The GOLD scream room

Discussion of the Gold portion of the Permanent Portfolio

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dualstow
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Re: The GOLD scream room

Post by dualstow » Sun Sep 12, 2021 9:15 am

Exactly.
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I Shrugged
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Re: The GOLD scream room

Post by I Shrugged » Mon Sep 13, 2021 2:04 pm

buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
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buddtholomew
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 2:06 pm

I Shrugged wrote:
Mon Sep 13, 2021 2:04 pm
buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
Within the confines of the 4 HBPP assets.
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Re: The GOLD scream room

Post by D1984 » Mon Sep 13, 2021 2:41 pm

buddtholomew wrote:
Mon Sep 13, 2021 2:06 pm
I Shrugged wrote:
Mon Sep 13, 2021 2:04 pm
buddtholomew wrote:
Fri Sep 10, 2021 1:02 pm
dualstow wrote:
Fri Sep 10, 2021 1:01 pm
buddtholomew wrote:
Fri Sep 10, 2021 12:56 pm
What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
A CAGR of 6-7%? That doesn’t sound so bad.
The problem is the opportunity cost.
Over that time I would have quadrupled my money.
You should have mega remorse for not loading up on Bitcoin 10-12 years ago.
Within the confines of the 4 HBPP assets.
Forgive me if I seem overly critical but.....

You appear to want/desire a portfolio that has all the upside of equities (i.e. no opportunity cost when the US equity market is going up) but at the same time has less volatility and less downside risk (i.e. something like the PP, Wellesley, Larry Portfolio, conservative allocation version of the Juicy Portfolio, Barbell Portfolio, Golden Butterfly, Desert Portfolio, etc) than a pure stock portfolio.

Unfortunately, that portfolio doesn't exist in real life (at least unless you are willing to engage in market timing and/or take a chance on active management). Even a simple 60/40 or 65/35 stock/ITT blend (whose upside or downside risk is dominated by equity market beta due to equities' much higher volatility than bonds) doesn't give you all the upside of stocks with less of the downside.

If you know of such a portfolio, please inform the rest of us about it so that we may profit by your wisdom. If, on the other hand, you don't know of such a portfolio (which I can't hold against you as I don't either), then why waste your time and energy complaining on here? Either accept the full measure of downside risk of a portfolio with a high equity allocation or accept the full measure of opportunity cost by going with a portfolio with a much lower equity allocation. Pick your poison and live with it. TANSTAAFL, Budd.
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 6:02 pm

vincent_c wrote:
Mon Sep 13, 2021 5:46 pm
Sometimes I don’t know if he is being serious. There seems to be an intelligent person there somewhere, but then there seems to be an inability to understand the most basic of concepts that lead us all here. However, there seems to be an acceptance if you know what I mean.

Like he knows how and why it works, he accepts it and even would in certain scenarios invest in it yet he cannot come to terms that it is in fact one of the, if not the best approach.
Don’t insult me by calling me intelligent :D

My main issue with the 4x25PP allocation is it diminishes the fact that stocks rise 7/10 years. Stocks are also projected to have the highest returns over time. Why then do we only allocate 25%?

LTT’s, Gold and Cash are projected to have lower returns over time yet we allocate 75% of the portfolio to these assets (compared to equities).

This agnostic approach (4x25%) to report construction seems unfounded and there is absolutely nothing magical about having equal percentages across each asset.

My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
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Re: The GOLD scream room

Post by barrett » Mon Sep 13, 2021 6:35 pm

buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
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Re: The GOLD scream room

Post by buddtholomew » Mon Sep 13, 2021 7:55 pm

barrett wrote:
Mon Sep 13, 2021 6:35 pm
buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
HAHA, “Budd Light Gold” is actually a beer that if found would grant you 2 tickets to the Super Bowl.
Love it!
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Re: The GOLD scream room

Post by barrett » Tue Sep 14, 2021 7:57 am

buddtholomew wrote:
Mon Sep 13, 2021 7:55 pm
barrett wrote:
Mon Sep 13, 2021 6:35 pm
buddtholomew wrote:
Mon Sep 13, 2021 6:02 pm
My personal allocation is 45/15/20/20 s/g/b/c which seems more appropriate for me. I’d love to divest out of gold even further but the taxes are quite ridiculous.
I kind of like that mix, actually. The Budd Gold Light Portfolio. Seriously, you get still have enough of the defensive assets to cushion a stock massacre. And enough stocks to hopefully satisfy your desire to be more equity heavy.

