Gyroscopic Investing

I know good question ...it somehow vanished ..I will recompose it

Any way to repost , I just explained my point a lil different than the first time which vanished .

Long term investing does not mean one has to sit and die with exactly the same funds year after year . So the changing of components over time are a part of long term investing .


But no matter what we swap to it is one balance continuation daily ....we have no idea what the future holds for any asset or that it will even have its day in the sun in our lifetime ....

So when you are an investor already , swapping anything is merely a continuation of the the plan .


Whether I moved in to the pp two months ago or stayed in what I had is irrelevant.up to today that balance is what it is and the portfolio effect is what it is ...the fact it may change one day if stocks tank is irrelevant .

All we got is today’s balance at the moment we look...

If the balance at this point in time means nothing to one , then look again next year .

But if it means something or you care and track it then every days is another balance and just the cumulative effect of decades of investing

So much pain with TLT.

Brutal.

amdda01 wrote: ↑Fri Feb 19, 2021 11:11 am So much pain with TLT.

Brutal.

Or, opportunity.... Unless you really think rates are going to rise long term.

amdda01 wrote: ↑Fri Feb 19, 2021 11:11 am So much pain with TLT.

Yeah, brutal it is (Yoda style). I was wondering which of the 2 assets (TLT vs GLD) will decline more ... though TLT seems to be in a free fall recently. It had also dropped below the lower boundary of the well established descending channel, really ugly. On the other hand GLD is still hovering slightly above an important support level, so there still might be some chance rebounding higher...

Certainly stocks in classic HBPP does not appear too much of overperforming at this exact moment in order to cover losses of the rest.. And while averaging down is not for everyone (which is different from being invested and riding down the price from day one), cash is certainly also a valid position

Yeah , I still think gold may surprise everyone and do very well ...we are fighting the fed with Tlt ,..the fed said they are in favor of higher bond rates as they want to keep a lid on inflation ....it is never a good idea to fight the fed as they say .

https://www.reuters.com/article/us-usa- ... SKBN29C2ZH


“I am encouraged to see the rise in market indicators of inflation expectations. ... That is what we are trying to support,” Richmond Federal President Thomas Barkin said on Thursday in an interview with Reuters.

Barkin said he regarded a recent rise in interest rates on Treasury bonds as also part of a “reflation trade,” a sign that investors were factoring future hikes in prices into their decisions by demanding higher interest rates, rather than representing a worrisome tightening of financial conditions.

“The ingredients for higher inflation are in place,” St. Louis Fed President James Bullard said in separate comments to reporters. “You have very powerful fiscal policy in place and perhaps more to come,”

MJ,

U staying the course?

At this point yeah , losses in Tlt and Gld mounted way to quick and very high so I am in it for the haul, not that so far I don’t regret making the move to the pp ,because I do so far ...

Fighting the fed is not a great idea because until some point and god knows when they decide to do some yield curve control , the losses to recover are getting worse and worse.

I may still average down ..at least the almost 2% interest is a consolation although seeing the next two years interest evaporate so far still sucks

For how many years have we heard the Fed wants to normalize, or raise rates? Not buying it yet. I am likely going to bring my % back in line closer to 25%

When did you last hear the fed was happy with investors bidding up bonds while they the fed were not raising the benchmark rates ? I can’t think of any off hand in my investing life time.

As far as I can see this is unique.

Anytime I remember had the fed raising rates and investors bidding rates lower creating an inverted yield curve

mathjak107 wrote: ↑Fri Feb 19, 2021 1:41 pm When did you last hear the fed was happy with investors bidding up bonds while they the fed were not raising the benchmark rates ? I can’t think of any off hand in my investing life time.

As far as I can see this is unique

Exactly. I think it is BS. But that's my opinion. Always jawboning something. In this case I think they are jawboning to get some room for an eventual collapse of everything, along with bond yields.

Nah , they just raised their inflation bar and they don’t want to touch short term rates since inflation is not a problem..but they have no problem with investors bidding up the rates they want to buy treasuries and hence the entire bond market moves rates upward.

