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  1. #2751
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    Quote Originally Posted by 4matic View Post
    TIPS might be better place to park the emergency money to protect against inflation risk and preserve some capital.
    Heh, that actually is where I was parking cash, although I'm out at the moment.

    Quote Originally Posted by El Chupacabra View Post
    2.25%
    That's good. 5 year? Min deposit?

  2. #2752
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    5-yr term. It's with Synchrony Bank -- formerly something like GE Capital, renamed for who knows what reason... It was fairly easy to set up the account with them.

    https://www.myoptimizerplus.com/banking/products/cd/

    Looks like it's a $2K minimum deposit, based on that link. Rates go up/down periodically -- I was going from memory on the 2.25% rate that we have. (We definitely do not have $25K+ in CDs in order to get the 2.25% rate quoted on the website now.)
    Quote Originally Posted by powder11 View Post
    if you have to resort to taking advice from the nitwits on this forum, then you're doomed.

  3. #2753
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    Quote Originally Posted by 4matic View Post
    If you examine the recent 5-10-and 15 year returns in your link you can clearly see the "risk." Examine the one year and you can also see the risk potential.

    Absolutely agree. I was clear that there was risk. And one may choose a less risky fund than the S&P 500 because of that. But if you look at the 15, you're still doing much better than a bank acct or Chup's CDs. And even looking at the 10 or 5 year returns, the risk is mostly that you won't do as well as the savings acct if the emergency hits at a bad time; you won't be screwed. The real big risk, IMO, is that the emergency happens shortly after a crash which happens shortly after you buy in. I mean, look at 2008. If you had set up your emergency fund in 2003, that huge 37% loss would only put you at -2.19% overall. If you had set it up in 1998, it would only put you at -1.39%, and that's only because that 10 year period includes 2 crashes, including the worst crash in my lifetime.

    So yes, if you buy in shortly before that crash, and then need your emergency fund shortly after, you have a problem.
    "fuck off you asshat gaper shit for brains fucktard wanker." - Jesus Christ
    "She was tossing her bean salad with the vigor of a Drunken Pop princess so I walked out of the corner and said.... "need a hand?"" - Odin
    "everybody's got their hooks into you, fuck em....forge on motherfuckers, drag all those bitches across the goal line with you." - (not so) ill-advised strategy

  4. #2754
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    Quote Originally Posted by El Chupacabra View Post
    5-yr term. It's with Synchrony Bank
    Thanks. I was actually just checking bankrate to see who's paying what.

    Def don't want to lock up 25K just to get that rate. From poking around their site it looks like you can get 2.20% for as little as 2K. Unless there's fine print that I haven't found, the fee for early withdrawal is 180 days interest. Not bad.

  5. #2755
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    Anybody read the recent Tony Robbins book on Money?
    I was given a copy, but have yet to crack it. I heard him talk about it on a few podcasts and I am intrigued, but some of the claims seem a little far fetched but the basics seem sound.
    another Handsome Boy graduate

  6. #2756
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    Tony Robbins is a very energetic life coach, of sorts, but not a very good financial advisor. He is out of his league when he goes there.

  7. #2757
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    Quote Originally Posted by Danno View Post
    I have no idea what you mean by "risk free forward 30 year return", I'm not a finance guy. And besides, nothing I have talked about is risk free, not by a longshot.

    but yes, expecting 7% return may be optimistic. I'm not actually expecting any specific number, just looking to get a good return on a pot of money that is likely to sit around unused for a very long time. But looking at the charts here for the S&P 500: http://financeandinvestments.blogspo...for-s-500.html it seems like 7% is not an awful number to choose. If you look at the 20 year annualized return, which of course would include any crashes within those 20 year periods, there are only 4 years in the last 60 years where the 20 year annualized return is under 7%, and there isn't a single year under 6%.

