The GOLD scream room

Discussion of the Gold portion of the Permanent Portfolio

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sophie
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Re: The GOLD scream room

Post by sophie » Tue Jul 10, 2018 9:26 pm

Wha?

I completely agree that for money that you will stash away and not look at, access, or otherwise deal with for at least 20-30 years, 100% stocks is a great choice. If that were compatible with the human condition, there would be no need for the Permanent Portfolio, or indeed any stock/bond portfolio mixture. All I was trying to say is that any asset - gold included - can have multi-year losing streaks, where "multi" can reach into double digits. Reading between the lines, I *think* your response to that is that in the case of stocks it's irrelevant because of the performance of the S&P 500 over the last 50+ years.

And I think all this started when buddtholomew posted something about gold having a losing streak of 7 years and asking what other asset could do that. So I answered.
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Kbg
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Re: The GOLD scream room

Post by Kbg » Tue Jul 10, 2018 10:39 pm

I think the horse has been beaten down to glue now. :)
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Wed Jul 11, 2018 8:15 am

sophie wrote:
Tue Jul 10, 2018 9:26 pm
Wha?

I completely agree that for money that you will stash away and not look at, access, or otherwise deal with for at least 20-30 years, 100% stocks is a great choice. If that were compatible with the human condition, there would be no need for the Permanent Portfolio, or indeed any stock/bond portfolio mixture. All I was trying to say is that any asset - gold included - can have multi-year losing streaks, where "multi" can reach into double digits. Reading between the lines, I *think* your response to that is that in the case of stocks it's irrelevant because of the performance of the S&P 500 over the last 50+ years.

And I think all this started when buddtholomew posted something about gold having a losing streak of 7 years and asking what other asset could do that. So I answered.
Thats not what I said.
I said it has performed the “worst” of all assets over the 7-year timeframe I have been invested.
You manipulated to make your point which was wrong.
Stocks outperformed Gold when including dividends.

Oh by the way, wholesale inflation jumps and your precious gold declines. Remarkable really, stocks and bonds are outperforming gold even today...trade et al.
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Cortopassi
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Re: The GOLD scream room

Post by Cortopassi » Wed Jul 11, 2018 9:36 am

Conversely, tariffs kick in and stocks jump. Yeah, down a little today, but looking like they'll probably end green.

Nothing makes a lot of sense.

From Slope of Hope: "In a normal, rational market, a United States President openly declaring a trade war on the biggest economy on the planet and ratcheting it up with tariffs on $200 billion in goods would be a LIMIT-DOWN situation (followed by similar limit-down days, day after day, until he backpedaled). In this insane asylum, however, the NQ has already bounced 50 points off its panic low, and the ES is cheerfully healing itself."

Tell me stocks make sense in their reactions. About as much as gold.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Wed Jul 11, 2018 9:44 am

Cortopassi wrote:
Wed Jul 11, 2018 9:36 am
Conversely, tariffs kick in and stocks jump. Yeah, down a little today, but looking like they'll probably end green.

Nothing makes a lot of sense.

From Slope of Hope: "In a normal, rational market, a United States President openly declaring a trade war on the biggest economy on the planet and ratcheting it up with tariffs on $200 billion in goods would be a LIMIT-DOWN situation (followed by similar limit-down days, day after day, until he backpedaled). In this insane asylum, however, the NQ has already bounced 50 points off its panic low, and the ES is cheerfully healing itself."

Tell me stocks make sense in their reactions. About as much as gold.
Agree that nothing makes sense at all...
But the one common denominator is stocks +, gold - or stocks -, gold -.
That is clear as day.
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Cortopassi
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Re: The GOLD scream room

Post by Cortopassi » Wed Jul 11, 2018 11:43 am

buddtholomew wrote:
Wed Jul 11, 2018 9:44 am
Cortopassi wrote:
Wed Jul 11, 2018 9:36 am
Conversely, tariffs kick in and stocks jump. Yeah, down a little today, but looking like they'll probably end green.

Nothing makes a lot of sense.

From Slope of Hope: "In a normal, rational market, a United States President openly declaring a trade war on the biggest economy on the planet and ratcheting it up with tariffs on $200 billion in goods would be a LIMIT-DOWN situation (followed by similar limit-down days, day after day, until he backpedaled). In this insane asylum, however, the NQ has already bounced 50 points off its panic low, and the ES is cheerfully healing itself."

