Thank You

[Smith1776]

You can disagree all you want but this is where so many burn themselves .....if you want a well rounded view you are never going to get it from hanging out only with those who support your view no matter what it is in life. You need to get in to the enemy camp and learn what they know . Then make your choices.

" Confirmation bias
What it is: We tend to seek out information that confirms or supports what we already think, and reject information that does not support our view.. In the words of Muhammad Ali, "I don't always know what I'm talking about, but I know I'm right."

The problem: Limiting yourself to information that confirms what you already think can cause you to miss important Data and facts from your reasoning

https://youtu.be/SPmxsRDSmTc

[dualstow]

I so lament that I discovered the PP after Craig and Tex had moved on.
...

They’re like the elder aliens that built the wormhole transport in ‘Contact’: they’re long gone, but the fruits of their labor are still functioning well.

[Smith1776]

I so lament that I discovered the PP after Craig and Tex had moved on.
...

They’re like the elder aliens that built the wormhole transport in ‘Contact’: they’re long gone, but the fruits of their labor are still functioning well.

Perfect analogy.

I don’t care what anyone says, I enjoyed that movie!

[Cortopassi]

When we hang out with only those who support our view , like the same stuff and high five each other you never SLEEP WITH THE ENEMY ...that is the biggest obstacle most hit in developing their financial plan .

The PP is defacto sleeping with the enemy every day! How many people would scorn the low allocation to stocks, the high allocation to gold, the crazy allocation to bonds now that the bond bull is dead (hah). So much cash, are you crazy? And so on.

At any one time you are sleeping with up to 4 potential enemies, and probably only love 1 or 2 of the holdings.

And it works.

[dualstow]

.....if you want a well rounded view you are never going to get it from hanging out only with those who support your view no matter what it is in life. You need to get in to the enemy camp and learn what they know . Then make your choices.

But that's how I discovered the pp in the first place. They were the enemy camp when I discovered them at bogleheads.

[mathjak107]

but then you don't want to dismiss non pp forums either . there is a lot to be learned from both sides ... i mean i frequent here but my first choice in a long term hold portfolio is not the pp ..

i am a temporary user at times when i need a place to stash the gains i made elsewhere when i am a little uncomfortable ... but i still copy the mail here and learn different views .. in fact i can argue for and against the pp equally well ...

so i would never say i am divorcing myself from the competition ... rather i want to learn more about the other side .

over the years following the work of michael kitces on other forums has not only taught me a lot but dispelled many of the thoughts and ideas i grew up on ...so i am always learning from other forums not just the ones that agree with me .

[dualstow]

I agree. There's always something to learn.
I mean, I do dismiss daytrading and thus won't be subscribing to your upcoming newsletter, but I like reading this thread just the same.

My pp+vp is actually still closer to the classic bogleheads' 60/40 when I look at it altogether.
However, a lot of their advice didn't apply to me and I had to unlearn it, not having 10 million dollars or a large income. Tax loss harvesting, pooh-poohing dividends (and gold), keeping bonds in tax-deferred. I would have been better off having ignored all that.

[mathjak107]

Exactly ..
But I still don’t trust Tlt and Gld in a sustained rising rate environment .. it has not really been in one in the last 40 years ...so I prefer a much less interest rate sensitive portfolio as my full time portfolio and I enjoy seeing how i refine that over time ...

So I close my eyes to nothing and I assume what I know or believe can change at any time once a better argument is presented on all sorts of things

[dualstow]

Hey, the road to ruin is paved with good arguments. :-)
That's why I prefer an agnostic portfolio, albeit with a mild tilt to prosperity.

[Cortopassi]

Exactly ..
But I still don’t trust Tlt and Gld in a sustained rising rate environment .. it has not really been in one in the last 40 years ...so I prefer a much less interest rate sensitive portfolio as my full time portfolio and I enjoy seeing how i refine that over time ...

So I close my eyes to nothing and I assume what I know or believe can change at any time once a better argument is presented on all sorts of things

From Nov 2016 to July 2019, rates went from 0.41% to 2.4%, a 500% increase. Here's what happened to gold and TLT during the same time. Explain?

[mathjak107]

For the long bond the average went from 2.60 in 2016 to under 3% in 2019 .....the long bond went no where ....there was no increase in long term rates ....... increases in short term rates have little to do with where investors take longer term rates ...

