The GOLD scream room
Moderator: Global Moderator
Re: The GOLD scream room
Budd,
If you did your homework you should know the following:
- PP always underperforms a more conventional port during bull markets
- The PP makes up some or all of the lag during equity bear markets
- When looked at as a whole portfolio, it is one of the least volatile simple portfolios around
- It is very tax efficient
- And finally the blatantly obvious, a full 50% of the port is in non return bearing assets.
I will repeat something I have mentioned 2 or 3 times previously, quit fixating on individual assets. Three of the four are highly volatile. Until the equity market enters a bear, don’t expect anything from the two assets you are currently complaining about. Currently the PP is down 2ish and 4-5 realish...why are you in the state you are. There is absolutely nothing unusual about what is going on right now.
Put this post in your favorites folder please and save us all the Buddbursts.
If you did your homework you should know the following:
- PP always underperforms a more conventional port during bull markets
- The PP makes up some or all of the lag during equity bear markets
- When looked at as a whole portfolio, it is one of the least volatile simple portfolios around
- It is very tax efficient
- And finally the blatantly obvious, a full 50% of the port is in non return bearing assets.
I will repeat something I have mentioned 2 or 3 times previously, quit fixating on individual assets. Three of the four are highly volatile. Until the equity market enters a bear, don’t expect anything from the two assets you are currently complaining about. Currently the PP is down 2ish and 4-5 realish...why are you in the state you are. There is absolutely nothing unusual about what is going on right now.
Put this post in your favorites folder please and save us all the Buddbursts.
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
The portfolio is a massive waste of time and energy...a la Bogle “full of sound and fury, signifying nothing”. It does not bring peace of mind but only angst.Kbg wrote: ↑Mon Oct 08, 2018 4:29 pm Budd,
If you did your homework you should know the following:
- PP always underperforms a more conventional port during bull markets
- The PP makes up some or all of the lag during equity bear markets
- When looked at as a whole portfolio, it is one of the least volatile simple portfolios around
- It is very tax efficient
- And finally the blatantly obvious, a full 50% of the port is in non return bearing assets.
I will repeat something I have mentioned 2 or 3 times previously, quit fixating on individual assets. Three of the four are highly volatile. Until the equity market enters a bear, don’t expect anything from the two assets you are currently complaining about. Currently the PP is down 2ish and 4-5 realish...why are you in the state you are. There is absolutely nothing unusual about what is going on right now.
Put this post in your favorites folder please and save us all the Buddbursts.
“Nothing unusual”...what you mean to say is underperforming a 50/50 conservative allocation by 700 basis points.
We’ll see what happens in a bear market but I’m not holding my breath.
Re: The GOLD scream room
I for one hope to hear many more Buddbursts to come. They are very therapeutic for comic relief.
- Kriegsspiel
- Executive Member
- Posts: 4052
- Joined: Sun Sep 16, 2012 5:28 pm
Re: The GOLD scream room
budd, your FOMO is making you angsty. You own a big slice of stocks outside your PP in addition to the ones inside it, just chill.
PS "700 basis points?" C'mon bro why are you trying to sound like a financial warlock. Just say 7%.
PS "700 basis points?" C'mon bro why are you trying to sound like a financial warlock. Just say 7%.
-
- Executive Member
- Posts: 1317
- Joined: Wed Aug 10, 2016 1:40 am
- Contact:
Re: The GOLD scream room
Arent we supposed to use market cap weight? Where's gold and commodities in the chart
https://thumbor.forbes.com/thumbor/960x ... tfolio.jpg
https://www.forbes.com/sites/phildemuth ... -investor/
Also https://ftalphaville.ft.com/2015/08/04/ ... portfolio/
https://thumbor.forbes.com/thumbor/960x ... tfolio.jpg
https://www.forbes.com/sites/phildemuth ... -investor/
Also https://ftalphaville.ft.com/2015/08/04/ ... portfolio/
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
Haha, it just makes the math easier.Kriegsspiel wrote: ↑Mon Oct 08, 2018 8:13 pm budd, your FOMO is making you angsty. You own a big slice of stocks outside your PP in addition to the ones inside it, just chill.
PS "700 basis points?" C'mon bro why are you trying to sound like a financial warlock. Just say 7%.
Re: The GOLD scream room
Oddly, I also kind of enjoy reading Buddbursts. A collection of those with our responses would make kinda of a fun little book.
I wouldn't consider either gold or 30 year bonds to be "conservative". They are both if anything more volatile than stocks. Call them "insurance assets" instead.
The reason you hold the PP is not because bonds and gold are such fantastic investments - I wouldn't hold either of those alone. Try this little exercise: go onto FIRECALC and run some simulations with a portfolio that is about 20x annual expenses. Plug in 100% stocks, or 75/25 stock/bond for investments and see what the success rate is. Then try a random portfolio with returns of 5%, inflation 0% (i.e. a 5% real return, lower than either the PP or GB historically), and standard deviation of 8% (which is a bit higher than the Golden Butterfly, and higher yet than the PP). When I did this, the success rate with this crummy real return, low-variance portfolio was higher than either of the stock portfolios. So much for the conventional wisdom that you need large stock allocations to succeed!
