Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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dualstow
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Re: Stock scream room

Post by dualstow » Mon Jun 10, 2019 11:29 am

I am very happy for PointedStick as I believe is all in stocks. As long as I live, I don't think I could ever go back to a 100% allocation. I only did that when I was starting out in investing, before my dad said, "You really should have some bonds."

S&P is closing in on its all-time high.
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Re: Stock scream room

Post by Cortopassi » Mon Jun 10, 2019 11:38 am

Am I just a negative Nancy on stocks? Thank God for the PP, or I would still not be invested in stocks at all, but really why, for years now, can I not shake the feeling that the current economy is all a mirage, based off fake numbers and debt?

It must be a condition. I should be just as happy when my 40% allocation to stocks goes up as I am when my 25% allocation to gold goes up, but I just can't seem to ever be confident that the market isn't going to plunge at a moment's notice.

Must be that wall of worry?
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Re: Stock scream room

Post by dualstow » Mon Jun 10, 2019 11:42 am

Cortopassi wrote:
Mon Jun 10, 2019 11:38 am
Am I just a negative Nancy on stocks?
... but really why, for years now, can I not shake the feeling that the current economy is all a mirage
...
Must be that wall of worry?

You're just alive and using your brain.
I'm able to enjoy these surges while they last, but I am only using a small particle of brain. O0
Last edited by dualstow on Mon Jun 10, 2019 11:44 am, edited 1 time in total.
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Re: Stock scream room

Post by ochotona » Mon Jun 10, 2019 11:42 am

I can't help thinking that going from the lower Bollinger Band to the upper in a few days isn't a good thing.
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Re: Stock scream room

Post by pmward » Mon Jun 10, 2019 12:17 pm

ochotona wrote:
Mon Jun 10, 2019 11:42 am
I can't help thinking that going from the lower Bollinger Band to the upper in a few days isn't a good thing.
Depends on the timeframe you're looking at. On a daily chart yes it is, but daily chart is also for short term swing trades. On a weekly chart, which is a bit more accurate for long term investors, we are just barely above the center line. I probably wouldn't recommend anyone that is on this forum looking at a daily chart for anything, as nobody here is that short term. I think weekly and monthly charts are probably what I would recommend sticking to for analysis, as it filters out the short term noise. It helps separate the wheat from the chaff for someone that is not actively trading on a daily timeframe.
Last edited by pmward on Mon Jun 10, 2019 12:24 pm, edited 1 time in total.
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Re: Stock scream room

Post by flyingpylon » Mon Jun 10, 2019 12:23 pm

Cortopassi wrote:
Mon Jun 10, 2019 11:38 am
Am I just a negative Nancy on stocks? Thank God for the PP, or I would still not be invested in stocks at all, but really why, for years now, can I not shake the feeling that the current economy is all a mirage, based off fake numbers and debt?

It must be a condition. I should be just as happy when my 40% allocation to stocks goes up as I am when my 25% allocation to gold goes up, but I just can't seem to ever be confident that the market isn't going to plunge at a moment's notice.

Must be that wall of worry?
I used to feel similarly about the economy and stocks being a mirage, until I started to realize that the mirage includes WAY more than just that. Now it's like... why ask why... so what?
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Re: Stock scream room

Post by Kriegsspiel » Mon Jun 10, 2019 7:30 pm

I get where PS is coming from. Like a Stoic or Buddhist philosophy of not being too attached to your wealth, so just let it ride on 100% stocks and screw the risk. I obviously come at it from the other angle, why bet it all on one thing if you don't have to? I like the idea of stable, robust, generational wealth, and I think that's best expressed in something like the PP.
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Re: Stock scream room

Post by Tortoise » Mon Jun 10, 2019 8:17 pm

Nicely put.

I actually decided just today that my taxable savings have finally grown to a size where it makes sense to consider my emergency fund and intermediate-term savings as part of my taxable PP rather than separate from it.

That change required me to make three large purchases of stocks, bonds, and gold. In isolation, the stock purchase would have made me nervous as hell since stocks seem potentially overvalued right now. But because I also bought bonds and gold to diversify, I'll sleep well tonight.

I love never having to worry about timing the market.
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Re: Stock scream room

Post by drumminj » Mon Jun 10, 2019 9:03 pm

Tortoise wrote:
Mon Jun 10, 2019 8:17 pm
But because I also bought bonds and gold to diversify, I'll sleep well tonight.
This is part of why I struggle with buying the lagging asset when contributing. Feels like betting on one asset vs buying another "share" in the portfolio.

May need to start contributing to cash and then buying all assets when I get enough to justify purchasing each...
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Re: Stock scream room

Post by dualstow » Tue Jun 11, 2019 7:07 am

I think Sophie did some backtesting that showed buying the lagging asset produced, well, a lagging total compared to the other methods.
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Re: Stock scream room

Post by pmward » Tue Jun 11, 2019 11:53 am

dualstow wrote:
Tue Jun 11, 2019 7:07 am
I think Sophie did some backtesting that showed buying the lagging asset produced, well, a lagging total compared to the other methods.
I would be curious to see the results of that. I've always wondered which was the best way to accumulate, but I'm not aware of any tools I can use to automate this so it would require either hand coding a tool or hand testing, nether of which I've had the motivation to do, haha.
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Re: Stock scream room

Post by Tortoise » Tue Jun 11, 2019 12:51 pm

I remember Sophie’s backtest. However, I recall the difference in measured performance was not huge and might have been due simply to statistical variation within the historical data set. Even if the difference were real, there’s no guarantee it would persist going forward.

