Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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boglerdude
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Re: Stock scream room

Post by boglerdude » Wed Sep 18, 2019 1:05 am

PP drama xD

20% VP means you keep adding to it if it goes down. Go ahead and gamble, just call it gambling. Some poker players are better than others right

What Browne, Shiller etc think is just appeal to authority.

We cant all get PhDs in technical analysis and make money because its zero sum. Unless youre acting on economic news before the other players get it, and even that is dubious.
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Re: Stock scream room

Post by Cortopassi » Wed Sep 18, 2019 8:38 am

What I think of technical analysis is that it works, but the machines/algorithms see the crossovers, trend line breaks, etc, a gazillion times faster than humans, so unless you have an automated system directly connected to the market like HFT firms do, you are fighting a losing battle.

Fundamental analysis is great, until it isn't, i.e. unknown events, like a company warning on earnings. Same thing on fundamentals, with HFT trading, you have zero chance of getting out fast enough when something like this happens and the machines read the headlines.

So I choose not to play with individual stocks anymore. I say more power to you if you can and be successful at it. But I am in the same camp with Sophie; my bet would be is if we were to revisit this 15 years from now when you are 52 the likely situation is you will have stopped trying at some point because it wasn't turning a profit, or the stress and time in turning a profit wasn't worth it. And I'll be 67. Holy f&*k

This forum is a fun diversion with interesting people, and most are very polite.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 10:02 am

MediumTex had a practice of saying, “I’m buying Intel today”, or whichever stock. That was fun, and refreshingly honest, and we could follow along to see how he was doing based on his date of announcement. Everything else just feels like stocks are ready to go down, but then again they might not for a certain period of time and then they will go down..maybe, with no real takeaway.

To be able to follow along in real time with a specific selection starting on a known date and therefore price is a nice diversion from the highly reliable but boring pp.
Smith1776 wrote:
Tue Sep 17, 2019 4:05 pm
I'd like to chime in here with a link and perspective.

https://youtu.be/3EzdvkRgToY

That link is to a Yale lecture done by Robert Shiller on efficient markets. Right around the 42 minute mark he talks about technical analysis.

Shiller, tellingly, recalls a story where he presses Burton Malkiel on why A Random Walk Down Wall Street seems to be sorely lacking on sources in his technical analysis chapters.
...
I really admire Robert Shiller, so that means something to me, Smithers. Not that I would attempt analysis on my own anytime soon. If anything, I would use my relative’s newsletter that has a whole team of full-time quants behind it.
Cortopassi wrote:
Wed Sep 18, 2019 8:38 am
What I think of technical analysis is that it works, but the machines/algorithms see the crossovers, trend line breaks, etc, a gazillion times faster than humans, so unless you have an automated system directly connected to the market like HFT firms do, you are fighting a losing battle.
We should take all that computing power and focus it on modeling weather & climate like they do in Japan.
RIP Marcello Gandini
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ochotona
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Re: Stock scream room

Post by ochotona » Wed Sep 18, 2019 2:44 pm

There are many technical indicators, but I really don't understand why people would consider simple techniques like trading using the 200 day moving average to be "zero sum games". They're clearly not, they've worked for a very long time, as long as people have had equity markets. Might they not work any longer? Of course. But what would that mean? It would mean that markets would have to become and stay "trendless".. which means what? They flatline forever? That's like saying no more nighttime.
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:12 pm

boglerdude wrote:
Wed Sep 18, 2019 1:05 am
20% VP means you keep adding to it if it goes down.
That's correct. If you're using HB's method, you don't keep a certain percentage of your wealth in the VP bucket. Otherwise, it's just another leg of the PP. You have to keep them separate, and only rebalance within each bucket. So you would only add non-investment income to the VP, like wages.
Go ahead and gamble, just call it gambling. Some poker players are better than others right
*shrug*
It's clearly not gambling. But it's also not allocating. Buying stock in individual companies is closer to the traditional meaning of "investing" than buying a mutual fund is. I think most people nowadays understand investing to mean that you have some savings that you're trying to get a higher rate of return on somehow, as opposed to letting it sit in a checking account. But like dualstow said earlier, it's kinda semantics to argue what word you should use. Just say how you're doing it and duke it out.
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Kriegsspiel
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:14 pm

BTW I like hearing what Shiller has to say too. You can watch some of his Financial Markets lectures online.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 6:31 pm

Kriegsspiel wrote:
Wed Sep 18, 2019 6:12 pm
boglerdude wrote:
Wed Sep 18, 2019 1:05 am
20% VP means you keep adding to it if it goes down.
That's correct. If you're using HB's method, you don't keep a certain percentage of your wealth in the VP bucket. Otherwise, it's just another leg of the PP. You have to keep them separate, and only rebalance within each bucket. So you would only add non-investment income to the VP, like wages.
[\quote]


I guess different people handle it differently, right? You raise an interesting question. If the vp is “money you can afford to lose” (Harry’s words) do you replenish that once you lose it?