..we have not had a true bear market trend in more than 40 years in long term bonds.. they tend to not be effected much by short term moves by the fed . In fact most of the time longer term bonds like short term increases by the fed if it seems to hold the line on inflation....so we are not talking the feds short term moves ...I am talking investors have not thrown the long term bonds in to a bear market yet in my investing lifetime

Longer term stuff does not move when investors don’t see eye to eye with the feds short term increases ..that is why we get these inversions

Interest rate cycles can span decades ...we have not seen anything but a down trend with some short term burps in 40 years in longer term bonds..

If you like at my chart I posted you can ski down it

[Tyler]

Interest rate cycles can span decades ...we have not seen anything but a down trend with some short term burps in 40 years in longer term bonds

True, but we do have good data for the PP in the decade of the 70s when rates skyrocketed from about 6% to over 15%. And portfolio performance was largely the same then at it is now. So faith in the PP during periods of rising rates is not without empirical evidence.

[mathjak107]

We still have not seen investors throw long term bonds in to any meaningful modern day bear market ...not in 40 years.. you can ski down the slope of the last 40 years.

Nothing I would bet the ranch on that is for sure in the 1970’s vs today.. you see Tlt fall 2% in a heart beat when investors don’t like what they see And that is in an instant on some daily noise not a trend reversing 40 years of lower and lower rates

So I would never go by the past on the 1970’s action on a treasury bond to be honest, to me this is still uncharted waters since we have had nothing in more than 40 years as an example, certainly not in more modern day markets

[Tyler]

This reminds me of any number of discussions about global warming where someone mentions "this is the warmest year in 100 years" as evidence we're all going to die soon, and all I can think is "so you're telling me it was even warmer 100 years ago and we're all still here to talk about it?"

I hear ya, Mathjak. We just have different perspectives, and I'm not inclined to crop the data at 40 years instead of 50.

[Cortopassi]

mj, what the PP allows me to do is be invested in the blue line below. I otherwise never would have been, because in my opinion if there's a market that requires a severe correction it's the blue line. 12 years of near non-stop up and to the right movement. Sure a couple blips, esp. late last year.

I am not pooh poohing being invested in the stock market. But the one thing I see all the time from people (you included) is the thinking that bonds and gold can get dumped for decades at a time, but the stock market always bounces back. Always a buying opportunity. Until it doesn't.

The media is a huge factor in this. What gets covered? Dow Jones, S&P and Nasdaq. Rarely hear anything about bonds, and almost never gold except for when there's a "flight to safety." Trump tweets as well, hey look at the markets, everything is just peachy as long as the stock market is going up. Nevermind almost half of Americans don't own stocks.

I hate the "another record close" coverage. Gets old. Would be more fun to watch the market drop like a rock and see people freak out while the PP buffers it or even goes up.

[mathjak107]

Actually I am not thinking in terms of equities . I am thinking that perhaps the pp is way way to interest rate sensitive for seeing a trend reversal in bond rates..

I think it may be doing the one thing Harry preached against. And that is ruling out the fact that it may be way overly bond rate sensitive for a trend like we had for 40 years ....a reversal to historical average rates in the 5-6% range over years would be killer.

Remember we are not talking fed short term rate moves ...we are talking investors bidding bond rates back towards historical averages

[mathjak107]

This reminds me of any number of discussions about global warming where someone mentions "this is the warmest year in 100 years" as evidence we're all going to die soon, and all I can think is "so you're telling me it was even warmer 100 years ago and we're all still here to talk about it?"

I hear ya, Mathjak. We just have different perspectives, and I'm not inclined to crop the data at 40 years instead of 50.

I agree , the old data is the data , it should stay ...the only question is based on modern markets and likely a 40 year drop in rates that Harry never anticipated, is the kryptonite to the pp going to be a long term trend in bond rates back up ?

I would count on the assets in the pp correlating with the economy very well ....but we are unsure of the effect of sustained rising bond rates on it just back to historical averages.. my opinion is I think caution here is a good idea . I would think twice about putting everything in the pp at this point ...I believe some should be kept in a portfolio far less interest rate sensitive just in case , like you would do a variable portfolio only this is a more conventional low risk portfolio maybe even something like Wellesley .

[Ad Orientem]

I had completely forgotten this post until our resident archivist dug it up. Re-reading it I confess to a certain sense of warm nostalgia, and sadness at the apparent departure of so many great forum members. (No plans for anything special when I hit 3000.)