Gyroscopic Investing

TBH, this forum is basically just a collection of INTJ rants that I like to occasionally check while I am sitting on the pot. It is entertainment.

If it wasn't for the "Politics" and "Other Discussions" sections, I think this forum would already be dead. I don't realistically even consider this an investing forum anymore. There is way too much PP dogma bias (and emotional bias) for productive conversations to flourish.

The PP prospered in a period of FALLING RATES over the past 40 years. As those 40 years unfolded, the PP "dogma" allocation was similar to those seeking to maximize their risk/reward diversified approach through back-testing. However, over the past several years these two groups have diverged. HB PP loyalists believe the PP will protect them through all cycles (the latter see the end of the falling rate cycle as requiring significant changes to maximize their risk/reward ratio). Having these two groups have a productive conversation is like trying to have a serious talk about science with a religious fanatic. It is an utter waste of energy. There are so many other places to have open-minded discussions. What added value does this forum really bring to the table for that 2nd group?

So I think the real question has to be "Will the HB PP DOGMA rise in popularity again?" (i.e. build up that 1st group) Who knows? But I seriously doubt it. The HB PP has a lot of headwinds. Taking advice from a dead gold bug that rose to semi-popularity before there was even internet doesn't exactly scream credibility.

What does the PP really provide to fresh eyes? Here is what the average person sees... crypto is sexier than gold, LTT risk/reward sucks, government intervention in markets is extraordinary, I could go on and on...

I think the PP is like a small cult. People usually discover cults because they are open-minded, but then being in that cult makes them more closed-minded to changes in the world (since their beliefs are continually reinforced by those around them). Before you know it, the dogma that attracted you to the cult in the first place (maximizing your risk/reward ratio) is keeping you from actually seeking that out because of your biases. Meanwhile, on the outside, people start viewing that cult as a bunch of wackos as they drift further and further away from modern times (since the cult is still clinging on to some outdated set-in-stone "principles"). This lowers the quality of new followers that you attract.

I am not trying to dog the PP, I think it is pretty good for an old lady who wants a set-it-and-forget-it approach. But for anyone that is actively involved in their investments and seeking to maximize their risk/reward ratio... well, my bank account is certainly glad that I don't follow it. It is hard for me to see any large qualities that would attract new open-minded investors going forward to it.

Just my 2 cents.

Old ladies aren’t the only people who want to set it and forget it.

Tortoise wrote: ↑Thu Jun 03, 2021 1:19 pm Old ladies aren’t the only people who want to set it and forget it.

Nothing wrong with that as long as you are willing to except a higher risk of lower returns.

Lots of people give up money for insurance that, from a risk-adjusted standpoint, isn’t optimal. That doesn’t make them wrong. It just makes them have a higher chance of having less money than someone who doesn’t take a one-size-fits-all approach.

Again, the PP was never designed to be a great investment approach. It was meant to be a good-enough investment approach that freed up your time and provided low stress so you can go do other things with your life.

IMHO, its returns reflect that.

vincent_c wrote: ↑Thu Jun 03, 2021 12:14 pm What you say doesn't make sense at all.

If you want to be actively involved in your portfolio and you believe that is the way to maximize your risk/reward ratio. That statement in itself is very revealing.

The PP has outperformed its expectations in recent years so I can understand how it has attracted performance chasers especially when they believe that you can get such outperformance with what is touted as a fail-safe approach. I am equally concerned when the PP outperforms its expectations by multiple standard deviations as I am when it underperforms, but in the end it isn't about the PP prospering because of 40 years of falling interest rates. The PP prospers because it allows investors to have time in the market rather than to time the market.

You're essentially investing in businesses that earn a profit over time, lending money at positive nominal returns, storing a quarter of your wealth in whatever you consider a good long term store of value, and having a quarter of your wealth liquid in your unit of account earning whatever short term nominal interest rate is available in the market.

