Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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sophie
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Re: Stock scream room

Post by sophie » Tue Oct 07, 2014 4:06 pm

Saw this and had to check...wow.  What happened today?

CNN seems to like calendar-based explanations of stock market performance dips.  Last month it was "September is bad for stocks".  Before that it was "sell in May", then "summer is bad for stocks".  Now it's "October is scary for stocks."  I guess that's what you write when you want to sound smart but don't have anything worthwhile to say.

Note to all those who were frantic to avoid buying bonds in a recent thread:  SEE????  TLT went up more today than the stock market went down.  Gold went down a bit, so PP is probably near flat for the day.
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Re: Stock scream room

Post by Reub » Tue Oct 07, 2014 4:13 pm

Actually GLD and IAU were up a little, making the day positive despite massive stock market losses. :)

Now GTU was another story! :(
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Re: Stock scream room

Post by iwealth » Tue Oct 07, 2014 4:20 pm

sophie wrote: CNN seems to like calendar-based explanations of stock market performance dips.  Last month it was "September is bad for stocks".  Before that it was "sell in May", then "summer is bad for stocks".  Now it's "October is scary for stocks."  I guess that's what you write when you want to sound smart but don't have anything worthwhile to say.
"Sell in May and go away" is a widely used investing strategy. You exit the market in May and come back in November. It actually backtests quite well.
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Re: Stock scream room

Post by Libertarian666 » Tue Oct 07, 2014 4:25 pm

Reub wrote: Actually GLD and IAU were up a little, making the day positive despite massive stock market losses. :)

Now GTU was another story! :(
Good for me if that keeps up, as I'm planning to trade physical gold in my retirement account for GTU outside.  ;D
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Re: Stock scream room

Post by Reub » Tue Oct 07, 2014 6:04 pm

What I meant was that GTU was down today while GLD and IAU were up, once again under performing.
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Re: Stock scream room

Post by dragoncar » Wed Oct 08, 2014 11:15 am

Reub wrote: What I meant was that GTU was down today while GLD and IAU were up, once again under performing.
Is there a financial reason GTU is so low?  I mean like increased risk in the underlying company itself?
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Re: Stock scream room

Post by stuper1 » Wed Oct 08, 2014 1:17 pm

For every day that GTU underperforms, there seems to be another day that it overperforms compared to GLD.  Over the long-term, the performance seems to be quite similar.
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Re: Stock scream room

Post by sophie » Wed Oct 08, 2014 1:45 pm

GTU has a lag compared to the gold index price.  It runs at a discount when few people are buying (relative to sellers), and at a premium when there is high demand for gold.  So it does not necessarily track gold perfectly on a day to day basis.

A lot of people here (including me) are buying it even in retirement accounts because of the current discount of 7%.  If gold rises and that discount goes to zero (or even a premium), you'll get an extra 7% bump added to your winnings.
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Re: Stock scream room

Post by Libertarian666 » Wed Oct 08, 2014 2:23 pm

sophie wrote: GTU has a lag compared to the gold index price.  It runs at a discount when few people are buying (relative to sellers), and at a premium when there is high demand for gold.  So it does not necessarily track gold perfectly on a day to day basis.

A lot of people here (including me) are buying it even in retirement accounts because of the current discount of 7%.  If gold rises and that discount goes to zero (or even a premium), you'll get an extra 7% bump added to your winnings.
Right, and furthermore the discount can't grow indefinitely because there is some mechanism for cashing out if it does. They actually called me to discuss that but I was on a very important call and couldn't pick up. I need to call them back about how that works...
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Re: Stock scream room

Post by stuper1 » Wed Oct 08, 2014 7:20 pm

Here's a comparison of GTU and GLD.  It seems to me that GTU is tracking GLD pretty well.

[img width=500]http://i60.tinypic.com/264n8yo.jpg[/img]
Last edited by stuper1 on Wed Oct 08, 2014 11:00 pm, edited 1 time in total.
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Re: Stock scream room

Post by Pointedstick » Wed Oct 08, 2014 7:40 pm

Stuper1, why are you using Internet Exploder!?! ;)
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Re: Stock scream room

Post by Xan » Wed Oct 08, 2014 10:35 pm

The last release or two of IE have, somewhat surprisingly, been pretty good.
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Re: Stock scream room

Post by stuper1 » Thu Oct 09, 2014 10:32 am

IE is the only browser my employer allows on its computers, and they haven't upgraded in a long time, so we're stuck with an old version.  I use Chrome at home thanks to your suggestion, and I'm much happier.

By the way, I should have pointed out that for the PP, GTU may be better than GLD due to the discount/premium thingy.  When gold is riding high and you're ready to sell some to rebalance, it will likely be at a premium, so you will get a better selling price.  When gold is low, and you're rebalancing into it, it will likely be at a discount, so you will get a better buying price.  Of course, in practice it won't always work exactly like the theory, but it shouldn't be too far off.
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Re: Stock scream room

Post by Pointedstick » Thu Oct 09, 2014 10:38 am

stuper1 wrote: By the way, I should have pointed out that for the PP, GTU may be better than GLD due to the discount/premium thingy.  When gold is riding high and you're ready to sell some to rebalance, it will likely be at a premium, so you will get a better selling price.  When gold is low, and you're rebalancing into it, it will likely be at a discount, so you will get a better buying price.  Of course, in practice it won't always work exactly like the theory, but it shouldn't be too far off.
I agree, and do this myself, but I hedge my bets by also holding IAU and physical.
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Re: Stock scream room

Post by Pointedstick » Thu Oct 09, 2014 1:36 pm

Also, ouch!

