Absolutely brutal - 5/5

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mathjak107
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jul 04, 2022 2:43 am

It is for comparison purposes only …

It still would be a head of the pp over most time frames even with the losses in 2008.

I mean , it is no different then the fact that even 100% equities can loose way more at this point and still be ahead balance wise of the pp so you need to look at a complete cycle .

Many times the losses are what we are not gaining that we could have and were there for the takings by simply upping our equity allocation to broad based funds .

As much as I always liked the pp ever since I read Harry’s books in the 1980s ,it just was never appropriate for me in my accumulation stage and I have little use for it in retirement as even in the down turn other portfolios have now worked the same or better .

So balance wise a lot more was given up compared to say the pp even including 2008 .

My fidelity low priced stock fund which is 100% equities is down pretty close to the same thing as the pp yet had you had that since 2008 there would be a big difference in balance .

Going back to 2007 the pp would have 10k grow to about 25k …fidelity low priced stock fund is over 32k yet the ytd now are about the same as the pp

So you can’t go by a particular drop in a particular year .

Flpsx was down 32% in 2008 and the pp was down about 2.50%

Yet today the drop is almost the same yet there is a big difference in balance despite a bigger drop

2008 was also an exceptional time since even the most conservative fidelity funds got stuck with that toxic paper exasperating losses
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I Shrugged
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Re: Absolutely brutal - 5/5

Post by I Shrugged » Mon Jul 04, 2022 1:14 pm

A lot of years are bad for stocks, but this has been a very bad time for both stocks and bonds. It's pretty unusual.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Mon Jul 04, 2022 3:23 pm

It may not be so unusual anymore ….when rates were so low up is more likely then down
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Re: Absolutely brutal - 5/5

Post by Hal » Tue Jul 05, 2022 12:28 am

Meanwhile in Australia....
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Tue Jul 05, 2022 7:04 am

Excellent show and a more positive outlook for the pp and rates . Not so much for the economy though

https://wealthtrack.com/influential-pre ... ar-market/
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Re: Absolutely brutal - 5/5

Post by whatchamacallit » Tue Jul 05, 2022 5:27 pm

mathjak107 wrote:
Tue Jul 05, 2022 7:04 am
Excellent show and a more positive outlook for the pp and rates . Not so much for the economy though

https://wealthtrack.com/influential-pre ... ar-market/
Good post. I do enjoy listening to David Rosenberg.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Tue Jul 05, 2022 5:28 pm

He certainly makes sense
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Re: Absolutely brutal - 5/5

Post by ahhrunforthehills » Wed Jul 06, 2022 2:47 am

I Shrugged wrote:
Mon Jul 04, 2022 1:14 pm
A lot of years are bad for stocks, but this has been a very bad time for both stocks and bonds. It's pretty unusual.
It is my understanding that it is unusual in the short-cycle, not unusual for the long-cycle. Low rates push people into equities to chase yield. This makes equities increasingly overpriced. Government reacts by lowering rates to support economic growth. Rinse. Repeat.

This continues until rates bottom out. Then both bonds and equities get obliterated while the system resets.

My grandmother kept cash literally rotting in her basement and wouldn’t touch the stock market with a 10 foot pole.
History doesn’t necessarily repeat, but certainly rhymes.

Off topic, but my biggest concern is that if we are at the end of the long-term cycle, within the next couple decades politicians will trick the public into blaming some other country for our problems forcing my kids into a massive conflict.

It is like humans can’t help but to repeat history after those that have experienced it first hand are no longer alive to warn about it.
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Re: Absolutely brutal - 5/5

Post by joypog » Wed Jul 06, 2022 9:50 am

Bummer if that long cycle plays out, ain't much we can do then.

I guess we hang on for dear life and hope that we aren't the actual recipient of the bombs while our kids head off to the front?
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Re: Absolutely brutal - 5/5

Post by Jack Jones » Wed Jul 06, 2022 10:11 am

ahhrunforthehills wrote:
Wed Jul 06, 2022 2:47 am
Off topic, but my biggest concern is that if we are at the end of the long-term cycle, within the next couple decades politicians will trick the public into blaming some other country for our problems forcing my kids into a massive conflict.
Isn't that already happening?
JoeBiden wrote:Putin's Price Hike
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 09, 2022 2:45 am

Things are still getting worse and the pp is falling farther behind then the others .

The pp now shows down 14% ytd according to portfolio labs .

