Gyroscopic Investing

stuper1 wrote:

mathjak107 wrote: at the risk of sounding like a broken record

That gets my vote for understatement of the year.

I think we've got your point by now.  You'd accomplish a lot more good in the investing world by focusing your energies on the much larger group of people who are doing stupid things like wasting their money on market timing, high expense-ratio mutual funds, etc.  Us PP people just happen to have a different philosophy than you do, maybe a bit less certain about the future, and willing to put up with lower returns to have better insurance for possible black swan events.  I'm not saying that you should leave, but it does get a bit tiresome to hear the same spiel from you every day.

Who are you to tell him to leave? What mathjak107 does is make us reexamine our own preconceived ideas and biases and that's a very healthy function. Thank you, mathjak!

Maybe the PP is the best diversified portfolio for recessionary times. And one of the worst for all of the others.

Reub wrote:

stuper1 wrote:

mathjak107 wrote: at the risk of sounding like a broken record

That gets my vote for understatement of the year.

I think we've got your point by now.  You'd accomplish a lot more good in the investing world by focusing your energies on the much larger group of people who are doing stupid things like wasting their money on market timing, high expense-ratio mutual funds, etc.  Us PP people just happen to have a different philosophy than you do, maybe a bit less certain about the future, and willing to put up with lower returns to have better insurance for possible black swan events.  I'm not saying that you should leave, but it does get a bit tiresome to hear the same spiel from you every day.

Who are you to tell him to leave? What mathjak107 does is make us reexamine our own preconceived ideas and biases and that's a very healthy function. Thank you, mathjak!

I think he was suggesting that mathjak consider coming up with some new arguments against the PP, rather than just making the same old ones every day, especially when the PP has performed better than his personal allocation over the last 15 years, which you would never know from reading his posts.

Maybe the PP is the best diversified portfolio for recessionary times. And one of the worst for all of the others.

...and yet its historical average returns don't fluctuate a lot between recessionary and non-recessionary periods.

I don't want mathjak to leave.  I don't want anybody to leave.  I think my post was not worded very well.  My bad.

I also don't want to read the same stuff every day, over and over.

Much of what passes for PP dogma is repeated ad nauseum so why not some outside thinking as well?

I am against censorship, so I believe Mathjak has a right to post here. Besides, every philosophy or investment strategy needs skeptics, critics and a Devil's Advocate to challenge common conclusions or assumptions. If you don't like his postings, no one is required to read them.

But this doesn't mean that I agree with Mathjak as to his critique of the PP. I would also appreciate more concise postings from him. His posts are often so long that I scan them quickly and stop reading if they don't have anything new to say.

It's not censorship to say that the same idea repeated over and over can simply get boring.

Censorship is to say that a discussion is not permitted to go in a certain direction.  What I think we are talking about here is simply keeping the discussion moving in any direction at a rate that exceeds stall speed.

Reub wrote: Much of what passes for PP dogma is repeated ad nauseum so why not some outside thinking as well?

The only real problem I see with it is that lately every single investing thread devolves into the same back and forth between mathjak and the other participants. I'm sure some posters would like to avoid this, but it's impossible at this point. The guy is just too prolific.

And I wouldn't worry about him going away. He has nearly 36,000 posts on the city-data forum, averaging over 11/day. He's only just getting started here!

stuper1 wrote: I don't want mathjak to leave.  I don't want anybody to leave.  I think my post was not worded very well.  My bad.

I also don't want to read the same stuff every day, over and over.

How about this...

Every time mathjak complains about stocks outperforming gold and bonds, he has to attach one of those cool photographs of his to the post?

Reub wrote:

stuper1 wrote:

mathjak107 wrote: at the risk of sounding like a broken record

That gets my vote for understatement of the year.

I think we've got your point by now.  You'd accomplish a lot more good in the investing world by focusing your energies on the much larger group of people who are doing stupid things like wasting their money on market timing, high expense-ratio mutual funds, etc.  Us PP people just happen to have a different philosophy than you do, maybe a bit less certain about the future, and willing to put up with lower returns to have better insurance for possible black swan events.  I'm not saying that you should leave, but it does get a bit tiresome to hear the same spiel from you every day.

Who are you to tell him to leave? What mathjak107 does is make us reexamine our own preconceived ideas and biases and that's a very healthy function. Thank you, mathjak!

thanks ,  i forgot , what address do i send the check?  lol

AdamA wrote:

stuper1 wrote: I don't want mathjak to leave.  I don't want anybody to leave.  I think my post was not worded very well.  My bad.

