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Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 9:45 am
by Cortopassi
CullyB wrote:Bonds and stocks getting hurt badly again today. Equities aren't making up for it. This could be a very painful 4 or more years for this type of investing.
You meant gold, not stocks, right?

Whatever. Unless you got a 5% CD or money market I can plop my net worth in, there's nothing else I would consider doing than the PP.

All the moves every day are exaggerated both up and down in almost every type of holding. Does make it tough for those of us that like to watch daily.

I am bracing myself for December to erase the 6.5% gain I have for the year so far. If it doesn't, I will be pleasantly surprised.

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 3:13 pm
by buddtholomew
Cortopassi wrote:
CullyB wrote:Bonds and stocks getting hurt badly again today. Equities aren't making up for it. This could be a very painful 4 or more years for this type of investing.
You meant gold, not stocks, right?

Whatever. Unless you got a 5% CD or money market I can plop my net worth in, there's nothing else I would consider doing than the PP.

All the moves every day are exaggerated both up and down in almost every type of holding. Does make it tough for those of us that like to watch daily.

I am bracing myself for December to erase the 6.5% gain I have for the year so far. If it doesn't, I will be pleasantly surprised.
Seems like gold and LTT's are in a race to the bottom wherever that may be...
It has been really tough to watch the portfolio perform so poorly since the recent highs.
It feels like we are the bag holders when everyone else is selling to escape.
Still sticking to the plan, but man this is borderline abuse.

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 6:55 pm
by IDrinkBloodLOL
WHAT THE FUCK IS THIS SHIT

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 7:10 pm
by Kriegsspiel
I don't even the numbers.

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 7:34 pm
by IDrinkBloodLOL
I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 9:32 pm
by Cortopassi
IDrinkBloodLOL wrote:I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?
It will. It never feels like it at these points, but it will.

What would you have done otherwise? More stock? More active trading? Just curious.

Re: Trump's Effect on the PP

Posted: Wed Nov 30, 2016 11:57 pm
by rickb
Cortopassi wrote:
IDrinkBloodLOL wrote:I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?
It will. It never feels like it at these points, but it will.

What would you have done otherwise? More stock? More active trading? Just curious.
I don't track year to date returns, but I'm up about 6% over the last 12 months with >90% of assets in a PP portfolio. Seems pretty good to me.

The reason I'm in a PP portfolio is 2008. I've never been an aggressive investor, but in 2008 the total assets (accumulated over 30 years of "investing") dropped by about 25%.

If you do the arithmetic, you can easily figure out I'm over 50. This involves a significant amount of money (I'll clue you in that 25% was a mid 6 figures amount).

I've been financially fucked, repeatedly (a long story for a different time). There are certainly no guarantees, but the PP has been the closest I've ever seen to a "don't get fucked" portfolio.

If you want to hit triples every year, you'll strike out (repeatedly). If you're OK with hitting singles, ...

I have serious concerns about whether the PP will survive Trump. I'm seriously considering converting my paper gold (ETFs and CEFs) to physical gold. But the structure of the PP more or less guarantees that I'll preserve at least a significant portion of my accumulated wealth no matter what kind of chaos Trump manages to create.

We could be on the verge of a nuclear WWIII. Gold should do OK.

We could be on the verge of a worldwide depression due to trade wars that makes the 1930s look like nirvana. Short term treasuries and gold should do OK.

We could be on the verge of America being great again (whatever the fuck that means). Stocks should do OK.

The whole point of the PP is that you don't get fucked. No matter what.

Re: Trump's Effect on the PP

Posted: Thu Dec 01, 2016 7:20 am
by Cortopassi
rickb, exactly!

Worst thing that is going to happen right now is we get a perceived sale on gold and bonds if you rebalance in January.

At least small caps are doing well, for those doing the GB.

Re: Trump's Effect on the PP

Posted: Thu Dec 01, 2016 9:52 am
by Kevin K.
Thanks rickb and Cortopassi for your comments and sentiments. I'm in the same boat vis-a-vis 2008, as I suspect a lot of us are.

We all sign on for volatile individual assets when we take on the PP, but it is indeed difficult to see two of them getting hammered every day in unison with no end in sight.

So...there's staying the course as one option, the Golden Butterfly tweak with its higher allocation to equities as another, and beyond that the only portfolios I know of that would be even remotely appealing to those looking for a PP-like "bunker" are iterations of Larry Swedroe's "Larry Portfolio" of which (for me anyway) Desert's latest iteration (60% IT Treasuries, 10% each TSM, SCV, EM and gold) is the most appealing. Its backtested numbers are if anything even more impressive than the PP's in terms of stability of returns and avoiding drawdowns, but as HB and others here (always much gratitude to Craig and Medium Tex!) have taught us one has to look at the design independent of backtesting.

