mathjak's daytrading adventures

[mathjak107]

We are certainly enjoying it ..but it does take a certain safe withdrawal rate to maintain it through good and bad times .

Remember a safe withdrawal is based on the worst of times , so it can alway have principle go to zero ....

90% of all 129 30 year cycles we have had left you with more than you started with a typical 60/40 mix

2/3’s of the time you ended 30 years with 2x what you started .

But the first 15 years are most critical and you don’t usually know where you fall it out outcome wise ..it is more about the sequence of your returns then the average return

[mathjak107]

I'll add, even though GLD and TLT are down Im still happy I have them. They help me feel safe because I know in the event of real inflation or deflation...I'll have something that will do well.

That's the way the portfolio works. If you're truly diversified something is going to suck.

Yep that is true ..except I have a problem wth that when the model I left for the pp does not suck and is still up ..so yeah buyers remorse when you have a good comparison to what you were doing.

That may reverse one day but until then , down is down

[doodle]

I'll add, even though GLD and TLT are down Im still happy I have them. They help me feel safe because I know in the event of real inflation or deflation...I'll have something that will do well.

That's the way the portfolio works. If you're truly diversified something is going to suck.

Yep that is true ..except I have a problem wth that when the model I left for the pp does not suck and is still up ..so yeah buyers remorse when you have a good comparison to what you were doing.

That may reverse one day but until then , down is down

I appreciate talking to you because I am having many of the same emotions you have. It's almost like I'm having a conversation between the devil and angel on my right and left shoulders. What I say to you, I'm really just saying to myself.

What you described sucks. You bet on red and the latest market spin has come up black. That was entirely unpredictable. And frankly, what happens tomorrow is unknown as well. Maybe you jump out of this portfolio with a sigh of relief when rates get back to break even and jump back into old portfolio and suddenly the market takes a shit and you lose 20% of portfolio. Then you would feel even worse for jumping out of frying pan and into the fire. Who knows! Good thing your castle has some pretty thick walls and can take a lot of abuse.

[buddtholomew]

This is where I come in and say...
Should we really invest 25% in each asset class or is that strictly for simplicity?

[Mark Leavy]

This is where I come in and say...
Should we really invest 25% in each asset class or is that strictly for simplicity?

Obviously you can determine what the optimum historical allocation would have been via data fitting (not recommended). Going forward, it is anyone's guess.

Just for grins, I put SHY/GLD/TLT/SPY into PortfolioVisulazer's optimization tool and selected "Optimize for Kelly Criterion"

Funny. It came up with a portfolio of 22% gold and 78% SPY with no TLT or SHY

[mathjak107]

I can see a portfolio of equities and gold now

[buddtholomew]

Equities, gold, cash but that’s all hindsight.
I just can’t believe what I’m seeing in LTT’s.

[mathjak107]

Yeah , it was a lot of carnage very quickly ...

Well the good news is if I stay in Tlt for its duration of 19 years I will at least see about 1.85% interest on average. Lol

But we have not had a real bear market in bonds in 40 years ...so it may be time ...we had little bumps but nothing as a long term trend going up.

Who knows maybe we are in for the same thing we saw coming down ..only this time a 40 year trend going back up the fed can’t control.

[doodle]

The negativity here is crushing! All the hate starting to make me feel bullish!

[mathjak107]

The negativity here is crushing! All the hate starting to make me feel bullish!

Tune in to watch MJ defend the PP, it's going to be refreshing.

Believe me , I only want to do that .. with almost 3 million in that portfolio I want nothing more than to tell myself , you see .....

[buddtholomew]

The negativity here is crushing! All the hate starting to make me feel bullish!

Tune in to watch MJ defend the PP, it's going to be refreshing.

You’ve been a member for all of 3 months now.
How long have you held the PP and is it 4x25?
Apologies if you have already stated.

[doodle]

Looking at bright side...Gold is standing up impressively to some pretty heavy interest rate pressure!

[mathjak107]

Looking at bright side...Gold is standing up impressively to some pretty heavy interest rate pressure!

