The GOLD scream room

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
seajay
Executive Member
Executive Member
Posts: 430
Joined: Mon Aug 09, 2021 11:11 am

Re: The GOLD scream room

Post by seajay » Mon Aug 09, 2021 12:18 pm

flyingpylon wrote:
Thu Jun 17, 2021 11:17 am
So much of investing is psychological and emotional. After hanging out here for a decade or so, I've seen various posters come and go. It's apparent that some folks always need to feel like they're "winning". Like every single day. That's fine, but that mindset is not a good fit for PP-style portfolios because some "worthless" asset will always be holding them back and provoking outbursts on internet forums.
Weren't the 1980's/1990's a case of sell some shares to buy more gold only to see the price of gold decline further ... for two decades. One of the assets will always tend to be down and perhaps repeatedly declining for long periods.

Fundamentally you're rewarded for taking on risk exposure. No risk, no reward. Over the 1980/1990's whilst the price of gold declined rebalancing would have seen you accumulate multiple more ounces of gold. When that down-trend reversed so some of those accumulated ounces of gold were released to buy more stock shares/whatever.

Some say long dated treasury have only one way to go, and have been saying such for years. You could try your luck at selling completely, try and time the market, but that usually doesn't work out as expected. Selling out means having to time re-entry again, better to just hold and where one or more of the assets tends to more than offset the losses of the down asset(s) than it is to completely dump one of the assets and hope that you'll buy back in again at a appropriate time - which more often you wont.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » Mon Aug 09, 2021 2:04 pm

Cortopassi wrote:
Sun Aug 08, 2021 6:31 pm
And there goes a couple months of gains in two days!
I bought twice recently, a single ounce each time, just before the drop(s). In the long run it shouldn’t matter. I’m kind of tempted to buy one more time, but no rush.
RIP Marcello Gandini
modeljc
Executive Member
Executive Member
Posts: 271
Joined: Sat Feb 04, 2012 11:52 am

Re: The GOLD scream room

Post by modeljc » Mon Aug 09, 2021 2:45 pm

buddtholomew wrote:
Mon Aug 09, 2021 10:09 am
Dog shit as usual
Yep! It will fall during negative rates of 4 or 5%! A Fed increase move of 1/8th of a point will kill the price as fear will set in for a continued move in rates going forward. Trillions flowing around and nobody believes in this asset class! Not even foreigners with currencies wearer than the dollar.

Yep I have my 25%. But I lived through 1980 and was dancing in the streets when gold hit $843 on a London fix. Treasury rates went to 20% and gold quickly fell to $420. Woke up in 1999 and it was $259. Think of the missed money for 20 years just with a money market fund or any other investment.
Don
Executive Member
Executive Member
Posts: 286
Joined: Fri Apr 21, 2017 6:21 pm

Re: The GOLD scream room

Post by Don » Mon Aug 09, 2021 6:56 pm

dualstow wrote:
Mon Aug 09, 2021 2:04 pm
Cortopassi wrote:
Sun Aug 08, 2021 6:31 pm
And there goes a couple months of gains in two days!
I bought twice recently, a single ounce each time, just before the drop(s). In the long run it shouldn’t matter. I’m kind of tempted to buy one more time, but no rush.
So it's all your fault then. I thought so.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » Tue Aug 10, 2021 7:43 am

O0
RIP Marcello Gandini
modeljc
Executive Member
Executive Member
Posts: 271
Joined: Sat Feb 04, 2012 11:52 am

Re: The GOLD scream room

Post by modeljc » Thu Aug 12, 2021 1:43 pm

modeljc wrote:
Mon Aug 09, 2021 2:45 pm
buddtholomew wrote:
Mon Aug 09, 2021 10:09 am
Dog shit as usual

Gold acting very strong today and managed to stay even in the face of the news!

https://digital.olivesoftware.com/Olive ... emocratNW/


Yep! It will fall during negative rates of 4 or 5%! A Fed increase move of 1/8th of a point will kill the price as fear will set in for a continued move in rates going forward. Trillions flowing around and nobody believes in this asset class! Not even foreigners with currencies wearer than the dollar.

