutes and says: "I'm pretty sure the plane is about to crash."Matthew19 wrote:I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
Re: New PPer needs guidance.
Deep and subtle with the deftest touch.dragoncar wrote: Budd is the guy next to you during turbulence saying "wow, this jet airliner, often touted for it's extreme stability in flight, is sure rocking a lot! airliner for the lunch you can't afford to lose, my ass!"
[claps]
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
- sixdollars
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Re: New PPer needs guidance.
I'm imagining the following conversation.iwealth wrote: Since the start of the year, the portfolio is down what, 0.75% this year?
So, the equivalent of flying along at 30,000 feet and plummeting to 29,775.
Budd: "I should never have gotten on this plane flight. I felt fine as we ascended, but now it feels as though we're falling way too fast..."
Me: "Dude, we've only descended like 225 feet."
Budd: "OMG turbulence! I think the plane is crashing!"
Me: "This is normal for a long plane ride - I'd almost find it more strange if we encountered NO turbulence."
Budd: "Hold me, I'm scared."
Me: "Okay, come on in buddy."
Last edited by sixdollars on Fri Jun 05, 2015 6:00 pm, edited 1 time in total.
"There’s nothing wrong with Harry’s portfolio—nothing at all—but there’s everything wrong with his followers, who seem, on average, to chase performance the way dogs chase cars."
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- MachineGhost
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Re: New PPer needs guidance.
I really fear this is what will happen to budd when the PP hits that infamous maximum drawdown that I-used-to-mention-but-no-longer-do-due-to-he-who-shall-remain-nameless:
[align=center][/align]
[align=center][/align]
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: New PPer needs guidance.
I was thinking more of an internal pressure-induced event:MachineGhost wrote: I really fear this is what will happen to budd when the PP hits that infamous maximum drawdown that I-used-to-mention-but-no-longer-do-due-to-he-who-shall-remain-nameless:
I watched "Scanners" for the first time when I was about 12 years old, and in retrospect that was probably not a good idea. It's a disturbing movie.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: New PPer needs guidance.
I didn't expect this thread to end up with exploding heads haha
I'll say this for anyone who feels like they are missing out the stock market gains: the people who are stock heavy aren't selling, and you probably wouldn't be either. When it turns and takes a dump they will give it all back. I did it in 2010-2013 with the gold miners. Huge gains at first, but I never sold and now they are all negative. I would have loved to have had the modest gains of the PP instead of being half right in asset class timing.
I'll say this for anyone who feels like they are missing out the stock market gains: the people who are stock heavy aren't selling, and you probably wouldn't be either. When it turns and takes a dump they will give it all back. I did it in 2010-2013 with the gold miners. Huge gains at first, but I never sold and now they are all negative. I would have loved to have had the modest gains of the PP instead of being half right in asset class timing.
Re: New PPer needs guidance.
Going from some basic PP newbie questions to an exploding head without straying too far off topic and doing it in under 4 pages is pretty impressive.Matthew19 wrote: I didn't expect this thread to end up with exploding heads haha
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: New PPer needs guidance.
Maybe budd has a point. Is the PP positively biased because of the long term bull markets in gold and treasuries? Are we only here because of recency bias? What if these bulls have run their course? How do we know that what has happened in the past will repeat in the future? What if business cycles behave differently or these assets become less valuable or worthless?
Last edited by Reub on Sat Jun 06, 2015 12:16 am, edited 1 time in total.
- Pointedstick
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Re: New PPer needs guidance.
What long-term bull market in gold?Reub wrote: Maybe budd has a point. Is the PP positively biased because of the long term bull markets in gold and treasuries?
Human behavior is economic behavior. The particulars may vary, but competition for limited resources remains a constant.
- CEO Nwabudike Morgan
- CEO Nwabudike Morgan
Re: New PPer needs guidance.
And I would point Reub back to some of the PP basics, like if one asset is falling, another asset MUST be rising, and if you can somehow find proxies for assets associated with all conceivable economic environments, then you will always have at least one winner in your portfolio, and that's enough to protect you.Pointedstick wrote:What long-term bull market in gold?Reub wrote: Maybe budd has a point. Is the PP positively biased because of the long term bull markets in gold and treasuries?
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
- Mark Leavy
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Re: New PPer needs guidance.
Good question Reub (and Budd).
I think you should always question the fundamentals of any system. The problem is in not having a decent metric to evaluate whether the fundamentals are working or not. You can't look at the day to day swings. That is just noise and will drive you crazy. But without something else to look at, you can never be sure that it is all working.
The metric that I have finally settled on is a linear fit of the inflation adjusted returns. Here's the vanilla HBPP over the last 10 years:
[img width=800]http://i57.tinypic.com/2z8ng2w.png[/img]
The linear fit of the inflation adjusted growth rate is 8.45%.
The average (RMS) deviation from that best fit line is 4.88%
The largest deviation from the line (not MaxDD) is 13.5%
Our current deviation from that best fit linear line is 8.58%
So... yes we are down a little bit from average over the last 10 years.
We are still aways a bit from even our worst 10 year slump.
Nothing in this picture makes me think the model is broken.
Think of this post as just an example. You need some metric that can give you an accurate picture of the model performing to plan. Pick whatever you want - but a day/week up/down will not give you the information you are looking for.
Hope this helps.
All the best,
Mark
I think you should always question the fundamentals of any system. The problem is in not having a decent metric to evaluate whether the fundamentals are working or not. You can't look at the day to day swings. That is just noise and will drive you crazy. But without something else to look at, you can never be sure that it is all working.
The metric that I have finally settled on is a linear fit of the inflation adjusted returns. Here's the vanilla HBPP over the last 10 years:
[img width=800]http://i57.tinypic.com/2z8ng2w.png[/img]
The linear fit of the inflation adjusted growth rate is 8.45%.
The average (RMS) deviation from that best fit line is 4.88%
The largest deviation from the line (not MaxDD) is 13.5%
Our current deviation from that best fit linear line is 8.58%
So... yes we are down a little bit from average over the last 10 years.
We are still aways a bit from even our worst 10 year slump.
Nothing in this picture makes me think the model is broken.
Think of this post as just an example. You need some metric that can give you an accurate picture of the model performing to plan. Pick whatever you want - but a day/week up/down will not give you the information you are looking for.
Hope this helps.
All the best,
Mark