    My point is simply that while crashes happen, and can happen at the worst possible time for you (ie there IS risk), for a long term hold on a pot of money that will likely go untouched, those crashes will be smoothed out by gains during other times, and even if the crash happens at a bad time for you, if that time is at least a number of years from the establishment of the emergency fund, you will still likely be ahead of where you'd be if the money was in a savings acct.
    I know I may be saying "it's different this time", and someone may go after me for that, but, maybe it is, in the sense that you can't rely on the last century and it's movements and trends to predict this century. It really is a much different world than the early and late 20th century. I believe that the American economy has seen it's best time for a long time, and the rise of the east will be proof of that by mid century. But, suppose the entire world is deflating? Suppose that growth is dramatically slowing, and we may see a worldwide near depression for years and years? There are many factors in play that just weren't there for the last fifty years. Demographics are awful, both in the western world and China, and old people just don't spend money like 45 year olds. That will play out for a few decades, at least. Then there is the massive debt overhang in both the western world and the East, both private and public, that just didn't exist before easy credit started up around 1985. Student loans are over a trillion in America alone. How will those people fuel an economy when they have to take that debt to the grave. Nobody knows exactly how bad the debt problem is in China, but many agree it's pretty bad, even on the low side. Inflation, or, fast growth is the best way to clear those debts, but, that just isn't happening anywhere. Europe is in a depression, basically, America is crawling along ay maybe 2% or less, with millions out of the job market for various reasons, and China, the growth engine for a major portion of the world's economy for the last twenty years, is slowing dramatically. Add to that all sorts of technology putting millions out of work worldwide by the day, and that is just accelerating.
    There have been long periods in the history of capitalism the were near depressions, and it could easily happen again. We had a great time in America during those periods you are pointing to in the history of the S&P, most of which when we were at our best. I can't see us leading like that in the future, especially with billions in the Far East joining the "middle class" as I type. I hope I'm wrong, because I need 5 or 6% in my future to live well, but, I have no idea how to find that risk free. The upside is that deflation or near deflation keeps the things I buy cheap, and sometimes cheaper tomorrow, which is more important than returns, at times. Do a Monte Carlo simulation of money returns factoring in various inflation numbers, and you'll see what I mean. Inflation is poison to savings holdings.

  8. #2758
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    Well good morning sunshine. Aren't we optimistic today.

    Cheap/renewable energy will solve a lot of our problems. I bet we'll see something that's a game changer in ~10 years.

  9. #2759
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    Simply buying cheapest sector in S&P since 1991, yearly rebal, 7% per annum outperform.

    https://mobile.twitter.com/LeutholdG...84563970101251
    Charlie, here comes the deuce. And when you speak of me, speak well.

  10. #2760
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    Quote Originally Posted by huckbucket View Post
    Well good morning sunshine. Aren't we optimistic today.

    Cheap/renewable energy will solve a lot of our problems. I bet we'll see something that's a game changer in ~10 years.
    Hey, I'm in the market, not hiding in cash. I have some hope, I guess.

    How will cheap energy solve what problem? How's that going to put people to work? Look what's happening in Texas. It's putting people on the street.

    I think you have seen and are seeing the game changer for twenty years now, and that's cheap, powerful computers hooked up to the internet, and the rise of the robots. China will have the most robots in the world very soon, which means even they are giving up on manufacturing labor. And, the world's population just keeps on growing, almost exponentially.

  11. #2761
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    Quote Originally Posted by Benny Profane View Post
    Hey, I'm in the market, not hiding in cash. I have some hope, I guess.

    How will cheap energy solve what problem? How's that going to put people to work? Look what's happening in Texas. It's putting people on the street.

    I think you have seen and are seeing the game changer for twenty years now, and that's cheap, powerful computers hooked up to the internet, and the rise of the robots. China will have the most robots in the world very soon, which means even they are giving up on manufacturing labor. And, the world's population just keeps on growing, almost exponentially.
    Non-petrol energy. Enough to power desalinization. Enough to power cars, houses, business cheaply. Cheap energy empowers many technologies that are currently not feasible. More technology means more jobs. What those people will do is anyone's guess. Maybe public works projects.

