Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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vnatale
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 10:36 am

Kbg wrote:
Wed Mar 30, 2016 10:35 am
The main reason I pointed this out is because the exact purpose of LTTs in the PP is for exactly the kind of conditions we are in now (no/lo/deflation) but we continually want to WIN (whip inflation now)!  I still find it amazing that people can't really stop or have a very difficult time not predicting which is the whole philosophy behind a PP.

I totally understand and would agree with tilting a PP to one's circumstances. A younger person definitely should up the stock allocation as an example or go with a leveraged version of the PP.

I'm really not an HB groupie as I have a lot of money in other trading strategies, but I think HB was very smart man. It is not often you see a strategy do exactly what it purports to do over a very long time frame. PP certainly does.
And, just before I'd read this gem by Kbg.

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 10:48 am

buddtholomew wrote:
Wed Jan 17, 2018 7:31 pm
Haha, I was thinking for my birthday in Feb.
Agree, I would have sold to cash to “lock-in” profits countless times between 2009 and today. PP has kept me in stocks too.
It’s certainly been more challenging to stay in Gold and Bonds.
Nevertheless, I am happy with the PP’s performance and combined with a stock heavy global PP the combination has been rewarding.
In my time in the archives I've read a ton of posts by Budd. Therefore It was almost shocking to read the above by him!

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:15 am

hardlawjockey wrote:
Fri Jul 27, 2018 3:16 pm
When I see a headline like Mark Zuckerburg "losing" the greatest amount of money any human being has ever lost in a single day it only tells me how financially illiterate people are (or else knowingly posting click-bait with a hyperbolic headline).

I'm assuming, of course, that Mr. Zuckerburg didn't sell any of his stock in his own company to lock in the loss, in which case he still owns the same number of shares he did before. Any accountant will tell you there was no "loss".
I am an accountant. And, I know that Mathjak will agree with the following.

He may not have had a "realized" loss but he definitely had an "unrealized" loss.

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:19 am

hardlawjockey wrote:
Fri Aug 03, 2018 4:39 pm
pugchief wrote:
Fri Aug 03, 2018 4:27 pm
Why isn't anyone whining that all 3 assets are in the same direction (UP) today? :D
Human nature is weird, isn't it?

Who tunes into the news expecting to hear something positive?
Seems to play out in all areas involving humans.

On the various New York Yankees discussion lists I've been on when things are NOT going well ALL kinds of discussion (really complaints / criticisms). When things ARE going well, there are oftentimes dead silence.

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:21 am

Kbg wrote:
Sat Sep 15, 2018 3:00 pm
Fundamental long term projected return measures are actually quite good in their accuracy...just not in the timing. Seems like it is contradictory but it is not. Bonds are utterly predictable...expect the coupon return over multiple iterations. The only thing that is going to make the PP perform well going forward is Mr. Wildcard, gold. The other three assets are not going to do all that great over the next decade.
I assume you are still saying the same?

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:30 am

Cortopassi wrote:
Wed Dec 26, 2018 11:23 pm
Not every day you see 1000 points, wow.

Still, my rebalance is now buy 98% stocks, a sliver of bonds, and actually selling gold. Interesting.

We'll see what that looks like when I really will rebalance in early Jan after contributing to my IRAs.
Would have been a great move then, correct!!?? I assume I'll be soon reading here what you actually did do.

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:38 am

Kbg wrote:
Sat Mar 16, 2019 7:26 am
It took me several years of investing to differentiate clearly between descriptive and predictive. 99.9999999% of everything one reads about investing is the former and the only thing that will improve your bottom line is the latter. Nothing wrong with stockfotainment, but it’s useless at best and dangerous at worst if you can’t put your emotional reactions on mute.
Yet another gem by Kbg!

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 11:39 am

pugchief wrote:
Sat Mar 16, 2019 8:20 am
boglerdude wrote:
Fri Mar 15, 2019 11:56 pm
> that whole paragraph is nothing but meaningless gibberish

Stocks are legal gambling and gambling is fun. At the end of the day fun is all that matters
LOL. In the 90's I was into stock newsletters dealing with short-term "swing" trading and also was doing guys' trips to Vegas 2-3 times/year. There was actually one point in a casino where I turned to my buddy and said, "You know, winning or losing a grand at the tables just doesn't have the thrill it used to. Trading the stock market is like being at the high roller table, which makes this seem dull in comparison." Then we had the 2000 crash. Shortly after that, I put everything into low risk mutual funds and took a 10 year break from Las Vegas. The irony is that when 2008 hit, all of those low risk funds like Fairholme and T Rowe Price Capital Appreciation tanked along with everything else because they held corporate bonds instead of treasuries, and also had no gold. And that is what ultimately led me to the PP.
A good "how I got to the Permanent Portfolio" story worth resurrecting.

Vinny
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Re: Stock scream room

Post by Cortopassi » Fri Jan 31, 2020 12:04 pm

vnatale wrote:
Fri Jan 31, 2020 11:30 am
Cortopassi wrote:
Wed Dec 26, 2018 11:23 pm
Not every day you see 1000 points, wow.

Still, my rebalance is now buy 98% stocks, a sliver of bonds, and actually selling gold. Interesting.

We'll see what that looks like when I really will rebalance in early Jan after contributing to my IRAs.
Would have been a great move then, correct!!?? I assume I'll be soon reading here what you actually did do.

Vinny
I did rebalance in Jan 2019 after the big 2018 end of year drop, and absolutely it ended up being a positive event. At the time, it seemed a bit scary, because it was just bouncing back from the drop and certainly could have gone back the other way.

