Throwing in the Towel because Harry is Right!!!

[buddtholomew]

Misinformation is damaging to new investors. I appreciate the detailed analysis, but let's present the facts, not skew the design to support our case. How respectful is MG when he says "rubbish!" I stand behind my comment.

[LC475]

Feel free to provide the data proving your assertion.

Okay!  It's your funeral...

[img width=1024]http://i57.tinypic.com/2hygazc.png[/img]

Lovely chart!  Wonderful!  It's just missing one little thing... now this may seem like a quibble so don't be offended.... it's ever so minor,.... but I feel I should mention, there's just a little tiny thing missing...

-26.5%.


Again, feel free to provide data proving your assertions.

You're just blustering.

[MachineGhost]

Again, feel free to provide data proving your assertions.

No sir, feel free to calculate it yourself.

You raise a fair point though regarding conflation of profit charts with drawdown charts,  but I've already posted drawdown charts years ago.  My bad.

Since you're relatively new around here, I'll cut you some slack for being a dickhead (in the other thread).

[Reub]

Hey LC. Don't be a dickhead. That jobs already taken.

[dragoncar]

You guys are great!  Even the ones I hate :-P

[barrett]

According to http://peaktotrough.com,  maximum draw-down for a 35/15 rebalanced portfolio was 18.36%. The PP was up approximately 12% in the month of January alone that year, so the losses are not as extreme when considered in context.

Max Drawdown 18.36% (1980-01-21 - 1980-03-27)

That seems about right to me.  Using daily data and varying the start date, I've seen it get close to 20% max DD.
You really need to wrap your mind around that if you plan on staying with the PP long term.  The other number that I think is important is the maximum number of days between peaks.  I don't have the data in front of me right now, but I think it was something like 18 months from peak to peak - even with the ~20% draw down.

Whenever I am evaluating any portfolio I look at the maximum DD and the maximum number of days to a new peak - using as much historical data as I can get my hands on.  I start to get really uncomfortable with more than 20% DD and 18 months between peaks.

These are good numbers to have in mind. Thanks for providing them. I never really used peaktotrough but I found this also:

14.10% (2008-03-18 - 2008-11-13)

It's easy to look at the long-term yearly performance of the PP and forget that it still takes a strong belief in the portfolio to stick with it in tough times. Maybe it was easier not to bail in 2008 because the pain that most investors were feeling was coming from stock losses (Deep down none of us want to be doing worse than the other guy). PPers were doing relatively well by comparison, and then there was that major LTT rally in the last few weeks of the year that brought the PP almost back to even for the year. The caveat on that one is that you really had to hit the rebalance date correctly to not suffer bigger losses than advertised.

[LC475]

Hey LC. Don't be a dickhead. That jobs already taken.

By all means you may communicate by:

a) calling names meaninglessly.

Of course, this course makes language superfluous, as you could accomplish the same goal through screeching, sticking out your tongue, baring your teeth, and a wonderful array of other such options.  You don't need to type, or have a user account, or even a computer!  Or, you could:

b) use reason and logic.

The choice is yours, the power is within you! 

[LC475]

I've already posted drawdown charts years ago.

Bluster, bluster, bluster, bluster.

You have given no one any reason to believe your number is true.  You have given no one any reason to believe your number is anything but made up.  You have given no data to prove it true.  One would think it would be so easy.  If it were true.

Thus, I very reasonably conclude, that your figure is false.

Since you're relatively new around here, I'll cut you some slack

Forgiveness is a virtue, many people believe. 

for being a dickhead (in the other thread).

All I ask for is data, reason, and logic.  You prefer to throw insults and call names.  I find that quite meaningless.  It is not the way reasonable beings communicate.

So, just to review: Mr. MachineGhost has an assertion which he loves to repeatedly make, which he has refuses to or cannot or in any case has not supported.  In any way whatsoever.  With any real data whatsoever.  I invite him to do so.  Making that invitation, I submit, is imminently reasonable and not at all rude.  Pointing out the obvious truth -- that he has done nothing to support his claim -- is also the paragon of reasonableness.

[MachineGhost]

So, just to review: Mr. MachineGhost has an assertion which he loves to repeatedly make, which he has refuses to or cannot or in any case has not supported.  In any way whatsoever.  With any real data whatsoever.  I invite him to do so.  Making that invitation, I submit, is imminently reasonable and not at all rude.  Pointing out the obvious truth -- that he has done nothing to support his claim -- is also the paragon of reasonableness.

So now you're playing nice?  But I agree.  But I'm still not doing it for you.  Deal with it.  You can do it yourself.  All the data you need is publically available.  Have fun!

[LC475]

So now you're playing nice?

Not at all!  I'm the same yesterday, today, and always.  No nicer, and no less nice.  Just pointing out facts.

But I agree.  But I'm still not doing it for you.  Deal with it.  You can do it yourself.  All the data you need is publically available.  Have fun!

I am sure that we are all thrilled for Mr. Ghost that he has come up with the One Right Answer to absolutely everything in life and is the world's smartest person.  I don't want to throw any cold water on that!  But how are we mere peons to be able to have pure confidence in his brilliant bestowals of revelation upon us if we have no corroborating data?  We all want to believe, Father Machine.  Help thou our unbelief.

Til then?  Your statement is false, you know it's false, and now we all know it, too.

[MachineGhost]

So now you're playing nice?

Not at all!  I'm the same yesterday, today, and always.  No nicer, and no less nice.  Just pointing out facts.

So once a dickhead, always a dickhead?  Noted.  Did you by any perchance remove your dickhead post from last night?