  12. #2762
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    Quote Originally Posted by huckbucket View Post
    More technology means more jobs.
    Nope, sorry. Technology is responsible for destroying millions and millions of jobs, and I don't see them being replaced. Far from the zero sum game our lying and corrupt politicians and the economists who pander to them want you to believe.

    I include containerized shipping as another horribly disruptive technology.

    Quote Originally Posted by huckbucket View Post
    Maybe public works projects.
    No, that's not happening at all. We're at a super sweet spot for that right now with ZIRP to fund it, but, nothing. Sad. I just read an op-ed where somebody seriously just proposed shutting down LaGuardia airport, because it's just too far gone. That's it. That's the vision.

  13. #2763
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    Quote Originally Posted by Benny Profane View Post
    I know I may be saying "it's different this time", and someone may go after me for that, but, maybe it is, in the sense that you can't rely on the last century and it's movements and trends to predict this century. It really is a much different world than the early and late 20th century. I believe that the American economy has seen it's best time for a long time, and the rise of the east will be proof of that by mid century. But, suppose the entire world is deflating? Suppose that growth is dramatically slowing, and we may see a worldwide near depression for years and years? There are many factors in play that just weren't there for the last fifty years. Demographics are awful, both in the western world and China, and old people just don't spend money like 45 year olds. That will play out for a few decades, at least.
    Focusing on China and the Western world and then assuming the remainder of the world, which is modernizing variably but with high fertility rates, will remain neutral. It won't . The US as a microcosm with immigration more than offsetting a weak native replacement rate to drive underlying demand and, despite detrimental patterns of wealth distribution, consistently rive growth. Why can't that happen, and is it already happening, in Western Europe and much of the West?

    I agree with the risk and downside that is 'in the simulator' and don't fully discount a worst scenario, I just see underlying population growth and the expansion of transit infrastructure as negating some of the impact of sluggish native replacement. The next question is, will future policy ameliorate or exacerbate the current global public balance sheetstorm?

  14. #2764
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    fwiw S&P monthly looks like an old Cialis ad


  15. #2765
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    Quote Originally Posted by Bromontana View Post
    S&P monthly
    Weekly Sp500 chart still bullish. Junk bonds are solid in all this turmoil which is also bullish. Looks like another rotational correction to me. I sold 80% of my bonds in January and am forced to deploy so I'm nibbling at some equity ideas which means the whole thing will probably collapse.

    My best position is Virtu Financial VIRT. Can't beat them join them. And, I like Coke KO as long as the previous low holds . It reminds me of MSFT and IBM pre financial engineering.

  16. #2766
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    Curious - question for those of you who actively trade -

    How long have you been doing this, and what's your average return been over that time period?
    Quote Originally Posted by powder11 View Post
    if you have to resort to taking advice from the nitwits on this forum, then you're doomed.

  17. #2767
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    Quote Originally Posted by El Chupacabra View Post
    Curious - question for those of you who actively trade -

    How long have you been doing this, and what's your average return been over that time period?
    I sadly or fortunately learned my lesson a long time ago that active trading is a full time job and requires 100% commitment in a distraction free environment. I had a 5 minute tv show on FNN where I pitched risky investments for a brokerage. Fun. I Interviewed some legends like Robert Prechter, Larry Williams, and Denesh Desai.

    I have been a conservative asset allocator for decades. In the 2001 crash I was young enough to just keep buying stock and add to the stock allocation. In 2008-09 with a 65-35 stock bond allocation I took a 35% asset decline. There was no choice other than double down on equity and roll the dice so I went basically all in at 110% long equity (borrowed money) from 2009-2012. I sold the margin stake in 2012 and bought a short sale real estate in the Bay Area. That was a great trade but I wish I still owned those stocks (MSFT, JPM, and BRK.B). Post 2009 was the game changer for me. My assets with contributions are up 350% (market is up 250% on its own).

