The GOLD scream room

Discussion of the Gold portion of the Permanent Portfolio

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murphy_p_t
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Re: The GOLD scream room

Post by murphy_p_t » Mon Nov 29, 2021 3:13 pm

mathjak107 wrote:
Mon Nov 29, 2021 1:57 pm
i wasn't in it all of 2020 ….

i got in around the election in nov after doing very well in my usual models and wanting to preserve those gains .

gold and tlt were in the toilet for me with big dollar losses ..not only that but the model i left for it was up nicely even more so over all it cost me a pretty penny .

the pp was down for me from nov to january , once inflation fears hit it was doing poorly in comparison…

i show the pp up ytd about 3.50% not counting today. i am up about 13% with today.

that is a few hundred thousand dollars difference for me …that is a huge difference vs if i stayed in the pp
Congratulations on your investment prowess!

I view the pp as being Uber conservative... I think of it along the lines of a savings account, which pays a little return. Even Uber conservative amongst other passive portfolios.

PP has taught me a mindset to Branch out from. I see it as safe harbor, when the storms come.

Pp remains the core which I tweak.
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Re: The GOLD scream room

Post by mathjak107 » Mon Nov 29, 2021 4:16 pm

i kind of do the same thing .

i have a very conservative core portfolio which i use being i am retired but i try to mold it to better for the bigger picture .

it is the most conservative model in the insight portfolio but i add my own little spin like better inflation protection which i feel is more diversified than just gold and updated with some bitcoin and commodities…
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Re: The GOLD scream room

Post by pp4me » Mon Nov 29, 2021 4:33 pm

mathjak107 wrote:
Mon Nov 29, 2021 4:16 pm
i kind of do the same thing .

i have a very conservative core portfolio which i use being i am retired but i try to mold it to better for the bigger picture .

it is the most conservative model in the insight portfolio but i add my own little spin like better inflation protection which i feel is more diversified than just gold and updated with some bitcoin and commodities…
I decided to do give it a try with TIPS with a sizeable amount of my PP cash even though the PP recommendation is to avoid them. Didn't seem like a very risky thing to me though some others thought so.

I was very disappointed at first and was ready to abandon the experiment but lately it has been turning green. Not impressive returns by any means but a lot better than current cash alterntives. If it keeps up I will decide it was a brilliant strategy that I can brag about.

No idea if it will continue in that direction, of course. If inflation keeps up I don't see why not even though my chrystal ball stopped working a long time ago.
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Re: The GOLD scream room

Post by mathjak107 » Mon Nov 29, 2021 5:08 pm

tips are still bonds and can lose money if rates go up ..that will make the interest rate sensitivity even worse when coupled with long term bonds ….

i can see experimenting with tips instead of long term treasuries but not both together unless i was splitting the long term bonds in half
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Re: The GOLD scream room

Post by dockinGA » Mon Nov 29, 2021 5:11 pm

mathjak107 wrote:
Mon Nov 29, 2021 1:57 pm
i wasn't in it all of 2020 ….

i got in around the election in nov after doing very well in my usual models and wanting to preserve those gains .

gold and tlt were in the toilet for me with big dollar losses ..not only that but the model i left for it was up nicely even more so over all it cost me a pretty penny .

the pp was down for me from nov to january , once inflation fears hit it was doing poorly in comparison…

i show the pp up ytd about 3.50% not counting today. i am up about 13% with today.

that is a few hundred thousand dollars difference for me …that is a huge difference vs if i stayed in the pp
I think I've asked this before, but here goes.

