HOW ONE iTuliper IS INVESTED?

[pmmeaney]

Re: HOW ONE iTuliper IS INVESTED?

My Fidelity 401k plan is actually quite restricted in terms of what I can invest in. It is mostly stock funds with a few bond and money market type things thrown in. Very little that is interesting in the current market. (To get out of this straight jacket I'd have to quit my job which I'm hoping isn't in the cards for a bit.) About a year ago I took all of my money out of my stock funds - Contrafund and Europe stock fund and put it the US Treasury Money Market Fund and their Cash Reserve. Both have been able to weather the storm fairly well so far. My big question is whether I should be looking for alternatives to this? I'm quite curious about the Select Gold Portfolio for a couple of reasons - (1) it's remarkably beaten down so far (down about 60 - 65% from peak), (2) it's a bit of a hedge against the dollar (80% non-US investments), and (3) it is at least exposed to the gold world (I think only about 20% of its holdings would be in actual metals - the majority is in equities).

Does anybody have any thoughts on whether this would be a good play at this point or not?

Cheers,

Paul

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

10/16/08

YTD AM DOWN -0.86%,
+3.00% FOR LAST 52WKS,
+6.58% CMPD FOR LAST 2 YEARS,
+6.63% CMPD FOR LAST 3 YEARS
+9.06 CMPD FOR LAST 5 YEARS,
-1.45% CMPD SINCE 1/4/2000.

MY DRAWDOWN IS 12.73% and has occurred since 9/17/08.

As of 10/31/08

YTD AM DOWN -1.79%,
+0.76% FOR LAST 52WKS,
+5.08% CMPD FOR LAST 2 YEARS,
+6.29% CMPD FOR LAST 3 YEARS
+8.05 CMPD FOR LAST 5 YEARS,
-1.52% CMPD SINCE 1/4/2000.

MY DRAWDOWN IS 13.76% and has occurred since 9/17/08.

At the recent lows on 10/27/08 my drawdown was 19.00%.

For me this past month was a bummer, or clearly a very bad month. I really hope others, everybody, did better than I.

For October, I was wrong, except for eight days, about what I thought might, should, could happen next, and those 14 days where I was wrong cost me a lot. Every decision I made to be long or out of the equity markets was nearly perfectly timed to have been wrong. It could have been worse, I guess.

Currently I am allocated as follows:

Long equity ETF's 7.30% : DDM SSO QLD UWM
Long international ETF's 7.94% : EEM EFA EWG EWJ EWS EWZ GXC VWO
Long commodities 3.38% : USO UNG
Long refiners 1.79% : VLO TSO FTO
Long currencies 1.74% : FXF
Long PM's 7.28% : GTU CEF GDX AND PMPIX and a bit of physical.
Long US hedged equity 20.43% : HSGFX
CASH : 50.14%

Some of my present positions have been held for over two years, and some for just one to five days. The overall gain on my present positions is -8.49%.

Recently someone here on iTulip posted a comment that he (I guess it was a "he") never sold a position at a loss. I guess such is possible, but improbable in my opinion if one holds anything more than a day or two and tracks the highest prices of the position after one opens it.

After opening a position, tracking the difference between the daily closing price and the highest attained price amounts to the "drawdown" for that position. If one doesn't track drawdowns, for whatever reasons: time, no ability with a spreadsheet, fear, etc,. I don't see how one can keep up with when it might be reasonable to liquidate a position. I am assuming that not everyone buys stock-marketable assets with the intention of never selling them.

Buy a stock at 100 and open it with a mental stop-loss of 14%. That is to say, if the stock goes down to 86, the action is to close the position and take the 14% loss and look for other opportunities.

But what if it runs right up to 116.50 and then reverses back to 100? If tracking the drawdown, here one has a 14% loss on the appreciated value of the position, and near zero loss on the initial investment. It is my opinion that to attempt to keep from seeing good gains lost, that one should track the drawdowns, and thus in appreciating stocks, one is continually raising the mental stop-loss point.

I attempt to write things here that aren't nonsense about potential methods of winning more often than losing when it comes to trying to make a go with investing. For reasons of being human and subject to emotions and opinions of what I think may happen with my positions, I don't always follow the "rules" of what I think is wise investing, and from time to time it really costs me, and it always pisses me off.

[metalman]

Re: HOW ONE iTuliper IS INVESTED?

Some of my present positions have been held for over two years, and some for just one to five days. The overall gain on my present positions is -8.49%.

that's a shitload better than 90% of the 'professional' high paid fund managers out there. well done.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

that's a shitload better than 90% of the 'professional' high paid fund managers out there. well done.

Thanks for the "well done," but it truly does not salve the loss of what as of Friday was ~165K and on 10/27 was ~228K.