    In 2013 I started trimming my equity way back (too early) and by the middle of 2014 was 100% bonds at 5 yr duration. In January of this year I sold 80% of my bonds and have been 80% cash since then. With cash being trash I am forced to put the money to work. On the recent volatility I moved 20% of my assets to PFF yielding 6% (average price $39.60), 3% into KO @40.50, 3% into SBUX at $49.11 and 3% into VIRT at $21.50 (the equity is to try and add a bit of alpha). I also made one spec trade into a crappy business SLRC and took my loss after two days. Wrong idea, wrong trade, got out .25% loss.

    My current allocation:

    20% 5 year duration bond fund.
    20% 16 year duration preferred stock fund PFF (pretty risky at this point. Don't like the position)
    10% equity KO, SBUX, VIRT. (I'd dump VIRT in a second if my opinion changes)
    50% cash

    I am looking to add some international exposure at about 10% and will maintain a large cash position unless and until there is another unravel. I just don't need the risk.

    Now, to answer your question about how I have done. Over the last three years I have underperformed my benchmark of 50/50 stock/bond allocation by .75%. I would have been better off just allocating to a target fund in 2013. The period from 2009-2012 is the single alpha event that has made a difference for me. Had I not made that decision I'd be f'd up.

    I basically agree with William Bernstein, "When you have the game won, don't play."
    Last edited by 4matic; 05-12-2015 at 01:23 PM.

  18. #2768
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    Quote Originally Posted by El Chupacabra View Post
    Curious - question for those of you who actively trade -

    How long have you been doing this, and what's your average return been over that time period?
    Intermittently since 2010, with a 3 year gap in there. I lose money. Planning to open a new account soon with access to good borrows for shorting large squeezes in less liquid corners of the market. If that fails I'll quit, but there's enough encouragement in my trading data to keep trying.

    Fwiw, the figures that are important to me as a wanna be Jong trader are avg % gain on winning trades & loss per losing trade, avg $ gain & loss, % win vs. loss on all trades. The metrics on average performance per trade are very telling on trade style, risk involved, potential profitability once leaks are fixed, etc. On a good month I run +4-5% vs -2% avg, 75% winning on about 20 trades like below.


  19. #2769
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    Quote Originally Posted by Benny Profane View Post
    Nope, sorry. Technology is responsible for destroying millions and millions of jobs,
    People have always been afraid of new technology and effects on demand for labor. Plows, tractors, combines, etc. have always made each unit of labor more productive, and the total value generated greater. Sure if you refuse to give up your horse-and-buggy you might get left behind. New capital makes labor more valuable, not less. It just changes the kind of labor in demand. There's a reason farmers have the nicest trucks in town.

    http://www.nytimes.com/2014/06/22/op...he-robots.html

  20. #2770
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    Thanks 4matic & Bro for sharing your thoughts.

    I asked couple of weeks ago about euro. Prolly the question is dumbish would require Nostradums like mad skilz, but as Greeces clock keeps
    ticking, things start to be even more relevant in the coming weeks..

    Anyone has even remote idea what would happen to the value of Euro (comp to USD) if greece would decide to bail the ship?
    Let alone if the bailing would cause a domino effect and countries would start bail out of euro as well?
    Has anyone come across some articles (and) speculation what might happen. Have tried scrounging the depths of the web and talked with some
    friends in banking and...nada. It seems to be a thing to what there is no roadmaps whatsoever and foremost, basically no one daring to guess
    what the ramifications could be. Greece could be cut of euro with only slight rumble to the euro (and its value?) but if that could cause the
    southern belt to collapse, let alone euro itself.. uuh? Have a bit savings and have given thought or two about how to ground oneself for that
    potential cataclysm.
    The question remaining if it is even feasible?
    Splitting savings into 2-3 curriencies (franc,usd) & gold sounds more like prepping for apocalypse than a reasonable plan.

    Any thoughts in general?

    The floggings will continue until morale improves.

