Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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pmward
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Re: Stock scream room

Post by pmward » Sat May 02, 2020 8:35 pm

dualstow wrote:
Sat May 02, 2020 8:33 pm
pmward wrote:
Sat May 02, 2020 6:56 pm

Another way you could also frame that is having a PP that is 15/15/15/15 and a VP that is 25/0/0/15. There is nothing wrong with that at all. My PP is 40% of my total portfolio. I am keeping that 40% a pure vanilla PP implementation.
...
It looks like it’s your PP that adds up to 60% and your VP that adds up to only 40%, not the other way around.
Is that a mistake, or just a coincidence and I’m reading it wrong?
Haha, I was splitting up Budd's portfolio into vanilla PP and VP. That is not my personal portfolio. In mine it is 40%, or basically 10/10/10/10.
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dualstow
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Re: Stock scream room

Post by dualstow » Sat May 02, 2020 8:55 pm

ah, I gotcha. Thanks. O0
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ochotona
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Re: Stock scream room

Post by ochotona » Sun May 03, 2020 3:44 am

I guess mine is 40% PP also, and my VP is therefore virtually shorting stocks to completely offset virtual PP stocks (in other words I have TLT gold cash and very few stocks)

This is exactly what someone asked a few days ago - how do I short stocks in the VP? You do it by recognizing that the PP VP dotted line is a portfolio planning tool. If you think it's more than a dotted line, then you might be tempted to do weird sh** like being long and short in the same thing at the same time
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Re: Stock scream room

Post by ochotona » Sun May 03, 2020 9:15 am

Bogleheads fun today

Deviating from "set it and forget it" investment approach
[Cashed out in panic, how to get back in?]
How to get back in ..
Holding Gold as "Doomsday Fund" {isn't gold a venial sin for them? or a mortal sin?}
Tracking Progress on my Market Timing
I'm out [of the market]
Why shouldn’t I do this?

Rebellious teenagers in a fundamentalist family!
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dualstow
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Re: Stock scream room

Post by dualstow » Sun May 03, 2020 9:57 am

ochotona wrote:
Sun May 03, 2020 9:15 am
Bogleheads fun today

...
Hah! Those are good.

To be fair, we have

Help me get over my fear of LTTs
I'm worried about stagflation and am selling all my bonds tomorrow.

I was going to include some gold ones, but they appear to be ancient and only recently exhumed.
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Re: Stock scream room

Post by pmward » Sun May 03, 2020 10:33 am

ochotona wrote:
Sun May 03, 2020 3:44 am
I guess mine is 40% PP also, and my VP is therefore virtually shorting stocks to completely offset virtual PP stocks (in other words I have TLT gold cash and very few stocks)

This is exactly what someone asked a few days ago - how do I short stocks in the VP? You do it by recognizing that the PP VP dotted line is a portfolio planning tool. If you think it's more than a dotted line, then you might be tempted to do weird sh** like being long and short in the same thing at the same time
Yeah, if we get another leg to the bear, I'm likely going to short in my VP... which may put me at that "net 0" or even lower when you look at it from one angle. But if I were to short I also wouldn't short the same think I was long. My long PP 10% at that point would likely be in QQQ since it has the strongest relative strength right now, and I would short something like small caps, financials, or even some weak individual stocks inside weak sectors... whatever seems to have the weakest relative strength and the most downward momentum at that time. So in a way it would be a long/short trade, something like long large cap tech, short financials. Regardless what direction the market went, as long as financials would underperform large cap tech, I would make a profit on the whole. I could even be wrong on the direction of the market, and the market could go up, but so long as financials lagged QQQ I would net a profit. Another angle to view it from.
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Re: Stock scream room

Post by ochotona » Sun May 03, 2020 1:59 pm

My spouse has $15k long in TIAA, I don't want to be in there trading her stuff. It's a good fund. I could buy RWM, which is inverse Russell 2000 which is full of unicorns with no earnings. That would be long / short, long quality names, short dogmeat names.
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Re: Stock scream room

Post by Kriegsspiel » Mon May 04, 2020 6:26 pm

thisisallen wrote:
Sat May 02, 2020 6:16 pm
Explanation of what’s going on with the stock market from Pragmatic Capitalism
https://www.pragcap.com/what-the-hell-i ... ket-doing/
Investment will collapse 30%+. Dividends and buybacks will slow 20%+. Household saving will spike 20%+. They’ll come back, but slowly. Government saving, on the other hand, has been a huge, huge boost. The government’s deficit should be ~$3.7T this year. People don’t seem to understand how big this number is. And how big of a boon this is to corporate America because, ultimately, it all flows to corporations because Americans don’t save.
This is such a great frame.

