Gyroscopic Investing

pmward wrote: ↑Tue Mar 17, 2020 3:02 pm Not surprisingly, value is looking like it is starting to perk up relative to growth. Maybe those GB SCV tilts may actually start to pay off?

I do hope so.

Still waiting to rebalance; likely waited too long again (in 2908/2009 too early, since then, too hesitant on any of the shirt term dips)

Dieter wrote: ↑Tue Mar 17, 2020 3:21 pm

pmward wrote: ↑Tue Mar 17, 2020 3:02 pm Not surprisingly, value is looking like it is starting to perk up relative to growth. Maybe those GB SCV tilts may actually start to pay off?

I do hope so.

Still waiting to rebalance; likely waited too long again (in 2908/2009 too early, since then, too hesitant on any of the shirt term dips)

Remember, it's also ok to rebalance in a DCA manner. It's probably a bit easier on the nerves for most to do it that way than all at once. Since I have a lot of experience in technical analysis, I have been using both technicals and the rebalancing bands to help me feel more comfortable in rebalancing, as I'm doing it at times that I see as decent probability potential bottoms (areas I see with decent risk/reward). I rebalanced yesterday, but I'm totally willing to rebalance again if the market keeps trending down... at the right price. Better early or late than never. It's very difficult to pick an actual bottom. Rebalancing though helps you to get back to even quicker in the inevitable recovery that will eventually happen.

Hey check it out, stocks are almost only modestly overvalued!

re-balanced Tuesday, more or less on scheduled and according to plan... tlt from 32% to 26%, vtsax from 17% to 25%, gld and cash held at 24% ish.. this is traditionally the month of the year i pay taxes, make contributions and fill tax exempt space, (to be done soon, no further re-balancing expected) hopefully it will all work out..

Kriegsspiel wrote: ↑Wed Mar 18, 2020 6:46 am Hey check it out, stocks are almost only modestly overvalued!

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Probably true before the era of zero interest rates and a federal reserve almost singularly interested in inflating asset prices. I wonder if these metrics are still relevant.

l82start wrote: ↑Wed Mar 18, 2020 9:35 am re-balanced Tuesday, more or less on scheduled and according to plan... tlt from 32% to 26%, vtsax from 17% to 25%, gld and cash held at 24% ish.. this is traditionally the month of the year i pay taxes, make contributions and fill tax exempt space, (to be done soon, no further re-balancing expected) hopefully it will all work out..

Sounds ideal.

doodle wrote: ↑Wed Mar 18, 2020 9:57 am

Kriegsspiel wrote: ↑Wed Mar 18, 2020 6:46 am Hey check it out, stocks are almost only modestly overvalued!

8.png

Probably true before the era of zero interest rates and a federal reserve almost singularly interested in inflating asset prices. I wonder if these metrics are still relevant.

Yeah the "risk free rate" is the center of the universe. All assets are priced against that. Any valuation metric that does not include the risk free rate is incomplete. It's also best to look at more than one valuation metric.

My "rebalance indicator" has said yes now for 3 days in a row, but with bonds and gold now also falling, it'll all be from cash. So I would not be harvesting any gains, only using up dry powder. Thus, still not ready to pull the trigger. Everything is gyrating so wildly right now.

The other reason: I literally don't have time. I'm occupied at the hospital (again, not with COVID-19 cases, but elective procedure cases we are trying to get finished and out of the hospital ASAP) then coming home to deal with keeping my now virtual lab together, then in the evening it's family members, neighbors and friends who need/want attention, mixed in with administrative demands from work to submit this or that right now. I got quite a scolding last night from my cats because I didn't feed them until almost midnight.

sophie wrote: ↑Wed Mar 18, 2020 11:25 am My "rebalance indicator" has said yes now for 3 days in a row, but with bonds and gold now also falling, it'll all be from cash. So I would not be harvesting any gains, only using up dry powder. Thus, still not ready to pull the trigger. Everything is gyrating so wildly right now.

The other reason: I literally don't have time. I'm occupied at the hospital (again, not with COVID-19 cases, but elective procedure cases we are trying to get finished and out of the hospital ASAP) then coming home to deal with keeping my now virtual lab together, then in the evening it's family members, neighbors and friends who need/want attention, mixed in with administrative demands from work to submit this or that right now. I got quite a scolding last night from my cats because I didn't feed them until almost midnight.

