Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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Xan
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Re: Stock scream room

Post by Xan » Tue Sep 17, 2019 11:49 am

If pmward is doing this in a 20% VP, then it doesn't sound like he's heading for destitution, however things may go for him.

pmward, you say that people should just ignore your posts if they disagree with your strategy. "It's just words on a page!" And yet when people disagree with your strategy (this IS a discussion forum, after all) you kind of fly off the handle. Perhaps you could take your own advice?

I don't know that all the technical mumbo-jumbo is necessarily off-topic in a scream room, but in general, folks are doing the PP and frequenting this forum because they don't want to have to deal with all that. And there have been some heavy doses of it here lately.

The most interesting thing, I think, is how pmward enjoys this kind of analysis, believes himself to be good at it (and I'm not disagreeing), and yet STILL has the kind of humility to be 80% PP. I think it's much easier for people to say "I don't want to do that" and end up at the PP, or "I'm bad at that" and end up at the PP. But to say "I'm good at it and I like it and yet I may be very wrong" is pretty impressive.
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Re: Stock scream room

Post by Cortopassi » Tue Sep 17, 2019 12:02 pm

pmward,

I have read through Sophie's responses, and none sound like an attack, more like her strong opinion. I don't think she's going to try to convert 100% of your allocation to the pp.

That said, I am 52. Not sure how old you are. I have tried it all, day trading, options, spreads, covered calls, passive (but overweight, like 100% on stocks), technicals, fundamentals, mining stocks, gold, silver, a couple newsletters, tips from friends (worst idea ever), stop losses, risk management, you name it.

Burned by every single one. Mainly likely because I was too emotional, not because the system was necessarily bad.

As I've grown older and more concerned about having enough money for the rest of my life, I have found nothing that let's me rest easy more than the pp. I am steering my kids into doing it (my older daughter opened a Roth IRA last month and it is 25/25/25/25) because I know they have zero interest in the mechanics of investing.

I say go for it, if you enjoy it. I did, at times. But mainly it generated stress. I had too many heart palpitations over the years when you wake up and hear something in the world or economy or earnings report just destroyed any gains you had and blew through your stop loss because it gapped down at the open! Then you have to hold the POS stock waiting to break back even, or average down (another worst idea ever, at least for me).

Everything conspired for a long time to make it not fun and way too stressful. But I kept at it because I believed I needed to be active to successfully save for retirement. I was wrong!
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Re: Stock scream room

Post by pmward » Tue Sep 17, 2019 3:03 pm

Xan wrote:
Tue Sep 17, 2019 11:49 am
If pmward is doing this in a 20% VP, then it doesn't sound like he's heading for destitution, however things may go for him.
Seriously, this! It's 20% of my portfolio. Lest we forget, Harry Browne himself was one of the greatest speculators in history... I think Sophie saying I'm going to retire penniless and broke because of having a 20% VP is beyond ridiculous. Seriously.
Xan wrote:
Tue Sep 17, 2019 11:49 am
The most interesting thing, I think, is how pmward enjoys this kind of analysis, believes himself to be good at it (and I'm not disagreeing), and yet STILL has the kind of humility to be 80% PP. I think it's much easier for people to say "I don't want to do that" and end up at the PP, or "I'm bad at that" and end up at the PP. But to say "I'm good at it and I like it and yet I may be very wrong" is pretty impressive.
Yes I am not infallible. I have had my fair share of losing trades. I also prioritize other things in my life above my brokerage accounts. I also agree 100% with Cortopassi that it is indeed stressful, and that was also a large part in why I limit my trades these days. So having the majority of my money in a PP and having a VP of which I make longer term trend trades (i.e. I'm not doing day trading or even short term swing trading these days) seems pretty reasonable, especially considering I'm only 37 and have an almost 60% savings rate.... I'm far from doomed to dying penniless...
sophie wrote:
Tue Sep 17, 2019 11:38 am
pmward: forgive my not copying your word salad here....

I had an uncle who thought as you did, that he could predict future stock performance of individual companies. He spent his working career as a Wall Street trader, so he was probably much better positioned to do that than you are. When he retired, he set himself up with a full set of computer screens, tie-in to live stock prices etc so he could keep playing the market. He was as fully convinced that he had all the systems worked out as you are.