Most brains that choose a vp in the first place must get the itch to try again, unless they were lucky enough to really get badly burned early on.

If you actually made money in the vp from the beginning, you can always trim down to X%.

But when you say “you would only add-non-investment income to the VP”, it’s still money that could have been pp investment capital. Isn’t that another leg as well? A phantom limb?

Anyway, you just made me realize that I don’t know my own rules for my own vp. Most of it is quietly paying dividends and interest, but I should probably pay stricter attention to what share of the total it constitutes.
RIP Marcello Gandini
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:55 pm

dualstow wrote:
Wed Sep 18, 2019 6:31 pm
I guess different people handle it differently, right? You raise an interesting question. If the vp is “money you can afford to lose” (Harry’s words) do you replenish that once you lose it?

But when you say “you would only add-non-investment income to the VP”, it’s still money that could have been pp investment capital. Isn’t that another leg as well? A phantom limb?
I was referring to the wages that Harry said you can't re-earn. His point was that since you can't re-earn the wages, you shouldn't treat them haphazardly by throwing them away on speculative investments. I think his phrasing was that "your earned income is the source of your wealth" or something like that. So it's the fountainhead, not another leg.

I'm pretty sure he explicitly said do not transfer from the PP to the VP. If you screw up or get unlucky and your VP goes into the toilet, that's the way it goes, you just have less VP. Your PP is firewalled off from those losses.
If you actually made money in the vp from the beginning, you can always trim down to X%.

Anyway, you just made me realize that I don’t know my own rules for my own vp. Most of it is quietly paying dividends and interest, but I should probably pay stricter attention to what share of the total it constitutes.
Yup, you can take some winnings off the table. Or you can keep plowing them back into it. In my tax-deferred bucket I am exclusively stocks, because my intent is to let it keep it compounding until I'm 59.5. So if it does really well and constitutes a larger % of my total assets, that's fine with me. And if that turns out to be a bad strategy in a few decades.... hey, that's how she rolls.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 7:58 pm

That all makes sense, especially firewalling the pp. At first it seemed strange that new money from wages would go to the vp, but - it has to come from somewhere. (My vp came from savings/windfall, so I hadn’t thought about it much. And yes, same deal as with my question about new money- it could have gone to the pp instead).
RIP Marcello Gandini
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Re: Stock scream room

Post by Smith1776 » Thu Sep 19, 2019 2:34 am

It can definitely be difficult to maintain that firewall between your PP and VP (that's what she said), even if you have an explicit plan to do so.

The temptation to replenish the VP with PP cash can also be hard to resist.

My PP components are all ETFs, while my VP components are all individual stocks. This difference in form has made it a little bit easier in my case.

If I used the same investment vehicles in both the PP and VP that might muddy the waters.
I still find the James Rickards portfolio fascinating.
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Re: Stock scream room

Post by sophie » Sat Sep 21, 2019 7:26 am

Yes, HB did indeed caution that the PP is not to be a pool to replenish the VP when your bets go bad. You have a fixed amount of cash to start your VP, and if you lose it, c'est la vie.

If your active stock trading is 20% of your assets, then you don't have a PP - you have an actively managed portfolio that happens to include some PP assets. If you're comfortable with that, more power to you - but it really is something different from the passive investing philosophy that's at the core of the PP.

Also note - the many discussions about stock signals that have dominated the board lately were not (as now claimed) limited to VP speculation - I read these as applying also to the PP stock allocation. Please chime in if that's not correct. It would be good to clarify this because people new to the PP sometimes come here for information, and they could end up getting mixed/confusing messages.
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Re: Stock scream room

Post by Cortopassi » Mon Nov 25, 2019 3:11 pm

Anybody getting concerned that in the past <2 months, market indices have risen anywhere from 10-15%?

30% year so far for Nasdaq. Is it warranted?

How long ago I would have jumped out if not for the PP, thinking this is unsustainable....!
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Re: Stock scream room

Post by dualstow » Mon Nov 25, 2019 3:22 pm

Cortopassi wrote:
Mon Nov 25, 2019 3:11 pm
Anybody getting concerned that in the past <2 months, market indices have risen anywhere from 10-15%?

30% year so far for Nasdaq. Is it warranted?

