Depressed

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Reub
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Re: Depressed

Post by Reub » Thu Dec 17, 2015 1:41 pm

Seriously though, have you considered adding a little more cash to your portfolio to help you sleep better at night?
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buddtholomew
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Re: Depressed

Post by buddtholomew » Thu Dec 17, 2015 1:44 pm

I'm swimming in cash, but have purchased gold over and over and over again. Not buying more.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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Re: Depressed

Post by dragoncar » Thu Dec 17, 2015 1:55 pm

buddtholomew wrote: I'm swimming in cash, but have purchased gold over and over and over again. Not buying more.
F'in gold.  Looks like my 2016 nut will be mostly gold.  Not sure if I should let the allocation stay low, but I just know that will be poor market timing
Reub
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Re: Depressed

Post by Reub » Thu Dec 17, 2015 2:33 pm

buddtholomew wrote: I'm swimming in cash, but have purchased gold over and over and over again. Not buying more.
budd, are you reaching the band in equities? If you need to rebalance but don't want more gold then you might diversify into a different investment vehicle like Vanguard Wellesley. I am also investing using Hedgeable in their highest risk portfolio and am very happy there because they really manage your risk well while allowing most of the upside gains. Even Vanguard Wellington might work if you seek more equity exposure.
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Re: Depressed

Post by barrett » Thu Dec 17, 2015 3:19 pm

I don't have much new money to throw at the PP so I'll probably just pick up a few gold coins and call it a day.

The bands aren't sacred, budd. If you hate gold, just hold less of it. From what I think I know, you still have lots of good years left and an awesome career.

"Swimming in cash" sounds pretty nice from where I stand. It may yet end up being the least bad asset of 2015!
Reub
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Re: Depressed

Post by Reub » Thu Dec 17, 2015 4:09 pm

You can also rebalance but leave whatever funds are designated towards gold in cash and wait for a relative strength buy signal to deploy it.
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Re: Depressed

Post by barrett » Thu Dec 17, 2015 4:17 pm

Reub wrote: You can also rebalance but leave whatever funds are designated towards gold in cash and wait for a relative strength buy signal to deploy it.
This is a really good idea for someone who hates an asset. If it goes up from here and adds some value to your portfolio, you are happy. If it goes down further, you feel smart for having waited.

I would just add that at a certain point owning an asset really can't impact a portfolio if one doesn't hold a high enough percentage. The standard advice that a lot of money people seem to throw out about "5% in gold" just seems too low. Or as my grandmother once said, "If you're going to eat beans, eat beans!"
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ochotona
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Re: Depressed

Post by ochotona » Thu Dec 17, 2015 6:00 pm

The married puts thing is used by Meb Faber's Value and Momentum ETF to protect against market declines. I called up Cambria and talked to the man himself about it!

Just FYI for you people who are getting depressed over gold, I'm now executing a slow buy program for 2016, with an acceleration factor as the price goes lower. Buy 1 oz a quarter based on oversold technicals, if below $900/oz then 2 oz a quarter, if below $800/oz then 3 oz per quarter, etc., until my budget is used up.
Last edited by ochotona on Thu Dec 17, 2015 6:07 pm, edited 1 time in total.
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dualstow
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Re: Depressed

Post by dualstow » Thu Dec 17, 2015 9:56 pm

buddtholomew wrote: Is anyone on this board approaching a tolerance band and do you intend to rebalance?
Things are so zig zaggy that it would be untrue so say I'm approaching a band, really. But, Stocks and Bonds are both at 27%. Gold is at 20%. I thought I could wait for 15%, but if it drops much further, coinciding with new cash coming in this January, I will most definitely be rebalancing.

I would like to do a coin at a time like Ochotona, but I get a much better deal if I buy 10 at a time. That's a lot of money (which is why I almost never buy physical gold!)
Last edited by dualstow on Thu Dec 17, 2015 9:57 pm, edited 1 time in total.
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Re: Depressed

Post by Libertarian666 » Fri Dec 18, 2015 12:50 pm

ochotona wrote: The married puts thing is used by Meb Faber's Value and Momentum ETF to protect against market declines. I called up Cambria and talked to the man himself about it!

