Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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drumminj
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Re: Stock scream room

Post by drumminj » Tue Sep 10, 2019 8:36 pm

pmward wrote:
Tue Sep 10, 2019 4:16 pm
I'm starting to question if the timeline I was operating off of might have been a bit too early.
...and this is why we are in the pp - it's not about timing the market and shifting out of allocations. That talk belongs in the variable portfolio sub-forum!!
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Re: Stock scream room

Post by pmward » Tue Sep 10, 2019 8:38 pm

drumminj wrote:
Tue Sep 10, 2019 8:36 pm
pmward wrote:
Tue Sep 10, 2019 4:16 pm
I'm starting to question if the timeline I was operating off of might have been a bit too early.
...and this is why we are in the pp - it's not about timing the market and shifting out of allocations. That talk belongs in the variable portfolio sub-forum!!
This is a talk about stocks, so why would it not fit in the thread that is used... for stocks???
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Re: Stock scream room

Post by ochotona » Tue Sep 10, 2019 8:49 pm

We're just venting
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Re: Stock scream room

Post by dualstow » Wed Sep 11, 2019 9:18 am

drumminj wrote:
Tue Sep 10, 2019 8:36 pm
pmward wrote:
Tue Sep 10, 2019 4:16 pm
I'm starting to question if the timeline I was operating off of might have been a bit too early.
...and this is why we are in the pp - it's not about timing the market and shifting out of allocations. That talk belongs in the variable portfolio sub-forum!!
That’s how I felt about all the gold trade talk a year or two ago. I gave up. O0

I wouldn’t care except that it must be strange for someone new to the forum who hasn’t read any of Harry’s books to see all the fast-paced, momentumy, technical chatter. I mean, he’s got a chapter on how how technical stuff is mumbo jumbo.
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Re: Stock scream room

Post by pmward » Wed Sep 11, 2019 9:30 am

dualstow wrote:
Wed Sep 11, 2019 9:18 am
drumminj wrote:
Tue Sep 10, 2019 8:36 pm
pmward wrote:
Tue Sep 10, 2019 4:16 pm
I'm starting to question if the timeline I was operating off of might have been a bit too early.
...and this is why we are in the pp - it's not about timing the market and shifting out of allocations. That talk belongs in the variable portfolio sub-forum!!
That’s how I felt about all the gold trade talk a year or two ago. I gave up. O0

I wouldn’t care except that it must be strange for someone new to the forum who hasn’t read any of Harry’s books to see all the fast-paced, momentumy, technical chatter. I mean, he’s got a chapter on how how technical stuff is mumbo jumbo.
He has a chapter on the technical indicators he believed weren't mumbo jumbo and actually used extensively and successfully in his younger speculating years. He didn't believe all technical stuff was "mumbo jumbo". I highly encourage you to re-read "When the best laid plans..." again. 90% of the posts in this forum are about future speculation. There's simply no way to get rid of this, unless you stop going to investing forums. The gold scream room got to me last year as well, but that wasn't constructive. It was just one disgruntled person coming into the room a couple times a week basically saying "gold sucks, the PP sucks, my 70/30 is great, I have 6 million dollars and you all are poor fools" over and over again.

On this forum we have some people that love buy and hold with no VP, we have some people that love fundamental analysis, we have some people that love technical analysis, we have some people that love quantitative analysis, we have some people that love macro analysis. I think that these views are all valuable and constructive. I see no reason for anyone to poo poo the views that they don't subscribe to, especially since Harry was adamant that most people should have a VP. I also believe that due to normal human psychology most humans are better off having a VP. If all we allowed in here were discussions directly about the PP, there would be no discussion, and nobody would be here.
Last edited by pmward on Wed Sep 11, 2019 9:44 am, edited 1 time in total.
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Re: Stock scream room

Post by dualstow » Wed Sep 11, 2019 9:43 am

I’ve got it in my lap. Ok, he saw something in support and resistance — I think you and I talked about it the last time I said “mumbo jumbo” — but isn’t that totally obviated by rebalancing bands?
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Re: Stock scream room

Post by pmward » Wed Sep 11, 2019 9:49 am

dualstow wrote:
Wed Sep 11, 2019 9:43 am
I’ve got it in my lap. Ok, he saw something in support and resistance — I think you and I talked about it the last time I said “mumbo jumbo” — but isn’t that totally obviated by rebalancing bands?
FWIW, I agree with most of what Harry said on technicals, especially considering the demographic he was writing for. But no, rebalance bands are not a replacement for support and resistance. Both are used for two completely separate ends. I do agree that in the PP people are best sticking to rebalance bands. But in the VP any number of strategies are fair game. Support and resistance aka technical strategies are great. Momentum strategies are great. Buy and hold strategies are great. Quant strategies are great. I think these all are valuable. It really depends on the person and what their constitution and goals are. Personally, I know in my constitution I need a VP so I feel that I have some control. Having the VP to chase gains is a psychological tool that helps me to hold my PP and stick to the rules without modification.
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Re: Stock scream room