The insight income model down 10.1%

Wellesly down 9.6%
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Re: Absolutely brutal - 5/5

Post by dualstow » Sat Jul 09, 2022 6:34 am

I was just wondering, since you have said that you can’t publish the Insight model as it’s proprietary, do you include the cost of said model when calculating performance?
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Re: Absolutely brutal - 5/5

Post by Jack Jones » Sat Jul 09, 2022 6:59 am

mathjak107 wrote:
Mon Jul 04, 2022 2:43 am
I mean , it is no different then the fact that even 100% equities can loose way more at this point and still be ahead balance wise of the pp so you need to look at a complete cycle .
False. Consider someone who is about to retire. The returns of a complete cycle are less relevant to said individual.

Ain't it funny: now that we're in a recession and equities are being beaten down, Mathjak changes his tune to say that we weren't making enough money during the bull market. It's always trolling with this guy.
Last edited by Jack Jones on Sat Jul 09, 2022 8:00 am, edited 2 times in total.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 09, 2022 7:28 am

that statement you made is potentially false

it happened to me .

i was an aggressive investor all my life until pre retirement .

the day i retired the Chinese devalued the yuan and we had a market fall the day i set my draw .

but that drop in our draw from the level we achieved by being 100% in equities over the decades blew away the balance we had to set a draw on vs had we been more conservative in our investing all those years setting our draw on a much lower balance.

it is wise to tone things down 5 to as much as ten years before retiring but not wise to do so much farther out.

once you are in retirement the cycle still matters .

each year my draw is based on that years balance using bob clyatts 95/5 method .

in fact the 4%swr will fail unless you average at least a 2% real return the first 12-15 years of a 30 year retirement , so the cycle is still alive and well and plays a big roll. 2% real returns means you can have a buck left so just squeaking by is not good .


with the pp returning 4.34% nominal return the last decade the 10 year inflation adjusted average is about 2% according to portfolio visualizer .

10k in 2012 shows inflation adjusted the 10k is now at 12k in the pp as july 1

that would have required a pay cut from a 4% draw most likely at this stage
Last edited by mathjak107 on Sat Jul 09, 2022 10:18 am, edited 9 times in total.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 09, 2022 7:31 am

dualstow wrote:
Sat Jul 09, 2022 6:34 am
I was just wondering, since you have said that you can’t publish the Insight model as it’s proprietary, do you include the cost of said model when calculating performance?
huh ? all funds are regular fidelity funds and returns include fund expenses and the newsletter is all of 99 dollars a year so i am not sure what you are referring to as far as costs.

99 dollars is .00003% of the portfolio
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Re: Absolutely brutal - 5/5

Post by seajay » Sat Jul 09, 2022 9:21 am

mathjak107 wrote:
Sat Jul 09, 2022 7:31 am
99 dollars is .00003% of the portfolio
Congratulation on getting to a third of a $billion portfolio value :) [I know ... pretty sure you meant 0.003%]
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 09, 2022 9:24 am

my calculator says a 3,000,000 dollar portfolio has 99 dollars at .00003% , 4 zeros
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Re: Absolutely brutal - 5/5

Post by Xan » Sat Jul 09, 2022 10:40 am

mathjak107 wrote:
Sat Jul 09, 2022 9:24 am
my calculator says a 3,000,000 dollar portfolio has 99 dollars at .00003% , 4 zeros
That's 4 zeroes WITHOUT the percent. It's really .003%.
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Re: Absolutely brutal - 5/5

Post by joypog » Sat Jul 09, 2022 12:45 pm

Add a few more zero's and you too can be buying twitter!
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Re: Absolutely brutal - 5/5

Post by dualstow » Sat Jul 09, 2022 1:39 pm

mathjak107 wrote:
Sat Jul 09, 2022 7:31 am
dualstow wrote:
Sat Jul 09, 2022 6:34 am
I was just wondering, since you have said that you can’t publish the Insight model as it’s proprietary, do you include the cost of said model when calculating performance?
…all funds are regular fidelity funds and returns include fund expenses and the newsletter is all of 99 dollars a year so i am not sure what you are referring to as far as costs. …
That’s all I was asking. So the answer is yes.
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sat Jul 09, 2022 2:13 pm

Xan wrote:
Sat Jul 09, 2022 10:40 am
mathjak107 wrote:
Sat Jul 09, 2022 9:24 am
my calculator says a 3,000,000 dollar portfolio has 99 dollars at .00003% , 4 zeros
That's 4 zeroes WITHOUT the percent. It's really .003%.
Got it
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Re: Absolutely brutal - 5/5

Post by jalanlong » Sat Jul 09, 2022 9:05 pm

Jack Jones wrote:
Sat Jul 09, 2022 6:59 am
mathjak107 wrote:
Mon Jul 04, 2022 2:43 am
I mean , it is no different then the fact that even 100% equities can loose way more at this point and still be ahead balance wise of the pp so you need to look at a complete cycle .
False. Consider someone who is about to retire. The returns of a complete cycle are less relevant to said individual.