I know it's hard but try to get enough rest so you can remain productive.

..and healthy!

sophie wrote: ↑Wed Mar 18, 2020 11:25 am My "rebalance indicator" has said yes now for 3 days in a row, but with bonds and gold now also falling, it'll all be from cash. So I would not be harvesting any gains, only using up dry powder. Thus, still not ready to pull the trigger. Everything is gyrating so wildly right now.

The other reason: I literally don't have time. I'm occupied at the hospital (again, not with COVID-19 cases, but elective procedure cases we are trying to get finished and out of the hospital ASAP) then coming home to deal with keeping my now virtual lab together, then in the evening it's family members, neighbors and friends who need/want attention, mixed in with administrative demands from work to submit this or that right now. I got quite a scolding last night from my cats because I didn't feed them until almost midnight.

My three demand that food be in their food dish at ALL times! If it runs out by morning one or more of them will come to lightly scratch my face to get me up to do my job!

Vinny

Hah! I was awakened by a cat staring at me from the hallway at 5:30 this morning. I turned my head away from her. Never heard her jump down from a high area to the floor. Five seconds later, her face was 1 inch from mine.

dualstow wrote: ↑Wed Mar 18, 2020 12:42 pm Hah! I was awakened by a cat staring at me from the hallway at 5:30 this morning. I turned my head away from her. Never heard her jump down from a high area to the floor. Five seconds later, her face was 1 inch from mine.

She's a lot cuter.

For anyone that has been on the fence about rebalancing, tomorrow is probably a good day to do so. It is monthly options expiration. This selloff started the very first day after Feb options expiration for a reason. Dealers were positive gamma before then, and that pinned the indexes up. This month they've been negative gamma and pushing indexes down. Monday starts another fresh gamma slate. Seems like a high probability point for a rally attempt. At the very least, we won't have dealers pushing down on the markets next week. Taking what has been the biggest seller in the last month and resetting them to neutral is likely to reduce volatility substantially, especially since there has been a big uptick in bullish options trading in the last couple of days (especially the May expiration).

pmward wrote: ↑Thu Mar 19, 2020 6:58 pm For anyone that has been on the fence about rebalancing, tomorrow is probably a good day to do so. It is monthly options expiration. This selloff started the very first day after Feb options expiration for a reason. Dealers were positive gamma before then, and that pinned the indexes up. This month they've been negative gamma and pushing indexes down. Monday starts another fresh gamma slate. Seems like a high probability point for a rally attempt. At the very least, we won't have dealers pushing down on the markets next week. Taking what has been the biggest seller in the last month and resetting them to neutral is likely to reduce volatility substantially.

Thanks. I've been thinking about it -- not fully Rebalancing, but put a bit more into stocks

Guess I have done homework tonight.

pmward wrote: ↑Thu Mar 19, 2020 6:58 pm For anyone that has been on the fence about rebalancing, tomorrow is probably a good day to do so. It is monthly options expiration. This selloff started the very first day after Feb options expiration for a reason. Dealers were positive gamma before then, and that pinned the indexes up. This month they've been negative gamma and pushing indexes down. Monday starts another fresh gamma slate. Seems like a high probability point for a rally attempt. At the very least, we won't have dealers pushing down on the markets next week. Taking what has been the biggest seller in the last month and resetting them to neutral is likely to reduce volatility substantially, especially since there has been a big uptick in bullish options trading in the last couple of days (especially the May expiration).

I have no clue what it all means. :-)
Sticking to 15/35 bands. Better miss a small opportunity then do something I do not understand.

pmward wrote: ↑Thu Mar 19, 2020 6:58 pm . Monday starts another fresh gamma slate.

I think I get it.

I was thinking to rebalance tomorrow too, and pmward's encouragment definitely helps. I've been in rebalance territory all week, and now that the hospital work is wrapped up (for now), I actually will have time tomorrow to figure it out.

I looked up the sequence of events during 2008-2009, just to get some idea of what might happen with gold and bonds. It went like this: 1) stocks fall (October), 2) 2-3 months later bonds rose (December), 3) another month or two later gold went up. Somebody watching carefully would have rebalanced 3 times during that period: once out of cash, once out of bonds, once out of gold. Something similar might happen here. It made me feel better about rebalancing out of cash.