You jumped into the PP in November, and bailed in January. That's only 2-3 months. This begs a series of questions:
1. Why did you get in? What changed in just a couple of months that made you get out? Why are you so confident in your investing predictions, when this one series of events would seem to show that you get it wrong (at least sometimes)?
2. It seems like you're somewhat an active trader. When you look at your investing returns from the past do you consider the impact of taxes? Obviously this year you've done much better than the PP, so taxes will not even come close to bringing you back down to PP level returns, but over the long run those taxes do tend to add up.
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mathjak107
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Re: The GOLD scream room

Post by mathjak107 » Mon Nov 29, 2021 5:28 pm

i jumped in pre election to try to hold on to my nice gains .

what better place then the pp to hang out .

well gold and tlt started to get hammered bad ..

in a blink i was down over 100k …that while the model i left was still wracking up gains to boot .talk about adding insult to injury

the inflation outlook started to look worse and worse and i realized the pp is likely a mistake for me , at least for 2021s outlook .

i decided the interest rate risk and inflation risk was extreme and more then i felt i should have


i am not confident in all my decisions, after all i though the pp would be a safe place to hang out ..well i was wrong .

tlt and gld lost even more from january to now as they are both down ytd .

so my portfolio is conservative enough that even if i am wrong there is nothing that will get devastated ..the only thing i would do is if i see inflation come down i will reduce the portfolio hedge and add another 5-10% equites.

i didnt think gold would be a good gedge in moderate inflation either , which is why i combined it with bitcoin , commodities and fidelity fsrrx strategic real return

all my heavy trading is in my ira so taxes are not a factor , nor are capital gain distributions….

that is the beauty of a retirement account …. it grew to multiple seven figures over the decades between my iras and 401k.

we have fidelity contra in our taxable account with heavy gains but since we closed our real estate LLC we have a lot of carry over write offs from capital costs we couldn't fully take .

we can sell contra , pay zero tax and still have a lot to carry over for years.

i may actually have to do some trading just to use it up eventually
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Re: The GOLD scream room

Post by I Shrugged » Mon Nov 29, 2021 6:46 pm

mathjak107 wrote:
Mon Nov 29, 2021 5:28 pm
i jumped in pre election to try to hold on to my nice gains .

what better place then the pp to hang out .

well gold and tlt started to get hammered bad ..

in a blink i was down over 100k …that while the model i left was still wracking up gains to boot .talk about adding insult to injury

the inflation outlook started to look worse and worse and i realized the pp is likely a mistake for me , at least for 2021s outlook .

i decided the interest rate risk and inflation risk was extreme and more then i felt i should have


i am not confident in all my decisions, after all i though the pp would be a safe place to hang out ..well i was wrong .

tlt and gld lost even more from january to now as they are both down ytd .

so my portfolio is conservative enough that even if i am wrong there is nothing that will get devastated ..the only thing i would do is if i see inflation come down i will reduce the portfolio hedge and add another 5-10% equites.

i didnt think gold would be a good gedge in moderate inflation either , which is why i combined it with bitcoin , commodities and fidelity fsrrx strategic real return

all my heavy trading is in my ira so taxes are not a factor , nor are capital gain distributions….

that is the beauty of a retirement account …. it grew to multiple seven figures over the decades between my iras and 401k.

we have fidelity contra in our taxable account with heavy gains but since we closed our real estate LLC we have a lot of carry over write offs from capital costs we couldn't fully take .

we can sell contra , pay zero tax and still have a lot to carry over for years.

i may actually have to do some trading just to use it up eventually
I hope people will see this story as how not to invest in the PP. It's a long term plan, not a safe harbor for a couple of months. So you made a wrong short term pick, but then you're confident enough in your next idea to tell us about it a hundred times over? Come on man.
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Re: The GOLD scream room

Post by mathjak107 » Mon Nov 29, 2021 7:07 pm

i have had that other portfolio is in use for decades ..i would say that is a long term portfolio.

the only mistake was thinking the pp was going to provide some protection over the election uncertainty.. that was the mistake and misjudgment, it did considerably worse
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Re: The GOLD scream room

Post by Xan » Mon Nov 29, 2021 8:39 pm

mathjak107 wrote:
Mon Nov 29, 2021 7:07 pm
i have had that other portfolio is in use for decades ..i would say that is a long term portfolio.