Whether you buy the lagging asset, buy equal amounts of all assets, or contribute to cash until you hit a rebalance band, the net effect is very similar. In all three cases, you’re effectively buying more of the cheaper assets and less of the pricier ones.
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Re: Stock scream room

Post by dualstow » Tue Jun 11, 2019 2:03 pm

pmward wrote:
Tue Jun 11, 2019 11:53 am
dualstow wrote:
Tue Jun 11, 2019 7:07 am
I think Sophie did some backtesting that showed buying the lagging asset produced, well, a lagging total compared to the other methods.
I would be curious to see the results of that. I've always wondered which was the best way to accumulate, but I'm not aware of any tools I can use to automate this so it would require either hand coding a tool or hand testing, nether of which I've had the motivation to do, haha.

I remembered wrong. Lagging asset method does well. Tortoise remembers right: not a huge difference between #1 and #2.
viewtopic.php?f=1&t=9393&p=169302#p169386

I was unable to find the original post, but the link above is Sophie's summary of her findings.

ADDED: here's a 2013 thread on the topic. viewtopic.php?f=1&t=4452
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Re: Stock scream room

Post by pmward » Tue Jun 11, 2019 3:33 pm

Thanks. I've been doing the buy the lowest asset plan, and looks like the difference is small enough to not warrant any real consideration of change.
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Re: Stock scream room

Post by sophie » Wed Jun 12, 2019 6:44 am

I think we ended up deciding that buying the lagging asset is a good strategy for taxable accounts because it avoids the tax costs of rebalancing. That did better than the cash accumulation method which is another way of accomplishing same.

The best performance came from distributing new contributions equally (or in accordance with target asset proportions), which is what you do in a 401K. We'd been talking about the hit you take from commissions especially for gold ETFs, so I was actually kind of surprised by the result. I didn't model the effects of taxes though.

Also, with the stock market gyrating up and down in response to Trump-isms, it's been pretty easy lately to time stock purchases to juice returns. I just got a 5% boost from a stock purchase thanks to the Mexico tariff affair. Normally I'd be not in favor of this sort of thing, but the sequence of events is so laughably predictable it's hard not to.
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Re: Stock scream room

Post by Kbg » Wed Jun 12, 2019 9:58 am

For taxable, I doubt anything would do better than buying the lagging asset (eg avoiding taxable events).

Similar to Sophie but with gold, I’ve been rebalancing at the current support resistance bands.
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Re: Stock scream room

Post by ochotona » Thu Jun 20, 2019 11:49 am

SPY total return is 18%, we're at the year-end targets many of the pundits set at the beginning of 2019, I think it just goes in a trading range or down, and I don't care to buy any more equities because bonds and gold are roaring.
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Re: Stock scream room

Post by pmward » Thu Jun 20, 2019 12:47 pm

I think we do have potential to go higher. However, it's clear we are looking at late cycle dynamics as it's the defensives that are driving the market higher right now, not the growth stocks. So it's not a question of whether it can go higher, it's for how much longer?
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Re: Stock scream room

Post by ochotona » Mon Jul 01, 2019 10:16 am

I thought bonds were going to get killed today with the stock melt-up. Apparently not. Bonds ain't buying the "everything is awesome" narrative.

Later... bonds are down!
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Re: Stock scream room

Post by dualstow » Mon Jul 01, 2019 10:25 am

ochotona wrote:
Mon Jul 01, 2019 10:16 am
I thought bonds were going to get killed today with the stock melt-up. Apparently not. Bonds ain't buying the "everything is awesome" narrative.
I never realized that a melt-up = a rise, but I just looked it up and it does. I guess it's just a weird back-formation from meltdown? I always erroneously took it as more melt than up, as in, "She's breaking up, Captain!"
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Re: Stock scream room

Post by pmward » Mon Jul 01, 2019 11:22 am

I would hardly consider a .8% increase a melt-up... Especially since we are still rangebound for going on 19 months now...
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Re: Stock scream room

Post by Drpaulkeller » Thu Jul 04, 2019 10:12 pm

Happy 4th! No trading today!
Fireworks is just another way to set fire to your money. Lots of fun....Bad investment.

With the Brexit going on and the trade war and the Iran issue, maybe its time to start thinking about protecting your investment. (link removed (mod))
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Re: Stock scream room

Post by l82start » Thu Jul 04, 2019 10:58 pm

now that is a link to some solid investing advice spam
Topics, in the context of protection, such as dividend stocks, stop-loss orders, options trading, and much more are discussed in detail.

Although options strategies are considered advanced topics in investing, the essential concepts of options for protection are simplified so that the beginner investor will readily grasp the protection strategy.
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Re: Stock scream room

Post by dualstow » Tue Jul 09, 2019 10:34 am

For those of you who hold an international index, say VEU (ex-us stock etf) are you happy with its performance? Is it in your pp or vp?

I haven’t really looked. Besides an Israel etf, I don’t really hold foreign stocks these days. Occasional currency plays, like the Swiss franc & Japanese yen, but nothing serious or long-lasting.
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Re: Stock scream room

Post by Jack Jones » Wed Jul 24, 2019 1:45 pm

Everything's coming up Millhouse today!
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