Ain't it funny: now that we're in a recession and equities are being beaten down, Mathjak changes his tune to say that we weren't making enough money during the bull market. It's always trolling with this guy.
I don’t believe Mathjak has changed his tune at all. If you have been reading his posts over his time here, he has pointed out (correctly) that if you just invest in 100% stock portfolio, after a cycle you will be so far ahead of the PP that even the worst stock drawdown will leave you with more money than the PP. There is a cost to safety or the perception of it. Depending on your definition of safety the PP may not provide it.
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Re: Absolutely brutal - 5/5

Post by Hal » Sat Jul 09, 2022 9:30 pm

Interesting chart
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Re: Absolutely brutal - 5/5

Post by mathjak107 » Sun Jul 10, 2022 4:00 am

guy.
[/quote]

I don’t believe Mathjak has changed his tune at all. If you have been reading his posts over his time here, he has pointed out (correctly) that if you just invest in 100% stock portfolio, after a cycle you will be so far ahead of the PP that even the worst stock drawdown will leave you with more money than the PP. There is a cost to safety or the perception of it. Depending on your definition of safety the PP may not provide it.
[/quote]


Exactly … I have not changed my tune at all …..

This perception of safety may be nothing more than an illusion.

For those concerned about their balance from a fall there is an illusion of safety as their balance would be likely still higher with a more aggressive approach.

Look at the last ten years now for the pp . In retirement the pp is reaching the point 4% draw would not have held much longer

And likely this year would need a pay cut as it has barely held the minimum for holding a 4% swr and being considered safe .

The inflation adjusted balance the last 10 years for the pp is 12k for every 10k you started with .

Wellesly is 14,131

60/40 vti /bnd 17,375

100% vti 25,530 and that is as of July 1 so it already is reduced by the drop so far .

You can still lose almost half of being 100% vti and be a head of the pp .
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Re: Absolutely brutal - 5/5

Post by dockinGA » Sun Jul 10, 2022 5:45 am

jalanlong wrote:
Sat Jul 09, 2022 9:05 pm
Jack Jones wrote:
Sat Jul 09, 2022 6:59 am
mathjak107 wrote:
Mon Jul 04, 2022 2:43 am
I mean , it is no different then the fact that even 100% equities can loose way more at this point and still be ahead balance wise of the pp so you need to look at a complete cycle .
False. Consider someone who is about to retire. The returns of a complete cycle are less relevant to said individual.

Ain't it funny: now that we're in a recession and equities are being beaten down, Mathjak changes his tune to say that we weren't making enough money during the bull market. It's always trolling with this guy.
I don’t believe Mathjak has changed his tune at all. If you have been reading his posts over his time here, he has pointed out (correctly) that if you just invest in 100% stock portfolio, after a cycle you will be so far ahead of the PP that even the worst stock drawdown will leave you with more money than the PP. There is a cost to safety or the perception of it. Depending on your definition of safety the PP may not provide it.
This is assuming that you invest at the right time of a cycle, and stay invested throughout the cycle and don't abandon ship when things start looking bad. Mathjak may not have changed his tune, but as usual, he has spouted an overly simplistic view of things built off a bull market of historic proportions that is in no way shape or form guaranteed to continue in the future.

Just as evidence, see the following link for a comparison of PP (modified to include 50% 10 year treasury instead of bond barbell so that data can go back to 1972) compared to 100% stocks, starting in January of 1972 and running for 40 years. PP loses out by a whopping 0.12% CAGR, but has a far superior Sharpe ratio, drawdown, etc. Yes, the 100% stock investor would've ended up with $21k more dollars ($463k vs $441k). Big deal. Long story short, we don't know what the future holds. Anyone who's been invested in 100% stocks for the last 10-15 years has done very well. That could possibly mean the next 10-15 years won't be so good. And if it isn't, will a 100% investor, especially a new 100% investor with no bear market experience, be able to stomach the ride? I can say for sure that myself individually could not, and I learned that lesson in 2008 (thankfully with not a whole lot of money).

https://www.portfoliovisualizer.com/bac ... ion5_1=50
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