The GOLD scream room

[buddtholomew]

I don’t understand this at all since the amount of stocks I hold has nothing to do with whether I own gold.

I finally understand why you don’t understand then.

Do enlighten us great one.
Just remember I retired myself on stocks; an immigrant with zero to his name. It wasn’t the PP that retired me. Are you retired or just a TA in a bottom tier business school?

[buddtholomew]

I don’t understand this at all since the amount of stocks I hold has nothing to do with whether I own gold.

I finally understand why you don’t understand then.

ALOL

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

[buddtholomew]

I don’t understand this at all since the amount of stocks I hold has nothing to do with whether I own gold.

I finally understand why you don’t understand then.

Just spouting horse shit.
What about bonds and cash?
You forget about those assets.
Plead your case so we can all see what a moron you actually are.

[Xan]

Guys, please, could we keep things civil?

This is the gold scream room. If budd needs to spout off here, he can. If anybody wants to respond with a discussion about whether or not gold is worth holding, please have at it, but there's no need to come down on budd for being upset about how his gold is performing.

Budd, it would help to lower the temperature if there were less name-calling.

[buddtholomew]

Guys, please, could we keep things civil?

This is the gold scream room. If budd needs to spout off here, he can. If anybody wants to respond with a discussion about whether or not gold is worth holding, please have at it, but there's no need to come down on budd for being upset about how his gold is performing.

Budd, it would help to lower the temperature if there were less name-calling.

I truly asked a question and was eager to hear the point of view. Gold is down 14% from the high so a 2M holding is down 280K. It should be easy to understand why I am so frustrated.

[buddtholomew]

Just spouting horse shit.
What about bonds and cash?
You forget about those assets.
Plead your case so we can all see what a moron you actually are.

Assuming you want to maximize the USD as the unit of account, gold has fundamental reasons and historic reliability of having a long term positive return in USD.

It’s also an uncorrelated asset to stocks. This means that unless you don’t believe in diversification or more likely just do not understand portfolio construction, then the question of whether you should own gold is not a matter of if but how much.

Given the same degree of risk, you will be able to generate a higher return which is exactly what the sharpe ratio helps you determine. Ignore it if you want to, but it does mean that for a given amount of risk tolerance you are able to hold more stocks. The same thing goes with any uncorrelated asset when you want to add it to a portfolio. You’re welcome to educate me further on this if I’ve assumed wrong and you’re actually an expert that knows something I don’t.

“Risk adjusted return” you mean, not a higher return in absolute dollars else I wouldn’t be up 10% YTD in my 60/40 allocation while gold is down 10% and the PP up a measly 3%.

Funny there are millions of Bogleheads that must not understand portfolio construction either. Of course you are way smarter than them because you have run the historical numbers.

If I had only invested in the PP, I would still be working and most likely another 10 years before I retired.

You can’t eat a sharpe ratio and if I’m already taking risk in stocks I don’t want to take even more in Gold. In my investing lifetime there has not been a single case where ONLY Gold has taken the reigns while the other assets faltered.

Give me an example where you can hold more stocks because you hold gold. If that were the case why the fuck would the PP be 25/25/25/25. You make no sense.

[Mark Leavy]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

[buddtholomew]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

[buddtholomew]

“Risk adjusted return” you mean, not a higher return in absolute dollars else I wouldn’t be up 10% YTD in my 60/40 allocation while gold is down 10% and the PP up a measly 3%.

What you don’t understand is that it’s the same thing. You invest according to your risk so find the better risk adjusted return and then lever it up to match the risk of whatever the other option was!

Does anyone else understand what this guy is talking about? If you do, please communicate it in a way that makes sense to the reader. Maybe you don’t understand Vincent. Ever considered that a possibility. Just lost in your own head.

Throwing leverage into the discussion to prove some point...who is talking about leverage here? You want to me to lever stocks to increase my exposure now that I hold gold. That’s a good one.

[Mark Leavy]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

[buddtholomew]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

Thanks Mark, but MPT doesn’t have to include Gold. I believe in MPT so I diversify across stocks as well as fixed income.

My main point is risk adjusted return has a price when you diversify away from stocks. Risk adjusted often means lower returns. .80 vs 1.05 sharpe ratio...can you feel that difference. I sure can it’s about 7% + YTD in favor of the .8 ratio or about 280000 USD.

[Xan]

Budd, would it help if you looked at your portfolio not so much in dollar terms?

Maybe try to think of it like this: you own:
$2M cash
70 pounds of gold
Decent chunks of many large, successful companies
Promises from the US Treasury to pay you millions of dollars over many years

Maybe that would be healthier than looking at the ups and downs of everything in dollar terms? Those things largely will not change from day to day.