the only mistake was thinking the pp was going to provide some protection over the election uncertainty.. that was the mistake and misjudgment, it did considerably worse
It certainly did provide the protection. Any number of things COULD have happened, and you were insured against them. You don't look back at all the money you've "wasted" over the years on your homeowners' insurance because your house didn't burn down, do you?
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Re: The GOLD scream room

Post by vincent_c » Mon Nov 29, 2021 8:44 pm

He certainly does.
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Re: The GOLD scream room

Post by mathjak107 » Tue Nov 30, 2021 2:08 am

Xan wrote:
Mon Nov 29, 2021 8:39 pm
mathjak107 wrote:
Mon Nov 29, 2021 7:07 pm
i have had that other portfolio is in use for decades ..i would say that is a long term portfolio.

the only mistake was thinking the pp was going to provide some protection over the election uncertainty.. that was the mistake and misjudgment, it did considerably worse
It certainly did provide the protection. Any number of things COULD have happened, and you were insured against them. You don't look back at all the money you've "wasted" over the years on your homeowners' insurance because your house didn't burn down, do you?


i wouldn't insure against a flood if i lived in a dry area … nor would i insure against a situation with a poor chance of playing out that cost to much vs the odds of playing out or the damge it can inflict if it plays out .

hey best of luck to those who want to weight for low rates and low inflation but as of now and 2022 my opinion is it is very unlikely and not going to ge a good place to be again. so you gotta do what you see fit.

the low equity allocation , the cash and the inflation protection i added is my insurance… we are really no different …the pp is weighted for low rates and low to lower inflation …i am weighted for higher rates and higher inflation …let that sink in when you want to use your insurance analogy .

you are no better protected then i am , we are just weighted in opposite ends when you think about it with pretty equal exposure to equities in the middle . my equities are the same i used in the pp .

i have better coverage at one end where the pp is weak , and you have better coverage at the other end where i have some weakness but to think you are not exposed to risk like i am is just a case of the emperors new clothes .

actually i turned out better insured since with the same equities level my protection assets responded well to inflation and higher rates hence the better return with the same equity level .

for 2020 it looks like i was correct and my insurance paid off well , lets see what 2022 brings.
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Re: The GOLD scream room

Post by Cortopassi » Tue Nov 30, 2021 9:15 am

mj,

You used to trade into and out of TLT and gold quite a lot in the past. Have you pulled back from that? Seems like a lot of volatile opportunities lately!
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Re: The GOLD scream room

Post by mathjak107 » Tue Nov 30, 2021 9:28 am

very little trading in tlt this year ..i did some-in gold but when the trend is down more than up it is hard to do. i am still down in gold from the pp
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Re: The GOLD scream room

Post by murphy_p_t » Tue Nov 30, 2021 9:43 am

Looks steady to me.





Screenshot_2021-11-30-09-37-27-814.jpeg
Screenshot_2021-11-30-09-37-27-814.jpeg (195.93 KiB) Viewed 1060 times
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Re: The GOLD scream room

Post by mathjak107 » Tue Nov 30, 2021 9:47 am

i am close to even but not even yet ..
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Re: The GOLD scream room

Post by buddtholomew » Tue Nov 30, 2021 10:06 am

Just makes me laugh...up 1.4 to down .6 in 20 minutes...don’t care, feels good.
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Re: The GOLD scream room

Post by mathjak107 » Tue Nov 30, 2021 10:16 am

everything flipped on a dime ..moderna ceo said vaccines may not work well on the new one.

but the reality is no one knows much yet
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Re: The GOLD scream room

Post by buddtholomew » Tue Nov 30, 2021 10:56 am

End of month bullshit...
We’ll see how we close
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Re: The GOLD scream room

Post by Dieter » Tue Nov 30, 2021 5:46 pm

According to Quicken, my gold is down 0.6% for trailing 12 months; down 6.2% YTD

I rebalanced some into Gold in May of this year, which really hurt -- most expensive Gold I've bought to date!