If anything, rising interest rates may give PP investors a better shot at real long and short term interest rates being positive and therefore the PP will have a higher expected real return in the long term if interest rates rise faster than inflation.

It's hard to reconcile the comment that the PP has a lot of headwinds and your opinion that it would be a good choice for an old lady who wants to set it and forget it. The PP assets gives investors an efficient enough way to invest in the pure risks (credit and duration) as well as exposes you to the lack of credit risk when it comes to storing value. Is it that I've somehow missed something fundamental that's changed or has nothing really changed about businesses and the nature of lending money?

The only thing I think really up for debate is whether you should lend money with negative real returns and whether you need to diversify your long term stores of value to include other assets outside of gold like bitcoin and land.

There’s that dogma peeking through. IMHO, it is pretty unlikely that some cookie cutter approach of 25% x 4 will have an equal risk/reward ratio in all economic environments. But we can agree to disagree.

Tortoise wrote: ↑Thu Jun 03, 2021 1:19 pm
Old ladies aren’t the only people who want to set it and forget it.

Amen, Brother Tortoise!

Ahhrunforthehills...

Thank you for your thoughtful comments.

What portfolio has worked for you?

ahhrunforthehills wrote: ↑Thu Jun 03, 2021 1:39 pm

Again, the PP was never designed to be a great investment approach growth strategy. It was meant to be a good-enough investment approach capital preservation strategy that freed up your time and provided low stress so you can go do other things with your life.

IMHO, its returns reflect that.

If I may, I propose the terminology changes, but generally agree with you. Where some people get tripped up is wanting the defensive capital preservation features of the HBPP but wanting to "make money" at the same time.

HB wrote extensively about his view that you should be looking to your career as the place where you make and accumulate money, and your investments as a way of preserving it in real terms. So yes, it's no surprise that his portfolio is as you describe it.

Hitch a VP to it of all FAANG, or BC or whatever floats your boat. Choose correctly you make some money. Choose poorly, you end up still having some money. And likely still better off compared to bringing in professional help.

Summer is here (well at least in Florida right now), and Covid is subsiding. So it's time to quit sitting in front of the computer and go out and enjoy the big, beautiful world.

People will probably return to the forum eventually because they have nothing better to do.

pp4me wrote: ↑Wed Jun 09, 2021 9:50 pm Summer is here (well at least in Florida right now), and Covid is subsiding. So it's time to quit sitting in front of the computer and go out and enjoy the big, beautiful world.

People will probably return to the forum eventually because they have nothing better to do.

When they do, they'll probably find it to be a pretty confused place. And the new fad of parody and substituted handles has taken the forum off the path to echo chamber and redirected to a Tower of Babel.
More than one insightful member has recently resurfaced and promptly disappeared.

Simonjester wrote: maybe our resident parody'ists will move on to being trans political... https://www.youtube.com/watch?v=b56Si3DY6cQ

The rash of insubstantial, disingenuous, and otherwise trollish posts is making this forum an unpleasant place to be--not to mention a waste of time.

Is there a reason for this destructive trend, other than to bring down one of the best, most useful, internet forums in existence?

Maddy wrote: ↑Sat Jun 12, 2021 6:13 am The rash of insubstantial, disingenuous, and otherwise trollish posts is making this forum an unpleasant place to be--not to mention a waste of time.

Is there a reason for this destructive trend, other than to bring down one of the best, most useful, internet forums in existence?

Maddy, I totally agree with you. That was my thought when I created the poll for this thread. I was wondering if I were the only one who felt this way. I don't spend much time here anymore. Thanks for your post.

It seems this "disease" has spread to other forums I used to read a lot ... they too have devolved into a lot of sarcastic, mean-spirited drivel among the new, and many old, members. I think it may just be a reflection of us, the media, and politicians who are more interested in sensational stories and self-serving pocket-lining rather than being helpful members of society who care about others. YMMV

... Mountaineer

Maddy wrote: ↑Sat Jun 12, 2021 6:13 am The rash of insubstantial, disingenuous, and otherwise trollish posts is making this forum an unpleasant place to be--not to mention a waste of time.

