Gyroscopic Investing

ochotona wrote:

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.

I've learned not to trust charts, but I hope you're right. I think we have some more pain in the near future.

Libertarian666 wrote:

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:


"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...

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

This is very true. Trouble is, you could say this about almost any portfolio. Jumping in and out of different types of stock index funds (small cap value, emerging markets, etc) to chase returns is basically the same thing, just a bit less dramatic because of the lower tracking error compared to the total stock market. You read about it everywhere including on the Bogleheads "we love passive investing" board. I guess most people don't, in fact, love passive investing, and they don't care what the statistics say about performance of active vs. passive strategies over time.

Which is all the better for me, frankly. Too many people getting into passive investing might change the game significantly. The reason stocks go up and down is that people buy and sell them in their endless attempts to beat the market.

As much as I complain at times, the PP is still up 10.5% YTD for me, only 1.3% below the highest point about 2 weeks ago.

I did rebalance on Oct 3 after cash hit my upper limit, but with the drubbing in gold and esp. silver, I may do an annual rebalance on Jan 1 to increase those back to the right level, and it will allow me to pull some profit out of the stock side.

Cortopassi wrote:As much as I complain at times, the PP is still up 10.5% YTD for me, only 1.3% below the highest point about 2 weeks ago.

I did rebalance on Oct 3 after cash hit my upper limit, but with the drubbing in gold and esp. silver, I may do an annual rebalance on Jan 1 to increase those back to the right level, and it will allow me to pull some profit out of the stock side.

You have silver? I thought I was the only lunatic who still has any of that!

(< 2% of my portfolio)

Libertarian666 wrote:

Cortopassi wrote:As much as I complain at times, the PP is still up 10.5% YTD for me, only 1.3% below the highest point about 2 weeks ago.

I did rebalance on Oct 3 after cash hit my upper limit, but with the drubbing in gold and esp. silver, I may do an annual rebalance on Jan 1 to increase those back to the right level, and it will allow me to pull some profit out of the stock side.

You have silver? I thought I was the only lunatic who still has any of that!

(< 2% of my portfolio)

5% level. I don't know why I started buying it in addition to gold many years ago.

Hal posted a good silver history link in this thread.

Cortopassi wrote:

Libertarian666 wrote:

Cortopassi wrote:As much as I complain at times, the PP is still up 10.5% YTD for me, only 1.3% below the highest point about 2 weeks ago.

I did rebalance on Oct 3 after cash hit my upper limit, but with the drubbing in gold and esp. silver, I may do an annual rebalance on Jan 1 to increase those back to the right level, and it will allow me to pull some profit out of the stock side.

You have silver? I thought I was the only lunatic who still has any of that!

(< 2% of my portfolio)

5% level. I don't know why I started buying it in addition to gold many years ago.

I had about 5% until earlier this year. That's when I dumped CEF after another Sprott takeover attempt (which I guess is going to go through this time).

I have to laugh at these PP timing threads...so anti PP. Annual or band rebalancing do what needs to be done just let them do their thing.

ochotona wrote:Kangaroo meat

I don’t own any kangaroos, but I have ‘93 nuggets.
I guess those count.

Gold < 1250

The Salvation Army lady dumped my krugerrand right out of her bucket.
j/k

dualstow wrote:Gold < 1250

The Salvation Army lady dumped my krugerrand right out of her bucket.
j/k

Gold is Poor Man's Bitcoin

Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

A lot of gold analysts out there are saying (maybe a broken record) that once gold tags the 1200-1220 range, (in one case 1124), then it will begin a multiyear rise, along with the dollar continuing down.

I barely looked today. I don't care anymore, which helps. At this point, I will rebalance to targets on Jan 1, so barring some huge Dec. move, I will be adding gold and silver and selling some stocks, which feels right. TLT as a 25% holding is at 24.98%, so as the metals drop and stocks rise, bonds have stayed flat percentage-wise.

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

Ok, now I am curious....

Whats your thoughts on why Central Banks hold this "piece of metal" ?

Hal

https://www.forbes.com/sites/afontevecc ... 75f1cb52c4

Hal wrote:

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

Ok, now I am curious....

Whats your thoughts on why Central Banks hold this "piece of metal" ?

Hal

https://www.forbes.com/sites/afontevecc ... 75f1cb52c4

Central banks have an infinite time frame whereas my life is limited. Gold may at some time have relevance again but will it in my lifetime?

buddtholomew wrote:

Hal wrote:

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

Ok, now I am curious....

Whats your thoughts on why Central Banks hold this "piece of metal" ?

Hal

https://www.forbes.com/sites/afontevecc ... 75f1cb52c4

Central banks have an infinite time frame whereas my life is limited. Gold may at some time have relevance again but will it in my lifetime?