He died penniless, after losing his retirement savings in the stock market. Near the end of his life, he had to sell his house and move to a rented apartment. Ironically it may have been fortunate that he developed lung cancer at a relatively young age (~70), after chain smoking for most of his life.

This forum is about not repeating scenarios like this. Unfortunately pmward, your future is a lot more likely to look like my uncle's than like the one the rest of us are setting ourselves up with. To be perfectly honest, you've come to the wrong place for this sort of thing.

So why is it not ok for someone to have 80% of their money in a PP, and 20% in a VP that they use to try to chase returns in order to try to reach their goals sooner? Especially since HB himself made his fortune speculating and condoned people having a VP to speculate with? Why is having no VP suddenly the only way deemed correct, and everyone else that does otherwise is doomed to being ostracized on the forum and being doomed to a future life of poverty? Why is someone that has 80% of their funds in a PP in the "wrong place"? This is seriously a joke. Half the active regular users on this forum do some form of active investing. I'm far from the only one. The only options you have are to a) ignore it and move on with your life b) stop coming here c) perform a culling and ban everyone that is not 100 all in PP, which would mean banning half of the active members on this forum. This is seriously a joke... and one that is not very funny.
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Re: Stock scream room

Post by Xan » Tue Sep 17, 2019 3:31 pm

pmward, I think things would go much better if you could let things go. You've posted many times walls of text of technical gibberish (at least, that's how it comes across). Some people have pointed out that they don't believe in what you're doing. Why can't you leave it at that? Why can't you "ignore it and move on with your life" as you demand they do?
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Re: Stock scream room

Post by Smith1776 » Tue Sep 17, 2019 4:05 pm

I'd like to chime in here with a link and perspective.

https://youtu.be/3EzdvkRgToY

That link is to a Yale lecture done by Robert Shiller on efficient markets. Right around the 42 minute mark he talks about technical analysis.

Shiller, tellingly, recalls a story where he presses Burton Malkiel on why A Random Walk Down Wall Street seems to be sorely lacking on sources in his technical analysis chapters. Malkiel claims that "studies" show that technical analysis doesn't work and shoots it down.

It turns out that Malkiel was being rather liberal with how he compiled his data and did a lot of, er, "extrapolation" to come to his conclusions. Shiller later concedes that when you brush aside these unfounded criticisms, he found that technical analysis wasn't quite as unfounded as people had made it out to be.

Not exactly a ringing endorsement for technical analysis, but the idea being perhaps that there's at least something there...
I still find the James Rickards portfolio fascinating.
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Re: Stock scream room

Post by pmward » Tue Sep 17, 2019 4:14 pm

Xan wrote:
Tue Sep 17, 2019 3:31 pm
pmward, I think things would go much better if you could let things go. You've posted many times walls of text of technical gibberish (at least, that's how it comes across). Some people have pointed out that they don't believe in what you're doing. Why can't you leave it at that? Why can't you "ignore it and move on with your life" as you demand they do?
I have tried to exit this discussion so many times... I've said time and time again that I do not care to debate this, and that I have no interest in trying to change anyone's pre-existing beliefs. I even went so far as to give in and create an isolated thread in the VP forum for any "technical gibberish" last week to compromise. I had "moved on with my life". Then I get quoted by someone up here asking a question. Then I responded to the question I was asked thinking everything had blown over, and the torches and pitchforks come out anew from people I was not responding to. You really do not understand how frustrating this is. I honestly don't even know why I'm even still here... I really enjoyed this forum when I found it last year, and it's sad that in the last week I've been completely ostracized from the forum simply because of stating some "technical gibberish" and views that go against the typical dogma of the board. I thought this forum was a bit more open minded, or at least tolerant of opposing view. Apparently, I was very wrong in that assumption.
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Re: Stock scream room

