Gyroscopic Investing

This paper was posted in a thread on the current bond market situation on Bogleheads:

https://www.deshaw.com/assets/articles/ ... 210114.pdf

It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am
It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

pp4me wrote: ↑Thu Feb 25, 2021 1:10 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am
It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

Okay that makes sense. I believe that is what Harry Browne dictated. However was it not he or Craig and Tex in their book recommending also looking at it when you sensed that there was some major financial events going on?

yankees60 wrote: ↑Thu Feb 25, 2021 1:17 pm

pp4me wrote: ↑Thu Feb 25, 2021 1:10 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

Okay that makes sense. I believe that is what Harry Browne dictated. However was it not he or Craig and Tex in their book recommending also looking at it when you sensed that there was some major financial events going on?

Yes, I think that was in HB's book but somehow I failed to sense anything. And what would I have done if I had?

pp4me wrote: ↑Thu Feb 25, 2021 1:25 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:17 pm

pp4me wrote: ↑Thu Feb 25, 2021 1:10 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

Okay that makes sense. I believe that is what Harry Browne dictated. However was it not he or Craig and Tex in their book recommending also looking at it when you sensed that there was some major financial events going on?

Yes, I think that was in HB's book but somehow I failed to sense anything. And what would I have done if I had?

I sold bonds and bought stocks. Both were basically making vertical chart movements in opposite directions. Otherwise I think your strategy is probably the sounder one...I watch the markets a bit everyday but rarely do anything. If market gazing is a hobby, wonderful...but I can't imagine being glued to a computer trading all day. I'm perfectly happy to accept lower returns in exchange for a life.

{ EDITED in pp4me's quote to clarify I was responding to him. }

pp4me wrote: ↑Thu Feb 25, 2021 1:25 pm Yes, I think that was in HB's book but somehow I failed to sense anything. And what would I have done if I had?

Worse case scenario: you'd have panicked and capitulated. I have to say that is awesome that you missed the crash. I am envious, and I mean that sincerely, even though I didn't sell. Those were ulcer-forming days.

Even the guy who shut out the world in 2016 had his brother notifying him of massive events, just in case.

pp4me wrote: ↑Thu Feb 25, 2021 1:25 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:17 pm

pp4me wrote: ↑Thu Feb 25, 2021 1:10 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am
It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

Okay that makes sense. I believe that is what Harry Browne dictated. However was it not he or Craig and Tex in their book recommending also looking at it when you sensed that there was some major financial events going on?

Yes, I think that was in HB's book but somehow I failed to sense anything. And what would I have done if I had?

Were you not active here while it was going on? I believe it may have caused you to re-evaluate your bands?

dualstow wrote: ↑Thu Feb 25, 2021 1:34 pm
Worse case scenario: you'd have panicked and capitulated. I have to say that is awesome that you missed the crash. I am envious, and I mean that sincerely, even though I didn't sell. Those were ulcer-forming days.

Even the guy who shut out the world in 2016 had his brother notifying him of massive events, just in case.

My main and only move last mid-March was converting all my Vanguard Prime Portfolio and Federal Money Market Funds to the Federal and Treasury Money Market Funds according to what I was eligible to do last March. Subsequently I now have all in the Treasury Money Market Fund for my non-equity, non-U.S. Bond investments.

I have heard talk about rising yields now:

--On three radio shows
--On TV
--On the NYT front page website
--On here

That tells me we are close to a high in yields here. I rebalanced them last week. I am tempted to do that again. Crazy.

doodle wrote: ↑Thu Feb 25, 2021 1:33 pm

pp4me wrote: ↑Thu Feb 25, 2021 1:25 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:17 pm

pp4me wrote: ↑Thu Feb 25, 2021 1:10 pm

yankees60 wrote: ↑Thu Feb 25, 2021 1:06 pm

pp4me wrote: ↑Thu Feb 25, 2021 12:22 pm

Kevin K. wrote: ↑Thu Feb 25, 2021 9:59 am It offers the best analysis I've seen of how Treasuries performed during the spring 2020 stock market meltdown along with cautious predictions on what makes sense going forward given negative real yields across all maturities.

