Question for Xan re Searching

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Maddy
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Question for Xan re Searching

Post by Maddy » Wed Sep 28, 2022 10:31 am

This morning I was wondering whether anyone here has been hedging LT treasuries with TBT. When I searched for "TBT," I got the response that the search term was too short to be recognized. I've encountered this before when I've searched for a thread discussing a particular ETF. Is there a workaround for this?
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Re: Question for Xan re Searching

Post by Xan » Wed Sep 28, 2022 11:10 am

Maddy wrote:
Wed Sep 28, 2022 10:31 am
This morning I was wondering whether anyone here has been hedging LT treasuries with TBT. When I searched for "TBT," I got the response that the search term was too short to be recognized. I've encountered this before when I've searched for a thread discussing a particular ETF. Is there a workaround for this?
By default the forum's database's fulltext search index only indexes strings of four or more characters. It looks like that setting can be changed, but it's a database setting rather than a forum setting, and will require rebuilding the index. I'll see if I can do it soon.

In the meantime, you can try entering this into Google:
tbt site:gyroscopicinvesting.com

Looks like just two real results:
viewtopic.php?f=1&t=12573
viewtopic.php?t=1428&start=12
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Re: Question for Xan re Searching

Post by Maddy » Wed Sep 28, 2022 2:33 pm

Thank you!
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Re: Question for Xan re Searching

Post by Kbg » Thu Sep 29, 2022 10:02 am

Maddy,

I'd caution against hedging with TBT unless your market timing skills are good. Generally, you will be better off just taking some money off the table.

One thing I would definitely look into is how the swaps work for these...if the ETF is paying the swap fees (vs. receiving them), then there's a huge barrier to overcome (currently per some stuff I saw on Reddit somewhere between 8-9% + management fee on top of that. That's a huge barrier but those estimates are for the 3x long ETFs.)

On the flip side...maybe hedging will continue to work well so long as the Fed indicates they are going to raise rates???
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Re: Question for Xan re Searching

Post by Maddy » Thu Sep 29, 2022 2:58 pm

Kbg, my market timing skills suck. In fact, I'm absolutely certain that it was my reluctant entry into long-term bonds--the one segment of the PP that I had been holding back on--that caused this whole fiasco. If you go back and look at the date of the thread where I discuss my intent to buy my first 30-year bond, you'll see that it was not long after that that treasuries began tanking. I'm now down about 50% on that puppy.

Would you believe that I have never, even once, made money in the market? Not one year in the green. Seriously, I'm that bad at it. I'm jinxed.
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Re: Question for Xan re Searching

Post by vnatale » Thu Sep 29, 2022 5:31 pm

Maddy wrote:
Thu Sep 29, 2022 2:58 pm

Kbg, my market timing skills suck. In fact, I'm absolutely certain that it was my reluctant entry into long-term bonds--the one segment of the PP that I had been holding back on--that caused this whole fiasco. If you go back and look at the date of the thread where I discuss my intent to buy my first 30-year bond, you'll see that it was not long after that that treasuries began tanking. I'm now down about 50% on that puppy.

Would you believe that I have never, even once, made money in the market? Not one year in the green. Seriously, I'm that bad at it. I'm jinxed.


Everyone's bad at it. That is why the safest (and the majority of the times to get the best return) is to just invest in index funds. Then you get the market returns.
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."
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Re: Question for Xan re Searching

Post by Kbg » Fri Sep 30, 2022 8:14 am

Sorry to hear that Maddy. Were you going to do the 5 or 10 year hold and roll? If so, stick with your plan. It will work out over time.

If that was too much risk you are finding out, then you may want to slide down to ITTs. You get most of the return and less volatility by quite a bit and it's clear from backtesting if you roll your cash into ITTs then it's pretty much the same as doing the barbell thing. If you are a do it yourselfer, practically speaking an ITT ladder is much easier to manager, buy, hold 10, 7 or 5 years to maturity repeat or spend if you are in drawdown phase.
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Re: Question for Xan re Searching

Post by Maddy » Fri Sep 30, 2022 9:38 am

Kbg wrote:
Fri Sep 30, 2022 8:14 am
Sorry to hear that Maddy. Were you going to do the 5 or 10 year hold and roll? If so, stick with your plan. It will work out over time.

If that was too much risk you are finding out, then you may want to slide down to ITTs. You get most of the return and less volatility by quite a bit and it's clear from backtesting if you roll your cash into ITTs then it's pretty much the same as doing the barbell thing. If you are a do it yourselfer, practically speaking an ITT ladder is much easier to manager, buy, hold 10, 7 or 5 years to maturity repeat or spend if you are in drawdown phase.
Kbg, Yes, I was planning on staying pretty close to the original PP methodology. My problem is that I did not dollar-cost-average in; I put 25% into a single 30-year treasury bond in one lump sum. Unfortunately the rate at that time was 1.8 percent. So I have no ladder.

Thanks for the information on ITTs. They may be a better match for my temperment.
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Re: Question for Xan re Searching

Post by Kbg » Tue Oct 04, 2022 12:24 pm

The great thing about bonds is that a pencil and some scratch paper will tell you everything you really know to make an informed decision. If you are thinking of swapping out or adjusting you can precisely figure out the monetary tradeoffs involved. Unfortunately, you will have to make some assumptions about where interest rates are going to be in the future. We are actually getting into "the normal zone" now so a not bad assumption is interest rates are going to be somewhere between 4-6%.

One thing to consider unless you are spending down is to reinvest the interest payments in either new 30 year issues or start at a place further forward where you feel comfortable. Implicit in total yield calculations is the reinvestment of interest received.
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