Add in the extra safety of the large cash component, and you have the closest you're going to get to a worry-free retirement. Of course, it kind of defeats the purpose if you're going to worry about your assets on a daily basis anyway. If you can't handle watching any asset drop 2% in value, maybe you should just stick with savings bonds, tips, and T bills. I can only imagine the Buddburst that would result if you held a ton of stocks during a 30-50% market correction, so that's not the answer either.
I wouldn't consider either gold or 30 year bonds to be "conservative". They are both if anything more volatile than stocks. Call them "insurance assets" instead.
The reason you hold the PP is not because bonds and gold are such fantastic investments - I wouldn't hold either of those alone. Try this little exercise: go onto FIRECALC and run some simulations with a portfolio that is about 20x annual expenses. Plug in 100% stocks, or 75/25 stock/bond for investments and see what the success rate is. Then try a random portfolio with returns of 5%, inflation 0% (i.e. a 5% real return, lower than either the PP or GB historically), and standard deviation of 8% (which is a bit higher than the Golden Butterfly, and higher yet than the PP). When I did this, the success rate with this crummy real return, low-variance portfolio was higher than either of the stock portfolios. So much for the conventional wisdom that you need large stock allocations to succeed!
Add in the extra safety of the large cash component, and you have the closest you're going to get to a worry-free retirement. Of course, it kind of defeats the purpose if you're going to worry about your assets on a daily basis anyway. If you can't handle watching any asset drop 2% in value, maybe you should just stick with savings bonds, tips, and T bills. I can only imagine the Buddburst that would result if you held a ton of stocks during a 30-50% market correction, so that's not the answer either.
- dualstow
- Executive Member
- Posts: 14292
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: The GOLD scream room
At some point, Budd said, in so many words, I just need to vent. Fair enough. Now I kind of look forward to it on certain market days. It’s like we’re on the golf course together, Budd, and you’re saying, “My neighbor has screamy kids in the pool next door.” There’s nothing I can do about it, but I can listen.
Kbg, I think it’s funny that you entreated us not to respond to the outbursts, and then you yourself couldn’t help responding again to the very next one.
9pm EST Explosions in Iran (Isfahan) and Syria and Iraq. Not yet confirmed.
Re: The GOLD scream room
Budd can vent anytime he wants, I just find it surprising he does so on the same things repeatedly. Nothing personal Budd...please vent away if you need to. But if your mental comparison is US stocks vs. the PP you can plan on being frustrated 70%+ of the time.dualstow wrote: ↑Tue Oct 09, 2018 9:02 amAt some point, Budd said, in so many words, I just need to vent. Fair enough. Now I kind of look forward to it on certain market days. It’s like we’re on the golf course together, Budd, and you’re saying, “My neighbor has screamy kids in the pool next door.” There’s nothing I can do about it, but I can listen.
Kbg, I think it’s funny that you entreated us not to respond to the outbursts, and then you yourself couldn’t help responding again to the very next one.
Check this link out and spend some time looking at the PP from say 1990 to 2001 and REALLY look at 1996-1999 followed by 2000-2002 annual and monthly returns tabs. Of all the PP periods I believe the one highlighted is most like the current period. We shall see if we get a similar follow on.
https://www.portfoliovisualizer.com/bac ... sisResults
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
Thanks all for not ousting the crazy guy
Going to spend some time reading through the comments and looking at historical returns as I have obviously internalized the portfolio incorrectly and I need to realign expectations.
I think my financial position changed over time and the PP served its purpose at 4x25. Feel more comfortable at 30/20/15/35 and possibly moving towards 5x20.
Going to spend some time reading through the comments and looking at historical returns as I have obviously internalized the portfolio incorrectly and I need to realign expectations.
I think my financial position changed over time and the PP served its purpose at 4x25. Feel more comfortable at 30/20/15/35 and possibly moving towards 5x20.
Re: The GOLD scream room
Huh?buddtholomew wrote: ↑Mon Oct 08, 2018 4:47 pm The portfolio is a massive waste of time and energy...
To me, only time and energy I waste on PP when reading your complains. :-)
Kidding aside, it is quite opposite for me, I personally didn't spend much time on energy on PP at all.
Only when had it set up and then rebalanced for the first (and so far the only) time.
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
No Buddburst today
- dualstow
- Executive Member
- Posts: 14292
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: The GOLD scream room
Looks like gold and TLT are going down...not as fast as stocks.
There's a boglehead thread about John Bogle saying it makes sense to sell stocks down 5 or 10% if it helps one sleep. Hmm. This is in the context of his belief that we're not going to see great market returns in the years to come.
For those who are 4x25 this might be a great opportunity to do nothing. Have another pina colada.
9pm EST Explosions in Iran (Isfahan) and Syria and Iraq. Not yet confirmed.
Re: The GOLD scream room
FIW According to Bloomberg's Billionaire Index, The world’s wealthiest people have, in aggregate, lost 2 percent of their wealth so far this year...