Post by Xan » Tue Sep 17, 2019 5:00 pm

pmward wrote:
Tue Sep 17, 2019 4:14 pm
Xan wrote:
Tue Sep 17, 2019 3:31 pm
pmward, I think things would go much better if you could let things go. You've posted many times walls of text of technical gibberish (at least, that's how it comes across). Some people have pointed out that they don't believe in what you're doing. Why can't you leave it at that? Why can't you "ignore it and move on with your life" as you demand they do?
I have tried to exit this discussion so many times... I've said time and time again that I do not care to debate this, and that I have no interest in trying to change anyone's pre-existing beliefs. I even went so far as to give in and create an isolated thread in the VP forum for any "technical gibberish" last week to compromise. I had "moved on with my life". Then I get quoted by someone up here asking a question. Then I responded to the question I was asked thinking everything had blown over, and the torches and pitchforks come out anew from people I was not responding to. You really do not understand how frustrating this is. I honestly don't even know why I'm even still here... I really enjoyed this forum when I found it last year, and it's sad that in the last week I've been completely ostracized from the forum simply because of stating some "technical gibberish" and views that go against the typical dogma of the board. I thought this forum was a bit more open minded, or at least tolerant of opposing view. Apparently, I was very wrong in that assumption.
You haven't been ostracized, you're certainly free to hold your opinion, and there are folks here who agree with you. Just don't take everything so personally. Really, go for a nice walk or something.

Fundamentally, you're on a forum primarily for people who explicitly want to avoid what you're talking about. You have to expect a little friction, no?
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Re: Stock scream room

Post by boglerdude » Wed Sep 18, 2019 1:05 am

PP drama xD

20% VP means you keep adding to it if it goes down. Go ahead and gamble, just call it gambling. Some poker players are better than others right

What Browne, Shiller etc think is just appeal to authority.

We cant all get PhDs in technical analysis and make money because its zero sum. Unless youre acting on economic news before the other players get it, and even that is dubious.
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Re: Stock scream room

Post by Cortopassi » Wed Sep 18, 2019 8:38 am

What I think of technical analysis is that it works, but the machines/algorithms see the crossovers, trend line breaks, etc, a gazillion times faster than humans, so unless you have an automated system directly connected to the market like HFT firms do, you are fighting a losing battle.

Fundamental analysis is great, until it isn't, i.e. unknown events, like a company warning on earnings. Same thing on fundamentals, with HFT trading, you have zero chance of getting out fast enough when something like this happens and the machines read the headlines.

So I choose not to play with individual stocks anymore. I say more power to you if you can and be successful at it. But I am in the same camp with Sophie; my bet would be is if we were to revisit this 15 years from now when you are 52 the likely situation is you will have stopped trying at some point because it wasn't turning a profit, or the stress and time in turning a profit wasn't worth it. And I'll be 67. Holy f&*k

This forum is a fun diversion with interesting people, and most are very polite.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 10:02 am

MediumTex had a practice of saying, “I’m buying Intel today”, or whichever stock. That was fun, and refreshingly honest, and we could follow along to see how he was doing based on his date of announcement. Everything else just feels like stocks are ready to go down, but then again they might not for a certain period of time and then they will go down..maybe, with no real takeaway.

To be able to follow along in real time with a specific selection starting on a known date and therefore price is a nice diversion from the highly reliable but boring pp.
Smith1776 wrote:
Tue Sep 17, 2019 4:05 pm
I'd like to chime in here with a link and perspective.

https://youtu.be/3EzdvkRgToY

That link is to a Yale lecture done by Robert Shiller on efficient markets. Right around the 42 minute mark he talks about technical analysis.

Shiller, tellingly, recalls a story where he presses Burton Malkiel on why A Random Walk Down Wall Street seems to be sorely lacking on sources in his technical analysis chapters.
...
I really admire Robert Shiller, so that means something to me, Smithers. Not that I would attempt analysis on my own anytime soon. If anything, I would use my relative’s newsletter that has a whole team of full-time quants behind it.
Cortopassi wrote:
Wed Sep 18, 2019 8:38 am
What I think of technical analysis is that it works, but the machines/algorithms see the crossovers, trend line breaks, etc, a gazillion times faster than humans, so unless you have an automated system directly connected to the market like HFT firms do, you are fighting a losing battle.
We should take all that computing power and focus it on modeling weather & climate like they do in Japan.
RIP Marcello Gandini
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Re: Stock scream room