You know we can look at our gains or losses in a number of ways, some of which make us feel better and others which don't.

Were it actually correct that even at my current performance is better than 90% of the world's investors, it does not assuage the fact or pain of the loss. Anytime I might do well, I hope I never fail to appreciate that I could have done better, and the opposite is true for losses.

If anyone had balls of titanium (brass ain't nearly strong enough) and was correct last month with being short and stuck with it through the two bounces up on the 13th and from the 16th to the 20th, such a person could have made a real "killing" in the way of profits. It was one helluva opportunity to have made or lost a whole lot of money, and such an opportunity may not again occur in my lifetime. I wonder how many people stuck out October on the short side and either sold in the last three or four days or are still sticking with being short?

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

As of today, my allocation is as follow:

Position	%
Cash @ 3.85% / 4.0%	54.2%
Gold	32.6%
Platinum	5.9%
Silver	5.6%
Palladium	0.6%
Natural Gas ($CAD)	1.0%
	100.0%

I bought some Crude Oil 2 weeks ago (2% of my net worth at 2x leverage - $CAD hedged) but sold it after a three days due a 18% loss. Ouch. I plan to start accumulating crude oil as soon as it reaches $USD40 or less (if ever).

In 2009, I am planning to add crude oil and grains to my portfolio via Horizons Beta Funds (ETF traded in Toronto Stock exchange). These are $CAD hedged and 2x leverage.

I am done buying PMs for now (except for Palladium, which I like the most at this juncture; but I cannot get any from Kitco in Montreal since September). I have no plan however on selling any of my PMs.

My cash is tax free in a RRSP account (same as 401k for the US). 1/3 of the cash is at 4% for 18 months and 2/3 of my cash at 3.85% for 12 months (rates are down about 0.75% in the past 6 weeks on these products: lucky me).

I will also starting in 09 to track contributions vs actual return as my spreadsheet does not account for that right now. I know, my current spreadsheet is more to monitor allocation, but is clearly lacking from that regard.

So far this year (accounting for my savings) I am up 10.1% on my assets, but my investments return is somewhere in the range of -5% to 0% for the year.

I got it hard on my Nat. Gas position - down 80% :eek: in about 6 months (remember I "trade" them at 2x leverage), but I also lost a bit overall on Platinum and Silver. The bright area in my portfolio has been gold: up 22% so far this year. (remember: $CAD has depreciated substantially vs gold in the last quarter; now at record-high in $CAD terms).

Lastly, I have no RE exposure (renter) and no debt. My investment horizon is 35+ years.

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

Ok I had to scratch my itch...

Just allocated roughly 5% of my portfolio in crude oil @ $36.80 / barrel (HOU.TO on the Toronto stock exchange).

I intend to hold this for several years.

New allocation to be posted shortly.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Ok I had to scratch my itch...

Just allocated roughly 5% of my portfolio in crude oil @ $36.80 / barrel (HOU.TO on the Toronto stock exchange).

I intend to hold this for several years.

New allocation to be posted shortly.

I just sold all my +200% ETF on the major equity indices, my gold shares, my mining shares, and my international ETF's, actually, I didn't just sell them, I sold them a bit earlier today as they hit some stops.

[LargoWinch]

Re: HOW ONE iTuliper IS INVESTED?

I just sold all my +200% ETF on the major equity indices, my gold shares, my mining shares, and my international ETF's, actually, I didn't just sell them, I sold them a bit earlier today as they hit some stops.

Jim, like me you are using +200% ETF. As such, in the event you are unaware, the effective leverage long-term is higher than +200%.

Here is an ok article on the subject:
http://www.morningstar.ca/globalhome...eID12920081521

Quote:

Imagine two investors who want to make a bet on the price of Kryptonite, which is sitting at $100. The optimist invests in a two-times leveraged bull ETF, while his pessimistic counterpart buys units of the leveraged bear fund, each costing $100. The next day Kryptonite moves up 10% to $110. Ignoring fees and transaction costs, for the moment, the bull fund rockets to $120, and the bear fund falls to $80. The day after that, Kryptonite settles back to its original price of $100, a 9.1% retrenchment. To double that move, the bull fund goes down 18.2% to $98.19, and the bear fund gains the same percentage, rising to $94.55. Kryptonite is the same price it was at the beginning, yet both investors have lost money even before fees.
When ETFs are rebalanced daily, negative compounding creates a drag that increases with higher volatility. Conversely, a market that trends in one direction without fluctuating can cause ETFs to return more than their benchmarks.

The light bulb went on for me today...

[Basil]

Re: HOW ONE iTuliper IS INVESTED?