Post by dualstow » Wed Sep 11, 2019 9:51 am

pmward wrote:
Wed Sep 11, 2019 9:30 am
On this forum we have ...
I think that these views are all valuable and constructive. I see no reason for anyone to poo poo the views that they don't subscribe to, especially since Harry was adamant that most people should have a VP. I also believe that due to normal human psychology most humans are better off having a VP. If all we allowed in here were discussions directly about the PP, there would be no discussion, and nobody would be here.
I don’t recall anyone saying you couldn’t talk about it. drumminj said all that technical talk really belonged in the vp section. I was saying I felt the same way about previous talk in the gold section - someone was bragging about buying and selling all the time, which just doesn’t have anything to do with the permanent porftolio, but would be fine in the vp section.

None of it is verboten, though. And I agree that there isn’t much to talk about with respect to the workings of the portfolio itself. That’s the beauty of it. New people want to know how cash is dealt with or how to buy bonds at a certain brokerage firm and after that it practically runs itself. Thank Zod for the lounge section.
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Re: Stock scream room

Post by dualstow » Wed Sep 11, 2019 9:53 am

Re: quants - probably half the stocks I’ve mentioned in the vp section were chosen by a family member’s quant newsletter. I don’t normally partake, but I press the appropriate buttons for him per the newsletter and he seems happy.
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Re: Stock scream room

Post by dualstow » Wed Sep 11, 2019 10:07 am

If I could criticize Harry a little bit, I wish that he had stated clearly that the average investor just doesn't have the aptitude to benefit from technical analysis. Well, maybe that was not his opinion. Perhaps you're smart enough to do it, pm. You obviously have a background in it. But, only a few analysts can be..

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Re: Stock scream room

Post by pmward » Wed Sep 11, 2019 10:35 am

dualstow wrote:
Wed Sep 11, 2019 10:07 am
If I could criticize Harry a little bit, I wish that he had stated clearly that the average investor just doesn't have the aptitude to benefit from technical analysis. Well, maybe that was not his opinion. Perhaps you're smart enough to do it, pm. You obviously have a background in it. But, only a few analysts can be..

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I totally agree that the average person shouldn't dabble in technical analysis, as the amount of knowledge you need to gain is very large. The quote you posted from Harry earlier is true, that most people want that one technical indicator that is magic, and it simply doesn't exist. In technical analysis you have to use multiple indicators, and at any given time you're always going to have mixed signals. It's incredibly rare to have the stars align and see a perfect setup with no contrary indicators. These perfect setups tend to happen more on the longer term charts than the short term charts, like the recent gold breakout. I was pounding the table here for gold for months before it finally broke out. These longer term setups are indeed harder to time though, it was like "ok, be patient, gold is going to breakout like wildfire, but it could happen anytime between now and 2 years from now" haha. Everyone here on this forum had given up on it, and I kept pounding the table and saying it was the most beautiful long term setup I've ever seen. But in the short to medium term, there's almost always some bull and bearish indications on any chart, and if one is going to bet one does have to use some discretion and intuition here, along with the most important piece which is a proper risk management strategy. With a proper risk management strategy you can make more losing calls than winning calls, yet on the whole still make bank. Risk management strategies in trading are very similar to those employed by professional gamblers.

If the average Joe wants to leverage some sort of market timing strategy in their VP, I think that the quant momentum strategies that a few members here employ are much easier to understand and implement then a technical analysis system. Anybody could implement these in the VP and provided they stick to the rules over the long haul they will be successful. I do not trade like I used to, as it was too time consuming, as such I tend to focus more on the long term charts these days. But I still do love to think and discuss about what could happen next. When the stars do align and I see those perfect charts that signal a major macro shift, like gold, I want to make sure my VP is on the right side of the trade.

