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 » 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.
You know you’re into the pp when you see expiration dates at the grocery store and think, I have some bonds coming due then.
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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.
You know you’re into the pp when you see expiration dates at the grocery store and think, I have some bonds coming due then.
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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.
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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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Re: Stock scream room

Post by pmward » Fri Sep 13, 2019 10:42 am

sophie wrote:
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.
Just like Dualstow, you're putting a whole lot of words in my mouth that I have not spoken. I agree with general statements you've made here, especially in regards to the average investor. I don't see the need for people to take offense and start brining out the pitchforks just because someone discusses technicals. You have your opinions, I have mine. I don't take offense when other people state an opinion on an investing style different than mine. For gods sake, I have 80% of my money in a PP for one of the very reasons you mentioned, because while I was very successful in technical trading, it was overly time consuming and took away from other areas of my life that I held at a higher priority. And I have read all of Browne's books, and listened to all of his radio show, and I admire Browne. You know this, so talking down to me by recommending I read his work is demeaning. But I also have studied a lot of technical traders and admire them as well. There is not one blessed right way to invest. It's also ok to mix strategies and to speculate. Harry himself made his fortune speculating after all. He was one of the greatest speculators of his time. Let's not forget that.

If you all are going to rip someone apart every time they discuss something other than the PP please let me know now and I'll move on and stop coming here. Everyone on this board participates in speculating in what they think is going to happen in the future. Literally 90% of the comments on this board, even in the PP section, are just this. But the moment someone tries to back their opinion up with technical or quantitative analysis, people bust out the flame throwers. It's ridiculous and it's hypocritical.
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Re: Stock scream room

Post by Xan » Fri Sep 13, 2019 11:15 am

pmward wrote:
Fri Sep 13, 2019 10:33 am
dualstow wrote:
Fri Sep 13, 2019 6:06 am
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.
I believe Dualstow's point is that if everything is called "quantitative", then the term doesn't have any meaning anyway. So we either have to throw it out, or come up with something new to describe something specific.
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Re: Stock scream room

Post by pmward » Fri Sep 13, 2019 11:28 am

Xan wrote:
Fri Sep 13, 2019 11:15 am
pmward wrote:
Fri Sep 13, 2019 10:33 am
dualstow wrote:
Fri Sep 13, 2019 6:06 am
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.
I believe Dualstow's point is that if everything is called "quantitative", then the term doesn't have any meaning anyway. So we either have to throw it out, or come up with something new to describe something specific.
I agree. I made a general point, that indexing was a quantitative strategy. Of which he then took issue. Unless he can prove this is an incorrect statement, which he cannot, then his argument is not justified. He is arguing with his assumptions of what I meant, not what I actually meant. I was not making a statement about the finer specific quantitative strategy he was referring to. I was making a statement at a higher level. Because he does not support one very specific form of quantitative strategy, he is taking issue with me stating the true fact that the strategy he does support is also a quantitative strategy. It indeed makes no sense, which is why I'm getting very frustrated with this thread right now. I don't feel I deserve to be singled out and pounced on by the group for stating a true fact. Can anybody prove this fact wrong? Please I beg of someone to do so. If you cannot, then you realize this whole thing is pointless and over nothing. It's nothing more than people not liking the fact that a strategy they subjectively like can objectively be labelled with a name that they subjectively do not like. It's pointless. A peach is a peach, regardless of whether or not you like the work peach.
Last edited by pmward on Fri Sep 13, 2019 11:43 am, edited 1 time in total.
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Re: Stock scream room

Post by Kbg » Fri Sep 13, 2019 11:41 am

A couple of points/thoughts.

Pmward is right...you wouldn't be in the PP if not for its quantitative appeal and we know for a fact HB and I forget the gentlemen's name did quantitative analysis on this stuff in the late 70s/80s which is how they came up with the initial concept.

I like Cullen Roche's point...if you aren't following the total global asset allocation of all investable assets then you are making an active bet in some form or fashion.

The forum is divided into a PP and a VP section. Personally, I post asset related things in the asset rooms and non PP portfolio stuff in the VP section. I think technical analysis of assets really belongs in the VP. However, for the asset scream and dream rooms it does get a bit fuzzy on what the intent of them is and they tend to be BS (in the good sense of BSing) type rooms.
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Re: Stock scream room

Post by pmward » Fri Sep 13, 2019 11:49 am

Kbg wrote:
Fri Sep 13, 2019 11:41 am
A couple of points/thoughts.

Pmward is right...you wouldn't be in the PP if not for its quantitative appeal and we know for a fact HB and I forget the gentlemen's name did quantitative analysis on this stuff in the late 70s/80s which is how they came up with the initial concept.