[buddtholomew]

Budd, would it help if you looked at your portfolio not so much in dollar terms?

Maybe try to think of it like this: you own:
$2M cash
70 pounds of gold
Decent chunks of many large, successful companies
Promises from the US Treasury to pay you millions of dollars over many years

Maybe that would be healthier than looking at the ups and downs of everything in dollar terms? Those things largely will not change from day to day.

You’re probably right. In USD terms it’s a killer.

[buddtholomew]

Don’t confuse my disinterest for leverage as a lack of understanding. I own a home in CA, Bay Area. Also, you’re being awfully condescending so I’m done with you after this comment.

Direct me to HB’s body of work where he mentions using leverage to achieve your goals. That’s right, he doesn’t. You are NOT ascribing to PP philosophy when using leverage but rather something you’ve concocted that’s “better” than 4x25PP.

[dockinGA]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

Thanks Mark, but MPT doesn’t have to include Gold. I believe in MPT so I diversify across stocks as well as fixed income.

My main point is risk adjusted return has a price when you diversify away from stocks. Risk adjusted often means lower returns. .80 vs 1.05 sharpe ratio...can you feel that difference. I sure can it’s about 7% + YTD in favor of the .8 ratio or about 280000 USD.

Don't get so wrapped up in YTD data. And don't forget that better risk adjusted return for the PP vs stocks probably means that you'll be significantly better off in the next market crash with the PP. Just like the PP was better off in the early part of 2020, 2008-2009, etc. The PP is an unorthodox investment philosophy, and there will be significant tracking error when compared to just about every other investment philosophy. If you're going to get upset about not capturing all the gains in a given year that your friends/general public is getting, then the PP is not for you.

[flyingpylon]

You guys are trying to use logic and facts to address an emotional issue. Good luck with that.

[dockinGA]

You guys are trying to use logic and facts to address an emotional issue. Good luck with that.

Good point.

[vnatale]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

Thanks Mark, but MPT doesn’t have to include Gold. I believe in MPT so I diversify across stocks as well as fixed income.

My main point is risk adjusted return has a price when you diversify away from stocks. Risk adjusted often means lower returns. .80 vs 1.05 sharpe ratio...can you feel that difference. I sure can it’s about 7% + YTD in favor of the .8 ratio or about 280000 USD.

Don't get so wrapped up in YTD data. And don't forget that better risk adjusted return for the PP vs stocks probably means that you'll be significantly better off in the next market crash with the PP. Just like the PP was better off in the early part of 2020, 2008-2009, etc. The PP is an unorthodox investment philosophy, and there will be significant tracking error when compared to just about every other investment philosophy. If you're going to get upset about not capturing all the gains in a given year that your friends/general public is getting, then the PP is not for you.

What I am going to put here has been many times been referred to in this forum. However....it does totally support what I highlighted above...

Wild about Harry

http://www.efficientfrontier.com/ef/0adhoc/harry.htm

"And therein lies the real problem with the TPP: because of its huge tracking error relative to more conventional portfolios, it attracts assets and adherents during crises, then sheds them in better times. There's nothing wrong with Harry's portfolio nothing at all but there's everything wrong with his followers, who seem, on average, to chase performance the way dogs chase cars."


By the way....Bernstein was THE key influence in forming my prior investing philosophy. I'd either forgotten or did not know that he had a new book that came out this year.

The Delusions Of Crowds: Why People Go Mad in Groups Kindle Edition

https://www.amazon.com/Delusions-Crowds ... oks&sr=1-2

It seems like it has already been a well read book in the 7 months or so it has been out. But still too expensive for me in either paper or Kindle version. I will get it when the paper version price declines considerably.

[buddtholomew]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

Thanks Mark, but MPT doesn’t have to include Gold. I believe in MPT so I diversify across stocks as well as fixed income.

My main point is risk adjusted return has a price when you diversify away from stocks. Risk adjusted often means lower returns. .80 vs 1.05 sharpe ratio...can you feel that difference. I sure can it’s about 7% + YTD in favor of the .8 ratio or about 280000 USD.

Don't get so wrapped up in YTD data. And don't forget that better risk adjusted return for the PP vs stocks probably means that you'll be significantly better off in the next market crash with the PP. Just like the PP was better off in the early part of 2020, 2008-2009, etc. The PP is an unorthodox investment philosophy, and there will be significant tracking error when compared to just about every other investment philosophy. If you're going to get upset about not capturing all the gains in a given year that your friends/general public is getting, then the PP is not for you.