Is there a reason for this destructive trend, other than to bring down one of the best, most useful, internet forums in existence?

While I can't comment on a reason for the trend, I think another question would be how to make this forum better.

For my part I would suggest making a special effort to assist new posters in their queries, and secondly, if someone makes "insubstantial, disingenuous, and otherwise trollish posts" just don't reply.

Wish I could think of a Biblical quote. Help me out Mountaineer !

Ignoring useless posts is, of course, the best response to them; however, it does nothing to redeem the overall quality of the board.

I have an idea: How about those folks who care about high-quality discussion in the "Other Discussions" area take the time, at some point this week, to start at least one thought-provoking thread about something that has not already been beat to death? And how about all of us make an effort to contribute thoughtfully in response?

Hal wrote: ↑Sat Jun 12, 2021 6:38 am

Maddy wrote: ↑Sat Jun 12, 2021 6:13 am The rash of insubstantial, disingenuous, and otherwise trollish posts is making this forum an unpleasant place to be--not to mention a waste of time.

Is there a reason for this destructive trend, other than to bring down one of the best, most useful, internet forums in existence?

While I can't comment on a reason for the trend, I think another question would be how to make this forum better.

For my part I would suggest making a special effort to assist new posters in their queries, and secondly, if someone makes "insubstantial, disingenuous, and otherwise trollish posts" just don't reply.

Wish I could think of a Biblical quote. Help me out Mountaineer !

Hal, here are a variety Biblical quotes on the topic of caring about others and helping them.

... Mountaineer

Philippians 2:4 ESV
Let each of you look not only to his own interests, but also to the interests of others.

Ephesians 4:32 ESV
Be kind to one another, tenderhearted, forgiving one another, as God in Christ forgave you.

John 13:34-35 ESV
A new commandment I give to you, that you love one another: just as I have loved you, you also are to love one another. By this all people will know that you are my disciples, if you have love for one another.”

Galatians 6:9-10 ESV
And let us not grow weary of doing good, for in due season we will reap, if we do not give up. So then, as we have opportunity, let us do good to everyone, and especially to those who are of the household of faith.

Matthew 25:40 ESV
And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.’

1 Thessalonians 5:11 ESV
Therefore encourage one another and build one another up, just as you are doing.

Hal,
This may be more than you asked for, forgive me if it is. It is today's devotion from Lutheran Hour Ministries. Seems to be on target from a Christian point of view for the recent comments by you, Maddy, and me.

"Mindful of You and Me"
June 12, 2021
Psalm 8:3-4 - When I look at Your heavens, the work of Your fingers, the moon and the stars, which You have set in place, what is man that You are mindful of him, and the son of man that You care for him?

The greatness of God, so obvious to anyone with eyes to see, reminded the psalmist of the comparative insignificance of man. The Bible does not overrate man, nor does it underrate him. According to Scripture, man is not an accident. In spite of everything you might think, you are not here by chance. To God you are not an incidental side issue, even in this vast universe. You are a man or a woman, a boy or a girl—and you are important to God.

Look about you and what do you see? Sadly, there's a whole world of people trying to live as if there were no God, without any recognition of God and certainly no dependence upon Him. There are people who think it is beneath them—somehow an insult to their intelligence—to talk about God or to have faith in Him.

But when we look at Jesus, we begin to understand what the psalmist is saying. We see how mindful, in fact, God truly is of man. By His own design, and in fulfillment of His own purpose, God sent His eternal Son, Jesus Christ, to be a real Man among us. God made Him a little lower than the angels to live His human life just for us (see Hebrews 2:7). Living unto God, Jesus did for us what we could not: save us from our sins.

