The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

Moderator: Global Moderator

iwealth
Executive Member
Executive Member
Posts: 409
Joined: Thu Apr 26, 2012 5:45 pm

Re: The Bond Dream Room

Post by iwealth » Fri Feb 02, 2018 12:33 pm

dualstow wrote:Good to see iwealth writing again! I think I last saw you write about leaving gold saying you “get stocks”, i.e. understand them and thus presumably were about to put more in them. I’m a bit envious! I’m sticking with the pp, but I would have been fine staying in nearly all stocks in 2010 instead. Where “fine” = glorious.

More on topic: I know the 30-year bonds are held for their volatile price movements, but if the ten-year note yield keeps rising, it’s yield I’ll be thinking about. Tempted to, anyway.
Oh I did put more into stocks, but I tried to bottom pick the energy sector and got torched - luckily rode it out and recovered but whoooosh what a ride. On the bright side, it's made me entirely immune to drawdowns.
User avatar
dualstow
Executive Member
Executive Member
Posts: 10767
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: The Bond Dream Room

Post by dualstow » Fri Feb 02, 2018 2:14 pm

stuper1 wrote:I think if you backtest the PP using 10-year Treasuries instead of 30-year Treasuries, there is not a whole lot of difference in the results.
They would only go in the vp. I don't mess with the core.
Two out of three Canadians live within about 60 miles of the American border. — NYT
Lenovo To Sell OEM Ubuntu PCs To the Public (Tom's Hardware)
User avatar
ochotona
Executive Member
Executive Member
Posts: 3177
Joined: Fri Jan 30, 2015 5:54 am

Re: The Bond Dream Room

Post by ochotona » Fri Feb 02, 2018 6:15 pm

The MIDDLE part of the yield curve is taking it in the shorts based on 1-year momentum.
User avatar
ochotona
Executive Member
Executive Member
Posts: 3177
Joined: Fri Jan 30, 2015 5:54 am

Re: The Bond Dream Room

Post by ochotona » Sun Feb 04, 2018 11:04 am

Image
User avatar
pugchief
Executive Member
Executive Member
Posts: 3736
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: The Bond Dream Room

Post by pugchief » Sun Feb 04, 2018 2:25 pm

What is the conclusion of those 2 charts? That although the yield is about to break out to the upside, relative to stocks they are still a good buy?
User avatar
eufo
Executive Member
Executive Member
Posts: 243
Joined: Mon Dec 05, 2016 7:17 pm

Re: The Bond Dream Room

Post by eufo » Sun Feb 04, 2018 3:37 pm

pugchief wrote:What is the conclusion of those 2 charts? That although the yield is about to break out to the upside, relative to stocks they are still a good buy?
I'm wondering the same thing.

I feel a great temptation to tweak my holdings, which almost always means... I shouldn't. Lol.
Don't agree with me too strongly or I'm going to change my mind
User avatar
ochotona
Executive Member
Executive Member
Posts: 3177
Joined: Fri Jan 30, 2015 5:54 am

Re: The Bond Dream Room

Post by ochotona » Sun Feb 04, 2018 3:55 pm

pugchief wrote:What is the conclusion of those 2 charts? That although the yield is about to break out to the upside, relative to stocks they are still a good buy?
The author just wanted to tweak people who were going to ditch bonds, I think. The point is that you may be relatively safer in bonds than stocks. So stocks down 80%, bonds down 40%. Win?

These ratio charts are interesting, but they are ratios - they don't say anything about absolute levels. Like the gold-silver ratio. About 80 now. Well, it could revert to 50 if gold went to 850 and silver 17, but I doubt anyone would be celebrating.
Last edited by ochotona on Sun Feb 04, 2018 3:58 pm, edited 1 time in total.
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2104
Joined: Fri May 21, 2010 4:16 pm

Re: The Bond Dream Room

Post by buddtholomew » Sun Feb 04, 2018 3:56 pm

At some point a PP investor will have to purchase LTT’s to restore the AA to 4x25 or a variant thereof. I’m interested to know who among us plans to rebalance into LTT’s?
User avatar
sophie
Executive Member
Executive Member
Posts: 3882
Joined: Mon Apr 23, 2012 7:15 pm

Re: The Bond Dream Room

Post by sophie » Sun Feb 04, 2018 4:23 pm

I'll be facing that Rubicon soon. My LTTs have dropped below 20% and cash is above 30% (new contributions).

The increase in interest rates of 30 year bonds the last couple of days has actually made me lean toward buying. So far, I think I'll be rebalancing into gold and bonds as per schedule. But, I will wait to do that until a band has been crossed. We'll see. I may need some encouragement when the time comes!
User avatar
pugchief
Executive Member
Executive Member
Posts: 3736
Joined: Tue Jun 26, 2012 2:41 pm
Location: suburbs of Chicago, IL

Re: The Bond Dream Room

Post by pugchief » Sun Feb 04, 2018 4:32 pm

buddtholomew wrote:At some point a PP investor will have to purchase LTT’s to restore the AA to 4x25 or a variant thereof. I’m interested to know who among us plans to rebalance into LTT’s?
I contribute to the lagging asset, so I keep putting new funds into LTT [and some intermediate treasuries]. It can be less than fun at times, but if you can't follow the plan, you should just buy PRPFX or PERM or whatever so you can't watch the individual components. Or quit saying you run a PP.

When I first started on this forum [and with the PP] I was in PRPFX because I didn't think I could tolerate the individual components, and thought it would be a hassle to manage the moving parts. But everyone here kept saying it was easy, and way less expensive, and you didn't get the improper, outdated mix of PRPFX. So eventually, I grew a pair and went DIY 4x25. I never looked back. Or questioned the program. Peace at last. 8)
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2104
Joined: Fri May 21, 2010 4:16 pm

Re: The Bond Dream Room

Post by buddtholomew » Sun Feb 04, 2018 5:15 pm

Just the comfort I needed to follow the plan...soon.
Like Sophie I am slightly under 20% LTT’s but mentally preparing myself to rebalance on or near 15% when the time comes. I may invest more frequent, lower amounts as it requires less gumption than larger sums, less often.

Funny just a blink ago we were wondering whether LTT’s provided enough downside protection. I speculate they now meet that criteria.
User avatar
drumminj
Executive Member
Executive Member
Posts: 278
Joined: Wed Jul 22, 2015 9:16 pm

Re: The Bond Dream Room

Post by drumminj » Sun Feb 04, 2018 5:16 pm

buddtholomew wrote:I’m interested to know who among us plans to rebalance into LTT’s?
I just did, to a degree. Felt the itch and was at about 30% stocks so sold 10% of my holdings and rebalanced into LTT, cash, and gold.

I'll admit it hurts to see LTT going down right after the rebalance (feel a bit better with stocks having dropped considerably below my sell point!), but I don't profess to know which way the markets are going to move so being back at ~4x25 is as good as any other bet.

Do I wish I had just gone to cash/let it sit in 13-week treasuries for a while? Sure :)
Post Reply