Gyroscopic Investing

For some reason, I feel like there is going to be a lot of volatility and crazy stuff happening between now and the end of the year.

Long term treasuries will be the place to seek refuge.

JMHO, of course.

Are you talking about just the financial markets, or things in general?

I think the theme of markets rallying on Fed admissions of economic weakness is getting very very tired.

Personally I bought some October puts on all asset classes to protect me from something "breaking." They took a beating on the no-taper announcement but things feel even crazier now than before.

iwealth wrote: I think the theme of markets rallying on Fed admissions of economic weakness is getting very very tired.

Personally I bought some October puts on all asset classes to protect me from something "breaking." They took a beating on the no-taper announcement but things feel even crazier now than before.

I wanted to do the same but those puts are really expensive. Instead I placed a stop loss on VTI.

MediumTex wrote: For some reason, I feel like there is going to be a lot of volatility and crazy stuff happening between now and the end of the year.
...
JMHO, of course.

I can't find it so maybe it's just my imagination, but I thought you said something akin to "it feels like the stock market is broken" or maybe "about to break" earlier this year. I don't think it was your own thread, though. This was also, if I recall correctly, immediately after a surge followed soon after by a plunge. Maybe that specific combo instills such feelings in your mind? 

No idea. As has been the case with previous years, 2013 has been full of surprises. When a smart person like you says it feels like there's going to be volatility, I feel the market will surprise us with boring sideways movements.

Totally agree. The makets are so randon short-term and impossible to read though........... I feel better about cash than anything for three months but longer term (1 year) it's gold.

I have the least amount of confidence in gold, followed by equities, treasuries and cash...:-)

I expect something to break sometime in the next year or so. As far as I can tell, the exponential curve of government insanity is getting into the really steep region.

iwealth wrote: I think the theme of markets rallying on Fed admissions of economic weakness is getting very very tired.

I think that's what I'm feeling.

Plus this crazy stock market rally based upon a slightly healthier economy than we have had in the recent years is just unsettling.

Libertarian666 wrote: I expect something to break sometime in the next year or so. As far as I can tell, the exponential curve of government insanity is getting into the really steep region.

To me, it's not the government so much as just a really weak economy that the markets may not be fully grasping right now.

It's like a quack doctor treating a patient with a serious form of cancer.  The government is the quack doctor and the underlying economy is the patient.

Mdraf wrote:

iwealth wrote: I think the theme of markets rallying on Fed admissions of economic weakness is getting very very tired.

Personally I bought some October puts on all asset classes to protect me from something "breaking." They took a beating on the no-taper announcement but things feel even crazier now than before.

I wanted to do the same but those puts are really expensive. Instead I placed a stop loss on VTI.

Yeah they aren't cheap, but I don't trust myself enough to buy back into the market at the right time. There was a period of time where I owned a basket of stocks and hedged during a market correction by shorting SPY. Unfortunately I had no idea when to unload the short and held it waaaay too long.

Since that time I've very rarely hedged. It almost never works. But as discussed in this thread, things seem particularly weird right now. Weird enough for me to want protection against a >10% asset correction. I'm lightest on treasury puts, heavier on equities/metals.

buddtholomew wrote: I have the least amount of confidence in gold, followed by equities, treasuries and cash...:-)

Why please?!?!?!

I have the most confidence in gold right now and it's purchasing power so why is gold so scary now for you!?!?!?!?

iwealth wrote:

Mdraf wrote:

iwealth wrote: I think the theme of markets rallying on Fed admissions of economic weakness is getting very very tired.

Personally I bought some October puts on all asset classes to protect me from something "breaking." They took a beating on the no-taper announcement but things feel even crazier now than before.

I wanted to do the same but those puts are really expensive. Instead I placed a stop loss on VTI.

Yeah they aren't cheap, but I don't trust myself enough to buy back into the market at the right time. There was a period of time where I owned a basket of stocks and hedged during a market correction by shorting SPY. Unfortunately I had no idea when to unload the short and held it waaaay too long.

Since that time I've very rarely hedged. It almost never works. But as discussed in this thread, things seem particularly weird right now. Weird enough for me to want protection against a >10% asset correction. I'm lightest on treasury puts, heavier on equities/metals.

I agree. No shorting. But I'm willing to get stopped out of VTI even if I get jerked and it goes up again. At least I have some gains locked in. As for gold and treasuries, on days like this I reach for my bucket of sand. It helps.

I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

Reub wrote: I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

Yes, but I'm torn because this market is nuts and stocks could go up more. Since the are a lot of shorts out there we could see a massive short squeeze. The "Big Boys" like to do that.

Reub wrote: I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

I can't see any reasonable path to outsized gains in LTBs now. Maybe cash if they let ieverything crash but that is a slim slim chance to me.

50-50 gold and stocks and hanging in through the crash for me.

I'm young...ish.

MangoMan wrote: Isn't that kind of a violation of HB's rule ....

Seems like a lot of that going on in this thread.

Reub wrote: I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

I haven't done it yet and I probably won't. However, it would be the same as beginning a new PP with lower levels invested.

notsheigetz wrote:

MangoMan wrote: Isn't that kind of a violation of HB's rule ....

Seems like a lot of that going on in this thread.

I like to call it "Breaking Browne"

Kshartle wrote:

Reub wrote: I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

I can't see any reasonable path to outsized gains in LTSs now. Maybe cash if they let ieverything crash but that is a slim slim chance to me.

50-50 gold and stocks and hanging in throgh the crash for me.

I'm young...ish.

How would it affect your worldview if the United States became like Japan and for the next 20 years the only asset that performed was long term bonds?

dualstow wrote: I like to call it "Breaking Browne"

Starring MT as Walter White?

Just sitting tight. I feel fairly confident that whatever happens won't break the PP.

doodle wrote:

Kshartle wrote:

Reub wrote: I'm actually thinking of rebalancing my stock-heavy portfolio by reducing the stock portion down to the levels held in LTT's and gold and placing the extra funds in a VP consisting of cash. Has anyone else thought about doing this?

I can't see any reasonable path to outsized gains in LTSs now. Maybe cash if they let ieverything crash but that is a slim slim chance to me.

50-50 gold and stocks and hanging in throgh the crash for me.

I'm young...ish.

How would it affect your worldview if the United States became like Japan and for the next 20 years the only asset that performed was long term bonds?

This is like you expressing the view that gold is going to fall in price and I respond "How will it affect your worldview if it goes up for 20 years?" Ho-Hum

My worldview has nothing to do with anything.

How will it affect your worldview if the government continues to "stimulate" demand for 20 years like in Japan and the economy does not improve?

Will it just be a case of them not "stimulating" demand enough?

MediumTex wrote: For some reason, I feel like there is going to be a lot of volatility and crazy stuff happening between now and the end of the year.

I actually don't have that feeling.  The financial doesn't seem arrogant enough about stocks just yet.

I do wonder when the Euro will start to make headlines again.  That's never good.

I agree that treasuries are a good bet right now, I just think it may take 6-12 months for them to takeoff again.