Trump's Effect on the PP

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MachineGhost
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Re: Trump's Effect on the PP

Post by MachineGhost » Sun Nov 13, 2016 12:37 pm

Roy wrote:The last 3 days are dust in the wind—just as a few bad days in 2013 were, or those 3 great days (whenever), or the years that the PP lagged the broad market, or when it outperformed it when needed most.

All that is old news buried under a smooth flowing, longer-term trendline—but only if one does not fret over the dailies.

That the PP is a method that works—and works perhaps as well as anything can—is the sort of old news that allows one to do things other than watch it.

But the behavioral stuff is perneciously timeless. And for all the brilliance in its simple, effective design, it can not offer proof against one’s own gremlins.
I nominate the above for post of the year!
"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!
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IDrinkBloodLOL
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Thu Nov 17, 2016 8:42 am

rickb wrote: Trump will actually do whatever is best for Trump. First order of business is drastically reduce taxes on the wealthy. Second is to eliminate the estate tax so his kids will end up with everything he's scammed. Everything else is simply noise (he has no principles and no morals).

He's suggested "negotiating" (AKA defaulting) on US Treasuries. IMO, this is what's driving the treasuries beat down. If the "validity of the public debt of the United States ..." (see https://en.wikipedia.org/wiki/Fourteent ... nstitution) can be questioned, then one of the fundamental premises of the PP (the US will never default on treasuries) breaks. This is a very, very, very big deal. One way this happens is the Republican congress refuses to increase the debt limit. Trump is (at least notionally) a Republican. I suspect the market is simplified terrified about this (IMO, not terrified enough).
This is what I am worried about. It seems like PP implicitly assumes that united states money and bonds will never become worthless. A student of history knows all countries are temporary phenomena, especially democracies. Our democracy is looking to be on its last legs, beginning to see advanced and widespread corruption, civilian unrest, attacks on our soil by foreigners going unpunished, and demographic replacement of our founding stock.

Therefore to me in this increasingly unstable world I am really beginning to worry the PP is at abnormal risk of receiving a 50% hair cut in not a very long time.

I am really thinking 50/50 stock and gold, or some split off stocks, REITs and gold is what I will move towards. I am still thinking it through, but in this world it is obvious gold is a store of value through inflation, multinational corporations will be fine even as countries wither and die, and somebody will always be making a killing charging everyone rent.

Trying not to go all chicken little, but soon we might see Browne's assumptions go obsolete.
Last edited by IDrinkBloodLOL on Thu Nov 17, 2016 8:57 am, edited 1 time in total.
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buddtholomew
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Re: Trump's Effect on the PP

Post by buddtholomew » Thu Nov 17, 2016 8:56 am

IDrinkBloodLOL wrote:
rickb wrote: Trump will actually do whatever is best for Trump. First order of business is drastically reduce taxes on the wealthy. Second is to eliminate the estate tax so his kids will end up with everything he's scammed. Everything else is simply noise (he has no principles and no morals).

He's suggested "negotiating" (AKA defaulting) on US Treasuries. IMO, this is what's driving the treasuries beat down. If the "validity of the public debt of the United States ..." (see https://en.wikipedia.org/wiki/Fourteent ... nstitution) can be questioned, then one of the fundamental premises of the PP (the US will never default on treasuries) breaks. This is a very, very, very big deal. One way this happens is the Republican congress refuses to increase the debt limit. Trump is (at least notionally) a Republican. I suspect the market is simplified terrified about this (IMO, not terrified enough).
This is what I am worried about. It seems like PP implicitly assumes that united states money and bonds will never become worthless. A student of history knows all countries are temporary phenomena, especially democracies.

Therefore to me in this increasingly unstable world I am really beginning to worry the PP is at abnormal risk of receiving a 50% hair cut.

I am really thinking 50/50 stock and gold, or some split off stocks, REITs and gold is what I will move towards. I am still thinking it through, but in this world it is obvious gold is a store of value through inflation, multinational corporations will be fine even as countries wither and die, and somebody will always be making a killing charging everyone rent.

Trying not to go all chicken little, but soon we might see Browne's assumptions go obsolete.
I seriously doubt that the future will play out as you describe.
The fundamental premise of the PP is to hold all assets at ALL times.
I will continue to reinvest interest payments into LTT's as I believe the flight to safety and deflation are still possibilities.
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IDrinkBloodLOL
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Thu Nov 17, 2016 9:00 am

buddtholomew wrote: I seriously doubt that the future will play out as you describe.
The fundamental premise of the PP is to hold all assets at ALL times.
I will continue to reinvest interest payments into LTT's as I believe the flight to safety and deflation are still possibilities.
I get that, but is that in actual fact a good idea? How has a Venezuelan PP done recently? What I'm getting at is... are we assuming there are no possible scenarios where PP gets trashed bad enough to set you back a decade? Does the PP still work if you no longer believe America is magic?
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Re: Trump's Effect on the PP

