Gyroscopic Investing

Anyone want to venture a guess as to what happens to the 4 assets of the HBPP in 2013?

VTI +7%
GLD +24%
TLT -7%
SHY -1%

Hyper-inflation is a when question, not if.

Side bet, SLV +31%

I added a poll....

I'll say:

VTI -18%
TLT +22%
GLD +12%
SHY +0.5

This year seems harder to predict than ever.

VTI = -12%
TLT = -20%
GLD = -5%
SHY = 0.5%

Bad year for the PP.

For what it's worth, I was completely wrong about 2012, looking back to my Jan 2012 prediction post.

After proving that I had no idea last year, I cannot resist the opportunity to publically prove that it was not a fluke.

VTI -6%
TLT +6%
GLD +10%
SHY +0.5%

VTI: %s
TLT: %t
GLD: %g
SHY: %c

where (s+t+g+c)=CPI+3

TripleB wrote: VTI = -12%
TLT = -20%
GLD = -5%
SHY = 0.5%

Bad year for the PP.

For what it's worth, I was completely wrong about 2012, looking back to my Jan 2012 prediction post.

wow. that looks like worst nominal performance of the PP since inception. what is your take on inflation in 2013?

I think that a country arguing about gun control is a sign that the economy is probably continuing to improve.

I think that LT bonds will head back up to the 4.25%-4.50% range before coming back down so I don't think that bonds will do well in 2013. 

I think that stocks will probably drift sideways through the year without a lot of volatility and will probably end the year up a bit.  The secular bear market for stocks that started in 2000 will remain intact in 2013.

I think that gold will perform strongly in 2013, with gains in the 20%+ range.

Cash won't do much with rates so low.

I think that we are about half way through the process of economic crisis and recovery that started some time in 2007.  (That's a best case scenario.)

TripleB wrote: VTI = -12%
TLT = -20%
GLD = -5%
SHY = 0.5%

Bad year for the PP.

For what it's worth, I was completely wrong about 2012, looking back to my Jan 2012 prediction post.

People tend to make bad predictions when they allow their political biases to cloud their economic analysis. See Bill Gross, Jim Rodgers for examples. They often create a narrative that doesn't match up with reality.

Gumby wrote:

TripleB wrote: VTI = -12%
TLT = -20%
GLD = -5%
SHY = 0.5%

Bad year for the PP.

For what it's worth, I was completely wrong about 2012, looking back to my Jan 2012 prediction post.

People tend to make bad predictions when they allow their political biases to cloud their economic analysis. See Bill Gross, Jim Rodgers for examples. They often create a narrative that doesn't match up with reality.

political bias? Please share example for either commentator where they express political bias (other than both mainstream sides are inept/corrupt). (although i don't follow closely either of these guys...i must have missed it.)

VTI  +5%
GLD +13%
TLT  +3%
SHV  +0%

murphy_p_t wrote:

Gumby wrote: People tend to make bad predictions when they allow their political biases to cloud their economic analysis. See Bill Gross, Jim Rodgers for examples. They often create a narrative that doesn't match up with reality.

political bias? Please share example for either commentator where they express political bias (other than both mainstream sides are inept/corrupt). (although i don't follow closely either of these guys...i must have missed it.)

Not a problem... Here's what Jim Rogers had to say on October 14, 2008:

Bloomberg wrote:The risk is that yields rise as the U.S. increases debt sales to fund the bank rescue plan and pumps money into the economy, said investor Jim Rogers, chairman of Rogers Holdings and former partner of hedge fund manager George Soros who forecast the start of the commodities rally in 1999.

"The U.S. government is taking on gigantic amounts of debt,'' Rogers said in an interview in Singapore, where he lives. "They're printing gigantic amounts of money. Printing money has always led to more inflation. The last bubble in the world that I can find is long-term U.S. government bonds.''

Rogers said he is ``shorting'' 30-year debt, or betting prices will fall. Wrightson ICAP LLC in Jersey City, New Jersey, an economic advisory firm specializing in government finance, says the U.S. is likely to sell more of the debt to fund its bailout plan, along with more frequent auctions of 10-year notes, the reintroduction of three-and seven-year notes and increased sales of all maturities.

Source: Bloomberg

And here's what happened to Long Term Treasuries right after Jim Rogers made his prediction:

[align=center][/align]

Not only was Jim Rogers wrong, but he was wrong at the worst possible time — when Long Term Treasuries were the only investment anybody wanted to have.

