The GOLD scream room

Discussion of the Gold portion of the Permanent Portfolio

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vincent_c
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Re: The GOLD scream room

Post by vincent_c » Fri Sep 10, 2021 7:01 pm

Kriegsspiel wrote:
Fri Sep 10, 2021 6:31 pm
That's pretty much how I feel about the PP. I don't expect it to have a higher gear, it just trucks along without much drama.
It also allows you to be anti-fragile, you can have the vast majority of your assets in the PP and then you can take multiple small bets that you think have asymmetric risk to reward characteristics.
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Re: The GOLD scream room

Post by dockinGA » Fri Sep 10, 2021 7:42 pm

Bud will sell his gold, disappear, then reappear on the forums the next time a Great Recession or March 2020 scenario shows back up. After he buys back into the PP after stocks have hit rock bottom. :)
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 8:27 pm

I would never buy the PP if stocks hit rock bottom. That would be asinine. I’ll use cash instead of Gold for rebalancing since the former you can depend on and the latter you cannot.
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Re: The GOLD scream room

Post by vincent_c » Sat Sep 11, 2021 12:23 am

dockinGA wrote:
Fri Sep 10, 2021 7:42 pm
Bud will sell his gold, disappear, then reappear on the forums the next time a Great Recession or March 2020 scenario shows back up. After he buys back into the PP after stocks have hit rock bottom. :)
I still remember when I was still just a lurker that I would tune in every time gold dropped and I would try to find budd’s post. Quite entertaining because at the time the PP as a whole was going up and I didn’t understand the pain this guy was feeling. Amazingly, as soon as he said he sold his gold, I believe that marked the exact bottom for gold.

Kind of like how someone else disappeared when they sold their LTT marking the bottom.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Sat Sep 11, 2021 7:22 am

vincent_c wrote:
Sat Sep 11, 2021 12:23 am
dockinGA wrote:
Fri Sep 10, 2021 7:42 pm
Bud will sell his gold, disappear, then reappear on the forums the next time a Great Recession or March 2020 scenario shows back up. After he buys back into the PP after stocks have hit rock bottom. :)
I still remember when I was still just a lurker that I would tune in every time gold dropped and I would try to find budd’s post. Quite entertaining because at the time the PP as a whole was going up and I didn’t understand the pain this guy was feeling. Amazingly, as soon as he said he sold his gold, I believe that marked the exact bottom for gold.

Kind of like how someone else disappeared when they sold their LTT marking the bottom.
You’re way off, still have my Gold and retired very well off after the 2020 decline at 47 I might add.
I sold LTT’s in the 160’s and bought ITT’s when LTT was at 140.

Let me repeat for the slow learners, I have DOUBLED my gold position yet still think it is worthless. Up .23% one day and down 1.99% the next day “just because”. Fuck that.

Also, for those that praise the PP:
Gold down 8.31% YTD
TLT down 5.35 YTD
what a joke....
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Re: The GOLD scream room

Post by vincent_c » Sat Sep 11, 2021 7:40 am

I’m sure I’m not the only one who remembers this. It could be someone else with a similar name because that guy did say he left the forum.
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Re: The GOLD scream room

Post by SomeDude » Sat Sep 11, 2021 7:01 pm

vincent_c wrote:
Sat Sep 11, 2021 7:40 am
I’m sure I’m not the only one who remembers this. It could be someone else with a similar name because that guy did say he left the forum.
There are a lot of people who have left the forum for good multiple times and are still here.
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dualstow
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Re: The GOLD scream room

Post by dualstow » Sat Sep 11, 2021 7:17 pm

I remember poor Catacombs (Israeli) was briefly on the forum, panicked, got rid of his gold at the bottom. Never came back, at least not with that username.
https://www.youtube.com/watch?v=SXW-sL5gzHQ
After a while you can recognize the signs/
So if you get it wrong you'll get it right next time, next time.
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Re: The GOLD scream room