I think we sometimes forget that this is the gold SCREAM room. The rest of us should maybe have a gold resignation room.
HAHA, “Budd Light Gold” is actually a beer that if found would grant you 2 tickets to the Super Bowl.
Love it!
I only back tested from 2006 due to limited IAU data, but the Budd Light Gold has a Sharpe Ratio of 1.04 as compared to 0.80 for a traditional 60/40 portfolio. More Budd flavor ("Fucking Gold!!!") with 30% less risk!
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Re: The GOLD scream room

Post by I Shrugged » Tue Sep 14, 2021 8:45 am

I’m gonna guess that gold is the reason why.
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Re: The GOLD scream room

Post by buddtholomew » Tue Sep 14, 2021 10:15 am

It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
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Re: The GOLD scream room

Post by Mark Leavy » Tue Sep 14, 2021 10:47 am

buddtholomew wrote:
Tue Sep 14, 2021 10:15 am
It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
I hold it because:
a) It is uncorrelated with stocks, bonds, cash and real estate.
b) It can be held outside of the financial system
c) It is a store of value with a history of surviving any known type of economic collapse.

Other than that, not much reason to hold gold.
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Re: The GOLD scream room

Post by buddtholomew » Tue Sep 14, 2021 10:53 am

Mark Leavy wrote:
Tue Sep 14, 2021 10:47 am
buddtholomew wrote:
Tue Sep 14, 2021 10:15 am
It’s a love/hate relationship...

It seems lower interest rates drive gold higher and not inflationary pressures. Is that why I hold gold? Is that why you do?
I hold it because:
a) It is uncorrelated with stocks, bonds, cash and real estate.
b) It can be held outside of the financial system
c) It is a store of value with a history of surviving any known type of economic collapse.

Other than that, not much reason to hold gold.
All good reasons to hold gold.
Let me clarify my question, of the 4 economic climates, why do we hold gold - prosperity, inflation, deflation, recession?
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Re: The GOLD scream room

Post by dualstow » Tue Sep 14, 2021 1:09 pm

😂 @ Budd Lite Gold ®️ portfolio, great name.
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Re: The GOLD scream room

Post by I Shrugged » Tue Sep 14, 2021 4:31 pm

My answer would be the same as Mark's. In the early days, I would have said I'm holding it for inflation protection. But over time I came to strongly value the latter two of Mark's three points. It has attributes that just can't be had within the realm of dollar based assets.

I started out with just GLD. But I've diversified into more tangible forms. I like GLD for the convenience but it is also a dollar based asset, and I've got enough of those. I can see why a GLD or other ETF holder would be more inclined to just see it as a lower performing stock. If you get some ounces into the Texas Bullion Depository, or the vault in the Caymans, or Perth Mint, and physical, it becomes a much different asset. In my view.

To put it another way, if you have 8 figures all in dollar based assets, you are taking a risk of a certain type and it can be mitigated. It's not like you need the extra performance that you would have gotten if the gold allocation had been in stocks.
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Re: The GOLD scream room

Post by buddtholomew » Thu Sep 16, 2021 8:46 am

Fucking hell
Sharpe ratio huh
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Re: The GOLD scream room

Post by Ugly_Bird » Thu Sep 16, 2021 8:56 am

buddtholomew wrote:
Thu Sep 16, 2021 8:46 am
Fucking hell
Alien invasion, zombie apocalypse, WW III?
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Re: The GOLD scream room

Post by buddtholomew » Thu Sep 16, 2021 8:57 am

Ugly_Bird wrote:
Thu Sep 16, 2021 8:56 am
buddtholomew wrote:
Thu Sep 16, 2021 8:46 am
Fucking hell
Alien invasion, zombie apocalypse, WW III?
When you have 2M in piece of shit gold then we can talk.
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Re: The GOLD scream room

Post by Ugly_Bird » Thu Sep 16, 2021 9:25 am

buddtholomew wrote:
Thu Sep 16, 2021 8:57 am
Ugly_Bird wrote:
Thu Sep 16, 2021 8:56 am
buddtholomew wrote:
Thu Sep 16, 2021 8:46 am
Fucking hell
Alien invasion, zombie apocalypse, WW III?
When you have 2M in piece of shit gold then we can talk.
2M in Au would correspond to about 8M in PP... or 320k a year at 4% withdrawal rate. LOL, no need to talk there but enjoy life :-)
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Re: The GOLD scream room

Post by Cortopassi » Thu Sep 16, 2021 11:11 am

As usual (but I check less and less) for whatever pulled out of the ass reason gold gets walloped today. Just as it was deciding to peek back above $1800.