Yep I have my 25%. But I lived through 1980 and was dancing in the streets when gold hit $843 on a London fix. Treasury rates went to 20% and gold quickly fell to $420. Woke up in 1999 and it was $259. Think of the missed money for 20 years just with a money market fund or any other investment.
PP67
Executive Member
Executive Member
Posts: 188
Joined: Tue Dec 27, 2011 8:19 am

Re: The GOLD scream room

Post by PP67 » Fri Aug 13, 2021 8:47 am

Per Tyler's Portfolio Charts, the Ulcer Index of a 100% Gold portfolio is a PepCid Complete 47.8...

Some days/weeks/months/years it's tough to tour the sausage factory...
modeljc
Executive Member
Executive Member
Posts: 271
Joined: Sat Feb 04, 2012 11:52 am

Re: The GOLD scream room

Post by modeljc » Fri Aug 13, 2021 11:35 am

I asked google if Gold was considered an asset class? The reply:

Gold as an asset class serves as an excellent hedge against inflation. Gold has consistently returned 2% over and above inflation for the past 28 years. Gold is also highly liquid as an asset class, because it is a global standard. This means gold can be bought and sold at any time, anywhere across the world.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » Fri Aug 13, 2021 2:45 pm

PP67 wrote:
Fri Aug 13, 2021 8:47 am
Per Tyler's Portfolio Charts, the Ulcer Index of a 100% Gold portfolio is a PepCid Complete 47.8...

Some days/weeks/months/years it's tough to tour the sausage factory...
O0 Yeah, all gold is a diet of onions and ghost peppers, requiring Pepcid.
The pp is like a diet of miso soup, totally alkaline.
RIP Marcello Gandini
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » Thu Sep 09, 2021 8:54 am

Gold is a terrible investment vs stocks, but this tweet from Sowell makes me think about gold as savings.

https://twitter.com/ThomasSowell/status ... 61670?s=20
RIP Marcello Gandini
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » Thu Sep 09, 2021 1:34 pm

p.s. looks like Vinny retweeted it.
RIP Marcello Gandini
User avatar
vnatale
Executive Member
Executive Member
Posts: 9422
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: The GOLD scream room

Post by vnatale » Thu Sep 09, 2021 1:43 pm

dualstow wrote:
Thu Sep 09, 2021 1:34 pm

p.s. looks like Vinny retweeted it.


Of course! After you had above alerted me to its existence...
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 12:56 pm

What a useless asset.
I’ve held for 10-12 years and doubled my money.
Selling today.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14225
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: The GOLD scream room

Post by dualstow » 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.
I think that’s what I got from PepsiCo.
RIP Marcello Gandini
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » 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.
User avatar
Tortoise
Executive Member
Executive Member
Posts: 2751
Joined: Sat Nov 06, 2010 2:35 am

Re: The GOLD scream room

Post by Tortoise » Fri Sep 10, 2021 1:41 pm

There's an asset class out there with a guaranteed CAGR of 12-15% over any 10-12 year period? Nice! What is it?
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 2:58 pm

It’s called stocks.
Anyway, this portfolio is dogshit, always has been and always will be.
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 3:10 pm

vincent_c wrote:
Fri Sep 10, 2021 3:06 pm
buddtholomew wrote:
Fri Sep 10, 2021 2:58 pm
It’s called stocks.
Anyway, this portfolio is dogshit, always has been and always will be.
Yeah, one of the best risk adjusted returns is dogshit. You're just not using the right amount of leverage so I'll agree with you that the portfolio is bad since the standard construction is 4x25% without leverage.
Yes 4x25 is meaningless and so leveraging meaningless still leaves you with nothing.
Risk adjusted is fine but leaving 2M on the table for risk adjusted underperformance is this portfolios MO.
What a waste of time, energy and money.
No wonder only a handful of people adhere to this nonsense.
User avatar
Tortoise
Executive Member
Executive Member
Posts: 2751
Joined: Sat Nov 06, 2010 2:35 am

Re: The GOLD scream room

Post by Tortoise » Fri Sep 10, 2021 3:36 pm

Tortoise wrote:
Fri Sep 10, 2021 1:41 pm
There's an asset class out there with a guaranteed CAGR of 12-15% over any 10-12 year period? Nice! What is it?
buddtholomew wrote:
Fri Sep 10, 2021 2:58 pm
It’s called stocks.
Anyway, this portfolio is dogshit, always has been and always will be.

