The GOLD scream room

[dualstow]

Interesting that as some investors panic, gold is going up while bitcoin is going down. That doesn’t mean bitcoin won’t “win” eventually of course, but you can see that people still trust gold.

I hate when people call Bitcoin "digital gold".
…
Current situation shows it is not.

Yep, it’s just marketing. Everything gets compared to gold at some point. I guess it was a foregone conclusion that crypto would, too.

[seajay]

Yep, it’s just marketing. Everything gets compared to gold at some point. I guess it was a foregone conclusion that crypto would, too.

Bitcoin:

• Fungible? Not without a audit trail of interchanges

• Divisible? Not without a audit trail

• Tangible? No, only exists as a digital record, isn't backed by physical assets, its value is derived from scarcity and trust.

• Non harmful solid rather than inert gas or liquid? Nope.

• Can be passed to others directly. No, not without a audit trail record to change the passport (private key).

• Requires others/third parties.

Previously many saw bitcoin as a alternative to gold, sold gold to buy bitcoin, nowadays that seems to be reversing. Bitcoin regulations/controls make it little different to holding a leveraged tech stock index fund.

[dualstow]

Previously many saw bitcoin as a alternative to gold, sold gold to buy bitcoin, nowadays that seems to be reversing.

Of course the intangibility is generally seen as a plus.
Divisible: isn’t it the ultimate divisible instrument?

[seajay]

Previously many saw bitcoin as a alternative to gold, sold gold to buy bitcoin, nowadays that seems to be reversing.

Of course the intangibility is generally seen as a plus.
Divisible: isn’t it the ultimate divisible instrument?

There are +ve and -ve sides. Tangible in-hand assets have distinct advantages/disadvantages, ditto intangible. In hand physical assets have the advantage that for someone else to take some/all of that they have to physically come and prise them out of your hands, with digital/intangible they might take some/all of the value remotely by pressing buttons. When fungible, moving tangible assets across international borders might be performed by conversion to intangible, digitally transferring that and then converting to tangible again at the desired target location - sell physical gold for PAXG locally, convert PAXG to physical gold at the target destination.

Divisibility without third party involvement/sight may in some cases be desirable, in other cases a audit trail might be desired.

Bitcoin provides no additional benefit in the divisibility and intangibility aspect as other alternative assets such as stocks (given that nowadays some brokerages provide the option of buying/selling partial stock index shares).

The sole benefit of crypto is the public/distributed ledger basis, you aren't reliant/dependent upon ledgers that banks maintain. But where anyone can view that ledger.

The State can control banks that operate domestically, as can it control crypto exchanges that operate domestically. There's also a increasing move towards data sharing with other countries, both for bank accounts and crypto exchanges. Where those that don't opt into that are penalised/isolated.

Bitcoin is little different to something like TQQQ (3x leveraged QQQ), physical gold has distinct benefits (and risks) that can only be replicated with other similar in-hand assets such as silver ...etc. but where weight to value of silver is considerably higher than gold (gold/silver ratio of 80/whatever).

[dualstow]

Previously many saw bitcoin as a alternative to gold, sold gold to buy bitcoin, nowadays that seems to be reversing.

Of course the intangibility is generally seen as a plus.
Divisible: isn’t it the ultimate divisible instrument?

There are +ve and -ve sides. Tangible in-hand assets have distinct advantages/disadvantages, ditto intangible. In hand physical assets have the advantage that for someone else to take some/all of that they have to physically come and prise them out of your hands, with digital/intangible they might take some/all of the value remotely by pressing buttons. When fungible, moving tangible assets across international borders might be performed by conversion to intangible, digitally transferring that and then converting to tangible again at the desired target location - sell physical gold for PAXG locally, convert PAXG to physical gold at the target destination.

Divisibility …

I don’t know what +ve is, but I should add that nowadays there are so-called wrench attacks in which a holder of crypto can be physically coerced to give up his wallet password, whereas with gold the would-be robbers have the problem of getting in and out of your bank vault.

[ochotona]

Ouch day today. About a week ago I sold all of my miners because the ratio GDX:GLX's RSI had just blown up to way overbought. A few weeks ago, I sold 1/3 of my gold, and it's sitting in SGOV. I'm not sure I'll buy miners again.

[Ugly_Bird]

Ouch day today. About a week ago I sold all of my miners because the ratio GDX:GLX's RSI had just blown up to way overbought. A few weeks ago, I sold 1/3 of my gold, and it's sitting in SGOV. I'm not sure I'll buy miners again.

I'm so glad I have rebalanced! :-)

[flyingpylon]

Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.

[I Shrugged]

Good timing for you two. I've never been able to sell at the top.
I think it has higher tops ahead. Probably not in the short term though. I wonder if this drop is due to profit-taking by Wall St.

[dualstow]

Good timing indeed. Well done, guys.
It’s also higher than I ever dreamed or expected, even after this 5-6% hit.

Behold, some miners that I was required to buy for Dad per his newsletter. (They’re all still up overall, though).

IMG_0705.jpeg (368.54 KiB) Viewed 179 times

[dockinGA]

Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.

Amazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.

As an aside, it's just another example of the importance of having some type of plan, written or otherwise, and then sticking to it through good times and bad. When I bought a bunch of stocks in 2020 it felt like I was just lighting cash on fire, but I did it anyway because that was the plan. Yesterday felt like I was taking tons of future gains off the table (and I still feel that way), but there is at least some vindication today and increased resolve to just stick with the plan.

[Ugly_Bird]

just stick with the plan.

I look at this at a different angle: I'm not smart enough and do not have time to not to stick with the plan. So, I stick with the plan and staying the course.

[flyingpylon]

Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.

Amazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.

As an aside, it's just another example of the importance of having some type of plan, written or otherwise, and then sticking to it through good times and bad. When I bought a bunch of stocks in 2020 it felt like I was just lighting cash on fire, but I did it anyway because that was the plan. Yesterday felt like I was taking tons of future gains off the table (and I still feel that way), but there is at least some vindication today and increased resolve to just stick with the plan.

I made the same trade in March 2020 but it was more of a “YOLO” that worked out. I have since created this “may rebalance” thing to give myself some flexibility. If I wasn’t in the zone I would just chalk it up to market noise and ignore it as far as trading was concerned. But it also points out that there’s value to paying at least some attention to what markets are doing despite having a “lazy portfolio”. In this case I just felt that gold had jumped too far too fast so it was worth making a move. If it shoots up tomorrow or next week or whatever I would have had to rebalance anyway. Trades like this are fun but I hold other assets that prove I’m not so smart or lucky.

[stpeter]

Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.

I've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.

[Ugly_Bird]

Gold crossed into the "may rebalance" zone for my portfolio on Monday, which I define as within 2% of the "must rebalance" threshold. So I took advantage of that with a partial rebalance. Gold may eventually keep climbing, but it feels good to have taken a little off the table on a day like today. I created this concept of "may rebalance" because there were too many times that I missed out on an opportunity to take gains waiting for that last 1%. I don't have any math to prove that it's any better than anything else but it satisfies the emotional side of investing.

I've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.

My friend, who is another member here, did a post a while ago. Should be possible to find it through search.
The post was showing the analysis of differences between using different rebalance bands.
There wasn't much advantage in narrower bands. Also, they may add tax liability from more frequent trading if some portion of the portfolio is not in tax differed account.

[stpeter]

Amazingly I also triggered a rebalance over the weekend and had to do all the legwork for that yesterday. Pretty crazy to make a trade to produce big profits, and then the next day see that asset tank. In ten plus years with the PP, similar things have happened a few times (big rebalance out of LTT during March 2020 for instance, but this time the trend reversed with the flip of a switch the next day. Im sure it's only temporary, though.

As an aside, it's just another example of the importance of having some type of plan, written or otherwise, and then sticking to it through good times and bad. When I bought a bunch of stocks in 2020 it felt like I was just lighting cash on fire, but I did it anyway because that was the plan. Yesterday felt like I was taking tons of future gains off the table (and I still feel that way), but there is at least some vindication today and increased resolve to just stick with the plan.

I made the same trade in March 2020 but it was more of a “YOLO” that worked out. I have since created this “may rebalance” thing to give myself some flexibility. If I wasn’t in the zone I would just chalk it up to market noise and ignore it as far as trading was concerned. But it also points out that there’s value to paying at least some attention to what markets are doing despite having a “lazy portfolio”. In this case I just felt that gold had jumped too far too fast so it was worth making a move. If it shoots up tomorrow or next week or whatever I would have had to rebalance anyway. Trades like this are fun but I hold other assets that prove I’m not so smart or lucky.

In my experience with the PP/GB so far, it has really paid off to give close attention to times of crisis or irrational exuberance. I too rebalanced in March or April of 2020 because things were so far out of whack. (I almost rebalanced in April of 2025 during the "Liberation Day" madness, but I had recently switched from PP to GB and didn't want to rock the boat quite yet.) Following a "lazy portfolio" strategy doesn't mean you shouldn't stay alert.

[stpeter]

I've previously mentioned Gobind Daryanani's paper "Opportunistic Rebalancing: A New Paradigm for Wealth Managers" as worth reading. For the 4x25 PP, Harry Browne set the rebalancing band at 15%/35%, but Daryanani's paper indicates that a rebalancing band of 20%/30% is more profitable. Personally I've switched from the 4x25 PP to the Golden Butterfly, and I'm using rebalancing bands of 15%/25%. I rebalanced two weeks ago and I'm happy I did so.

My friend, who is another member here, did a post a while ago. Should be possible to find it through search.
The post was showing the analysis of differences between using different rebalance bands.
There wasn't much advantage in narrower bands. Also, they may add tax liability from more frequent trading if some portion of the portfolio is not in tax differed account.

Yes, there are always tradeoffs. Plus, I'm not smart enough to understand all the tax implications. However, from the perspective of sleeping well at night (a big draw of PP/GB for me), I don't want to get all stressed out about that last 1-2% with the wider bands. YMMV.

[Ugly_Bird]

Yes, there are always tradeoffs. Plus, I'm not smart enough to understand all the tax implications. However, from the perspective of sleeping well at night (a big draw of PP/GB for me), I don't want to get all stressed out about that last 1-2% with the wider bands. YMMV.

I found it! :-) It's tested from 2004-2011 (the year of the post) but I do not think running it to 2025 would significantly change anything.

viewtopic.php?p=19097#p19097

[Jack Jones]

Paul Belanger found that because of the way the correlations work out over various time periods, LTT are better rebalanced more frequently, and with Gold it's better to let the trend play out over the course of a few years, rebalancing gradually.

[dockinGA]

Following a "lazy portfolio" strategy doesn't mean you shouldn't stay alert.

Completely agree. When I started with the PP back in 2014 I, by chance, picked the 20th of each month to assess the portfolio. When I had lots of extra income coming in and not as much in the portfolio, I let the composition of the portfolio drive what I bought for that month. Now that I've semiretired, I still do the monthly checkup on the 20th each month, but it's rare that I need to do anything, even though I use the tighter +/-5% bands. Again, make a plan and stick to it. Check it monthly, yearly, daily, never, whatever you want to do. Just make sure emotion stays out of your investment decisions.