- Cortopassi
- Executive Member
- Posts: 3338
- Joined: Mon Feb 24, 2014 2:28 pm
- Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html
Re: The GOLD scream room
Well that was an interesting day.
If the pattern holds from recent history, tomorrow will be a spectacular up day for stocks, while bonds and gold will be trashed and the PP slope for the year will continue down.
But I have no better alternative for sure. About the only thing I am considering is going back to a higher % in cash since it is paying near 2% now at Ally. 25% in cash would have been a good buffer today.
Days like this certainly make me wonder about all the little tweaks I have made over the past couple years, which helped last year but are hurting this year.
If the pattern holds from recent history, tomorrow will be a spectacular up day for stocks, while bonds and gold will be trashed and the PP slope for the year will continue down.
But I have no better alternative for sure. About the only thing I am considering is going back to a higher % in cash since it is paying near 2% now at Ally. 25% in cash would have been a good buffer today.
Days like this certainly make me wonder about all the little tweaks I have made over the past couple years, which helped last year but are hurting this year.
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
The PP (or any balanced portfolio for that matter) is not immune to rising interest rates and tighter money.
Corto, this time is different
I see further declines in stocks as an 800 point drop in the DOW will panic most investors to sell.
Rates are going higher hell or high water and will exacerbate the declines in stocks even further than expected.
My guess is that rates pull-back in late October, equities stabilize and gold begins its ascent.
Probably will happen the other way then...
Corto, this time is different
I see further declines in stocks as an 800 point drop in the DOW will panic most investors to sell.
Rates are going higher hell or high water and will exacerbate the declines in stocks even further than expected.
My guess is that rates pull-back in late October, equities stabilize and gold begins its ascent.
Probably will happen the other way then...
- dualstow
- Executive Member
- Posts: 14292
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: The GOLD scream room
I agree. Anything could happen, but I feel tomorrow will see another slaughter or else a partial recovery, leading the semi-panicked to say ok, I recouped some of Wednesday’s losses and to sell by 3:00pm EST, i.e. an afternoon slaughter.buddtholomew wrote: ↑Wed Oct 10, 2018 4:30 pm I see further declines in stocks as an 800 point drop in the DOW will panic most investors to sell.
9pm EST Explosions in Iran (Isfahan) and Syria and Iraq. Not yet confirmed.
Re: The GOLD scream room
Is it wrong I love the slaughter days? It hurts my portfolio too, but it's interesting at least.
Don't agree with me too strongly or I'm going to change my mind
Re: The GOLD scream room
Sage advice from Alexander Hamilton, The Federalist, No. 12:
“The prosperity of commerce is now perceived and acknowledged, by all enlightened statesmen, to be the most useful as well as the most productive source of national wealth; and has accordingly become a primary object of their political cares. By multiplying the means of gratification, by promoting the introduction and circulation of the precious metals, (those darling objects of human avarice and enterprise), it serves to vivify and invigorate the channels of industry, and to make them flow with greater activity and copiousness. The assiduous merchant, the laborious husbandman, the active mechanic, and the industrious manufacturer, all orders of men look forward with eager expectation and growing alacrity to this pleasing reward of their toils.”
In other words, stop looking through the wrong end of the telescope. Buy gold for the long run.
“The prosperity of commerce is now perceived and acknowledged, by all enlightened statesmen, to be the most useful as well as the most productive source of national wealth; and has accordingly become a primary object of their political cares. By multiplying the means of gratification, by promoting the introduction and circulation of the precious metals, (those darling objects of human avarice and enterprise), it serves to vivify and invigorate the channels of industry, and to make them flow with greater activity and copiousness. The assiduous merchant, the laborious husbandman, the active mechanic, and the industrious manufacturer, all orders of men look forward with eager expectation and growing alacrity to this pleasing reward of their toils.”
In other words, stop looking through the wrong end of the telescope. Buy gold for the long run.
“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!"
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!"
- dualstow
- Executive Member
- Posts: 14292
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: The GOLD scream room
Atl least we don’t have to wonder anymore.
9pm EST Explosions in Iran (Isfahan) and Syria and Iraq. Not yet confirmed.
- Cortopassi
- Executive Member
- Posts: 3338
- Joined: Mon Feb 24, 2014 2:28 pm
- Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html
Re: The GOLD scream room
As expected, no stock selloff follow through.
- Cortopassi
- Executive Member
- Posts: 3338
- Joined: Mon Feb 24, 2014 2:28 pm
- Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html
Re: The GOLD scream room
What the hell?
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm
Re: The GOLD scream room
Mr. short squeeze has made an appearance.
Similar should happen to LTT’s as they are heavily shorted too.
- dualstow
- Executive Member
- Posts: 14292
- Joined: Wed Oct 27, 2010 10:18 am
- Location: synagogue of Satan
- Contact:
Re: The GOLD scream room
It's not even noon yet, and the S&P's down another 1%, but...if you say so.
9pm EST Explosions in Iran (Isfahan) and Syria and Iraq. Not yet confirmed.
- buddtholomew
- Executive Member
- Posts: 2464
- Joined: Fri May 21, 2010 4:16 pm