You might want to double-check your math, Bud:
During the best 10-year period (1949-1958), the S&P 500 delivered 17.9% annual returns.

During the worst 10-year period (1999-2008), the S&P 500 delivered -3.8% annual returns.

The median annual returns for 10-year periods since 1928 has been 6.5%.

The S&P 500 delivered negative annualized returns in 11 out of 81 10-year periods (13.6% of 10-year periods) since 1928.

https://fourpillarfreedom.com/heres-how ... ince-1928/
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 3:53 pm

Tortoise wrote:
Fri Sep 10, 2021 3:36 pm
Tortoise wrote:
Fri Sep 10, 2021 1:41 pm
There's an asset class out there with a guaranteed CAGR of 12-15% over any 10-12 year period? Nice! What is it?
buddtholomew wrote:
Fri Sep 10, 2021 2:58 pm
It’s called stocks.
Anyway, this portfolio is dogshit, always has been and always will be.

You might want to double-check your math, Bud:
During the best 10-year period (1949-1958), the S&P 500 delivered 17.9% annual returns.

During the worst 10-year period (1999-2008), the S&P 500 delivered -3.8% annual returns.

The median annual returns for 10-year periods since 1928 has been 6.5%.

The S&P 500 delivered negative annualized returns in 11 out of 81 10-year periods (13.6% of 10-year periods) since 1928.

https://fourpillarfreedom.com/heres-how ... ince-1928/
I missed you saying “any”.
Check your math last few years to see how pathetic PP has performed over a 60/40.
User avatar
Tortoise
Executive Member
Executive Member
Posts: 2751
Joined: Sat Nov 06, 2010 2:35 am

Re: The GOLD scream room

Post by Tortoise » Fri Sep 10, 2021 4:21 pm

buddtholomew wrote:
Fri Sep 10, 2021 3:53 pm
I missed you saying “any”.
Check your math last few years to see how pathetic PP has performed over a 60/40.
Backtest on ETF Replay shows the following performance over the past 3 years:

60/40 (VTI/BND): 46% total return (13.4% CAGR), 13.8% volatility, -22% max drawdown
4x25 PP (VTI/TLT/IAU/SHV): 37.7% total return (11.3% CAGR), 7.6% volatility, -11.4% max drawdown

So over that period, the PP achieved ~82% of the total return of the 60/40 with half the volatility and half the max drawdown. Somewhat lower return, yes, but dogshit? ::)

Looks like the standard PP tradeoff to me: You exchange some return for lower volatility and lower max drawdown.
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 4:28 pm

The problem is it’s always lower with less compounding.
Difficult for me to eat a sharpe ratio.
User avatar
Tortoise
Executive Member
Executive Member
Posts: 2751
Joined: Sat Nov 06, 2010 2:35 am

Re: The GOLD scream room

Post by Tortoise » Fri Sep 10, 2021 4:31 pm

I agree that you can't eat the PP's Sharpe ratio, but it does allow me to eat my food without puking due to stomach-churning drawdowns. ;)
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: The GOLD scream room

Post by buddtholomew » Fri Sep 10, 2021 4:32 pm

Tortoise wrote:
Fri Sep 10, 2021 4:31 pm
I agree that you can't eat the PP's Sharpe ratio, but it does allow me to eat my food without puking due to stomach-churning drawdowns. ;)
Yeah...but damn it never shines anymore.
SomeDude
Executive Member
Executive Member
Posts: 1080
Joined: Sun Nov 22, 2020 1:45 am

Re: The GOLD scream room

Post by SomeDude » Fri Sep 10, 2021 4:48 pm

I'm pretty sure gold has beaten stocks for the last 25 years, and that's at the end of I think literally the biggest bull market in US stock market history.

It might not be the end, but its long long into it. Think about that....the biggest bull market in history and gold has outperformed it for 25 years......maybe more.
Post Reply