Look about you and see the glory of God. Lift up your eyes and behold the Lord of the universe in the world He has created. Lift up your eyes to a hill from our own history, and know, positively, that God cares. Look at the Man dying there, I mean really dying, and be sure that God is talking to you through that Man.

Look at Jesus Christ, and you begin to understand what all of this really means: "When I look at Your heavens, the work of Your fingers, the moon and the stars, which You have set in place, what is man that You are mindful of him, and the son of man that You care for him?" Yes, God is indeed mindful of you and me. So much so that in Jesus Christ, the living God suffered and died for the sins of us all. He died to make things right. He died that you might be forgiven. He died and then He rose again in victory over death.

The Father invites you to trust in His Son. You can trust Him because He cares for you. He wants you, just as you, are to be renewed—restored by His redeeming power that comes to every person who trusts in Jesus as their Lord and Savior.

THE PRAYER: Heavenly Father, thank You for being mindful of us in the sending of Your Son. In His Name we pray. Amen.

From "The Universe Declares the Glory of God," a sermon excerpt from Rev. Dr. Oswald Hoffmann, former Speaker of The Lutheran Hour

Reflection Questions:

1. What's your view of human capability? What do you think is possible for us to achieve?

2. What does it mean to you that Scripture says the heavens are the work of God's hands?

3. What fact about the universe makes you feel really small?

Thanks Mountaineer,

Appreciate the effort you put into that post.
Want to make the forum better? Then have a look at some of the quotes.

Why am I passionate about this?
Easy Because of the advice on this forum, I was able to retire early and care for my elderly mother.

Let's see if we can help others!

Maddy wrote: ↑Sat Jun 12, 2021 7:40 am Ignoring useless posts is, of course, the best response to them; however, it does nothing to redeem the overall quality of the board.

I have an idea: How about those folks who care about high-quality discussion in the "Other Discussions" area take the time, at some point this week, to start at least one thought-provoking thread about something that has not already been beat to death? And how about all of us make an effort to contribute thoughtfully in response?

Outstanding, Maddy. I had exactly the same thought, and was trying to think of something to put up. I've actually done that before, e.g. the thread where I tried to trigger a discussion about populist policies that explicitly excluded any mention of Trump, but it didn't go anywhere.

However, I have noticed that the worst of the trolls and their worthless posts have mostly disappeared. I had them on ignore which kept many threads at least somewhat readable, but they kept sidetracking discussions. Maybe a real discussion could now be possible. It will require a concerted effort from the few solid contributors who are left. Among other things - IGNORE POSTS that don't meaningfully contribute to the discussion. Just totally ignore them. It's the only way this is going to work.

In the summer, I don't care about political things. Or much of anything important. I even forget about stock prices and my portfolio. Been that way for a while now. I think it's a good thing. But I still like to talk on the internet.

MangoMan wrote: ↑Sat Jun 12, 2021 11:42 am

Mountaineer wrote: ↑Sat Jun 12, 2021 8:21 am

Hal wrote: ↑Sat Jun 12, 2021 6:38 am
Wish I could think of a Biblical quote. Help me out Mountaineer !

Hal, here are a variety Biblical quotes on the topic of caring about others and helping them.

... Mountaineer

{bible quotes}

I'm not sure how the two of you think interjection of religion and bible quotes into any thoughtful discussion on any topic other than religion is in any way productive. You must realize that other forumites who do not share your passion find said comments to be annoying and off topic. I agree the trolling is out of hand, but trying to fix it with evangelism is not the solution.

Sorry. Was aiming to help by answering Hal’s request. Also the quotes are quite good for how to help and respect your fellow man regardless of their source. Please feel free to ignore the quotes, or me, if you aren’t feeling tolerant. Peace brother.

Mountaineer wrote: ↑Sat Jun 12, 2021 12:11 pm

MangoMan wrote: ↑Sat Jun 12, 2021 11:42 am

Mountaineer wrote: ↑Sat Jun 12, 2021 8:21 am

Hal wrote: ↑Sat Jun 12, 2021 6:38 am
Wish I could think of a Biblical quote. Help me out Mountaineer !

