Gyroscopic Investing

Interesting like a bad rash

from Cortopassi, Stock Scream Room thread:

Cortopassi wrote:Just saying, it would be nice one day to see gold saved on a daily basis as much as the market is.

Does anyone think that we should be holding our nose and loading up on gold the way investors should have loaded up on the S&P 500 during that dismal decade from 2000 to 2010? (Dismal, at least, in hindsight, in 2010).

I waver between that thought and the idea that I should not buy any more gold.

dualstow wrote:from Cortopassi, Stock Scream Room thread:

Cortopassi wrote:Just saying, it would be nice one day to see gold saved on a daily basis as much as the market is.

Does anyone think that we should be holding our nose and loading up on gold the way investors should have loaded up on the S&P 500 during that dismal decade from 2000 to 2010? (Dismal, at least, in hindsight, in 2010).

I waver between that thought and the idea that I should not buy any more gold.

Or both.

Amazing to me that there was so little gold and equity reaction to the latest ICBM launch.

ochotona wrote:Amazing to me that there was so little gold and equity reaction to the latest ICBM launch.

It’s just not a factor anymore. U.S. military officials were wondering why there hadn’t been a test for so long.

ochotona wrote:Amazing to me that there was so little gold and equity reaction to the latest ICBM launch.

Unless an event is perceived to potentially threaten the strength of the USD, I don't think it should be surprising if the price of gold doesn't move much. In one of his radio shows Harry Browne addressed this when talking about the WTC attack (I remember wondering at the time why gold wasn't soaring). And that was an event that struck at or close to the center of US finance.

If Trump declared that the US needs a weaker dollar so that the Chinese would buy our stuff, and the price of gold didn't move, that would be more surprising... unless, of course, enough people thought he didn't really intend to do anything about it.

USD #1 and gold #2 unless something threatens that order. Of course I have no idea about the equities part of your post, ocho.

So why hate gold this year? The ETF version is up 12%...

Kbg wrote:So why hate gold this year? The ETF version is up 12%...

So is the real version.

It's ridiculous but a part of me believes gold was supposed to go parabolic and not bitcoin. Yes it's +12%, but over a longer time frame 4/5 years has declined substantially.

Limit order bought me another ounce at $1264

ochotona wrote:Limit order bought me another ounce at $1264

I wouldn’t even bother...

ochotona wrote:Limit order bought me another ounce at $1264

What flavor?
Krunchy Krugerrand?

dualstow wrote:

ochotona wrote:Limit order bought me another ounce at $1264

What flavor?
Krunchy Krugerrand?

Canadian Maple?

barrett wrote:Canadian Maple?

Sweeeet

Kangaroo meat

Are we going to $1200?

ochotona wrote:Are we going to $1200?

Here's my technical analysis impression:

"Before we get to $1200 we will have to go through $1234.56. On the other hand, if we get up to $1299.90, we may break $1300!"

Libertarian666 wrote:

ochotona wrote:Are we going to $1200?

Here's my technical analysis impression:

"Before we get to $1200 we will have to go through $1234.56. On the other hand, if we get up to $1299.90, we may break $1300!"

Funny. Boy will there be gnashing of teeth when the same sort of price action comes to the stock market. What, have we been in the 1100-1300 range for 6 freaking years now? Feels like a lifetime.

You guys should prepare yourselves for gold at $750. Why not? It could happen.

Cortopassi wrote:

Libertarian666 wrote:

ochotona wrote:Are we going to $1200?

Here's my technical analysis impression:

"Before we get to $1200 we will have to go through $1234.56. On the other hand, if we get up to $1299.90, we may break $1300!"

Funny. Boy will there be gnashing of teeth when the same sort of price action comes to the stock market. What, have we been in the 1100-1300 range for 6 freaking years now? Feels like a lifetime.

I'm sure once the stock market stops going straight up and gold starts outperforming, we'll have a lot of new members who will pile in, then pile out again once that reverts.

Just like every other time.

Libertarian666 wrote:

Cortopassi wrote:

Libertarian666 wrote:
Here's my technical analysis impression:

"Before we get to $1200 we will have to go through $1234.56. On the other hand, if we get up to $1299.90, we may break $1300!"

Funny. Boy will there be gnashing of teeth when the same sort of price action comes to the stock market. What, have we been in the 1100-1300 range for 6 freaking years now? Feels like a lifetime.

I'm sure once the stock market stops going straight up and gold starts outperforming, we'll have a lot of new members who will pile in, then pile out again once that reverts.

Just like every other time.

I’ll believe it when I see it...

Libertarian666 wrote:I'm sure once the stock market stops going straight up and gold starts outperforming, we'll have a lot of new members who will pile in, then pile out again once that reverts.

Just like every other time.

That's kind of what the manager of PRPFX said. People are quick to abandon the pp when stocks are doing well.

dualstow wrote:

Libertarian666 wrote:I'm sure once the stock market stops going straight up and gold starts outperforming, we'll have a lot of new members who will pile in, then pile out again once that reverts.

Just like every other time.

That's kind of what the manager of PRPFX said. People are quick to abandon the pp when stocks are doing well.

Here's what Bill Bernstein said in 2010:

"Since the 2008 crisis, investors have piled back into PRPFX with a vengeance, bloating its assets to over $6 billion. As you might expect, you can drive a small pickup truck between the fund's time-weighted returns (10.10% annualized for the 10-year period ending 7/31/10) and dollar-weighted returns (6.41%). Investment discussion boards now fairly bulge with TPP threads. For example, the typical topic runs a few dozen messages on the respected Vanguard Diehards board; one Harry Browne sequence weighed in at nearly 3,500 posts.

"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.

"Investment success accrues not so much to the brilliant as to the disciplined, and the nature of the chosen strategy contributes mightily to this calculus. The very worst place an investor can find herself is, in the words of Mark Kritzman, "wrong and alone"; this is a near certainty at some point given the TPP’s huge tracking error relative to that of the overall market portfolio, approximated by a 60/40 mix of stocks and bonds. Thus, it will be nigh-impossible for even the most disciplined investors to adhere to the TPP in the long run. (And lord knows, most investors are unable to stick to even a 60/40 portfolio.)

"Diversifying asset classes, as Harry Browne knew well, can benefit a portfolio. The secret is deploying them before those diversifying assets shoot the lights out. Harry certainly did so by moving away from gold and into poorly performing stocks and bonds in the late 1970s. Sadly, this is the opposite of what the legions of new TPP adherents and PRPFX owners have been doing recently—effectively increasing their allocations to red-hot long Treasuries and gold. Consider: over the long sweep of financial history, the annual real return of long bonds and gold have been 2% and 0%, respectively; over the decade ending 2009, they were 5% and 11%.

"Many investors currently have the Harry Browne portfolio. The 1990s stampede of assets out of PRPFX and the more recent stampede back in suggest that few will turn out to have the Harry Browne right stuff."

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

What can I say after a day like today? Ugh.

eufo wrote:What can I say after a day like today? Ugh.

I look at the long term chart, and I see a shallow bowl forming, the edges are mid-2013 to mid-2018, the middle (bottom) was late 2015. A five year wide bottoming process, in other words. With no guarantees.