The PP may protect you during a market crash but only for a short period of time before stocks rebound and Gold/LTT’s sell off. You should be a buyer when stocks decline not sitting in the PP hoping for the best.

I also hold a 60/40 AA in retirement accounts which is very conservative and still beating the pants off the PP.

[dualstow]

It’s been said many times before, by craigr for example: I don’t necessarily want to be in an environment where gold is doing well. I hold some, but I want prosperity, in which stocks are doing well.

[dockinGA]

So what is the answer little Mark as he sits in class laughing at a joke he doesn’t understand. You’re the ALOL for holding this crap. All these intellectuals with $1000 to their name. Pip squeaks.

No insult intended Budd. I think the reference was to portfolio theory.

I must be really confused; just looking for a straight answer. ALOL at a derogatory comment made directly at me are fighting words where I come from.

I'll try and explain. I'm not the greatest at this sort of thing, but I'll give it a shot.

I was laughing at vincent's comment that he understood why you didn't understand. To me, that was a meta joke - in that the underlying issue was that the two of you approach investing via completely different philosophies. Vincent : from the modern portfolio background and you from the just let me earn the most I can background.

That dichotomy was funny.

Capice?

Thanks Mark, but MPT doesn’t have to include Gold. I believe in MPT so I diversify across stocks as well as fixed income.

My main point is risk adjusted return has a price when you diversify away from stocks. Risk adjusted often means lower returns. .80 vs 1.05 sharpe ratio...can you feel that difference. I sure can it’s about 7% + YTD in favor of the .8 ratio or about 280000 USD.

Don't get so wrapped up in YTD data. And don't forget that better risk adjusted return for the PP vs stocks probably means that you'll be significantly better off in the next market crash with the PP. Just like the PP was better off in the early part of 2020, 2008-2009, etc. The PP is an unorthodox investment philosophy, and there will be significant tracking error when compared to just about every other investment philosophy. If you're going to get upset about not capturing all the gains in a given year that your friends/general public is getting, then the PP is not for you.

The PP may protect you during a market crash but only for a short period of time before stocks rebound and Gold/LTT’s sell off. You should be a buyer when stocks decline not sitting in the PP hoping for the best.

I also hold a 60/40 AA in retirement accounts which is very conservative and still beating the pants off the PP.

If you're following the PP methodology, this is exactly what you would be doing. Last year on March 23rd, I followed through with my normal plan of rebalancing and bought thousands of dollars of stocks after selling some LTTs. At the time I was 100% convinced I was throwing money down a well, but with discipline and a TON of luck, I ended up buying at the very bottom.

I should also mention that if we ever get back to something resembling normal stock valuations (which would be the first time in my investing life), I would be very very tempted to move to something much closer to 100% global stocks than the PP for a significant portion of my portfolio. But in this crazy investing world we live in, that level of risk just isn't for me. And most people that tell you they can live with that level of risk are just fooling themselves, and will find that out during the next market crash.

[buddtholomew]

Great, me too.
Where was gold though?
Notice I don’t quibble about treasuries.

[dockinGA]

Great, me too.
Where was gold though?
Notice I don’t quibble about treasuries.

Gold surged a little later, into late summer. Not exactly sure why, but I suspect there was some liquidity driven selling (maybe) during the March 2020 market crash that took a little time to get over.

I am not a gold defender. In fact, in many ways, I hate each and every one of the individual investments in this portfolio, with probably gold at the top of the list. Taken as a whole, though, the portfolio has an impressive record of chugging along, returning reasonable gains without a lot of risk. Will it continue, who knows.

[barrett]

It’s been said many times before, by craigr for example: I don’t necessarily want to be in an environment where gold is doing well. I hold some, but I want prosperity, in which stocks are doing well.

Yeah, good point, and one that I frequently forget as I also have a tendency to think only in total portfolio dollars at any moment in time.

ALSO, and maybe I'm a bit of a weirdo here, it makes me uncomfortable when I feel that all assets are very high because it then looks like there's very little upside juice left.

It looks to me like two things are maybe happening with gold right now. One is that a lot of investors think that current inflation is only transitory as Jerome Powell says. The other is that gold is probably losing inflows to Bitcoin. Don't really want to own the latter but that does seem to be happening.

[Ugly_Bird]

Great, me too.
Where was gold though?
Notice I don’t quibble about treasuries.

Gold surged a little later, into late summer.

Did it ever surge right away? It is uncorrelated asset.
Whatever is happening right now just need to remember that the printing press is red hot ... all those stimulus money... lurking inflation? Au loves inflation.