Recently, I had traded some of my VP small caps for REIT's. When I made that shift small caps were technically looking dead as a doornail. No sooner did I make that shift than small caps started screaming bullish signals left and right. Thankfully I do have a risk management plan in place in case small caps do break out to hedge my bet. It's unfortunate though, and deserves some "scream room" love, haha. So far small cap resistance is holding though, we poked a bit above the channel line this morning only to sell back down below. I'm definitely watching small caps very intently right now. One thing I've said here many times is that I look to small caps as the canary in the coal mine for stocks. If small caps do indeed break out and hold, stocks are heading to new all time highs in a fresh stock bull rally over the coming months. It makes no sense to me right not from a fundamental perspective, but the tape doesn't lie, and I have to go with what the tape is telling me.
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Re: Stock scream room

Post by boglerdude » Wed Sep 11, 2019 11:35 pm

Technical analysis is sperglords jerking off. Pattern seeking feels good. Fine. Its a hobby, and "I need a VP so I feel that I have some control" is a legit reason. Lets not lose perspective tho, if you want to "outsmart" the markets (composed of players like Jim Simons et al): front run or insider trade.

Edit1: Well, money does seem to slosh around between asset classes, so there might be something to be said for "market timing" by buying something beat up. Still, its gambling and shouldnt be thought of as more clever than studying real science

Edit2: A current debate https://old.reddit.com/r/investing/comm ... le_for_an/
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Re: Stock scream room

Post by pmward » Thu Sep 12, 2019 10:56 am

boglerdude wrote:
Wed Sep 11, 2019 11:35 pm
Technical analysis is sperglords jerking off. Pattern seeking feels good. Fine. Its a hobby, and "I need a VP so I feel that I have some control" is a legit reason. Lets not lose perspective tho, if you want to "outsmart" the markets (composed of players like Jim Simons et al): front run or insider trade.

Edit1: Well, money does seem to slosh around between asset classes, so there might be something to be said for "market timing" by buying something beat up. Still, its gambling and shouldnt be thought of as more clever than studying real science
Your views are very limited, subjective, and uneducated. You do not have the knowledge or experience on technical analysis to pass any kind of judgment. It's ok if you say "it's not for me, and I'm not interested". But it's not ok to insult something you have absolutely no real knowledge of. That being said, I don't feel like getting into yet another debate on technical analysis. I've had too many of those already on different forums over the years, and just don't have the patience to go through it again. Just like any other strategy: Those that get it, get it. Those that don't, don't. I have no interest in trying to convert those in the "don't" subset into the subset of those that "get it". However, I will point out that having a closed mind on any subject is nothing more than a self imposed limitation.
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Re: Stock scream room

Post by ochotona » Thu Sep 12, 2019 3:02 pm

pmward wrote:
Thu Sep 12, 2019 10:56 am
Your views are very limited, subjective, and uneducated. You do not have the knowledge or experience on technical analysis to pass any kind of judgment. It's ok if you say "it's not for me, and I'm not interested". But it's not ok to insult something you have absolutely no real knowledge of. That being said, I don't feel like getting into yet another debate on technical analysis. I've had too many of those already on different forums over the years, and just don't have the patience to go through it again. Just like any other strategy: Those that get it, get it. Those that don't, don't. I have no interest in trying to convert those in the "don't" subset into the subset of those that "get it". However, I will point out that having a closed mind on any subject is nothing more than a self imposed limitation.
Another thing... people who hold the 1/4 of their assets in the S&P 500 think that it's somehow pure as untrammeled snow, and free from all of the "jerking off" of technical analysis, well, that's not true either. Stock inclusion into the S&P 500 is decided by, yes, a committee. "O the humanity!"

There is a lot of complexity under the covers with all of these securities, and it's OK if you don't want to think about it minute by minute, but just because you don't look, don't think that you don't silently assent to participate, because you do, and don't make fun of people who think about the complexity that you choose to ignore.
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Re: Stock scream room

Post by pmward » Thu Sep 12, 2019 4:02 pm

ochotona wrote:
Thu Sep 12, 2019 3:02 pm
pmward wrote:
Thu Sep 12, 2019 10:56 am
Your views are very limited, subjective, and uneducated. You do not have the knowledge or experience on technical analysis to pass any kind of judgment. It's ok if you say "it's not for me, and I'm not interested". But it's not ok to insult something you have absolutely no real knowledge of. That being said, I don't feel like getting into yet another debate on technical analysis. I've had too many of those already on different forums over the years, and just don't have the patience to go through it again. Just like any other strategy: Those that get it, get it. Those that don't, don't. I have no interest in trying to convert those in the "don't" subset into the subset of those that "get it". However, I will point out that having a closed mind on any subject is nothing more than a self imposed limitation.
Another thing... people who hold the 1/4 of their assets in the S&P 500 think that it's somehow pure as untrammeled snow, and free from all of the "jerking off" of technical analysis, well, that's not true either. Stock inclusion into the S&P 500 is decided by, yes, a committee. "O the humanity!"