Not much better than Tlt.

ytd they are both down within a percent or so of each other and both are almost as bad from the aug high

[mathjak107]

Tlt officially in a bear market as of Friday , now down 20% from august

https://www.bloomberg.com/news/articles ... elds-spike

[vnatale]

Tlt officially in a bear market as of Friday , now down 20% from august

https://www.bloomberg.com/news/articles ... elds-spike

Which might mean that since both gold and long-term bonds are both way off their peaks of last August....that now might be a time to buy?

[mathjak107]

I am hoping .....

Normally we buy bear markets but this is more unknown then a stock bear market ....if you played the odds , usually with few exceptions bear markets don’t go on long .....but commodities and interest rates tend to have very long cycles .

In fact in my investing lifetime I have never seen a rise in rates that was a long term trend and not much more than a speed bump in the ski slope down .

So not sure what to expect as far as rates cycling ....maybe we will never look back to these levels in my lifetime, which would mean it could take 20 years to see an under 2% return and that may be in a world of who knows what rates ....

Historically 5%-6% were the norm ...remember the 5-1/4% pass book account or are you to young ?

[vnatale]

I am hoping .....

Normally we buy bear markets but this is more unknown then a stock bear market ....if you played the odds , usually with few exceptions bear markets don’t go on long .....but commodities and interest rates tend to have very long cycles .

In fact in my investing lifetime I have never seen a rise in rates that was a long term trend and not much more than a speed bump in the ski slope down .

So not sure what to expect as far as rates cycling ....maybe we will never look back to these levels in my lifetime, which would mean it could take 20 years to see an under 2% return and that may be in a world of who knows what rates ....

Historically 5%-6% were the norm ...remember the 5-1/4% pass book account or are you to young ?

I'm a year older than you so definitely not too young. I remember when we'd refer to those bank accounts returns of only 5.25% with derision. Now we'd kill for a safe return like that!

[mathjak107]

Yep , we made fun out of those 5-1/4% accounts ...but that was the norm and bonds were even higher ..

So I don’t know what to expect from rates going forward and am very leary as to what they may do starting from such low interest rate levels.

All we need is the reverse , instead of falling for 40 years we trend up for a decade or two or three ..we have a lot more in modern day investing experience in equities than we do bonds which have only had rates fall as a trend in modern times

[vnatale]

Yep , we made fun out of those 5-1/4% accounts ...but that was the norm and bonds were even higher ..

So I don’t know what to expect from rates going forward and am very leary as to what they may do starting from such low interest rate levels.

All we need is a the reverse , instead of falling for 40 years we trend up for a decade or two or three ..we have a lot more in modern day investing experience in equities than we do bonds which have only had rates fall as a trend in modern times

Yes...and it was those Money Market Funds (not from banks) that were paying much higher rates...

[mathjak107]

Banks were fdic and did not pay as much because they didn’t have to in those days..few average folks heard of a brokerage money market or even had an account in one

[vnatale]

Banks were fdic and did not pay as much because they didn’t have to in those days..few average folks heard of a brokerage money market or even had an account in one

I first became involved with mutual fund money market funds in 1981.

As soon as the money came into our business I was mailing it to a money market fund located halfway across the country from us.

Then I had to stop when two of our bankers took me out to lunch to educate me that I was sending out checks on undeposited funds and writing checks on the same. That was back in the ancient days when it took many more days before banks would deem funds as being collected.

[mathjak107]

My guess is today the fed will announce nothing to put the brakes on rates . Hopefully there won’t be a sell off in bonds today .

With most of the world and especially us in a recovery with pretty low inflation I don’t see them doing much at this point ....this is likely just normalizing inflation wise after so many low years so I think rates will still climb and the pp will take its lumps for a while longer , no telling how much longer ...who knows ,it could be years unless the virus makes a comeback here.

[buddtholomew]

Lower, lower and lower...
Yay PP!

[amdda01]

F*ck TLT.

Seriously, f*ck it.

[buddtholomew]

F*ck TLT.

Seriously, f*ck it.

My sentiments exactly.
Anyone who says otherwise is being untruthful to themselves.