Gold Has Outperformed Stocks Over The Past 20 Years

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
mathjak107
Executive Member
Executive Member
Posts: 2724
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by mathjak107 » Tue May 19, 2020 10:23 am

yes ... we all actually have a weighted average over time as the market acts on more and more money ...the past become least important and the recent most important .

i was invested in the 1980's in the biggest bull in history .... but i had not much invested in those days compared to now ... its great the equities market averaged almost 14% from 1987 to 2003 ... but so what ... my big dollars did not happen and go in to the investments in a meaningful way until well after that .. so for me to quote an 11% return for 30 years is true but in reality my weighted average saw something very different and 1987 to 2003 was actually a moot point in the scheme of things , what counted more was the lost decade for stocks .

today whatever happens has the biggest effect on these kinds of dollars over shadowing much of the past
Last edited by mathjak107 on Tue May 19, 2020 10:46 am, edited 2 times in total.
User avatar
technovelist
Executive Member
Executive Member
Posts: 5584
Joined: Wed Sep 15, 2010 11:20 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by technovelist » Tue May 19, 2020 10:36 am

Smith1776 wrote:
Mon May 18, 2020 6:42 pm
technovelist wrote:
Mon May 18, 2020 6:36 pm
My plan for world domination is working. Muhahaha!
More and more I think of you as the unassuming guy in the disaster movie who you find out was behind the incident all along. :D
I feel more like the guy who figured it out early and no one listened to him. O0
Another nod to the most beautiful equation: e + 1 = 0
User avatar
Xan
Administrator
Administrator
Posts: 2513
Joined: Tue Mar 13, 2012 1:51 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by Xan » Tue May 19, 2020 11:07 am

mathjak107 wrote:
Tue May 19, 2020 9:34 am
my point is as the time frame gets longer and longer the past returns become less meaningful in our calculation and what happens near term matters so much more .

so as an example it was all well and good we can look at returns on asset class the last 20 years but if i had 10k invested early on, the fact those 20- year returns are made up mostly of the better returns 10 and 15 years ago is a moot point when i put hundreds of thousands of dollars in the last 5 and 10 years ,

it is the now , 3, 5 and 10 year return that are going to matter not the fact returns were great 15 , 20 years ago . so even though i owned that asset 20 years ago the fact is the return is different the last 10 years then my numbers would reflect .

this is why averages don't work in retirement calculations and sequence rules your outcome.

averages became almost meaningless when we add money and spend money because it then becomes a weighted average .
Okay, but then, so what? As in, what chart of past performance WOULD be useful, and what would it be useful for?
pp4me
Associate Member
Associate Member
Posts: 33
Joined: Wed Apr 29, 2020 4:12 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by pp4me » Tue May 19, 2020 11:32 am

I started the PP about 12 years ago so I don't have a 20 year history to report.

Since 2008 however, my gold is up 26% but only after spending many years in the red. Stocks bought at the same time (VTI) - up 119%.
User avatar
Smith1776
Executive Member
Executive Member
Posts: 1195
Joined: Fri Apr 21, 2017 6:01 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by Smith1776 » Tue May 19, 2020 1:06 pm

technovelist wrote:
Tue May 19, 2020 10:36 am
I feel more like the guy who figured it out early and no one listened to him. O0
I know exactly who you are then.

You’re Pierce Brosnan in Dante’s Peak — except even more dashing! ;D
For the money you can't afford to lose, why would you invest it in anything other than the PP? ???
Check out the Goldsmith PP: https://www.gyroscopicinvesting.com/forum/viewtopic.php?f=1&t=9613
User avatar
mathjak107
Executive Member
Executive Member
Posts: 2724
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by mathjak107 » Tue May 19, 2020 2:07 pm

Xan wrote:
Tue May 19, 2020 11:07 am
mathjak107 wrote:
Tue May 19, 2020 9:34 am
my point is as the time frame gets longer and longer the past returns become less meaningful in our calculation and what happens near term matters so much more .

so as an example it was all well and good we can look at returns on asset class the last 20 years but if i had 10k invested early on, the fact those 20- year returns are made up mostly of the better returns 10 and 15 years ago is a moot point when i put hundreds of thousands of dollars in the last 5 and 10 years ,

it is the now , 3, 5 and 10 year return that are going to matter not the fact returns were great 15 , 20 years ago . so even though i owned that asset 20 years ago the fact is the return is different the last 10 years then my numbers would reflect .

this is why averages don't work in retirement calculations and sequence rules your outcome.

averages became almost meaningless when we add money and spend money because it then becomes a weighted average .
Okay, but then, so what? As in, what chart of past performance WOULD be useful, and what would it be useful for?
No chart is really useful ....isn’t that why pp users use the portfolio? Because not always is the past a good indicator of the future but also in use you have to many variables to make it worth a darn On our personal levels ....all we need to know is assets go up and they go down .