There is a lot of complexity under the covers with all of these securities, and it's OK if you don't want to think about it minute by minute, but just because you don't look, don't think that you don't silently assent to participate, because you do, and don't make fun of people who think about the complexity that you choose to ignore.
That is very true, even behind the committee, all indices are themselves are by nature quant based. It's a very simplistic quant strategy, but a quant strategy none the less.
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Re: Stock scream room

Post by dualstow » Thu Sep 12, 2019 4:21 pm

That's a bit misleading, though, even if it's technically true. (I don't know whether it is or not).
Broad index funds don't have a lot of turnover. There isn't a lot of trading going on each year.
What about VTSAX? No trading.
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Re: Stock scream room

Post by pmward » Thu Sep 12, 2019 5:47 pm

dualstow wrote:
Thu Sep 12, 2019 4:21 pm
That's a bit misleading, though, even if it's technically true. (I don't know whether it is or not).
Broad index funds don't have a lot of turnover. There isn't a lot of trading going on each year.
What about VTSAX? No trading.
There is still trading in both every year... Bond funds always have to cycle their bonds, and the exact bonds and proportions they buy and sell are all driven from quant algorithms. VTSAX also has to buy and sell stock as people buy and sell shares, and the proportions they buy and sell in are driven from quant algorithms. VTSAX doesn't literally buy every stock in the market... there are plenty they leave out, and the stocks chosen and left out are done using quantitative algorithms. The ordering of stocks in VTSAX (market cap weight) is a quant algorithm. Any segmented index fund like a large cap, small cap, mid cap, value, growth, etc do all the above as well as select the securities using quant algorithms. You cannot have an index without quantitative analysis. Indexing IS quantitative. There is no separating the two.

Moreover, how did you choose the PP? Quantitative analysis. How did you choose buy and hold strategy? More quantitative analysis. If data showed that both were guaranteed to lose money, would you invest in those styles? No. You came to the decision in how you invest your money because of quantitative analysis. How do you perform your rebalancing rules? Using a quantitative strategy. How do you decide what to buy when you add money to your account? Another quantitative strategy. Therefore, your investing style is much more of a quant strategy than you realize.
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Re: Stock scream room

Post by dualstow » Thu Sep 12, 2019 8:00 pm

You can call any non-whim decision on earth quant, but it’s still misleading.
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Re: Stock scream room

Post by pmward » Thu Sep 12, 2019 8:12 pm

dualstow wrote:
Thu Sep 12, 2019 8:00 pm
You can call any non-whim decision on earth quant, but it’s still misleading.
No it is not misleading. What is misleading is trying to define the words "quantitative analysis" in a short sighted and overly tight manner to only mean one very specific form of quantitative analysis, and to choose to ignore all others.
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Re: Stock scream room

Post by Ad Orientem » Thu Sep 12, 2019 8:19 pm

Well known stock bug Jim Cramer is saying the market is overbought and people should put a hold on any significant stock purchases. He is also suggesting that this is a good time to take some profits. I don't trade stocks but I will note that this is not the sort of thing one typically hears from Cramer, who fairly or not, has a bit of a reputation as a perma bull. He is basing this call on the S&P's short term oscillator which Cramer says he trusts.

https://youtu.be/9yLTSeJr-EA
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Re: Stock scream room

Post by dualstow » Fri Sep 13, 2019 6:06 am

pmward wrote:
Thu Sep 12, 2019 8:12 pm
dualstow wrote:
Thu Sep 12, 2019 8:00 pm
You can call any non-whim decision on earth quant, but it’s still misleading.
No it is not misleading. What is misleading is trying to define the words "quantitative analysis" in a short sighted and overly tight manner to only mean one very specific form of quantitative analysis, and to choose to ignore all others.
VTSAX doesn't literally buy every stock in the market... there are plenty they leave out, and the stocks chosen and left out are done using quantitative algorithms.
Moreover, how did you choose the PP? Quantitative analysis. How did you choose buy and hold strategy? More quantitative analysis.
For the sake of beginning investors out there, not for my sake, please give us all an example of investing that isn’t quant. If you can’t, does the term having have any meaning anymore?

Or are you just muddying the waters for people who should really learn about indexing and lazy portfolios first, and all for the sake of being pedantic?
Last edited by dualstow on Fri Sep 13, 2019 6:16 am, edited 1 time in total.
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Re: Stock scream room

Post by dualstow » Fri Sep 13, 2019 6:14 am

Harry, Rule #3 in Fail-Safe:
You're investing when:

You hold a long-term position in the stock market with no attempt to time your investments or to determine which sectors of the market will perform best.
...
You’re speculating when:
...
You use fundamental analysis, technical analysis, cyclical analysis, or any other form of analysis or system to tell you when to buy and sell.
That’s the point.
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Re: Stock scream room

Post by sophie » Fri Sep 13, 2019 7:35 am

I just feel obliged to support dualstow here, since he and I have similar opinions on stock trading....