I also don't want to read the same stuff every day, over and over.

How about this...

Every time mathjak complains about stocks outperforming gold and bonds, he has to attach one of those cool photographs of his to the post?

i think it would be easier just to post the link to our website , far to many to post under those terms  but i will tell you what .  i will post some of the ones here i post on photography websites if ya'll like .

MediumTex wrote:

Reub wrote:

stuper1 wrote: That gets my vote for understatement of the year.

I think we've got your point by now.  You'd accomplish a lot more good in the investing world by focusing your energies on the much larger group of people who are doing stupid things like wasting their money on market timing, high expense-ratio mutual funds, etc.  Us PP people just happen to have a different philosophy than you do, maybe a bit less certain about the future, and willing to put up with lower returns to have better insurance for possible black swan events.  I'm not saying that you should leave, but it does get a bit tiresome to hear the same spiel from you every day.

Who are you to tell him to leave? What mathjak107 does is make us reexamine our own preconceived ideas and biases and that's a very healthy function. Thank you, mathjak!

especially when the PP has performed better than his personal allocation over the last 15 years, which you would never know from reading his posts.

Maybe the PP is the best diversified portfolio for recessionary times. And one of the worst for all of the others.

...and yet its historical average returns don't fluctuate a lot between recessionary and non-recessionary periods.

except why look at just the last 15 years when equity's had a sluggish run . how  about the last 20 or 30 where the balance is 2 to 3x  higher than the pp . or even the 5 year .

the fact is all that counts is your own results and what you are averaging with any portfolio over the time frame you have it

mathjak107 wrote: except why look at just the last 15 years when equity's had a sluggish run . how  about the last 20 or 30 where the balance is 2 to 3x  higher than the pp . or even the 5 year .

the fact is all that counts is your own results and what you are averaging with any portfolio over the time frame you have it

Math -

OK, so from 1/1/95 through yesterday, here is what I get on Peaktotrough.com (annual rebalances & dividends reinvested):

PP - 7.51% CAGR with a maximum drawdown of 14.18% and no other drawdowns greater than 10%. Total ending balance is $41,756.

60/40 S&P 500 & 10-year treasuries - 8.46 CAGR with a maximum drawdown of 29.91% and another of 23.39%. 8 total drawdowns of 10% or greater. Total ending balance is $53,728.

So greater volatility for a better ending bottom line. Back to what you wrote a few months ago, one needs a high "pucker factor" with a more volatile portfolio. Can you accept that most of us that implement a PP or something that is even PP-ish just aren't interested in the drama that comes with riding out those storms? We get that you have done well and you have added a lot to this forum in other areas. As for the PP, maybe its Waterloo is in fact here. We shall see. Maybe stocks are about to plunge or go to the moon. If the latter happens, well at least we own some stocks (and will be overbalanced in them much of the time, so holding more than 25%).

I guess rather than us reading posts that are so similar (I know, I know, I can just ignore them if I like), maybe you should just post the Mathjak 16 (5? 3?) Golden Rules Of Investing somewhere on here.

of course i agree about that fact . but what i disagree with is cherry picking time frames to make the pp compare better to a more aggressive model by singling in the worst period .  because while you could pull out the 2000-2015 time frame to compare the big factor is up to 2000 we had one of the greatest stock bull runs ever , with 17 years of almost 14% cagr .

in the end forget these charts . all that matters is what you do and if you are happy .

Math,

barrett has an idea here.  We all recognize you are one of the sharper knives in the drawer.

So... posting Math's 16 Golden Rules of Investing is an excellent idea- a collection in one place.

You might get  a place of honor at the top with Tyler.  You will have then ARRIVED!

Well done, barrett!

as soon as i know what those rules are i will let ya'all know .

i only have 1 rule when it comes to investing

"stay flexible and nudge the portfolio like steering a big ship to keep it on course.

there is not a strategy or trading system that does not need to be fined tuned and updated along the way to  keep it up with the times which do change .

mathjak107 wrote:
i only have 1 rule when it comes to investing

"stay flexible and nudge the portfolio like steering a big ship to keep it on course.

    Hmmmm.... Sounds like "sell at the bottom and buy at the top" to me. Nothing new here, Mathjak.

Thank you, you reminded me of rule #2

Buy low and sell high has lost more money for investors than any other mantra.

We all thought low was when markets fell 2000 points in 2008-2009.

Little did anyone know we had 4000 more to go.

So all those who thought they were buying low either got stopped out or scared out.