But right now I think everyone should be pretty worried about a global recession due to this virus.
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 12:07 pm

pmward wrote:
Mon Apr 01, 2019 9:17 am
Jeffreyalan wrote:
Mon Apr 01, 2019 7:35 am
How do you guys stay the course with your portfolios? I have been in the Desert Portfolio for a couple of years and it has done well for me. However, whenever I read about current events (robots taking jobs, Democratic Socialists, Govt Debt, End of the bull market etc) it makes me want to go to all cash and not risk .01 of my hard earned savings. How do you guys stay balanced and not go to the extreme of going to cash?
If you have a diversified portfolio (which you do) then none of those things matter, because you have specifically chosen assets that will respond favorably to all of the above. You always will have an asset that will be in a bull market. If you go to cash it defeats the purpose, especially since your defensive allocations are probably all down, you would be locking in losses and stripping them from their chance to shine. Most of these macro-economic environments and trends are cyclical, like a pendulum that swings back and forth over many years and even decades in some cases (like deflation to inflation). If you stick to your allocation and rebalance accordingly you will always be selling the in favor assets high to buy the out of favor assets low, so you will always be loaded up on the out of favor assets just in time for the pendulum swing and the roles to reverse.

Going to cash is also not a decision to take lightly, look at how hard of a time Ocho has been having trying to decide whether or not to get back in. Actively managing a portfolio is very stressful. Getting out is a much easier choice to make than getting back in. Until you've been in that position, you don't really understand. I lost a lot of sleep after going to cash in the past, trying to decide whether or not I should get back in, it's not fun. Look at the people on the Bogleheads forum that have been in cash since like 2015, and are still sitting there waiting for "the big one" that seems to never happen to get back in (and even when it does eventually come, will they really pull the trigger??? Will they even be able to get back in lower than they got out???) Don't take the decision to go to cash lightly. You have chosen a defense first portfolio, I would personally just sit back and let it do it's job.

Also, I sometimes find solace going back on the bogleheads forum and reading the posts from the 2008/2009 timeframe. If you could go back and purchase stocks at 2009 prices would you? I know in hind site I personally would be borrowing money any way I could to throw into the market. However, when you read what people were actually saying... you read comments about how the market was "expensive". During the best buying opportunity in my lifetime people thought the market was expensive... You read all kinds of logical reasons why the world was going to end and the market was going to go back down, all of which sounded plausible but either didn't happen or didn't play out like people suspected (I mean who would have thought that QE, 0% interest rates, and low inflation could all co-exist for almost a decade???). At any period of time there are always potential headwinds. There is always an argument that can be made that the market is "expensive", that the government is going to screw everything up, and that doom and gloom is the only possible outcome. Likewise an argument can always be made that the markets have nowhere to go but up. But at the end of the day, the markets tend to move in the way that fools the maximum amount of people possible. Markets had people capitulating on bonds to buy stocks the last couple of years... and bonds have in turn been the best performing asset. The market is not a logical or rational thing, especially in the short term. So nobody knows what will happen. It's best for most people to pick a balanced portfolio and just stick to it come what may.

Another gem....

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 12:11 pm

jacksonM wrote:
Wed Apr 03, 2019 3:45 pm
Jeffreyalan wrote:
Mon Apr 01, 2019 11:16 am
The case for 100% cash is a lot stronger than 100% Gold or Stocks IMO. 100% stocks could easily lose you 50% in a year and make take many, many years to recover. Cash will not ever do that to you unless you are talking about runaway inflation. Correct me if I am wrong on that.

When I say I think about going to cash, I don't mean for a certain period of time and then trying to jump back in. I am thinking of going to cash permanently. I often think instead of putting my money at risk (even if it is a small risk) squeezing a 4-6% return out of the Desert Portfolio, why don't I just keep my money in 2.5% bank accounts and Treasury bills and focus on trying to save more, cutting my cost of living, having no debt, buying things in bulk, taking advantage of special bank offers of promotional rates, working an extra hour of overtime each week? Those would be certain returns instead of hopeful returns.
My parents were all cash in their retirement, starting with a nest egg of about $300k, accumulated mostly from the sale of property belonging to themselves and my grandparents when they died.

Retiring in the late 70's they were very fortunate to begin with an excellent sequence of returns - perhaps the best ever for cash with CD's paying as much as 18%. Doesn't take long to double your money at that rate.

If they had started today in similar circumstances, I'm reasonably certain they would have run out of money long before they died. As a matter of fact, they almost did thanks to ZIRP. Fortunately there was a little bit left for my sister when my mother died in January at the age of 98. Another year in the nursing home and I think there would have been nothing left.

Still, it would probably work even at today's rates if you have a big enough nest egg to start with and can live within a budget and manage things wisely like my parents did. I think that is actually the recommendation of William Bernstein who recommends nothing but TIPS once you've "won the game". I guess the question is, how do you know when you are there?

I also do remember reading this by William Bernstein.

If one, indeed, has "won the game" do you see any flaws in his recommendation "nothing but TIPS"?

Vinny
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Re: Stock scream room

Post by vnatale » Fri Jan 31, 2020 1:42 pm

mathjak107 wrote:
Sat Nov 30, 2019 4:03 am
warren has tried to buy some private companies with that money but it did not go through . tech data was one .

he is on the hunt to buy but he has not found what he is looking for . don't forget he buys a lot of private companies we can't and they are uneffected in price by market drops since they dont trade on stock exchanges .
I just HAD to ask since you ARE a drummer / musician....but was the above a sly reference to...

https://www.youtube.com/watch?v=e3-5YC_oHjE

????????????!!!!!
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