I remember years ago, someone was talking about how they didn't want to buy stocks, because they hate corporations and they don't want to help them. I told him that I thought a great way to stick it to a corporation was to stake a claim to some of its profits, and then not spending those profits on corporate products or services. I thought of how people frequently accuse corporations of draining off capital from factory towns, and how a hippy oligarch could move to a small town and pour government profits into it. I suspect this particular person gave it some thought, but that a typical American would hate hate hate that kind of agency.
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Re: Stock scream room

Post by technovelist » Mon May 04, 2020 7:22 pm

Kriegsspiel wrote:
Mon May 04, 2020 6:26 pm
thisisallen wrote:
Sat May 02, 2020 6:16 pm
Explanation of what’s going on with the stock market from Pragmatic Capitalism
https://www.pragcap.com/what-the-hell-i ... ket-doing/
Investment will collapse 30%+. Dividends and buybacks will slow 20%+. Household saving will spike 20%+. They’ll come back, but slowly. Government saving, on the other hand, has been a huge, huge boost. The government’s deficit should be ~$3.7T this year. People don’t seem to understand how big this number is. And how big of a boon this is to corporate America because, ultimately, it all flows to corporations because Americans don’t save.
This is such a great frame.

I remember years ago, someone was talking about how they didn't want to buy stocks, because they hate corporations and they don't want to help them. I told him that I thought a great way to stick it to a corporation was to stake a claim to some of its profits, and then not spending those profits on corporate products or services. I thought of how people frequently accuse corporations of draining off capital from factory towns, and how a hippy oligarch could move to a small town and pour government profits into it. I suspect this particular person gave it some thought, but that a typical American would hate hate hate that kind of agency.
I would just have said "You know that buying a corporation's stock on the secondary market doesn't give the corporation any money, don't you?"
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Re: Stock scream room

Post by dualstow » Thu May 07, 2020 12:03 pm

pmward wrote:
Fri Apr 10, 2020 8:36 am
Cortopassi wrote:
Fri Apr 10, 2020 8:11 am
pmward wrote:
Thu Apr 09, 2020 10:48 am
The breadth of this market rally does make me nervous... I hate to say it, but the probabilities of the bullish outcome are starting to look higher than the bearish outcome. ...
Why do you seem worried and hate to say it? Because....(fill in)
Because I was hoping to deploy my giant cash pile into stocks at a much lower level. I'm worried I missed the boat. The evidence still favors this being a bear market rally, and at least a retest of the March lows. But that technical evidence is starting to get weaker and weaker by the day. We are literally dancing on the borderline of what I would define as a "bear market rally" and a brand spanking new bull market trend. Now it's not uncommon to dance on that line... both 2001 and 2008 did the same thing and rejected... but it's no less stressful waiting to see if I'm right, or if I'm wrong and have to buy back in, haha. So there's 2 things to worry about. 1) I missed the boat and have to buy in much higher. 2) I buy back in and get whipsawed as my theory is eventually proven right. but months down the road.
Do you feel you have missed the boat, pmward?
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Re: Stock scream room

Post by pmward » Thu May 07, 2020 12:14 pm

dualstow wrote:
Thu May 07, 2020 12:03 pm
pmward wrote:
Fri Apr 10, 2020 8:36 am
Cortopassi wrote:
Fri Apr 10, 2020 8:11 am
pmward wrote:
Thu Apr 09, 2020 10:48 am
The breadth of this market rally does make me nervous... I hate to say it, but the probabilities of the bullish outcome are starting to look higher than the bearish outcome. ...
Why do you seem worried and hate to say it? Because....(fill in)
Because I was hoping to deploy my giant cash pile into stocks at a much lower level. I'm worried I missed the boat. The evidence still favors this being a bear market rally, and at least a retest of the March lows. But that technical evidence is starting to get weaker and weaker by the day. We are literally dancing on the borderline of what I would define as a "bear market rally" and a brand spanking new bull market trend. Now it's not uncommon to dance on that line... both 2001 and 2008 did the same thing and rejected... but it's no less stressful waiting to see if I'm right, or if I'm wrong and have to buy back in, haha. So there's 2 things to worry about. 1) I missed the boat and have to buy in much higher. 2) I buy back in and get whipsawed as my theory is eventually proven right. but months down the road.
Do you feel you have missed the boat, pmward?
Nope, I'm back in now. I kind of went back to the drawing board for how I construct my portfolio a bit. The fine details are in my thread down in the VP section, but the tldr is basically I settled on keeping a 40% PP, 30% VP quant trend-following, and 30% VP active trading allocations. So basically the quant trend-following strategy I chose got me back in a couple weeks ago. It would have been nice to buy lower, but oh well. And I may still get that opportunity, as the trend-following strategy model I chose uses volatility as it's trigger and is still floating very close to it's "risk off" trigger. So if we get another leg down it will get me out really quickly (hopefully still with a small gain from this risk on period) and back in at a lower level. In my active trading bucket I'm heavily into metals and miners, where I think more opportunity lies than in general stocks at the moment. So on the whole, while it would have been nice to get that big back the truck up equity purchase sub-2k, I'm happy with where I am currently at on the whole. Times like this are a great learning lesson. The experience definitely helped me to find my way into a strategy that I think is a better fit for me.
Last edited by pmward on Thu May 07, 2020 12:17 pm, edited 1 time in total.
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Kriegsspiel
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Re: Stock scream room

Post by Kriegsspiel » Thu May 07, 2020 12:16 pm

I sold stocks at or just before the top, then I put about 1/3 back in at the very bottom ($100 for my newsletter). So now I have some cash waiting, but I'm not that stressed at the valuations that stocks raced back up to. I'm ok with taking the "loss" for the optionality of the cash. If I'm looking at the long term, I'm down with having some assets "languish in cash," or "pay for optionality," until stocks make sense again.
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