Hal, here are a variety Biblical quotes on the topic of caring about others and helping them.

... Mountaineer

{bible quotes}

I'm not sure how the two of you think interjection of religion and bible quotes into any thoughtful discussion on any topic other than religion is in any way productive. You must realize that other forumites who do not share your passion find said comments to be annoying and off topic. I agree the trolling is out of hand, but trying to fix it with evangelism is not the solution.

Sorry. Was aiming to help by answering Hal’s request. Also the quotes are quite good for how to help and respect your fellow man regardless of their source. Please feel free to ignore the quotes, or me, if you aren’t feeling tolerant. Peace brother.

Might be good to have that as a new thread, so folks can participate as desired.

Yes, a lot of it is generic. But other parts do come across as protheletizing.

vincent_c wrote: ↑Mon Jun 14, 2021 9:10 am
To bring this thread back on track.

Was the original post referring to "Enthalpy" or does "Ehthalpy" have another definition I couldn't find?

Go back to page 1 and see my response and then the response to it...

vincent_c wrote: ↑Mon Jun 14, 2021 11:01 am

yankees60 wrote: ↑Mon Jun 14, 2021 10:57 am

vincent_c wrote: ↑Mon Jun 14, 2021 9:10 am To bring this thread back on track.

Was the original post referring to "Enthalpy" or does "Ehthalpy" have another definition I couldn't find?

Go back to page 1 and see my response and then the response to it...

Am I missing something?

I think Vinny was trying to point out that he had tried to point out the same typo earlier. It was so subtle though that nobody noticed.

Xan wrote: ↑Mon Jun 14, 2021 11:02 am

vincent_c wrote: ↑Mon Jun 14, 2021 11:01 am

yankees60 wrote: ↑Mon Jun 14, 2021 10:57 am

vincent_c wrote: ↑Mon Jun 14, 2021 9:10 am To bring this thread back on track.

Was the original post referring to "Enthalpy" or does "Ehthalpy" have another definition I couldn't find?

Go back to page 1 and see my response and then the response to it...

Am I missing something?

I think Vinny was trying to point out that he had tried to point out the same typo earlier. It was so subtle though that nobody noticed.

My apologies people, I made a typing error in my original post. The word intended is enthalpy as contrasted to entropy. Didn’t notice the error as I have not been on the forum much lately.

vincent_c wrote: ↑Mon Jun 14, 2021 8:06 pm
As a mechanical engineer who has studied thermodynamics I was ashamed that there may have been this property that I was not aware of and the first two posts should have been clear enough but because the typo wasn't fixed I assumed it wasn't a typo.

Anyway, let's hope for an increase in enthalpy then as it implies that things will heat up with more energy. Enthalpy has direction whereas entropy always tends toward disorder.

I started at an engineering / science/ math college where EVERY student was required to take (among other required courses) during our first two years:

4 semesters calculus
3 semesters physics
2 semesters chemistry

My freshman chemistry class was nearly 52 years ago...but to this day I can still remember the excellent example the professor used to explain to us entropy in the sense that things always tend towards disorder. His words were, "...think of your dorm rooms." Each of us in the room instantly then understand what entropy meant!

Back to my original response on page 1....I'd never prior seen any spelling of the word...and I do think I successfully looked up its definition in spite of it being mis-spelled. But I STILL do not understand what it means!

I ended up majoring in math at that college. But I can remember some of my engineering majoring friends talking about thermodynamics ("themo"!) and how difficult it was. I never came near taking the course, which explains why I'd never prior seen the word "enthalpy"?

yankees60 wrote: ↑Mon Jun 14, 2021 9:25 pmBut I STILL do not understand what it means!

Vinny, I think it's just the opposite of entropy.