On the other hand buy high and sell higher has made more money than anything else.

An object in motion stays in motion until it hits something.

Odds are if you want to sell you will not be the last man on the line in a
bull market and that the very next move will result in a loss and spiral
downward.
Trying to buy low has not made nearly as much money as buy high and sell higher .

Google it for some interesting thoughts on that as a mantra. Think of gold.

mathjak107 wrote: of course i agree about that fact . but what i disagree with is cherry picking time frames to make the pp compare better to a more aggressive model by singling in the worst period .  because while you could pull out the 2000-2015 time frame to compare the big factor is up to 2000 we had one of the greatest stock bull runs ever , with 17 years of almost 14% cagr .

in the end forget these charts . all that matters is what you do and if you are happy .

The only reason that we pulled the 15 year data was because you presented your 15 year returns as if to show how much better your strategy was than the PP, and yet the PP would have provided you with better returns over that same period.

In general, the PP will give you lower returns and lower volatility than more aggressive allocations, and that's what the PP investor wants--less volatility along with consistently positive real returns.  Yes, we are turtle jockeys.  That's the kind of ride we like.

you know i agree with that . capital preservation is certainly a good thing .

my only objection is when the charts are created to show how the pp is right up there during only select time frames  vs  more conventional portfolio's .  my example was that i did a lot better than the s&p 500 did  the last 15 years as the s&p 500  is only one fund and one segment of the market .

so my point using just an s&p 500 fund the last 15 years would not be representative of what a fully integrated portfolio did  with midcaps and small caps with enough weighting so they were not dominated totally by the s&p 500 like a total market fund is ..

it was not a comparison to the pp since  it was one of the most sluggish 15 year periods we had . especially since the 15 years prior were some of the best ever for a conventional portfolio so regression to the mean says it has to give back at some point .

mathjak107 wrote:my example was that i did a lot better than the s&p 500 did  the last 15 years as the s&p 500  is only one fund and one segment of the market .

So your suggestion is that everybody simply needs to be as lucky as you were?

not at all ,  what everyone needs to do is just watch their own performance and stop trying to go by what was , or could have been .

if you are happy with it , then that is your benchmark . not the fact you can pull out times that came and went and feel good about them .  do i think i will ever see 14% a year ffor so long ?  oof course not , in fact right now i see single digit gains .

so i watch the portfolio , i watch the bigger picture and i nudge it as we go along .

mathjak107 wrote: Buy low and sell high has lost more money for investors than any other mantra....

On the other hand buy high and sell higher has made more money than anything else.

Well, MJ, you will have a great future in your new career endorsing whichever brand of crystal ball you use to come up with your latest "guaranteed miracle forecast" for... tomorrow, but no longer? How about the Joe Granville model? As I recall, Joe was so confident of his forecasting prowess that he predicted a date for the next Big One earthquake, which he said would flatten Los Angeles. (He made that prediction decades ago, by the way.) 

No thanks, I'm sticking with the PP. 

no crystal ball needed , they are just nothing special funds  both equity's and bonds . at times they may contain reits and commodity's .  been 30 years now and never needed a crystal ball .

you do realize there are millions of successful investors who use conventional allocations and  do just fine self included .

see this is the problem i have with many pp users who get it in their head that their way is the only way and everything else is speculating . .

fine tuning different types of diversified funds that better fit the time  is hardly speculating .  the reality is that even if the weighting was off a bit it still  doesn't matter much in the long term scheme of things . so  as an example i would not use fidelity multinational and export when the dollar is strong  but it was a great fund when the dollar was weak .  i would swap out some total bond fund for the limited term bond fund  now ,  there are times funds are taken over by better managers , etc . , that is hardly joe granville stuff .

mathjak107 wrote: fine tuning different types of diversified funds that better fit the time  is hardly speculating .  the reality is that even if the weighting was off a bit it still  doesn't matter much in the long term scheme of things . so  as an example i would not use fidelity multinational and export when the dollar is strong  but it was a great fund when the dollar was weak .  i would swap out some total bond fund for the limited term bond fund  now ,  there are times funds are taken over by better managers , etc . , that is hardly joe granville stuff .

Another way to put this is that you are adjusting your asset allocation according to what you project will do the best in the near future, and extrapolating which trends appear sufficiently durable that  that you believe can continue to make money off them for a while longer, and which trends are nearly played out such that they are no longer going to do well. You are not taking an agnostic view; you are using your intuition and experience to forecast what will make more money based on conditions in the present and near future.

In other words, speculating. …Unless you have a very different definition of the term!