Thanks for your thoughts.

Relevance to the Central Banks - Store of Wealth, or an investment or ...... ?

Relevance to yourself is...... ?

I totally understand your feelings about the time frame. Recently found a small bar of silver in the back of the garage still with the 1980's receipt. Roughly 37 years and still haven't broken even !

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

So when are you selling?

ochotona wrote:

dualstow wrote:Gold < 1250

The Salvation Army lady dumped my krugerrand right out of her bucket.
j/k

Gold is Poor Man's Bitcoin

No, that would be Beanie Babies.

Libertarian666 wrote:

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

So when are you selling?

I’m not selling until I recognize a profit and only to rebalance. Anything else would require me to abandon the PP.

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

I remember everyone felt the same about equities in 1982.

buddtholomew wrote:

Libertarian666 wrote:

buddtholomew wrote:Gold = damaged goods.
Thank god for the increased equity exposure else I would feel like a total lemming owning this useless piece of metal. It’s certainly lost its luster for me, if it had any to begin with in the first place.

So when are you selling?

I’m not selling until I recognize a profit and only to rebalance. Anything else would require me to abandon the PP.

Yes, you would have to abandon the PP.

But why do you want to keep the PP if you hate gold so much? I would never invest in a way that would require me to hold a significant quantity of an investment that gives me heartburn.

I think gold going absolutely nowhere for long periods when stocks are on fire is precisely one of the deals you make with yourself when you set up a PP. In very general terms gold carried a PP in the 1970s and 2000s and has just been a total non-contributor in the 1980s, 1990s and the current decade. Stocks stunk up the joint in the 1970s and 2000s. These are supposed to be assets with low correlations, right? I think it's just really hard to accept that one is going to be holding a lousy performer at any given time, which is really at the heart of this thread. Most investors are sort of OK when stocks are doing poorly because of the commiseration factor.

Did anyone else on here read this article of Tyler's?

https://portfoliocharts.com/2017/11/20/ ... -investor/

My favorite part is, "When other portfolios are doing extremely well, you are happy for those investors but feel no envy because you are thankful that your own portfolio consistently meets your financial needs just fine."

The PP is designed to be a slow upward grind.

barrett wrote:I think gold going absolutely nowhere for long periods when stocks are on fire is precisely one of the deals you make with yourself when you set up a PP. In very general terms gold carried a PP in the 1970s and 2000s and has just been a total non-contributor in the 1980s, 1990s and the current decade. Stocks stunk up the joint in the 1970s and 2000s. These are supposed to be assets with low correlations, right? I think it's just really hard to accept that one is going to be holding a lousy performer at any given time, which is really at the heart of this thread. Most investors are sort of OK when stocks are doing poorly because of the commiseration factor.

Did anyone else on here read this article of Tyler's?

https://portfoliocharts.com/2017/11/20/ ... -investor/

My favorite part is, "When other portfolios are doing extremely well, you are happy for those investors but feel no envy because you are thankful that your own portfolio consistently meets your financial needs just fine."

The PP is designed to be a slow upward grind.

Barrett, that is almost where I am at. Great explanation. I am again seeing virtually every blogger out there negative on gold, many talking about bitcoin. I suspect we are close to a bottom.

98% of the time gold's price action doesn't bother me. 2% still does. Was flipped not too long ago.

Cortopassi wrote:

barrett wrote:I think gold going absolutely nowhere for long periods when stocks are on fire is precisely one of the deals you make with yourself when you set up a PP. In very general terms gold carried a PP in the 1970s and 2000s and has just been a total non-contributor in the 1980s, 1990s and the current decade. Stocks stunk up the joint in the 1970s and 2000s. These are supposed to be assets with low correlations, right? I think it's just really hard to accept that one is going to be holding a lousy performer at any given time, which is really at the heart of this thread. Most investors are sort of OK when stocks are doing poorly because of the commiseration factor.

Did anyone else on here read this article of Tyler's?

https://portfoliocharts.com/2017/11/20/ ... -investor/

My favorite part is, "When other portfolios are doing extremely well, you are happy for those investors but feel no envy because you are thankful that your own portfolio consistently meets your financial needs just fine."

The PP is designed to be a slow upward grind.

Barrett, that is almost where I am at. Great explanation. I am again seeing virtually every blogger out there negative on gold, many talking about bitcoin. I suspect we are close to a bottom.

98% of the time gold's price action doesn't bother me. 2% still does. Was flipped not too long ago.

The bottom was about two years ago. We are up almost $200 from that point.

tech,

A local bottom for the painful last few weeks...