Just FYI for you people who are getting depressed over gold, I'm now executing a slow buy program for 2016, with an acceleration factor as the price goes lower. Buy 1 oz a quarter based on oversold technicals, if below $900/oz then 2 oz a quarter, if below $800/oz then 3 oz per quarter, etc., until my budget is used up.
When it gets down to zero, then I'll really load up!
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dualstow
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Re: Depressed

Post by dualstow » Fri Dec 18, 2015 3:15 pm

Feeling better about the pp today, Budd?
I shouldn't even ask, b/c it's so ephemeral, but still.

S&P down 1.78%
Dow down > 2%

TLT up .56%
GTU up 1.12%
RIP Dusty Hill and be well, Bob Odenkirk
Professor Disorientation
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Re: Depressed

Post by Professor Disorientation » Fri Dec 18, 2015 3:52 pm

My PP was up .01 today when the market took a mild beating. I know a lot of people are uncomfortable about gold. But the way I see it is that the asset class that is despised today will be prized tomorrow.

Michael
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Re: Depressed

Post by Kbg » Fri Dec 18, 2015 4:22 pm

dualstow wrote: Feeling better about the pp today, Budd?
I shouldn't even ask, b/c it's so ephemeral, but still.

S&P down 1.78%
Dow down > 2%

TLT up .56%
GTU up 1.12%
Budd will only feel half as good about this as he would feel bad about the opposite according to behavioral scientists...he's just screwed both ways going. :-)

On a more serious note, buying puts on a PP makes absolutely no sense to me. If you are truly bearish then just sell outright and don't forget to figure out when you are going to get back in before you get out. What IS a good idea assuming your account is big enough to make it worth it is to rebalance by selling puts (buy rebalance) and calls (sell rebalance). This also assumes you are holding the ETF versions of all this stuff so it is feasible.

The thing to absolutely never forget about options as a hedge is that you have to get both the direction and the timing right or it is almost without fail a money losing adventure.  Selling puts and calls as a way to buy and sell is a very good thing to do. Basically, free money for something you were going to do anyway.
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ochotona
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Re: Depressed

Post by ochotona » Fri Dec 18, 2015 5:14 pm

Professor Disorientation wrote: My PP was up .01 today when the market took a mild beating. I know a lot of people are uncomfortable about gold. But the way I see it is that the asset class that is despised today will be prized tomorrow.

Michael
Gold is looking better and better. When the 200 day MA runs horizontal for a while instead of straight down, that will be even better.
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buddtholomew
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Re: Depressed

Post by buddtholomew » Fri Dec 18, 2015 6:08 pm

Retirement account 70/30 equities/bonds is -1.53% YTD.
Taxable account HBPP 4x25 with cash to maintain a 5.6 year fixed income duration is -1.60% YTD.
Disclaimer: I bought equities in both retirement and taxable accounts when SPY was trading at 190.

The PP was less volatile, but I would have expected either LTT's or Gold to support the portfolio as equities declined. Gold is still -10% YTD and LTT's (dividends not reinvested) are -2% YTD. If the PP works as planned, equities should just be one of the four assets in decline and one or more (perhaps cash this year) of the remaining assets should rise to buoy the overall portfolio. Time will tell.

Lesson learned: you can achieve the same returns with less risk :o
Last edited by buddtholomew on Sat Dec 19, 2015 9:36 am, edited 1 time in total.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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stpeter
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Re: Depressed

Post by stpeter » Wed Dec 30, 2015 6:24 pm

Austen Heller wrote: Perhaps you need to tighten up your rebalance bands.  Stocks were down 10% a few months back, then popped up near the highs.  Did you harvest any of this volatility?  IMO the 15/35 bands are too wide to capture small swings like we saw in the fall.  Using 20/30 or 22.5/27.5 bands would allow you to get some gains, since the overall returns of the 4 asset classes are predicted to be low going forward.
I think the jury is out on whether modifying the rebalancing bands from HB's 15/35 makes much of a difference (although narrowing the bands will certainly increase your trading fees). There's a good discussion in an older thread here: http://gyroscopicinvesting.com/forum/pe ... -questions
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