My take it that the intermediate term bonds are a lot easier to deal with in a rising-rate environment while still offering plenty of protection when flight-to-safety events happen. Desert's stock allocation is straight from Swedroe's 70% stable bonds/30% super-volatile stocks playbook and IMO makes a lot more sense than U.S. large caps only given relative valuations (Swedroe's excellent book(let) "Reducing the Risk of Black Swans" has the data and logic). The 10% gold really does make a difference in the returns and reflects Desert's careful study of the PP, but 10% is a whole lot easier to live with than 25% - just enough (as he put it) for "SHTF" insurance.

Re: Trump's Effect on the PP

Posted: Thu Dec 01, 2016 12:14 pm
by Jack Jones
At least small caps are doing well, for those doing the GB.
The stock portion of my PP is half SP500, and half Vanguard Small Cap (credit goes to MG for inspiring me to make this modification). I feel like it's a reasonably safe and sensible deviation from a proper PP.

Re: Trump's Effect on the PP

Posted: Thu Dec 01, 2016 4:36 pm
by I Shrugged
I am also in the boat RickB described. I only had the one scary loss, in 08/09, though. But it made me go for the PP. I already believed in it, but had not really adopted it. I think the end of ZIRP will dwarf whatever the GOP may do. However ZIRP unwinds, it will be a great test for the PP. I don't love being a guinea pig, but then, at this point, what investor isn't one?

Re: Trump's Effect on the PP

Posted: Thu Dec 01, 2016 5:13 pm
by buddtholomew
Investors that chased gold and bond returns have certainly paid the price.
Those of us invested in the PP this year have watched an outsize return evaporate as these same assets declined.
What lies ahead is anyone's guess, but I for one am going to re-balance into gold and treasuries to maintain my allocation.
We have witnessed a remarkable recovery in equities since the depths of 08/09.
If it continues, great, but when it does retract I fully expect gold and/or treasuries to be the main recipients.
Investors are always on the wrong side and I am not going to choose.
I will also be OK if investors flee to cash if interest rates rise and savings begin to pay a decent yield.

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 6:46 am
by barrett
buddtholomew wrote:Investors that chased gold and bond returns have certainly paid the price.
Those of us invested in the PP this year have watched an outsize return evaporate as these same assets declined.
What lies ahead is anyone's guess, but I for one am going to re-balance into gold and treasuries to maintain my allocation.
We have witnessed a remarkable recovery in equities since the depths of 08/09.
If it continues, great, but when it does retract I fully expect gold and/or treasuries to be the main recipients.
Investors are always on the wrong side and I am not going to choose.
I will also be OK if investors flee to cash if interest rates rise and savings begin to pay a decent yield.
Yeah, I'm pretty much with you on all points, Budd. One thing of note... When I look at historical data, it seems that investors are willing to deal with higher stock P/E ratios over time. The highs on the historical graph are higher as well as the lows. So, while I believe stocks are coming down at some point, they may not really get hammered as they did in 2008. But, yeah, keeping the four assets pretty much in balance seems likely to be the best approach going forward.

What I struggle with at times is looking at that retirement account # going down when I am trying to get my finances in line to retire (don't HAVE to yet but I would like for it to be an option). It's natural to get "anchored" on the amount of $ one has at a peak and feel, OK, this is where I am at. All is well. Then during the drawdowns, which happen with ANY portfolio, it feels like $ is being taken away. So maybe I work a year or three longer than I had planned. That's hardly a tremendous hardship. Anyway, just blathering here.

But, while I am blathering, I may as well continue! The YTD PP gains three months ago just seemed unsustainable. This portfolio is not supposed to beat inflation by 12-14%. But, to vaguely bring this post back to any effect Trump might be having on the PP, I just don't see that anything much has changed fundamentally since he was elected. I don't see that inflation, prosperity or any other economic condition naturally follows just because we have Trump to deal with for the next 2-4 years (we'll see what happens in the 2018 midterm election).

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 8:44 am
by buddtholomew
I sympathize with your position Barrett.

What has helped me emotionally is continuing to add contributions and ALSO holding a traditional BH 70/30 AA.

Again, I fully expect the BH portfolio to sustain a loss at some point and for the PP to change course once again.

The only alternative I would consider if only a PP investor is NOTHING. I rebalanced out of small-cap and EM and will not purchase as part of the PP to ride that rollercoaster back down like gold and bonds.

You have to be there before the run-up to participate fully.

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 8:52 am
by Cortopassi
barrett wrote:It's natural to get "anchored" on the amount of $ one has at a peak and feel, OK, this is where I am at. All is well. Then during the drawdowns, which happen with ANY portfolio, it feels like $ is being taken away.
That's the worst part. You lost money that you didn't have, but it still hurts. But not like anyone knows the peak at which to sell and the bottom at which to buy.