I just sold all my +200% ETF on the major equity indices, my gold shares, my mining shares, and my international ETF's, actually, I didn't just sell them, I sold them a bit earlier today as they hit some stops.

So Jim does this mean that you are giving up on a bull rally? I have seen several people who believed a big bull rally was coming get stopped out or lose faith in it over the last week. I myself have decided that after the Dow made another run at the Nov. 28 high but could not bust it, even after an unprecedented rate cut, there may not be much more steam in this rally.

BTW, when you distinguish between gold shares and mining shares, what do you mean?

Thanks,

Basil

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

So Jim does this mean that you are giving up on a bull rally? I have seen several people who believed a big bull rally was coming get stopped out or lose faith in it over the last week. I myself have decided that after the Dow made another run at the Nov. 28 high but could not bust it, even after an unprecedented rate cut, there may not be much more steam in this rally.

BTW, when you distinguish between gold shares and mining shares, what do you mean?

Thanks,

Basil

My attitude for the moment is mainly concerned with curtailing further drawdown (paper losses from highest attained value of my portfolios). So whether the rally continues or dies, I am out of the picture moreso than for a long time. Don't have exact allocations figured at this moment; probably near 75% in cash.

It looks to me as though the recent rally off 11/20 has been stopped at the 50 DMA on most of the major equity indices. Some of the breadth indicators I follow have been overbought since 12/8 and have tended to remain that way, though lessened, without yet getting into negative breadth. Had the market not hit some close stops I had in place I would have stayed in there long.

I think gold has topped out for the time being, and, of course, I may well be wrong. CEF, GTU, GLD, SLV are precious metal shares, GDX and PMPIX, two I use, are mining shares or based on mining share indices. I still have a little physical gold sewn into my adominal wall. :rolleyes:

I don't think the deflation is over. The equity markets may start back up tomorrow--probably will since I'm out of them.

At any rate I am settling with my current drawdown of ~15.2%, improved from a max drawndown of ~22% back on 11/20. I'm down -3.44% YTD, up +132% from my portfolio lows in 10/2002 or 14.58% cmpd since then, -3.9% in last year, +2.96% cmpd 2 years, +4.39% cmpd 3 years, +8.18% cmpd 5 years, and -1.63% cmpd since personal highs 1/1/2000. And I am tired, and I have no faith in anything.

Do you understand the difference in shares that asked about?

[Chris]

Re: HOW ONE iTuliper IS INVESTED?

Jim, that is consistent with Taleb's view. The hedge funds will look for rallies to offload their remaining positions in order to meet margin calls and redemptions. You don't want to be the sucker left holding the bag at that stage.

Allocation: 70% gold bullion, 15% mining shares (don't want to talk about it), 5% in cash waiting to take a leveraged short position in long bond futures, and 10% cash waiting to get into oil and grains. I'll probably move a little gold in to oil when the time is right but not yet.

[Basil]

Re: HOW ONE iTuliper IS INVESTED?

My attitude for the moment is mainly concerned with curtailing further drawdown (paper losses from highest attained value of my portfolios). So whether the rally continues or dies, I am out of the picture moreso than for a long time. Don't have exact allocations figured at this moment; probably near 75% in cash.

It looks to me as though the recent rally off 11/20 has been stopped at the 50 DMA on most of the major equity indices. Some of the breadth indicators I follow have been overbought since 12/8 and have tended to remain that way, though lessened, without yet getting into negative breadth. Had the market not hit some close stops I had in place I would have stayed in there long.

I think gold has topped out for the time being, and, of course, I may well be wrong. CEF, GTU, GLD, SLV are precious metal shares, GDX and PMPIX, two I use, are mining shares or based on mining share indices. I still have a little physical gold sewn into my adominal wall. :rolleyes:

I don't think the deflation is over. The equity markets may start back up tomorrow--probably will since I'm out of them.

At any rate I am settling with my current drawdown of ~15.2%, improved from a max drawndown of ~22% back on 11/20. I'm down -3.44% YTD, up +132% from my portfolio lows in 10/2002 or 14.58% cmpd since then, -3.9% in last year, +2.96% cmpd 2 years, +4.39% cmpd 3 years, +8.18% cmpd 5 years, and -1.63% cmpd since personal highs 1/1/2000. And I am tired, and I have no faith in anything.

Do you understand the difference in shares that asked about?

Jim,

Thank you for the clarifications. I, too, have been thinking of just dropping out for the time being. I have a bullion position of about 30%, and small positions in SRS, SLW, SA, DGP, SLV and HTE, each totaling less than 3% of my overall portfolio. Just added some USO at the close with a position small enough to hold through thick and thin if deflation persists longer than some on itulip think. But I did not play the down turn as well as I should have and have suffered losses that basically put me back to where I was before I sold some land for an undeserved profit. I, too, hope to short the bond market when the time seems right.

