Today is one of those days where the cash component went up nicely

Discussion of the Cash portion of the Permanent Portfolio

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MadMoneyMachine

Today is one of those days where the cash component went up nicely

Post by MadMoneyMachine » Wed May 19, 2010 9:45 am

Stocks, Bonds, Gold all down today. I guess the cash component is more valuable in relation to each of them. Not that I'm watching that closely or anything...
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MediumTex
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Re: Today is one of those days where the cash component went up nicely

Post by MediumTex » Wed May 19, 2010 9:24 pm

Bonds were up today.

TLT up .33%
EDV up 1.12%

It looks like your post was from early in the day.
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
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craigr
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Re: Today is one of those days where the cash component went up nicely

Post by craigr » Thu May 20, 2010 12:23 pm

You can sense the markets getting wound tighter and tighter like a spring. I wonder what's going to pop?
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Re: Today is one of those days where the cash component went up nicely

Post by MediumTex » Thu May 20, 2010 12:54 pm

craigr wrote: You can sense the markets getting wound tighter and tighter like a spring. I wonder what's going to pop?
I wouldn't bet on it, of course, but it seems to me that treasurys are the obvious winner out of the all of the current market confusion.

Add one European continent full of rats jumping off a sinking ship and treasurys could make a powerful move that may surprise everyone.

I have noticed that the German 30 year has been below 4% for a long time and I have often wondered what kind of person would think that German debt was less risky than U.S. debt when it appears that Germany is basically going to have to either bail out much of the EU or else preside over the demise of the euro, which couldn't possibly be good for anyone near the eurozone.

It's important to remember, too, that all we hear about is what the media deems to be the most entertaining storylines.  Thus, at any given point in time investors are simply unaware of over 99% of what is actually going on.  Think about situations in which you were personally involved that were also covered by the media--how good a job did the media do of accurately reporting the story?  (check my sig line)

I think that part of the brilliance of HB's approach to investing is that he also allowed for a distorted information flow to the individual without it messing up his investment returns.  Check out the movie "The Sting" or Goldman Sachs' annual report for more on this method of separating people from their money.
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
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