This has been a good year for me mentally. I care less and less, especially as I realize more and more there's not a damn thing I can do about it, other than just stuff money under my mattress.

I'm sure some will say go to a different allocation, etc, but the split I have right now "feels" right for me, and that's the most important thing:

25% total market
5% small cap
5% emerging market
25% TLT
25% gold
5% silver

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 12:17 pm
by foglifter
Cortopassi wrote: I'm sure some will say go to a different allocation, etc, but the split I have right now "feels" right for me, and that's the most important thing:

25% total market
5% small cap
5% emerging market
25% TLT
25% gold
5% silver
That's a fine allocation. Are the numbers correct? Looks like 10% is missing. :)

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 12:21 pm
by Cortopassi
Oops! 10% cash.

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 4:14 pm
by buddtholomew
Now its terrible! ;D

In response to barrett's comment on anchoring
It's natural to get "anchored" on the amount of $ one has at a peak and feel, OK, this is where I am at.
To me it feels like a mini-recession when I have become accustomed to the total in my account and the portfolio pulls back from a recent high.
"Anchoring" is difficult to overcome and that's what is/was so appealing to me about the PP.
The number I anchor around and the actual value are both higher than I started the year with.
The recent high is now the next target.
It doesn't always work...

Re: Trump's Effect on the PP

Posted: Fri Dec 02, 2016 9:47 pm
by JohnnyFactor
Cortopassi, why do you have silver? I like silver myself but I don't know how to classify it as an investment.

Re: Trump's Effect on the PP

Posted: Sun Dec 04, 2016 8:33 am
by barrett
JohnnyFactor wrote:Cortopassi, why do you have silver? I like silver myself but I don't know how to classify it as an investment.
Hey, I just logged on to ask the same question! Cortopassi, are you just fiddling around the edges or do you have a strategy behind your silver position? As in, it may do well in an economic boom for industrial reasons but also might provide a bit of inflation protection? For me both of those are already pretty well covered by the 4X25 PP. Or are you just down in your man cave in the basement fondling your secret silver stash?

Re: Trump's Effect on the PP

Posted: Sun Dec 04, 2016 12:57 pm
by Cortopassi
I already held physical silver before I started the PP, and cannot bear to part with it, so I incorporated it. I continue to like the idea of having a good % physical vs. being bits on a server somewhere.

While it is supposed to act good as an industrial metal, as far as I've seen for 8 years it is basically just an amped up version of gold. Rises faster/more and falls faster/more.

If I did not hold any, my tweaking for the past year has been targeted to get to 10% cash, so I likely would just have done 30% gold instead.

Re: Trump's Effect on the PP

Posted: Mon Jan 13, 2020 10:05 am
by vnatale
Libertarian666 wrote:
Fri Nov 25, 2016 8:30 pm
I'm going to suggest the following plan to President-Elect Trump:
1. Revalue the Treasury's gold to a high enough price to pay off the debt not held by the Fed.
2. Cancel the debt held by the Fed.
3. End the Fed.
4. End the following departments: HUD, Commerce, Education.
5. Submit a balanced budget, and propose a constitutional amendment requiring this. This will end the trade deficit automatically because there won't be hundreds of billions of $ flowing overseas.
6. Propose a constitutional amendment requiring a balanced budget.
7. End the IRS, funding the government via tariffs.

Then watch the economy take off!
3 years 2 months later he has so far accepted none of your above recommendations?

Vinny

Re: Trump's Effect on the PP

Posted: Mon Jan 13, 2020 12:35 pm
by stuper1
Techno, you are obviously a fascist for even considering the possibility that Trump is not the reincarnation of Adolf Hitler. Haha, just kidding.

I did some head scratching about some of the recent remembrances about past Trump discussions. I don't remember them the way that some people do. I guess it's true what they say about eye-witness accounts varying. Anywho, my political philosophy is very simple: I support smaller government over bigger government, and I don't really care what anybody posts on Twitter including our dear bombastic president, nor do I care about hyperbolic private conversations he may have had in the past about female proclivities to put up with caddish behavior by a well-endowed male.

Re: Trump's Effect on the PP

Posted: Tue Jan 14, 2020 6:19 pm
by I Shrugged
I had to think about "least non-libertarian."
I take it you couldn't bring yourself to say "most libertarian." :)

Re: Trump's Effect on the PP

Posted: Tue Jan 14, 2020 8:50 pm
by Libertarian666
I Shrugged wrote:
Tue Jan 14, 2020 6:19 pm
I had to think about "least non-libertarian."
I take it you couldn't bring yourself to say "most libertarian." :)
I consider “libertarian” to be an absolute. If you abide by the NAP then you are one; otherwise not. But there are degrees of violation and he is the least bad President in my lifetime.