There are two ways to invest in stocks. One is passive, buying an index or basket of stocks and holding them long term in the context of a fixed multi-asset portfolio. The other is active, where you watch signals of various kinds (or just your own gut feeling) to determine when to time purchases and sales.

The data CLEARLY show that passive beats active management over the long term about 95% of the time. Can you win big with active management? Yes, but it's rare. Also, unless you trade stocks for a living, the time you spend on active management is time you are not spending on furthering your own career - which comes at a cost which may offset any potential gains you get from your active stock playing.

Harry Browne made all these points very elegantly and succinctly in his books and radio show. Fail Safe Investing is a very quick read and a good place to start. Jack Bogle has said much the same.

Pmward, you certainly can enjoy your active management style all you want. However, realize that this board concerns the Permanent Portfolio, which is based on a passive investment philosophy. There is a "variable portfolio" section for discussions that do concern active investing, so I suggest you confine your active management comments there. Harry Browne also had useful tips for active investing, if you read his books.
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Re: Stock scream room

Post by Kriegsspiel » Fri Sep 13, 2019 10:04 am

dualstow wrote:
Fri Sep 13, 2019 6:14 am
Harry, Rule #3 in Fail-Safe:
You're investing when:

You hold a long-term position in the stock market with no attempt to time your investments or to determine which sectors of the market will perform best.
...
You’re speculating when:
...
You use fundamental analysis, technical analysis, cyclical analysis, or any other form of analysis or system to tell you when to buy and sell.
It's weird reading those quotes. Because really, if you're buying shares of companies that you don't even know about, on the hope that they'll be productive over the long run, but you don't know if they're actually shitty companies or profitable... isn't that the real speculation? Consider the definition of speculative (engaged in, expressing, or based on conjecture rather than knowledge) and conjecture (an opinion or conclusion formed on the basis of incomplete information).

I think of it more as allocating, like Cullen Roche does, instead of investing.

IE, you're allocating when you designate a certain % of your wealth towards stock ownership, regardless of what those companies are doing or how they're performing at any time. And you're investing/speculating when you investigate and specify where your money is going. Investing/speculating is more of a business activity, and allocating is more of a personal finance/behavioral finance activity.
You there, Ephialtes. May you live forever.
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Re: Stock scream room

Post by pmward » Fri Sep 13, 2019 10:33 am

dualstow wrote:
Fri Sep 13, 2019 6:06 am
pmward wrote:
Thu Sep 12, 2019 8:12 pm
dualstow wrote:
Thu Sep 12, 2019 8:00 pm
You can call any non-whim decision on earth quant, but it’s still misleading.
No it is not misleading. What is misleading is trying to define the words "quantitative analysis" in a short sighted and overly tight manner to only mean one very specific form of quantitative analysis, and to choose to ignore all others.
VTSAX doesn't literally buy every stock in the market... there are plenty they leave out, and the stocks chosen and left out are done using quantitative algorithms.
Moreover, how did you choose the PP? Quantitative analysis. How did you choose buy and hold strategy? More quantitative analysis.
For the sake of beginning investors out there, not for my sake, please give us all an example of investing that isn’t quant. If you can’t, does the term having have any meaning anymore?

Or are you just muddying the waters for people who should really learn about indexing and lazy portfolios first, and all for the sake of being pedantic?
Yes that is my point exactly, and why I've been wondering why you have taken so much offense simply to me stating that indexing, the PP, and buy and hold are quantitative strategies. This was the only point I made, that you started pushing back on. There is no way those things can be classified as not being quantitative in nature. It makes no sense why you would deny this. Now within quantitative strategies, you may have some you favor and some you don't. There are certainly some that are better for beginners, and some that are not. There are certainly some that are better for the average Joe, and some that are better for professionals. There are certainly some that will fit a certain individual better than others. I have said nothing regarding any of those subjective points, I think you're arguing with things you've assumed not things I've said. I stated above that I have no interest in trying to convert anyone to any particular style. But if anyone has questions and wants to know about the technical side of things, which I am very experienced, I am more than happy to discuss. You can choose to be entertained by my gibbering about technicals, you can choose to ignore it, but there is no reason to be offended by it. In general, I don't believe having a closed mind on any subject is a good thing. One should always remain open. I don't bash any investment style personally, because in the right hands they all work.
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