Post by Smith1776 » Sat Sep 11, 2021 8:02 pm

dualstow wrote:
Sat Sep 11, 2021 7:17 pm
I remember poor Catacombs (Israeli) was briefly on the forum, panicked, got rid of his gold at the bottom. Never came back, at least not with that username.
That's exactly what a portfolio like the PP will protect us from... an uncertain future. He should have rebalanced INTO gold. Poor guy.
I act as if God exists.

https://youtu.be/SG7mKcIVvQQ
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dualstow
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Re: The GOLD scream room

Post by dualstow » Sun Sep 12, 2021 9:15 am

Exactly.
https://www.youtube.com/watch?v=SXW-sL5gzHQ
After a while you can recognize the signs/
So if you get it wrong you'll get it right next time, next time.
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I Shrugged
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Re: The GOLD scream room

Post by I Shrugged » Mon Sep 13, 2021 2:04 pm

buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 2:06 pm

I Shrugged wrote:
Mon Sep 13, 2021 2:04 pm
buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
Within the confines of the 4 HBPP assets.
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Re: The GOLD scream room

Post by D1984 » Mon Sep 13, 2021 2:41 pm

buddtholomew wrote:
Mon Sep 13, 2021 2:06 pm
I Shrugged wrote:
Mon Sep 13, 2021 2:04 pm
buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
Within the confines of the 4 HBPP assets.
Forgive me if I seem overly critical but.....

You appear to want/desire a portfolio that has all the upside of equities (i.e. no opportunity cost when the US equity market is going up) but at the same time has less volatility and less downside risk (i.e. something like the PP, Wellesley, Larry Portfolio, conservative allocation version of the Juicy Portfolio, Barbell Portfolio, Golden Butterfly, Desert Portfolio, etc) than a pure stock portfolio.

Unfortunately, that portfolio doesn't exist in real life (at least unless you are willing to engage in market timing and/or take a chance on active management). Even a simple 60/40 or 65/35 stock/ITT blend (whose upside or downside risk is dominated by equity market beta due to equities' much higher volatility than bonds) doesn't give you all the upside of stocks with less of the downside.

If you know of such a portfolio, please inform the rest of us about it so that we may profit by your wisdom. If, on the other hand, you don't know of such a portfolio (which I can't hold against you as I don't either), then why waste your time and energy complaining on here? Either accept the full measure of downside risk of a portfolio with a high equity allocation or accept the full measure of opportunity cost by going with a portfolio with a much lower equity allocation. Pick your poison and live with it. TANSTAAFL, Budd.
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Re: The GOLD scream room

Post by vincent_c » Mon Sep 13, 2021 5:46 pm

Sometimes I don’t know if he is being serious. There seems to be an intelligent person there somewhere, but then there seems to be an inability to understand the most basic of concepts that lead us all here. However, there seems to be an acceptance if you know what I mean.

Like he knows how and why it works, he accepts it and even would in certain scenarios invest in it yet he cannot come to terms that it is in fact one of the, if not the best approach.
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 6:02 pm

vincent_c wrote:
Mon Sep 13, 2021 5:46 pm
Sometimes I don’t know if he is being serious. There seems to be an intelligent person there somewhere, but then there seems to be an inability to understand the most basic of concepts that lead us all here. However, there seems to be an acceptance if you know what I mean.

Like he knows how and why it works, he accepts it and even would in certain scenarios invest in it yet he cannot come to terms that it is in fact one of the, if not the best approach.
Don’t insult me by calling me intelligent :D

My main issue with the 4x25PP allocation is it diminishes the fact that stocks rise 7/10 years. Stocks are also projected to have the highest returns over time. Why then do we only allocate 25%?

LTT’s, Gold and Cash are projected to have lower returns over time yet we allocate 75% of the portfolio to these assets (compared to equities).

This agnostic approach (4x25%) to report construction seems unfounded and there is absolutely nothing magical about having equal percentages across each asset.