Vinny: I switched my cats to meal feeding to head off food bowl bullying issues. My cats are sweet as sugar to me, but not, alas, to each other. Then one cat decided he wanted to go back to grazing, so I ended up buying him a microchip-activated feeder.

sophie wrote: ↑Thu Mar 19, 2020 8:40 pm I was thinking to rebalance tomorrow too, and pmward's encouragment definitely helps. I've been in rebalance territory all week, and now that the hospital work is wrapped up (for now), I actually will have time tomorrow to figure it out.

I looked up the sequence of events during 2008-2009, just to get some idea of what might happen with gold and bonds. It went like this: 1) stocks fall (October), 2) 2-3 months later bonds rose (December), 3) another month or two later gold went up. Somebody watching carefully would have rebalanced 3 times during that period: once out of cash, once out of bonds, once out of gold. Something similar might happen here. It made me feel better about rebalancing out of cash.

Vinny: I switched my cats to meal feeding to head off food bowl bullying issues. My cats are sweet as sugar to me, but not, alas, to each other. Then one cat decided he wanted to go back to grazing, so I ended up buying him a microchip-activated feeder.

I was just remarking to myself a few days ago how my 2 sister cats (two years old later this month) and the about 4 year old cat all cooperatively eat off the same flat plate with no issues.

Of course that leads me to a story. I got the two sisters as six week old kittens on a Thursday. Then I got the now about 4 year old, the next day on a Friday. I could make this story longer but this time I will not.

Anyway it was early June when I got all three. That time of year is different for me than it is at this time of year. Now even without all that's going on I'm home and inside quite a bit.

In June I'm out working, playing softball, outside until the sun goes down. Not much time spent inside.

Therefore it was not conducive to blending in 2 sister kittens with an adult cat--keeping an eye on them to step in in case any issues arose between them.

What was I to do? I decided to give the adult cat the full house to roam in while I kept the 2 sister kittens locked up in the bathroom for a week!

Finally a week later, on a Friday, I was home to work that day. Decided to try to integrate them.

I open the bathroom door while the adult cat is in the hallway. The two kittens walk out the door and then freeze when they see the adult cat. And, the adult cat is quite surprised to see these two creatures who she had no idea were also in the house! I think there was a tiny bit of hissing but the three of them soon got along quite famously.

This is all three of them just five days after that fateful hallway meeting. Now the all black one on the right is bigger than the black one in the middle!

Haha, yeah gamma is a hard thing to wrap your head around. But basically market makers and options dealers need to hedge their exposure, and they do that using gamma. This is not me calling a bottom. It is totally possible we could get another leg down. I'm totally willing to rebalance again if that happens. But, since dealers make up such a large chunk of the volume every day (these are all algorithmic trades) them at least going neutral on Monday should help volatility go down a bit. Either way, if someone like Ugly Bird hasn't hit their bands yet then by all means carry on. But, for someone that was looking to do a rebalance anyways in the coming days, tomorrow is probably a good day for that. I would rather rebalance at the end of a negative gamma period than once we are back to neutral gamma.

pmward wrote: ↑Thu Mar 19, 2020 9:29 pm if someone like Ugly Bird hasn't hit their bands yet then by all means carry on.

Thanks! :-)
I think the reason I didn't hit the bands (15/35 4x25 HBPP) and actually quite far from those (Stocks are lurking at around 20%) because I do not rebalance annually and do not even remember when I did last time. At that time I had to move around some LTTs and Stocks from taxable to non-taxable accounts so I just rebalanced as well. But meanwhile my PP was quite balanced itself despite I was adding cash to cash portion.
I guess in some near future I will have to rebalance if the stocks sink even more or Au skyrockets (or both). I have no clue how markets work and actually do not want to know, it is kind of boring :-)

I like your attitude, Bird. Just for posterity, what is a field that fascinates you?

dualstow wrote: ↑Fri Mar 20, 2020 8:38 am I like your attitude, Bird. Just for posterity, what is a field that fascinates you?

I'm a Materials Chemist, loving science and... windsurfing! :-)

Cool. I took a few windsurfing lessons as a teenager. Getting slammed into the water for tacking the wrong way was good prep for my stock portfolio this month.