Image

A day after the Fed's soothing words pumped it up, no less. ::)
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Re: Stock scream room

Post by Tyler » Thu Oct 09, 2014 3:15 pm

With a few more days like today, I predict a surge of new interest in the PP.  8)
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Re: Stock scream room

Post by buddtholomew » Thu Oct 09, 2014 4:39 pm

Tyler wrote: With a few more days like today, I predict a surge of new interest in the PP.  8)
Not so fast. The rest of the components didn't offer much support. Equities down 2.07, Gold up .14 and LTT's down .4.

Treasury yields moved up on a 300 point decline AND the stronger dollar. Can you imagine if the EU had cut rates...we'd be down 1000.
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Re: Stock scream room

Post by stuper1 » Thu Oct 09, 2014 4:44 pm

The support doesn't necessarily come in lockstep with the declines.  Give it a little while to show up.  I like to use peaktotrough.com, focusing on the line showing the overall PP performance and including say a decade of history along with recent results.  The PP doesn't always go upward, but the down parts are much smaller and briefer compared to most other portfolios.
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Re: Stock scream room

Post by dragoncar » Thu Oct 09, 2014 4:58 pm

buddtholomew wrote:
Tyler wrote: With a few more days like today, I predict a surge of new interest in the PP.  8)
Not so fast. The rest of the components didn't offer much support. Equities down 2.07, Gold up .14 and LTT's down .4.

Treasury yields moved up on a 300 point decline AND the stronger dollar. Can you imagine if the EU had cut rates...we'd be down 1000.
not to mention GTU down .3%    I have a surge of new interest in hitting my head against my desk
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Re: Stock scream room

Post by Gosso » Thu Oct 09, 2014 5:50 pm

I haven't seen stocks move like this since Shakira's "Hips Don't Lie": https://www.youtube.com/watch?v=DUT5rEU6pqM
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Re: Stock scream room

Post by Tyler » Thu Oct 09, 2014 6:25 pm

dragoncar wrote:
buddtholomew wrote:
Tyler wrote: With a few more days like today, I predict a surge of new interest in the PP.  8)
Not so fast. The rest of the components didn't offer much support. Equities down 2.07, Gold up .14 and LTT's down .4.

Treasury yields moved up on a 300 point decline AND the stronger dollar. Can you imagine if the EU had cut rates...we'd be down 1000.
not to mention GTU down .3%    I have a surge of new interest in hitting my head against my desk
Lol.  Relax guys -- I'm just stirring the pot.  It's a fun day for knee-jerk threads on various investing boards. 
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Re: Stock scream room

Post by dualstow » Wed Oct 15, 2014 11:55 am

Seems like just yesterday I was feeling bad about taking profits. I had not hit exactly 35% in stocks, and I also only did a half-assed rebalance, preferring to ease into it and finish at the point where the stock share would have hit 35%. That day never came. I really thought stocks would go wild after breaching 2000  (S&P). Needless to say, now I feel great about the premature rebalancing that I did do.
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Re: Stock scream room

Post by Tortoise » Wed Oct 15, 2014 11:29 pm

dualstow wrote: Seems like just yesterday I was feeling bad about taking profits. I had not hit exactly 35% in stocks, and I also only did a half-assed rebalance, preferring to ease into it and finish at the point where the stock share would have hit 35%. That day never came. I really thought stocks would go wild after breaching 2000  (S&P). Needless to say, now I feel great about the premature rebalancing that I did do.
That's good to hear. I was waiting for my stock allocation to hit the 35% rebalance band, and it got pretty close--but then, just short of the mark, stocks started falling like a rock.

This is making me consider switching to 20/30 rebalance bands going forward.
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Re: Stock scream room

Post by Tyler » Thu Oct 16, 2014 9:36 am

Tortoise wrote: That's good to hear. I was waiting for my stock allocation to hit the 35% rebalance band, and it got pretty close--but then, just short of the mark, stocks started falling like a rock.

This is making me consider switching to 20/30 rebalance bands going forward.
Funny -- I had the opposite reaction.  Probably because I've been preparing myself for early retirement by working out strategies to minimize taxes, I tend to view rebalancing these days not as a profit capturing activity but as a (potentially) sizable expense.  If the PP keeps growing within the 15/35 bands while needing a rebalance only very rarely, that would be a fine outcome.  Or maybe I'm just lazy and thankful the markets may save me the effort for a while longer.  ;)
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Re: Stock scream room

Post by dualstow » Thu Oct 16, 2014 9:41 am

I don't have enough income to worry about taxes from investments. 15% bracket.
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