And let's not even talk silver. You want to talk about a black hole that hasn't seen $30 in 8 years. Sheesh.

If you are into these things, gold looks like a huge cup and handle since about 2011. Ready for the moon, in the next 1-10 years.... ;)

I do better the less I look, just like the less I look at news.

I have no interest or drive to try to find some better or optimal allocation vs. what I have. I'd be gyrating constantly, wondering if I could improve, why did I make this vs. that decision, etc.
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Re: The GOLD scream room

Post by buddtholomew » Thu Sep 16, 2021 12:26 pm

The problem with arguing against gold is that neither this site nor the Permanent Portfolio would continue to exist.
It’s just not worth the headache anymore.
I don’t care if it doubles from here, it would have to quadruple to match my stock returns.

10+ years of heartache for nothing.
REITs +30% YTD, gold down double digits.
Inflation protection my ass.
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Re: The GOLD scream room

Post by murphy_p_t » Thu Sep 16, 2021 1:15 pm

Couldn't resist nibbling on some smaller miners, cde, hl

I did resist selling some senior miners to take a bigger bite on the Juniors
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Re: The GOLD scream room

Post by buddtholomew » Thu Sep 16, 2021 1:50 pm

vincent_c wrote:
Thu Sep 16, 2021 1:00 pm
buddtholomew wrote:
Thu Sep 16, 2021 12:26 pm
The problem with arguing against gold is that neither this site nor the Permanent Portfolio would continue to exist.
It’s just not worth the headache anymore.
I don’t care if it doubles from here, it would have to quadruple to match my stock returns.

10+ years of heartache for nothing.
REITs +30% YTD, gold down double digits.
Inflation protection my ass.
Are you able to hold as much stocks if you didn't hold gold?

If you can, you're doing yourself a disservice by holding gold. You hold gold so you can allocate a higher % of your wealth into stocks so someone who only held cash might have a risk tolerance that tells them they can only hold 50% stocks, but if they held 25% gold they might be able to allocated 75% to stocks. Don't you understand that?

You don't have an opportunity cost because you would never have taken the risks.
I don’t understand this at all since the amount of stocks I hold has nothing to do with whether I own gold.
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Re: The GOLD scream room

Post by dualstow » Thu Sep 16, 2021 2:31 pm

Cortopassi wrote:
Thu Sep 16, 2021 11:11 am
As usual (but I check less and less) for whatever pulled out of the ass reason gold gets walloped today. Just as it was deciding to peek back above $1800.

And let's not even talk silver. You want to talk about a black hole that hasn't seen $30 in 8 years.
I just ordered coins yesterday before the big drop. Glad I only ordered 2. It won’t make much of a difference in the long run.

I can’t take silver seriously. I have only bought it to give it away.

@Budd- if I had 2MM in gold, I think I would be ecstatic. First I’d insure it, and then I’d take a treasure bath.
buddtholomew wrote:
Thu Sep 16, 2021 1:50 pm
the amount of stocks I hold has nothing to do with whether I own gold.
I remember in the past you said something about not being able to relax. Something like, one always wants more, need to ensure a good life for the kids, etc. It’s clear you own enough stocks that you’re not going to go broke, and I think that should make it easier to hold gold for the long term, knowing that, like fire insurance, it might never come to the rescue in your lifetime. But it’s there.
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Re: The GOLD scream room

Post by buddtholomew » Thu Sep 16, 2021 2:58 pm

Congrats Gold, you doubled my worst performer of the day.
Not sure I can count on Gold for disaster insurance.
It would probably just go down and be worthless.
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Re: The GOLD scream room

Post by Mark Leavy » Thu Sep 16, 2021 8:33 pm

vincent_c wrote:
Thu Sep 16, 2021 8:31 pm
buddtholomew wrote:
Thu Sep 16, 2021 1:50 pm
I don’t understand this at all since the amount of stocks I hold has nothing to do with whether I own gold.
I finally understand why you don’t understand then.
ALOL
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