Recession Mode

[frugal]

In Recession all the assets, maybe except Cash, go DOWN.

Unfortunately in the last weeks the PP has going vertically down.

It's really hard to see it, on our money that we can't afford to lose.

[iwealth]

As discussed in another thread, the phrase "money that one can't afford to lose" is twisted a bit when people use it to refer to investing in the PP. There's no investment I'm aware of that promises no drawdowns will ever occur. YMMV, but I'm seeing a peak to trough drawdown here of between 4-4.5% from the October 2012 PP highs. And that's with both gold and long bonds tanking.

I do question whether the PP is underweight economic prosperity.

I'd venture to say stocks are the only asset class we hold that addresses prosperity. There've been periods in history where bonds have done well during prosperity, but I believe disinflation during those periods was the real reason for bonds performing well. Market seems to be pricing in steady predictable low inflation right now, hence the pillaging of bonds and gold. And by most accounts the economy is experiencing some moderate growth - which I suppose is what I'd expect when inflation is presumed to be so under control.

Of course the above discounts the effects of the Fed on both the current monetary and economic conditions. Fascinating times really. But definitely a little creepy. I'm sure there's been other articles written to address the same point, but this was the first I've seen on a major news outlet: "'Almost Every Major Asset Class in the World Is Overpriced': Analyst" http://www.cnbc.com/id/100803010

But what can you do? Either ride it our or go all cash until you are confident we're headed in one direction or another...then get whipsawed as soon as you re-enter.

[doodle]

If ever the future was in question, it is now. There are so many unbelievable uncertanties happening within the global economic system that I dont know what else to do than PP.

For me these are...

1. Demographic changes..
2. Resource/ ecological challenges
3. Job stealing robotic innovation
4. High sovereign and private debt levels..
5. Tumultuous middle east and peak oil...
6. Large central bank intervention..
7. Western political gridlock...europe and United states

Im sure there are many more....these are just a few

[MediumTex]

If ever the future was in question, it is now.

That's probably a safe statement to make at almost any time.

When is the future not in question?  Isn't its "in question-ness" what makes it the future (as opposed to the present or the things that have already happened)?

[jbrown]

If ever the future was in question, it is now. There are so many unbelievable uncertanties happening within the global economic system that I dont know what else to do than PP.

For me these are...

1. Demographic changes..
2. Resource/ ecological challenges
3. Job stealing robotic innovation
4. High sovereign and private debt levels..
5. Tumultuous middle east and peak oil...
6. Large central bank intervention..
7. Western political gridlock...europe and United states

Im sure there are many more....these are just a few

If I can borrow slightly from FDR's speechwriter, the only thing we can be certain of is uncertainty itself.

I'd say times are probably pretty good when you can only sit down and quickly come up with seven major things to be uncertain of.

[doodle]

Certainly, the future is generally uncertain. However, I would argue that we are on the cusp of a major paradigm shift. Just as the transition into the industrial age brought upheavel, the transition out of it will involve similar discomfort. The pace of change is especially frenetic right now, it wasnt always that way. For most of human history things tended to change rather slowly.

[WildAboutHarry]

Or as Ike said:

"Things are more like they are now than they ever were before."