Post by buddtholomew » Thu Nov 17, 2016 9:47 am

IDrinkBloodLOL wrote:
buddtholomew wrote: I seriously doubt that the future will play out as you describe.
The fundamental premise of the PP is to hold all assets at ALL times.
I will continue to reinvest interest payments into LTT's as I believe the flight to safety and deflation are still possibilities.
I get that, but is that in actual fact a good idea? How has a Venezuelan PP done recently? What I'm getting at is... are we assuming there are no possible scenarios where PP gets trashed bad enough to set you back a decade? Does the PP still work if you no longer believe America is magic?
I don't hold a Venezuelan PP as the country is not the world's reserve currency.
What other country do you expect to take America's place?
We truly live in a time when the cards are stacked on our side if you live in the US.
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Thu Nov 17, 2016 10:01 am

buddtholomew wrote: I don't hold a Venezuelan PP as the country is not the world's reserve currency.
What other country do you expect to take America's place?
We truly live in a time when the cards are stacked on our side if you live in the US.
Just to drive my point home, what if in some setting the world had an oligopoly of competing powers with separate currencies, such as the USA, China and Russia, and there was no clear singular world reserve currency? What if in another hypothetical, the oil economy collapsed due to a combo of diminishing supply and highly successful alternative technology, leaving currency markets upended? Before the gold standard was thrown out, nobody would believe paper had value unless it was a claim on gold, how are we sure 2016 is not a similar environment where we naively scoff at the idea of a world where the petrodollar is not the most important reserve of currency?
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Re: Trump's Effect on the PP

Post by buddtholomew » Thu Nov 17, 2016 10:31 am

IDrinkBloodLOL wrote:
buddtholomew wrote: I don't hold a Venezuelan PP as the country is not the world's reserve currency.
What other country do you expect to take America's place?
We truly live in a time when the cards are stacked on our side if you live in the US.
Just to drive my point home, what if in some setting the world had an oligopoly of competing powers with separate currencies, such as the USA, China and Russia, and there was no clear singular world reserve currency? What if in another hypothetical, the oil economy collapsed due to a combo of diminishing supply and highly successful alternative technology, leaving currency markets upended? Before the gold standard was thrown out, nobody would believe paper had value unless it was a claim on gold, how are we sure 2016 is not a similar environment where we naively scoff at the idea of a world where the petrodollar is not the most important reserve of currency?
Yikes, can you imagine the ramifications to the retail investor if such an outcome would come to fruition?
I can't so I hold all assets at ALL times as 2 assets losing 50% of their value represents a 25% portfolio decline.
This does not take into consideration how the remaining two assets respond.

25% drawdown is awful but not catastrophic.
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Re: Trump's Effect on the PP

Post by MachineGhost » Thu Nov 17, 2016 11:56 am

Use trend following on T-Bonds and stop worrying about it.
"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!
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Thu Nov 17, 2016 12:51 pm

buddtholomew wrote: I seriously doubt that the future will play out as you describe.
The fundamental premise of the PP is to hold all assets at ALL times.
I will continue to reinvest interest payments into LTT's as I believe the flight to safety and deflation are still possibilities.
buddtholomew wrote:yeah, its fucked up.
All the gains this year are disappearing before my eyes.
I've sat through more painful drops in gold and treasuries than I ever would have experienced in a 50/50 stock/bond portfolio.
Completely give up...
So are you all in or are you having your own doubts? Why are you acting like I am a retard who just does not understand Browne's ideas when you say stuff like this?
dutchtraffic
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Re: Trump's Effect on the PP

Post by dutchtraffic » Thu Nov 17, 2016 3:37 pm

CullyB wrote:What is the maximum time horizon on 2 of the assets falling simultaneously? It sure looks like that might happen for the next 4 years or even 8.
All 4 of them could decline for the next 300 years.

What do you mean..?
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Re: Trump's Effect on the PP

Post by buddtholomew » Thu Nov 17, 2016 3:37 pm

IDrinkBloodLOL wrote:
buddtholomew wrote: I seriously doubt that the future will play out as you describe.
The fundamental premise of the PP is to hold all assets at ALL times.
I will continue to reinvest interest payments into LTT's as I believe the flight to safety and deflation are still possibilities.
buddtholomew wrote:yeah, its fucked up.
All the gains this year are disappearing before my eyes.
I've sat through more painful drops in gold and treasuries than I ever would have experienced in a 50/50 stock/bond portfolio.
Completely give up...
So are you all in or are you having your own doubts? Why are you acting like I am a retard who just does not understand Browne's ideas when you say stuff like this?
45% of retirement assets invested in the PP.
Feel very uncomfortable holding gold and treasuries, always have, always will.
If you buy into the philosophy it makes sense to hold all assets at all times.
I've considered shortening duration further (5.6 years), but concerned that the PP will not have sufficient fixed income exposure to respond to a stock and/or gold decline.

It looks like you are a new PP poster, so wanted to share some of the feedback I have received over the years.
Last edited by buddtholomew on Thu Nov 17, 2016 4:08 pm, edited 1 time in total.
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Re: Trump's Effect on the PP

Post by dutchtraffic » Thu Nov 17, 2016 3:41 pm

So let me get this straight.

Everybody is whining like crazy for ages that rates are waayyyyy too low, and when they finally rise a tiny tiny bit, everybody goes full-mental mode...? Look at the longterm chart, it barely moved, it's still a loonnnnggg way down to get to normal rates. And it's still a very big "IF", if rates even go back to 'normal' anytime soon.

Why are you guys investing?
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