But all told, this market is wearing me out!

Enjoy the opportunity to relax a little.

Basil

[Orforded]

Re: HOW ONE iTuliper IS INVESTED?

With respect to the funds I control SEP/IRA (opposed to my share of my businesses profit sharing plan which I continued to allow the so called financial advisor to contine to control, now down about %25) I have been in all cash since the spring. I cashed out of equity mutual funds, against the so called financial advisors advise when DOW was at 12,900 so now am sitting on about 165k (down from an all time high of 180k when Dow was at 15k) wondering what to do with it, since its getting moldy under my mattress and I trust the investment guy as far as I can throw him.
On a seperate note I opened a $1,000 Scottrade account last January that is now worth about $1,150 making me look like a savant - but really am an idiot savant since 2 other small 2k accounts I opened to fool around with are down more than 50% following a colleagues recommendation to buy and stay in a couple of small gold mining stocks which went into the shitter.

The big question is what to do with the 165k - keep it in cash? buy oil at under $40 -can it possibly go any lower? Buy some gold etfs? Value stocks whose dividends are currently higher than T Notes? What to do. What to do.

[FRED]

Re: HOW ONE iTuliper IS INVESTED?

With respect to the funds I control SEP/IRA (opposed to my share of my businesses profit sharing plan which I continued to allow the so called financial advisor to contine to control, now down about %25) I have been in all cash since the spring. I cashed out of equity mutual funds, against the so called financial advisors advise when DOW was at 12,900 so now am sitting on about 165k (down from an all time high of 180k when Dow was at 15k) wondering what to do with it, since its getting moldy under my mattress and I trust the investment guy as far as I can throw him.
On a seperate note I opened a $1,000 Scottrade account last January that is now worth about $1,150 making me look like a savant - but really am an idiot savant since 2 other small 2k accounts I opened to fool around with are down more than 50% following a colleagues recommendation to buy and stay in a couple of small gold mining stocks which went into the shitter.

The big question is what to do with the 165k - keep it in cash? buy oil at under $40 -can it possibly go any lower? Buy some gold etfs? Value stocks whose dividends are currently higher than T Notes? What to do. What to do.

Our motto here: When in doubt, stay in cash. The whole "stay out of the stock market and you'll miss the big move!" pitch is pure Wall Street sales and marketing.

Stay in cash until you have your own investment thesis. Don't trust anyone else with your money.

Once you develop conviction in your thesis, then move out of cash -- slowly. No hurry. If it's a good now it'll be good in a few months after your thesis is further confirmed -- or not.

Any investment decision made in a hurry is a high risk decision.

Not personal advice, just what we've been saying for 10 years.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

With respect to the funds I control SEP/IRA (opposed to my share of my businesses profit sharing plan which I continued to allow the so called financial advisor to contine to control, now down about %25) I have been in all cash since the spring. I cashed out of equity mutual funds, against the so called financial advisors advise when DOW was at 12,900 so now am sitting on about 165k (down from an all time high of 180k when Dow was at 15k) wondering what to do with it, since its getting moldy under my mattress and I trust the investment guy as far as I can throw him.

On a seperate note I opened a $1,000 Scottrade account last January that is now worth about $1,150 making me look like a savant - but really am an idiot savant since 2 other small 2k accounts I opened to fool around with are down more than 50% following a colleagues recommendation to buy and stay in a couple of small gold mining stocks which went into the shitter.

The big question is what to do with the 165k - keep it in cash? buy oil at under $40 -can it possibly go any lower? Buy some gold etfs? Value stocks whose dividends are currently higher than T Notes? What to do. What to do.

Why Orforded? Why not "Orchevied" or Orjeeped?" I've always wanted to ask that.

Things turned out well for you in that when you first posted you were near lows in a lot of things wondering whether or not to sell. The summation of "advice" that showed up in that thread was to hold out for a rally and sell into it. I think that happened and you did, so good for you.

I expect someone suggested getting rid of your advisor(s) if you didn't trust them. Why haven't you done that?

I made some suggestions to a guy ER59 about some newsletters I thought could help him. If you care to search out ER59's posts, then you should come upon them. I would still make that recommendation to anyone who asked, and perhaps you can PM ER59 and see what he thinks of the newsletters.

Orforded, I think it was you who put up that you had paid some $7-8K for a course in investing. Was that you? Did you complete the course? Was it of no benefit?

Advice: Screw colleagues' investments tips.

If you care to disclose, how much has your 401 lost this year under the guidance of your advisors?

Be patient.