Tell me stocks make sense in their reactions. About as much as gold.
Agree that nothing makes sense at all...
But the one common denominator is stocks +, gold - or stocks -, gold -.
That is clear as day.
You yanking my chain? Back to Sophie's point about long periods. Budd, what would you have been saying about the 6 year period I show below? You think it can't/won't happen again?

If anything, these excursions seem to get greater as time goes on. So I'd fully expect for the next stock downturn to be worse than 2008.

Image

Or this even much longer period (I forgot I could use SPY). Actually this chart is likely wrong, GLD only goes back to late 2004, so gold would be higher.

Image

Here's Kitco from 2000 to now. Gold blew the pants off stocks for 11 years.

Image
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Wed Jul 11, 2018 12:28 pm

dupe
Last edited by buddtholomew on Wed Jul 11, 2018 12:29 pm, edited 1 time in total.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Wed Jul 11, 2018 12:28 pm

Cortopassi wrote:
Wed Jul 11, 2018 11:43 am
buddtholomew wrote:
Wed Jul 11, 2018 9:44 am
Cortopassi wrote:
Wed Jul 11, 2018 9:36 am
Conversely, tariffs kick in and stocks jump. Yeah, down a little today, but looking like they'll probably end green.

Nothing makes a lot of sense.

From Slope of Hope: "In a normal, rational market, a United States President openly declaring a trade war on the biggest economy on the planet and ratcheting it up with tariffs on $200 billion in goods would be a LIMIT-DOWN situation (followed by similar limit-down days, day after day, until he backpedaled). In this insane asylum, however, the NQ has already bounced 50 points off its panic low, and the ES is cheerfully healing itself."

Tell me stocks make sense in their reactions. About as much as gold.
Agree that nothing makes sense at all...
But the one common denominator is stocks +, gold - or stocks -, gold -.
That is clear as day.
You yanking my chain? Back to Sophie's point about long periods. Budd, what would you have been saying about the 6 year period I show below? You think it can't/won't happen again?

If anything, these excursions seem to get greater as time goes on. So I'd fully expect for the next stock downturn to be worse than 2008.

Image

Or this even much longer period (I forgot I could use SPY). Actually this chart is likely wrong, GLD only goes back to late 2004, so gold would be higher.

Image

Here's Kitco from 2000 to now. Gold blew the pants off stocks for 11 years.

Image
If I was invested in the PP over that timeframe I would have been posting in the Stock Scream room.
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Cortopassi
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Re: The GOLD scream room

Post by Cortopassi » Mon Jul 16, 2018 10:32 am

Budd, no worries about having to post in the stock scream room anytime soon.

I think there should be another gold topic called the 5 stages of owning gold. Somewhere between depression and acceptance right now...
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Mon Jul 16, 2018 11:03 am

Yes, I am at acceptance now Corto.
At some point you are just beaten into submission.
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ochotona
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Re: The GOLD scream room

Post by ochotona » Mon Jul 16, 2018 11:28 am

I don't think we've really hit the bottom of sentiment. Honestly... a goodly fraction of Baby Boomers who hold gold are going to have to die, and then their Millennial heirs are going to sell it off when they inherit. Gold may go lower.

Someday we will hit a geological peak gold scenario, and then the US budget and debt problem will eventually flare up.

That's why I only hold 10%. Because it will be hard to hold onto through crap like we are going through now for year after year, but it could really take off, we just don't know when. Could be in 10 years. Then you won't be able to get physical when you need to. My 10% will rise to 25% of my portfolio, then I'll have a PP.
barrett
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Re: The GOLD scream room

Post by barrett » Mon Jul 16, 2018 5:10 pm

ochotona wrote:
Mon Jul 16, 2018 11:28 am
I don't think we've really hit the bottom of sentiment. Honestly... a goodly fraction of Baby Boomers who hold gold are going to have to die, and then their Millennial heirs are going to sell it off when they inherit. Gold may go lower.
Ocho, Do you have any good links on what percentage of his or her wealth the average Boomer has in gold? I would think it would be quite low (and that some of it might be stashed in long-forgotten hiding places!).

I found this little bit of terrible investing advice while searching for the answer to the above:

http://www.wyattresearch.com/article/wh ... -buy-gold/

For those of you uninterested in reading the link, it's a short article from late 2011 saying that one should hold off on buying stocks until an ounce of gold is worth roughly the same as the level of the Dow Industrial Index ("So for instance, if the Dow drops to 5000 and gold rises to $5,000 an ounce, I would sell my gold and buy the Dow.").

Ouch!!!
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