Post by ochotona » Wed Sep 18, 2019 2:44 pm

There are many technical indicators, but I really don't understand why people would consider simple techniques like trading using the 200 day moving average to be "zero sum games". They're clearly not, they've worked for a very long time, as long as people have had equity markets. Might they not work any longer? Of course. But what would that mean? It would mean that markets would have to become and stay "trendless".. which means what? They flatline forever? That's like saying no more nighttime.
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:12 pm

boglerdude wrote:
Wed Sep 18, 2019 1:05 am
20% VP means you keep adding to it if it goes down.
That's correct. If you're using HB's method, you don't keep a certain percentage of your wealth in the VP bucket. Otherwise, it's just another leg of the PP. You have to keep them separate, and only rebalance within each bucket. So you would only add non-investment income to the VP, like wages.
Go ahead and gamble, just call it gambling. Some poker players are better than others right
*shrug*
It's clearly not gambling. But it's also not allocating. Buying stock in individual companies is closer to the traditional meaning of "investing" than buying a mutual fund is. I think most people nowadays understand investing to mean that you have some savings that you're trying to get a higher rate of return on somehow, as opposed to letting it sit in a checking account. But like dualstow said earlier, it's kinda semantics to argue what word you should use. Just say how you're doing it and duke it out.
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:14 pm

BTW I like hearing what Shiller has to say too. You can watch some of his Financial Markets lectures online.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 6:31 pm

Kriegsspiel wrote:
Wed Sep 18, 2019 6:12 pm
boglerdude wrote:
Wed Sep 18, 2019 1:05 am
20% VP means you keep adding to it if it goes down.
That's correct. If you're using HB's method, you don't keep a certain percentage of your wealth in the VP bucket. Otherwise, it's just another leg of the PP. You have to keep them separate, and only rebalance within each bucket. So you would only add non-investment income to the VP, like wages.
[\quote]


I guess different people handle it differently, right? You raise an interesting question. If the vp is “money you can afford to lose” (Harry’s words) do you replenish that once you lose it?

Most brains that choose a vp in the first place must get the itch to try again, unless they were lucky enough to really get badly burned early on.

If you actually made money in the vp from the beginning, you can always trim down to X%.

But when you say “you would only add-non-investment income to the VP”, it’s still money that could have been pp investment capital. Isn’t that another leg as well? A phantom limb?

Anyway, you just made me realize that I don’t know my own rules for my own vp. Most of it is quietly paying dividends and interest, but I should probably pay stricter attention to what share of the total it constitutes.
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Re: Stock scream room

Post by Kriegsspiel » Wed Sep 18, 2019 6:55 pm

dualstow wrote:
Wed Sep 18, 2019 6:31 pm
I guess different people handle it differently, right? You raise an interesting question. If the vp is “money you can afford to lose” (Harry’s words) do you replenish that once you lose it?

But when you say “you would only add-non-investment income to the VP”, it’s still money that could have been pp investment capital. Isn’t that another leg as well? A phantom limb?
I was referring to the wages that Harry said you can't re-earn. His point was that since you can't re-earn the wages, you shouldn't treat them haphazardly by throwing them away on speculative investments. I think his phrasing was that "your earned income is the source of your wealth" or something like that. So it's the fountainhead, not another leg.

I'm pretty sure he explicitly said do not transfer from the PP to the VP. If you screw up or get unlucky and your VP goes into the toilet, that's the way it goes, you just have less VP. Your PP is firewalled off from those losses.
If you actually made money in the vp from the beginning, you can always trim down to X%.

Anyway, you just made me realize that I don’t know my own rules for my own vp. Most of it is quietly paying dividends and interest, but I should probably pay stricter attention to what share of the total it constitutes.
Yup, you can take some winnings off the table. Or you can keep plowing them back into it. In my tax-deferred bucket I am exclusively stocks, because my intent is to let it keep it compounding until I'm 59.5. So if it does really well and constitutes a larger % of my total assets, that's fine with me. And if that turns out to be a bad strategy in a few decades.... hey, that's how she rolls.
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 7:58 pm

That all makes sense, especially firewalling the pp. At first it seemed strange that new money from wages would go to the vp, but - it has to come from somewhere. (My vp came from savings/windfall, so I hadn’t thought about it much. And yes, same deal as with my question about new money- it could have gone to the pp instead).
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Re: Stock scream room

Post by Smith1776 » Thu Sep 19, 2019 2:34 am

It can definitely be difficult to maintain that firewall between your PP and VP (that's what she said), even if you have an explicit plan to do so.