I like Cullen Roche's point...if you aren't following the total global asset allocation of all investable assets then you are making an active bet in some form or fashion.

The forum is divided into a PP and a VP section. Personally, I post asset related things in the asset rooms and non PP portfolio stuff in the VP section. I think technical analysis of assets really belongs in the VP. However, for the asset scream and dream rooms it does get a bit fuzzy on what the intent of them is and they tend to be BS (in the good sense of BSing) type rooms.
Thank you Kbg, especially for pointing out that the scream and dream rooms tend to be very off topic in general. I had a reason to "scream" in that I did make an active move in my VP, and as soon as I made that move it started going against me. Moreover, the way it went against me changed my short to medium term view entirely. Small caps and value are both breaking out and holding, this changes everything for me. I see this as a big shift in the markets, potentially akin to both the gold breakout earlier this year and the rally that came off of the December lows. So I felt it a worthwhile thing to discuss, as my views haven't changed in many months. So essentially, my view changed from where it was in all my past comments on this forum for the last couple of months. I have since enacted my Plan B, and all is right in the world in my VP. But to me, this happening was big news. If I would have known that I would have half the forum breaking out the torches and pitchforks over my comment I wouldn't have shared. I was trying to spur an interesting discussion, not create an argument or debate on the validity of technical or quantitative analysis. I'm ok to agree to disagree on this point. I wasn't trying to get in a debate on this, I was hoping others would discuss my findings and share their unique views and reasoning behind it. I though it was an interesting point of topic. I did not realize it would turn into all of this.
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Re: Stock scream room

Post by dualstow » Fri Sep 13, 2019 1:36 pm

What Xan said.
And for the record, I am not even remotely "offended." I feel strongly about my point but all is well over here, and I think hope you are fine, too.
Kriegsspiel wrote:
Fri Sep 13, 2019 10:04 am
dualstow wrote:
Fri Sep 13, 2019 6:14 am
Harry, Rule #3 in Fail-Safe

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.
Not really, kriegs. I mean that's a semantical game that no one can really win, because there's no authority on it.

It's risk-taking when you buy stocks for the long term, even if you're buying the broad market.

One could pick apart these words ad absurdam, and then what is the point of having any categories at all?
You could prospect for gold because you heard there might be deposits in the hills and start digging randomly.
A farmer can buy seeds from a reputable source and plant them on the land he knows well.
You can buy a stock for a company you don't really believe in, but you like the way the patterns of activity look.
You can buy the broad market.
You can have a 100% treasury portfolio.
There is a spectrum of risk-taking here, even if we don't want to strictly put each one into investing or speculating. It's very clear. To turn around and say that every choice is based on some kind of analysis, well- is not saying very much of anything.

Caveats about past performance notwithstanding, you can know something about stock market investing, decide if you want to take risk in the market, and *invest* in the broad market. If you say that is the real speculation because you haven't studied the 3,000+ companies, then I don't know what "investing" is. But I would definitely say yours is a false premise.
You know you’re into the pp when you see expiration dates at the grocery store and think, I have some bonds coming due then.
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Re: Stock scream room

Post by Kriegsspiel » Fri Sep 13, 2019 3:29 pm

dualstow wrote:
Fri Sep 13, 2019 1:36 pm
Kriegsspiel wrote:
Fri Sep 13, 2019 10:04 am

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.
Not really, kriegs. I mean that's a semantical game that no one can really win, because there's no authority on it.

It's risk-taking when you buy stocks for the long term, even if you're buying the broad market.

One could pick apart these words ad absurdam, and then what is the point of having any categories at all?
You could prospect for gold because you heard there might be deposits in the hills and start digging randomly.
A farmer can buy seeds from a reputable source and plant them on the land he knows well.
You can buy a stock for a company you don't really believe in, but you like the way the patterns of activity look.
You can buy the broad market.
You can have a 100% treasury portfolio.
There is a spectrum of risk-taking here, even if we don't want to strictly put each one into investing or speculating. It's very clear. To turn around and say that every choice is based on some kind of analysis, well- is not saying very much of anything.

Caveats about past performance notwithstanding, you can know something about stock market investing, decide if you want to take risk in the market, and *invest* in the broad market. If you say that is the real speculation because you haven't studied the 3,000+ companies, then I don't know what "investing" is. But I would definitely say yours is a false premise.
It made more sense in my head. Maybe it is more of a semantic argument. Personally I "invest" mostly in the sense that Harry Browne was using, even if I think about it with different concepts.
To die, to sleep
To sleep, perchance to dream; ay, there's the rub
For in that sleep of death what dreams may come
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