[Edit / Note: my overall retirement allocation to Gold targets ~15%; currently closer to 12%. Yeah, performance has not been near TSM, but, I worry much less now over my retirement portfolio than I used to.]
Last edited by Dieter on Tue Nov 30, 2021 5:52 pm, edited 1 time in total.
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Re: The GOLD scream room

Post by mathjak107 » Tue Nov 30, 2021 5:49 pm

it wouldnt be so bad except gold cant seem to get any traction …other assets like commodities or bitcoin can make 6% up in an afternoon ….but gold just cant get to first base in this environment which is why i dont want gold as my only hedge going forward.

i want it combined with other inflation oriented assets
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Re: The GOLD scream room

Post by buddtholomew » Mon Dec 13, 2021 10:00 am

mathjak107 wrote:
Tue Nov 30, 2021 5:49 pm
it wouldnt be so bad except gold cant seem to get any traction …other assets like commodities or bitcoin can make 6% up in an afternoon ….but gold just cant get to first base in this environment which is why i dont want gold as my only hedge going forward.

i want it combined with other inflation oriented assets
Agree 100%
Just sits there doing absolutely nothing like a deer in the headlights or a 5 year old whose lost his mommy at the store.
What a waste of space, both mentally and physically.

You would never hear me say this about bonds, the true equity diversifier. Check on those for some idea of how a volatile asset is supposed to respond.
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Re: The GOLD scream room

Post by flyingpylon » Mon Dec 13, 2021 10:18 am

Here's a different perspective from Paul Belanger:

2021-12-11 Current Gold and Equity Valuation
Fundamentally gold should increase in price by about 7.5% per year over the very long term plus a little extra boost from the fact that it would need to increase in price by 30% currently just to revert back to historic valuations. Fundamentally stocks need to fall by about 50% to revert back to historic norms; however, with currency being printed at a rate of 7.5% per year stocks could merely remain stagnant to revert back to normal (a lost decade similar to the 2000’s). A stock investor could take solace in the fact that he or she would be collecting a 1.25% dividend during the wait. It’s not much, but hey it’s better than banks are paying! In my view a long term investor will be more handsomely rewarded in gold over the next 10-20 years than in the S&P500.
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Re: The GOLD scream room

Post by buddtholomew » Mon Dec 13, 2021 10:38 am

flyingpylon wrote:
Mon Dec 13, 2021 10:18 am
Here's a different perspective from Paul Belanger:

2021-12-11 Current Gold and Equity Valuation
Fundamentally gold should increase in price by about 7.5% per year over the very long term plus a little extra boost from the fact that it would need to increase in price by 30% currently just to revert back to historic valuations. Fundamentally stocks need to fall by about 50% to revert back to historic norms; however, with currency being printed at a rate of 7.5% per year stocks could merely remain stagnant to revert back to normal (a lost decade similar to the 2000’s). A stock investor could take solace in the fact that he or she would be collecting a 1.25% dividend during the wait. It’s not much, but hey it’s better than banks are paying! In my view a long term investor will be more handsomely rewarded in gold over the next 10-20 years than in the S&P500.
Sorry this is meaningless to me, just like gold 5000 or 10000. Just not going to happen.
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Re: The GOLD scream room

Post by buddtholomew » Tue Dec 14, 2021 7:42 am

Wholesale prices up 9.6%, gold down .7%
I rest my case.
Good luck to you all holding this J U N K

Also, no more excuses that USD is strong, it’s not!
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Re: The GOLD scream room

Post by barrett » Tue Dec 14, 2021 8:02 am

It's disappointing, to be sure. Even stranger to me though is seeing the yield on the 30-year treasury hovering around 1.8%. That would seem to indicate that investors still don't see inflation lasting for a prolonged period when pretty much everyone who is talking about it has dropped the term "transitory".
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