How long ago I would have jumped out if not for the PP, thinking this is unsustainable....!
But we haven't gotten to the irrational exuberance part yet.
RIP Marcello Gandini
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Re: Stock scream room

Post by ochotona » Mon Nov 25, 2019 3:40 pm

Some really good ST indicators are the RSI of course, and the deviation of the weekly or monthly candle from the 5 period exponential moving average. When the entire candle is above the average line, give the buying a rest... wait until it reconnect. It will. Same on the downside. Stop selling. RSI suggests overbought on a daily basis, and pretty much weekly as well. I'm not in a hurry with my pension lump-sum. I think there has to be a pull-back.
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dualstow
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Re: Stock scream room

Post by dualstow » Mon Nov 25, 2019 3:52 pm

I don't know much about candles -- the Trader Joe's honeycrisp is very nice --
but it is interesting that the market has gone up so much on light trading volume.
If we get heavy volume, wow.
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Re: Stock scream room

Post by ochotona » Thu Nov 28, 2019 7:10 pm

Harry Dent is now selling a -70 to -90% stock market decline narrative. -90% would bring us back to July August 1987.

https://seekingalpha.com/article/4302114?source=ansh
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Re: Stock scream room

Post by Pet Hog » Fri Nov 29, 2019 2:17 am

ochotona wrote:
Thu Nov 28, 2019 7:10 pm
Harry Dent is now selling a -70 to -90% stock market decline narrative. -90% would bring us back to July August 1987.

https://seekingalpha.com/article/4302114?source=ansh
I think the PP would do well -- or at least it would do no worse than (most) any other strategy and, therefore, do well in relative terms -- and we'd have a great stock buying opportunity. Even if the other three assets did nothing, and stocks declined by 90%, we'd go from 25/25/25/25 to 2.5/25/25/25 -- in other words, from 100 to 77.5, a decline in the PP of 22.5%. Or about as bad as the decline in stocks was late last year and affected those who were 100% stocks.
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Re: Stock scream room

Post by mathjak107 » Fri Nov 29, 2019 3:08 am

harry dent is likely the worst predictor in history ..why he bothers to still do this stuff escapes me .
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Re: Stock scream room

Post by dualstow » Fri Nov 29, 2019 3:35 am

mathjak107 wrote:
Fri Nov 29, 2019 3:08 am
harry dent is likely the worst predictor in history ..why he bothers to still do this stuff escapes me .
That’s how I feel about Stansberry. The answer in both cases: someone is paying for their useless prognostications.
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Re: Stock scream room

Post by Kbg » Fri Nov 29, 2019 9:10 am

Doom porn to sell subscriptions, nuf said.
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Re: Stock scream room

Post by Ad Orientem » Fri Nov 29, 2019 11:18 pm

Not a fan of doom porn, but Warren Buffet is a hardcore stock bug and he is sitting on $128 billion in cash. More than a few people think the market is getting frothy and is due for a correction.

https://www.cnbc.com/2019/11/29/buffett ... ation.html
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Re: Stock scream room

Post by mathjak107 » Sat Nov 30, 2019 4:03 am

warren has tried to buy some private companies with that money but it did not go through . tech data was one .

he is on the hunt to buy but he has not found what he is looking for . don't forget he buys a lot of private companies we can't and they are uneffected in price by market drops since they dont trade on stock exchanges .
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Re: Stock scream room

Post by dualstow » Sat Nov 30, 2019 6:37 am

Yep, Warren B was outbid by Apollo Global.
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Re: Stock scream room

Post by Cortopassi » Thu Jan 09, 2020 9:30 am

Whatever has been going on since October is insane. Is it just me who thinks this is unsustainable? Yet nearly day after day, record highs. Wow.

% of stocks above 200 day MA is around 80% vs. 55% at the beginning of Oct.

I wouldn't touch stocks with a 20 foot pole unless I was in the PP, so we are all profiting from this, but it just seems so much smoke and mirrors. We go from WW3 starting to All is Well in 48 hours. It's like this is all running on a 2 hour movie timescale.
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Re: Stock scream room

Post by drumminj » Thu Jan 09, 2020 9:38 am

Cortopassi wrote:
Thu Jan 09, 2020 9:30 am
I wouldn't touch stocks with a 20 foot pole unless I was in the PP, so we are all profiting from this, but it just seems so much smoke and mirrors. We go from WW3 starting to All is Well in 48 hours. It's like this is all running on a 2 hour movie timescale.
Agreed, I've been struggling with this as well. The only way I can convince myself to buy stocks is to remind myself I believe in the system of 4 assets, and I need to hold all four. It's still not been easy, though.

Then again, I have the same struggle with LTT and gold these days O0
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