My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
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Re: The GOLD scream room

Post by barrett » Mon Sep 13, 2021 6:35 pm

buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
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Re: The GOLD scream room

Post by vincent_c » Mon Sep 13, 2021 6:52 pm

I haven’t received a response regarding leverage. Is holding $1 less cash in the 4x25% PP unacceptable or does it make the PP more risky? Does holding $1% less cash? Does holding 10%, 25%, or -100% less cash change the portfolio’s risk/return characteristics?

If the consensus is that 25% cash unlevered is how we are discussing the PP then maybe I will agree with Budd, because if you can handle the 100% unlevered stocks drawdown but no leverage at all on the PP then the rational choice should be 100% stocks.
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 7:55 pm

barrett wrote:
Mon Sep 13, 2021 6:35 pm
buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
HAHA, “Budd Light Gold” is actually a beer that if found would grant you 2 tickets to the Super Bowl.
Love it!
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Re: The GOLD scream room

Post by barrett » Tue Sep 14, 2021 7:57 am

buddtholomew wrote:
Mon Sep 13, 2021 7:55 pm
barrett wrote:
Mon Sep 13, 2021 6:35 pm
buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
HAHA, “Budd Light Gold” is actually a beer that if found would grant you 2 tickets to the Super Bowl.
Love it!
I only back tested from 2006 due to limited IAU data, but the Budd Light Gold has a Sharpe Ratio of 1.04 as compared to 0.80 for a traditional 60/40 portfolio. More Budd flavor ("Fucking Gold!!!") with 30% less risk!
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Re: The GOLD scream room

Post by I Shrugged » Tue Sep 14, 2021 8:45 am

I’m gonna guess that gold is the reason why.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Tue Sep 14, 2021 10:15 am

It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
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Re: The GOLD scream room

Post by Mark Leavy » Tue Sep 14, 2021 10:47 am

buddtholomew wrote:
Tue Sep 14, 2021 10:15 am
It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
I hold it because:
a) It is uncorrelated with stocks, bonds, cash and real estate.
b) It can be held outside of the financial system
c) It is a store of value with a history of surviving any known type of economic collapse.

Other than that, not much reason to hold gold.
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Re: The GOLD scream room

Post by buddtholomew » Tue Sep 14, 2021 10:53 am

Mark Leavy wrote:
Tue Sep 14, 2021 10:47 am
buddtholomew wrote:
Tue Sep 14, 2021 10:15 am
It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
I hold it because:
a) It is uncorrelated with stocks, bonds, cash and real estate.
b) It can be held outside of the financial system
c) It is a store of value with a history of surviving any known type of economic collapse.

Other than that, not much reason to hold gold.
All good reasons to hold gold.
Let me clarify my question, of the 4 economic climates, why do we hold gold - prosperity, inflation, deflation, recession?
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Re: The GOLD scream room

Post by dualstow » Tue Sep 14, 2021 1:09 pm

😂 @ Budd Lite Gold ®️ portfolio, great name.
https://www.youtube.com/watch?v=SXW-sL5gzHQ
After a while you can recognize the signs/
So if you get it wrong you'll get it right next time, next time.
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I Shrugged
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Re: The GOLD scream room

Post by I Shrugged » Tue Sep 14, 2021 4:31 pm

My answer would be the same as Mark's. In the early days, I would have said I'm holding it for inflation protection. But over time I came to strongly value the latter two of Mark's three points. It has attributes that just can't be had within the realm of dollar based assets.

I started out with just GLD. But I've diversified into more tangible forms. I like GLD for the convenience but it is also a dollar based asset, and I've got enough of those. I can see why a GLD or other ETF holder would be more inclined to just see it as a lower performing stock. If you get some ounces into the Texas Bullion Depository, or the vault in the Caymans, or Perth Mint, and physical, it becomes a much different asset. In my view.

To put it another way, if you have 8 figures all in dollar based assets, you are taking a risk of a certain type and it can be mitigated. It's not like you need the extra performance that you would have gotten if the gold allocation had been in stocks.
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