The temptation to replenish the VP with PP cash can also be hard to resist.

My PP components are all ETFs, while my VP components are all individual stocks. This difference in form has made it a little bit easier in my case.

If I used the same investment vehicles in both the PP and VP that might muddy the waters.
I still find the James Rickards portfolio fascinating.
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Re: Stock scream room

Post by sophie » Sat Sep 21, 2019 7:26 am

Yes, HB did indeed caution that the PP is not to be a pool to replenish the VP when your bets go bad. You have a fixed amount of cash to start your VP, and if you lose it, c'est la vie.

If your active stock trading is 20% of your assets, then you don't have a PP - you have an actively managed portfolio that happens to include some PP assets. If you're comfortable with that, more power to you - but it really is something different from the passive investing philosophy that's at the core of the PP.

Also note - the many discussions about stock signals that have dominated the board lately were not (as now claimed) limited to VP speculation - I read these as applying also to the PP stock allocation. Please chime in if that's not correct. It would be good to clarify this because people new to the PP sometimes come here for information, and they could end up getting mixed/confusing messages.
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Re: Stock scream room

Post by Cortopassi » Mon Nov 25, 2019 3:11 pm

Anybody getting concerned that in the past <2 months, market indices have risen anywhere from 10-15%?

30% year so far for Nasdaq. Is it warranted?

How long ago I would have jumped out if not for the PP, thinking this is unsustainable....!
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Re: Stock scream room

Post by dualstow » Mon Nov 25, 2019 3:22 pm

Cortopassi wrote:
Mon Nov 25, 2019 3:11 pm
Anybody getting concerned that in the past <2 months, market indices have risen anywhere from 10-15%?

30% year so far for Nasdaq. Is it warranted?

How long ago I would have jumped out if not for the PP, thinking this is unsustainable....!
But we haven't gotten to the irrational exuberance part yet.
RIP Marcello Gandini
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Re: Stock scream room

Post by ochotona » Mon Nov 25, 2019 3:40 pm

Some really good ST indicators are the RSI of course, and the deviation of the weekly or monthly candle from the 5 period exponential moving average. When the entire candle is above the average line, give the buying a rest... wait until it reconnect. It will. Same on the downside. Stop selling. RSI suggests overbought on a daily basis, and pretty much weekly as well. I'm not in a hurry with my pension lump-sum. I think there has to be a pull-back.
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Re: Stock scream room

Post by dualstow » Mon Nov 25, 2019 3:52 pm

I don't know much about candles -- the Trader Joe's honeycrisp is very nice --
but it is interesting that the market has gone up so much on light trading volume.
If we get heavy volume, wow.
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Re: Stock scream room

Post by ochotona » Thu Nov 28, 2019 7:10 pm

Harry Dent is now selling a -70 to -90% stock market decline narrative. -90% would bring us back to July August 1987.

https://seekingalpha.com/article/4302114?source=ansh
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Re: Stock scream room

Post by Pet Hog » Fri Nov 29, 2019 2:17 am

ochotona wrote:
Thu Nov 28, 2019 7:10 pm
Harry Dent is now selling a -70 to -90% stock market decline narrative. -90% would bring us back to July August 1987.

https://seekingalpha.com/article/4302114?source=ansh
I think the PP would do well -- or at least it would do no worse than (most) any other strategy and, therefore, do well in relative terms -- and we'd have a great stock buying opportunity. Even if the other three assets did nothing, and stocks declined by 90%, we'd go from 25/25/25/25 to 2.5/25/25/25 -- in other words, from 100 to 77.5, a decline in the PP of 22.5%. Or about as bad as the decline in stocks was late last year and affected those who were 100% stocks.
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Re: Stock scream room

Post by mathjak107 » Fri Nov 29, 2019 3:08 am

harry dent is likely the worst predictor in history ..why he bothers to still do this stuff escapes me .
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