In fact when the market sell off happened in equities for reasons not on the charts we had both Tlt and Gld take a nasty hit .


So driving and looking in the rear view mirror is not a great idea ...... market averages can be like yesterday’s weather.

We had the greatest bull market in history in stocks only to be followed up by the lost decade
User avatar
Xan
Administrator
Administrator
Posts: 2513
Joined: Tue Mar 13, 2012 1:51 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by Xan » Tue May 19, 2020 2:21 pm

Backtesting can't prove a theory correct, but it can disprove it, and if something occurs in history, it's at least possible for it to occur again.

I don't see the purpose in sniping at Smith's chart when he shows that gold can outperform stocks over a 20 year period. I don't understand saying "That's not useful because you don't know how much you have invested". If you want to say "Charts are useless and nobody should ever look at them because the future is unpredictable" then that's at least coherent, but probably nobody will agree with you that charts are useless.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 2724
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by mathjak107 » Tue May 19, 2020 2:29 pm

Xan wrote:
Tue May 19, 2020 2:21 pm
Backtesting can't prove a theory correct, but it can disprove it, and if something occurs in history, it's at least possible for it to occur again.

I don't see the purpose in sniping at Smith's chart when he shows that gold can outperform stocks over a 20 year period. I don't understand saying "That's not useful because you don't know how much you have invested". If you want to say "Charts are useless and nobody should ever look at them because the future is unpredictable" then that's at least coherent, but probably nobody will agree with you that charts are useless.
History never repeats itself ..only historians repeat themselves ....each time things play out just different enough that what happened last time is not the trigger or reason the next time ....

First Iraq war We plunged , 2nd Iraq war we soared .

So while the business cycles are with us , the triggers ,the reasons and what we thought ,generally do us no good the next time it happens..... the fact if I bought gold 15 or 20 years that because that price point beat equities today has zero to do with anyone who bought within that 20 year period but bought the last 10 years of that 20 year period .....equities Blew gold away over the last 10 years of the twenty year period so that is my point.

It would be like having an amazing year for an asset , and then stating for 20 years that asset beat xyz .....except for the other 19 years it did not beat it ......does that make sense?
User avatar
jhogue
Executive Member
Executive Member
Posts: 492
Joined: Wed Jun 28, 2017 10:47 am

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by jhogue » Tue May 19, 2020 2:48 pm

mathjak uses charts when they suit his purpose.

His favorite is a chart showing the decline of 30 year T-bond interest rates that is supposed to prove that interest rates have nowhere to go but up.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
User avatar
mathjak107
Executive Member
Executive Member
Posts: 2724
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by mathjak107 » Tue May 19, 2020 2:54 pm

jhogue wrote:
Tue May 19, 2020 2:48 pm
mathjak uses charts when they suit his purpose.

His favorite is a chart showing the decline of 30 year T-bond interest rates that is supposed to prove that interest rates have nowhere to go but up.
That assumption is wrong ...it merely shows we have not had a true bear market in bonds in 40 years ....it says nothing about rates have to go up ,big difference between the two .... it does not say bonds beat stocks for 40 years either..
There may be segments in the 40 year period where someone beat equities but that does not mean for 40 years bonds beat stocks
Last edited by mathjak107 on Tue May 19, 2020 2:58 pm, edited 1 time in total.
User avatar
technovelist
Executive Member
Executive Member
Posts: 5584
Joined: Wed Sep 15, 2010 11:20 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by technovelist » Tue May 19, 2020 2:58 pm

Smith1776 wrote:
Tue May 19, 2020 1:06 pm
technovelist wrote:
Tue May 19, 2020 10:36 am
I feel more like the guy who figured it out early and no one listened to him. O0
I know exactly who you are then.

You’re Pierce Brosnan in Dante’s Peak — except even more dashing! ;D
I can neither confirm nor deny that. :D
Another nod to the most beautiful equation: e + 1 = 0
User avatar
Xan
Administrator
Administrator
Posts: 2513
Joined: Tue Mar 13, 2012 1:51 pm

Re: Gold Has Outperformed Stocks Over The Past 20 Years

Post by Xan » Tue May 19, 2020 3:32 pm

mathjak107 wrote:
Tue May 19, 2020 2:54 pm
jhogue wrote:
Tue May 19, 2020 2:48 pm
mathjak uses charts when they suit his purpose.

His favorite is a chart showing the decline of 30 year T-bond interest rates that is supposed to prove that interest rates have nowhere to go but up.
That assumption is wrong ...it merely shows we have not had a true bear market in bonds in 40 years ....it says nothing about rates have to go up ,big difference between the two .... it does not say bonds beat stocks for 40 years either..
There may be segments in the 40 year period where someone beat equities but that does not mean for 40 years bonds beat stocks
Just a lot of words rationalizing an incoherent position. Are historical charts meaningful or not?
Post Reply