In 2010, Jim Rogers continued to cling to his 30 year bond short, despite his misunderstanding the Treasury market. Again, he used this opportunity to mainly criticize government spending.

In 2011, he shorted LTTs again!

CNBC wrote:"I cannot imagine or conceive lending money to the United States government for 30-years at 3, 4, 5 or 6 percent —you pick a number — in U.S. dollars," [Rogers] said.
Source: http://www.cnbc.com/id/43628669

Rogers has spent the past half a decade complaining about the size of the US debt and uses his disdain for the size of the debt to convince people to short Treasuries. His political bias clouds his ability to understand how Treasuries work.

And I believe he is still shorting LTTs yet again.

Bill Gross did the exact same thing...

http://finance.fortune.cnn.com/2011/03/ ... k-markets/

Fortune wrote:"Bond yields and stock prices are resting on an artificial foundation of QE II credit that may or may not lead to a successful private market handoff and stability in currency and financial markets," he writes.

Gross, who has been urging investors to steer clear of government bonds for most of the past year, reasons that yields will have to rise to keep attracting buyers who up till now have been willing to accept bond returns that are well below their historical average
Source: http://finance.fortune.cnn.com/2011/03/ ... k-markets/

Even the so-called "Bond King" lets his political biases cloud his judgement. In his monthly newsletters on Pimco.com, he often criticizes US policy to justify his investment decisions.

Ultimately once these guys make their money, they often use the limelight to become political pundits masquerading as investors.

Most really bad public predictions probably have an underlying political bias/motive.

Gumby, I fully acknowledge that their timing/predictions failed. However, I question why you maintain these bad calls were made based on "politics".

murphy_p_t wrote: Gumby, I fully acknowledge that their timing/predictions failed. However, I question why you maintain these bad calls were made based on "politics".

Because they were informed by a political belief about deficits, debt, and what they entail, rather than a realistic one.

Pointedstick wrote: ... rather than a realistic one.

or they just got to the party early!

BTW...I went online and found that Gross contributed the max to Obama.

murphy_p_t wrote:

Pointedstick wrote: ... rather than a realistic one.

or they just got to the party early!

BTW...I went online and found that Gross contributed the max to Obama.

I'm not talking about whether these guys voted for Obama or not. I'm talking about their vocal opposition to fiscal and monetary policy and using those specific oppositions to justify their market predictions. Using one's public opposition (or support) of fiscal and monetary policy as a means to base market predictions on tends to not work out very well. More often than not, those fiscal/monetary biases tend to cloud their judgements because they are trying to project or envision a particular narrative.

murphy_p_t wrote:

Pointedstick wrote: ... rather than a realistic one.

or they just got to the party early!

In the investing world, isn't that known as "losing big?" 

Gold will fall to 1500, then rebound to 2000. (+18%)

Stocks will bounce around but not go anywhere. (+2%)

LTTs will move above 3.5% (-8%)

GLD  42%
SHY  .3%
TLT (24%)
VTI  3%

A bad year for the PP in nominal and especially real terms. A dollar crisis and weakness. Stocks melt up but as the bad economic data comes in they drop back. Ben is unable to print them higher.

Bonus....new record avg price for gas prices at $3.85 and the media gives up pretending there's a housing recovery.

First, I have no clue how to forecast a year out for asset classes, but my guess is.....

Gold will break big, one way or another.  It's been flat more or less for 18 months now.  I suspect it goes much higher after some big consolidation.

Stocks are due for a huge correction, IMO.  I think it goes up through May and then becomes very volatile but stays flat until the fall (possibly into spring of next year), before having a 30%+ DD.

Bonds, I think head lower, until the stock market breaks and then bond funds will break to new highs.

Cash seems like a no-brainer.  Stays flat (down in real terms).  I see no signs of imminent inflation that would necessitate monetary tightening.

I'm not able to make any predictions, but I am certainly enjoying the irony of a "predictions" thread on a Permanent Portfolio forum. 

I have proven in the past to be the worst prophet of all, so be aware
VTI: +32 %
TLT: - 8 %
GLD  -12 %
SHY  + 4 %
makes + 4 % portfolio

flyingpylon wrote: I'm not able to make any predictions, but I am certainly enjoying the irony of a "predictions" thread on a Permanent Portfolio forum. 

It's no different than guessing the outcomes of sporting events without placing a wager.

To me, it's always good to have a theory about what the future may hold.  The problem we run into is when we place too large a bets on what we think is going to happen.

2012 predictions:

http://gyroscopicinvesting.com/forum/in ... 3.msg24178