  21. #2771
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    I think there were some articles on project syndicate recently. I'll try to look somewhat soon. Might not have a good chance until Monday though.

  22. #2772
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    Quote Originally Posted by Meathelmet View Post
    Fate of the Euro
    My guess would be anything material happening to the currency would have already happened. The low recently at 106 might have been the "event." I've always thought Marc Chandler was one of the best currency commentators:

    http://www.marctomarket.com/#!

    Canada and Australia have highish yielding currency and are trading at multi year lows vs dollar. Worth a look.

  23. #2773
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    Quote Originally Posted by markb View Post
    People have always been afraid of new technology and effects on demand for labor. Plows, tractors, combines, etc. have always made each unit of labor more productive, and the total value generated greater. Sure if you refuse to give up your horse-and-buggy you might get left behind. New capital makes labor more valuable, not less. It just changes the kind of labor in demand. There's a reason farmers have the nicest trucks in town.

    http://www.nytimes.com/2014/06/22/op...he-robots.html

    Ok, the old horse and buggy thing. Look back at that transition, and, since suddenly there was a massive need for tractors (and trucks and other heavy machinery to replace the work horse) it was a logical transition from the field to the factory for many workers. That's what I mean about the early twentieth century. But, today, there is no transition. A computer replaces you, especially in white collar and service jobs, and that worker is no longer needed in the economy in any way, especially if they are 50 and above, still prime working years in today's medical environment. Poof, you're no longer needed, bye. Where are the recent peasants in China going to support their new urban life when a robot replaces them? Where are all of those millions of kids graduating from their university system over there, lame as it is, find work? The old school image of thousands streaming out of factories at quittin' time is long gone to history. The modern factory is sparsely staffed, and be there are people working real hard, I'll bet, at engineering capitalistic nirvana, the factory devoid of humans.

    New capital makes labor more valuable?? Really? You do know that, in the last thirty or so years, as the financial industry has conjured capital from thin air and spread it around like buttah, that labor has lost "value" steadily. You really should download Das Kapital to the Kindle and check it out. The man was far from wrong, and the last few decades, especially since 08, have proved him right.

    Rattner is a near felon who has a very appropriate name. He is a member in good standing of the Obama Dem neoliberal Wall Street mafia, and is lucky not to be in jail. He did do good work on the GM bailout, so, I'll give him that.

    These also look like a good read: http://www.nytimes.com/2015/05/17/bo...work.html?_r=1

  24. #2774
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  25. #2775
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    Quote Originally Posted by Benny Profane View Post
    Ok, the old horse and buggy thing. Look back at that transition, and, since suddenly there was a massive need for tractors (and trucks and other heavy machinery to replace the work horse) it was a logical transition from the field to the factory for many workers. That's what I mean about the early twentieth century. But, today, there is no transition. A computer replaces you, especially in white collar and service jobs, and that worker is no longer needed in the economy in any way, especially if they are 50 and above, still prime working years in today's medical environment. Poof, you're no longer needed, bye. Where are the recent peasants in China going to support their new urban life when a robot replaces them? Where are all of those millions of kids graduating from their university system over there, lame as it is, find work? The old school image of thousands streaming out of factories at quittin' time is long gone to history. The modern factory is sparsely staffed, and be there are people working real hard, I'll bet, at engineering capitalistic nirvana, the factory devoid of humans.

    New capital makes labor more valuable?? Really? You do know that, in the last thirty or so years, as the financial industry has conjured capital from thin air and spread it around like buttah, that labor has lost "value" steadily. You really should download Das Kapital to the Kindle and check it out. The man was far from wrong, and the last few decades, especially since 08, have proved him right.

    Rattner is a near felon who has a very appropriate name. He is a member in good standing of the Obama Dem neoliberal Wall Street mafia, and is lucky not to be in jail. He did do good work on the GM bailout, so, I'll give him that.

    These also look like a good read: http://www.nytimes.com/2015/05/17/bo...work.html?_r=1
    My lifestyle is financed by guys like you.

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