David Rosenberg: Long Treasuries Are Still The Safest Asset Around

[mathjak107]

There are just things very unlikely to occur in this country ..not that they can’t happen but the odds are so low you wouldn’t want to bet the same odds of them happening .

This country would stay out of deflation at almost all costs of higher inflation

[dualstow]

... And IMHO it makes the case quite persuasively that allocating equal amounts of one's assets to hedge against economic conditions that are by no means equally likely to occur, and that entail very different costs to insure against, isn't agnostic - it's merely symmetrical (i.e. 4 x 25%).

I don’t put much money into flood insurance — zero, actually, because I’m not on a flood plain and i know it’s that unlikely that i’m going to experience flooding, whereas fires are fully covered.
I guess I need a good source of the odds of the economic conditions.
Via the vp, I tilt toward stocks. Maybe that’s close to a golden butterfly in disguise. If the Golden Butterfly were called the Monarch Butterfly, I’d call mine the Viceroy.
But, I do it only because I like stocks, i’m comfortable with stocks, and I’ve watched them go up nicely in my lifetime. Not very scientific. I need to read ‘Deep Risk’ and find that source. Maybe Bernstein knows something that Rosenberg doesn’t.

https://jasonzweig.com/shallow-risk-and ... the-woods/

So far Tyler's Golden Butterfly is the most elegant solution to these issues I've seen but there are obviously many other viable options.

Reading the link now...

[mathjak107]

It is important to just understand that throwing equal amounts of money in to outcomes that are anything but equal as far as playing out does not mean you are not betting on the under dog with the same amount of money as the favorite and that in itself is a pretty heavy bet on the under dog odds

[dualstow]

I’m just glad you didn’t convince me in 2010 when I started buying those bonds.
I also had to ignore a close personal friend who thought I was nuts buying such an instrument with a yield of 4-4.75%.

[mathjak107]

We can all cherry pick a time frame for anything in the past as an example for something that did well ...but times change and conditions change and what was may be no more ...we can even pull out 1929-as a depression time frame .

I don’t think odds are good putting the same money on a depression as prosperity ...despite the fact I pull a time frame out .

So despite what we can drag up from the past odds are quite different making our bet on it quite different and not equal ..

To be equal would take a probability study and then adjust the money to match