Unsurprisingly to most here, the PP/GB "barbell" is looking pretty smart at the moment. Will be interested in the thoughts of the many more knowledgeable folks who frequent these forums.

I didn't even know there was a stock market meltdown last spring.

Are you serious about that? Has there ever even been a worst performance in such a compressed time period in all of stock market history?

Yes, I am serious. I try to check the portfolio only once a year at the end of the year like HB recommended but I do remember checking it around my birthday in June last year and don't recall being disappointed.

Over on Bogleheads they have a thread about stocks being in free-fall but that's there all the time so I don't pay attention.

Okay that makes sense. I believe that is what Harry Browne dictated. However was it not he or Craig and Tex in their book recommending also looking at it when you sensed that there was some major financial events going on?

Yes, I think that was in HB's book but somehow I failed to sense anything. And what would I have done if I had?

I sold bonds and bought stocks. Both were basically making vertical chart movements in opposite directions. Otherwise I think your strategy is probably the sounder one...I watch the markets a bit everyday but rarely do anything. If market gazing is a hobby, wonderful...but I can't imagine being glued to a computer trading all day. I'm perfectly happy to accept lower returns in exchange for a life.

I actually thought was the whole point of the permanent portfolio which is why I bought into it. I'm sure everyone has noticed that Craig and MT don't post here any more and I think it's because they saw it as baby sitting.

I do have the advantage of having guns loaded and cocked and pointed directly at my head on a couple of occasions in my younger days and this helped me to understand the saying "God help me to accept the things I cannot control".

I think Craig and Medium Tex, besides having busy lives, were being accused of being snake oil salesmen. Good guys, and I'm surprised they lasted as long as they did. They did pop in fairly recently.

Here's hoping at least a few folks read the article I posted as it'd be nice to get some comments on it rather than unrelated (or at best tangential) topics.

Today's stock/bond/gold market meltdown notwithstanding the article makes a pretty compelling case (from what I can tell) for needing to go out at least 10 years with Treasuries in order for them to provide a meaningful offset to future stock market crashes. They also discuss Japan and Europe and the need to watch out for a similar situation with long bonds here in which case there'd be no reason to hold anything but cash on the fixed income side.

To get the yield the day you bought in to Tlt would require about 20 years based on the fund duration which is about 19 years .

anything less is like trying to sell an individual bond before maturity...other wise you take your chances .

"No one can predict the treasury yield because the market is too big."
-- Louis Navellier, this morning

All that matters is our own outcomes .... if the planets don’t align soon for gold and LT bonds the damage that will need to be undone will be quite severe because it is not just one asset that needs to bounce back..it may be 3

mathjak107 wrote: ↑Mon Mar 08, 2021 11:26 am All that matters is our own outcomes .... if the planets don’t align soon for gold and LT bonds the damage that will need to be undone will be quite severe because it is not just one asset that needs to bounce back..it may be 3

I’m a libra and we libras know astrology isn't real.
Looking fwd to buying gold and bonds, though.

I am a libra too but so far gold and tlt are from Uranus..

Anything I add at lower prices at this point is like peeing in an ocean compared to the damage that has to be made back

mathjak107 wrote: ↑Mon Mar 08, 2021 3:14 pm I am a libra too but so far gold and tlt are from Uranus..
...

{ https://www.deshaw.com/assets/articles/ ... 210114.pdf }

Kevin K. wrote: ↑Thu Feb 25, 2021 4:22 pm Here's hoping at least a few folks read the article I posted as it'd be nice to get some comments on it rather than unrelated (or at best tangential) topics.
...

Bump. Finally reading this, with interest.

I listened to a podcast this weekend (I’ve forgotten which one it was offhand) that talked about this. The money manager on that show indicated that with each passing “crisis” and subsequent interest rate reduction, bonds are going to be less and less able to cushion the losses from stocks. His feeling was that traditional asset allocation was not going to provide the protection it once did.

He thought the only way to play this new economic reality was to hold a basket of global stocks that are not focused on technology but rather diversified by industry, geography and market cap.

jalanlong wrote: ↑Sun Mar 21, 2021 6:06 pm...

He thought the only way to play this new economic reality was to hold a basket of global stocks that are not focused on technology but rather diversified by industry, geography and market cap.

He didn’t mention gold at all?