I am sure that we are all thrilled for Mr. Ghost that he has come up with the One Right Answer to absolutely everything in life and is the world's smartest person.  I don't want to throw any cold water on that!  But how are we mere peons to be able to have pure confidence in his brilliant bestowals of revelation upon us if we have no corroborating data?  We all want to believe, Father Machine.  Help thou our unbelief.

Til then?  Your statement is false, you know it's false, and now we all know it, too.

Actually, it seems to be only you that has a problem, so please speak only for yourself.  Truly, I dislike lazy people that can't find the facts for themselves.  I'm not here for anyone's entertainment, especially yours.  You are now on my ignore list. 

[upside]

So now you're playing nice?

Not at all!  I'm the same yesterday, today, and always.  No nicer, and no less nice.  Just pointing out facts.

So once a dickhead, always a dickhead?  Noted.  Did you by any perchance remove your dickhead post from last night?

I am sure that we are all thrilled for Mr. Ghost that he has come up with the One Right Answer to absolutely everything in life and is the world's smartest person.  I don't want to throw any cold water on that!  But how are we mere peons to be able to have pure confidence in his brilliant bestowals of revelation upon us if we have no corroborating data?  We all want to believe, Father Machine.  Help thou our unbelief.

Til then?  Your statement is false, you know it's false, and now we all know it, too.

Actually, it seems to be only you that has a problem, so please speak only for yourself.  Truly, I dislike lazy people that can't find the facts for themselves.  I'm not here for anyone's entertainment, especially yours.  You are now on my ignore list.

Do you really think he's asking for entertainment purposes? Seems like he just wants to see some evidence for the 25% drawdown figure that you use. I'd be interested to see the evidence as well, as I'm sure many others would.

[Reub]

I think that if we are requesting some information we could do it in a nice way. Please be civil!

http://gyroscopicinvesting.com/forum/ot ... ivil-6079/

[mukramesh]

I know I am a new member here and I spend more time reading the posts than I do commenting, but I'd also be interested to see the data with the 25% Max DD for the PP. I chose the PP due to it's low overall volatility and think this information would be interesting.

I know LC475 is being a bit rough, but is it possible for you to share the information with the rest of us for the community's benefit, MachineGhost?

[buddtholomew]

Some people get irritated sooner than others.

I too would like to know how MG calculated the 25% maxDD value. My source is peaktotrough.com
and I am unable to replicate this figure under the permutations available (specifically interested in annual rebalancing or 15/35) and time period covered. Are you comfortable with that data set as many of us value the authenticity of this site?

[LC475]

I too would like to know how MG calculated the 25% maxDD value.

He is too above us to be bothered by stuff like that.  So, He requires prophets to interpret His words, perform exegesis, and explain what His Divine Wisdom really means.  I, taking the role of just such a prophet, have pieced together this picture:

7.83% CAR, -26.50% MaxDD (rebalanced annually)

Not to rain on your parade, but 7% is really nothing to the PP.  The worst MaxDD is around -25% which is a scary chunk of your wealth to lose.  I don't know if that was less harsh in real terms.

And historically the PP experienced a -25% peak to trough MaxDD on a daily granularity basis and can certainly blow past it in the future on new "macroeconomic events" never seen before in history, like stock and bonds being simultaneously overvalued and dropping.

So there was a 26.5% drop in one day at some point, and a few (how many?  What days?) other 15-25% drops.  Could you share the data where you're getting this?  Thanks.

Of course there is never any response to such requests.  However, luckily I discovered the answer myself:

I forgot to mention that in real terms, the maximum drawdown in the 25x4 during 1938 to 1951 was around 25%.  That's a jaw-dropping amount of net worth & purchasing power to have lost, especially outside the actual Great Depression.  Using the S&L rates for the given years reduces the real maximum drawdown to around 20%.  Still too high for a "conservative" portfolio.

This figure is from (faulty) daily data somewhere in 1938-1951.  Or it is completely bogus and made up. 

[Pointedstick]

I agree with you, LC, but I think you could be a little nicer about it. When two pig-headed people disagree on something, it's easy for both of them to enter a cycle of nastiness, but it only takes one person to break it. It can be you, or MG, or both of you can be nasty to one another forever. But I think it would be much nicer for it to end.

[Reub]

LC can't you feel the love on these forums? Let it envelop you and make you whole!

[dragoncar]

I only see a -15% in the chart MG posted, although it's a graphic image so I didn't manually enter each month or OCR.

LC can't you feel the love on these forums? Let it envelop you and make you whole!

[yankees60]

According to http://peaktotrough.com,  maximum draw-down for a 35/15 rebalanced portfolio was 18.36%. The PP was up approximately 12% in the month of January alone that year, so the losses are not as extreme when considered in context.

Max Drawdown 18.36% (1980-01-21 - 1980-03-27)

That seems about right to me.  Using daily data and varying the start date, I've seen it get close to 20% max DD.
You really need to wrap your mind around that if you plan on staying with the PP long term.  The other number that I think is important is the maximum number of days between peaks.  I don't have the data in front of me right now, but I think it was something like 18 months from peak to peak - even with the ~20% draw down.

Whenever I am evaluating any portfolio I look at the maximum DD and the maximum number of days to a new peak - using as much historical data as I can get my hands on.  I start to get really uncomfortable with more than 20% DD and 18 months between peaks.

I assume this has not changed in the intervening years?

Vinny

[johntaylor]

According to @tyler max drawdown was 14% and longest drawdown took 5 years:
https://portfoliocharts.com/portfolio/p ... portfolio/