The fed is in favor of higher bond rates and that is the scary part for us holding Tlt.

Without the fed signaling if not intervening in to these rising rates , every day Tlt goes lower and lower..there has been no let up in months

What about rates and the US debt?
I was under the impression a rise in rates would result in higher interest payments to pay our debt.

One or both of us is wrong. Regardless, I am ready to bring my % in gold and TLT back in line. Maybe I regret it, but I have regretted a lot in the past and I am trying to do this with as little emotion as possible.

buddtholomew wrote: ↑Fri Feb 19, 2021 1:53 pm What about rates and the US debt?
I was under the impression a rise in rates would result in higher interest payments to pay our debt.

I wasn't going to go into that, but yeas, the Fed really cannot have higher rates. It will be a self fulfilling crash if they do get them, and then it will all crash even sooner.

I have started to add more to gold and stocks and t- bills bringing them up to 600k in each ..Tlt sits at 570k and I have no desire to add another 30k yet ....I have been beaten up almost daily averaging down .

So for now I certainly have enough in Tlt , more than enough but I will wait a bit before throwing anymore more in to the hole in Tlt

Cortopassi wrote: ↑Fri Feb 19, 2021 1:55 pm

buddtholomew wrote: ↑Fri Feb 19, 2021 1:53 pm What about rates and the US debt?
I was under the impression a rise in rates would result in higher interest payments to pay our debt.

I wasn't going to go into that, but yeas, the Fed really cannot have higher rates. It will be a self fulfilling crash if they do get them, and then it will all crash even sooner.

Higher inflation on the other hand decreases the debt load ...wow my first mortgage was 30k in the 1970’s ..that was crushing back then ..today taxes are 15k ..that mortgage won’t even cover utilities..

So while interest may climb a bit the debt load is actually smaller inflation wise...inflation is great for reducing a debt load or making an increasing one seem smaller .

As gdp inflates the debt is a smaller percentage

https://kahlerfinancial.com/financial-a ... -inflation

With long term bonds , every dollar they owe even at 2% inflation will be paid back with what amounts to just 400 dollars per thousand

mathjak107 wrote: ↑Fri Feb 19, 2021 2:04 pm https://kahlerfinancial.com/financial-a ... -inflation

With long term bonds , every dollar they owe even at 2% inflation will be paid back with what amounts to just 400 dollars per thousand

That is a great piece.

That is why the fed does not care to much about the interest ..the entire debt deflates with inflation

So that is why Tlt is scary ....the fed action is behind the increasing rates and inflation and as we all experienced at one point or another , don’t fight the fed..buying Tlt is fighting the feds policy , at least until some point it isn’t their policy ...who knows what kind of losses will be sustained that have to be recovered in that investment .

Those poor buyers of Tlt last august are in a crazy slump . It was I think about 175 ...heck if that was me I would be down an insane 4000 shares x 30 dollars ...that is a 120k hit to recover

From the article:

The Federal Reserve is back in the inflation business. The Fed, with the blessing of the U.S. Treasury and the Obama administration, recently announced they will again start inflating the money supply in hopes of staving off a sustained deflation. Why are they so fearful of deflation?

-----------
Notice it was written sometime during Obama's terms. We are 2 presidents past that now! Where's the inflation and rise in yields?

For example, another wrong call:



And here is the continuation of that chart

I would saywe are seeing it since august.

In the mean time the 30 buck slide is because of the fed and their policy so we are seeing it in action

Couldn't help but notice but since your Covid experience you are now capitalizing the first word in every sentence.

Very Good observation.

In the hospital I was stuck using my iPad day in and and day out ...it has auto type and auto fill of punctuation...when we got home from the hospital I couldn’t sit at the desk top much so I only used the iPad .

I became so comfortable using it and laying on the couch or from a recliner that I never went back to using the desktop...

Only issue is the auto type puts in words sometimes that I don’t catch that are pretty funny .

Very observant

One could say that while you were in the hospital you were confined to an iPadded room.

ONE *COULD* SAY THAT