Your Balanced Portfolio

[Aman A.K.A. Ahamburger]

First rule of investing is : do not lose any money!!! Sharpe ratio is about how to keep what you made

Wise words from a wise man!!

I missed this I'm going to spend some time studying this thanks B!!!!

[ModE98]

Excellent thinking ...will trim some of the high divi REIT stock. The problems developing in parts of the Middle East no doubt is going to have some disruption in the markets to which we should also pay attention.

[bimetalaupt]

Jan 29, 2011 9:12:41 GMT -5 ModE98 said:

Excellent thinking ...will trim some of the high divi REIT stock. The problems developing in parts of the Middle East no doubt is going to have some disruption in the markets to which we should also pay attention.

BOND RATES WILL INCREASE WITH THE IMPROVED ECONOMIC BOOM IN FOOD AND FUEL..INFLATION IS HIDING BEHIND THE 41% CPI IN THE DECLINING HOUSING MARKET... THIS WILL COME TO END AS LAW OF SMALL NUMBERS " INCLUSIVE OR" MATH REDUCES THIS NUMBER AS THE AVERAGE WAGE CAN SUPPORT..

THE BOTTOM LINE IS BLOOMERS DID NOT SAVE ENOUGH TO RETIRE...NOW THEY ARE GOING LONG ON RISK!!!

Just a thought,
Bi Metal Au Pt
NEW YORK (MarketWatch) — The past two years have seen the biggest boom in bond investing on record. Investors, fleeing the ravaged stock market, have poured hundreds of billions of dollars into the presumed safety of bond funds. CAN YOU SAY BUBBLE THREE TIMES

From January 2009, we saw 22 consecutive months of inflows into bond funds, according to the Investment Company Institute, an astonishing $643.4 billion in all.

But starting in November, nervous investors began to pull money from bonds — mostly municipals, amid fears about state and local governments’ finances. Outflows from munis have persisted into January, but money has continued to trickle into corporate bonds, the mainstay of the 2009-2010 bond boom.

And now many investors who’ve just made a big bet on fixed income are worried about getting caught on the wrong side of the trade yet again.
Treasury fears

There are a few reasons investors might be wary of the Treasury market, says Brett Arends.

The rumblings apparently got loud enough that Gus Sauter, chief investment officer of The Vanguard Group, the largest U.S. bond mutual fund manager with $413.6 billion of fixed income assets as of Dec. 31, posted a cautionary message on the company’s website.

“I’m increasingly worried that people aren’t aware of the risks in the bond market,” he wrote. “The problem is that when you’re at historically low rates, as we are now … yields aren’t likely to go significantly lower, and at some point when the economy does strengthen, they’re likely to push higher.”

“If rates move sharply, we could experience a year or more where investors receive a meaningfully negative total return from bonds. That’s certainly happened in the past. And it’s very possible, if not probable, at some point in the future,” he concluded. Read Pamela and Mary Anne Aden’s views on the direction of interest rates on MoneyShow.com.

Vanguard was at pains to call that “education,” not the dreaded “market timing.” But the message couldn’t be clearer: Fasten your seat belts; it’s going to be a bumpy ride.

???And it’s a ride for which bond investors simply aren’t prepared.

“Surveys have shown that many bond investors do not understand that … if you have a long-maturity bond and rates increase, then prices fall,” said long-time bond investor Richard Band, who edits the Profitable Investing newsletter.

Investors have moved en masse out of stocks, whose risks were amply demonstrated in the 2008-2009 market meltdown, and toward the boring, regular coupon payments of bonds. Now, Sauter and others warn that the modest returns they were counting on may not be in the bag, either.

This shouldn’t be surprising, given the huge run we’ve seen. Still, Francis M. Kinniry Jr., a principal in Vanguard Investment Strategy Group, told me he doesn’t “believe at all there is a bubble in bonds. We do not see a [popping or a bursting] in fixed income.”

According to Vanguard’s research, “the worst 12-month return for U.S. bonds since 1926 was [negative] 9.2%, while the worst 12-month return for U.S. stocks was [negative] 67.6%...The worst calendar year for the broad bond market was 1994, when due to an unexpected [rise] in interest rates, the bond market returned [negative] 2.9%.”

So, the worst decline we’ve seen in bonds was chump change compared with the shellacking we’ve just experienced in stocks. And he adds that historically “a 3.5% bond is fairly valued.” That’s about where 10-year Treasury notes are trading now.

Of course, it’s often hard to identify a bubble before it bursts. But the herd mentality of buying bonds, the certainty among so many investors that they were safe (remember “home prices have never fallen” or “the Internet will change everything”?), and the sheer volume of the money make me think it was indeed a bubble, albeit one of the quieter ones we’ve seen.

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[yclept]

Some of us are using TBT as a way to play this. I didn't buy it until mid December, but the position has gone up a bit over 8% for me in the period since then.

[scaredshirtless]

My money is parked for now.

[bimetalaupt]

Jan 27, 2011 18:50:55 GMT -5 bimetalaupt said:

Jan 27, 2011 13:16:06 GMT -5 tyfighter3 said:

Bruce, I read your post, don't understand all of them but I DO Read Them.

Tyfighter3,
Then you know this is a major change in my A++portfolio system and asset matching. I am worried about inflation!! Got it from the gang at Luxembourg .

IF YOU EVER HAVE A QUESTION,PLEASE ASK.. iT MAY BE i WORK 16-18 HOURS SOME DAYS , ALSO.

PLEASE HAVE A GREAT DAY!!!
Bruce

I had an upside price movement on MMXI for gold to 1362.29170828793
with an approximate 93.058924234% correlation.
. Did it all in one day... .. bad things are going on in the world...strong relation to M3 so I was going to see what M3 did Friday before I posted.

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[scaredshirtless]

Thanks Bruce. We're listening.

[bimetalaupt]

Feb 4, 2011 9:40:43 GMT -5 @scaredshirtless said:

Thanks Bruce. We're listening.

SS,
I should add .. these are weekly numbers and m3: WENT dove this week.. very very very HIGH volitional.. like the future bond market and small caps... But DJUA has the highest volatility (23.0469335255%) of the five on MMXI.. Look for interesting events!!

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[IPAfan]

Bruce,

I noticed this old post when I picked my favorite 5 stocks under $5.

09/13/09 08:46 PM

My under $5 list might have been:

EROC
SOAP
GSL
VXGN.OB
NRF

Turned out to be a pretty solid list of stocks. All solid performers except VXGN.OB. That's the thing I love about concentrated investments. If I pick 5. 1 performs poorly, 2 perform well (SOAP and NRF) and 2 shoot the lights out (GSL and EROC.)

I've managed to get 20% returns investing like this since 1999. I do appreciate the idea of a decent slug of bonds based on stock/bond valuation. However, at these levels I'm not interested in owning bonds. I'd rather own liquidation situations.

[bimetalaupt]

now Glassman author of the idea of DJIA and the 10% average return on stocks is now at 50/50 re-balancer system.. Help did you see The wild bond market

James Glassman's book Dow 36,000 couldn't have come out at a worse time. Released in 1999, moments before the tech bubble burst and sucked the air out of the high flying Nasdaq, the book heralded the U.S. stocks market as essentially a surefire way to make money. (See:Man Who Once Said "DOW 36,000!" Now Recommends A Diversified Portfolio, But Still Believes 36,000 Is In the Cards)

Obviously, two major crashes has a tendency to change one's mind.

In his latest book, Safety Net: The Strategy For De-Risking Your Investments In a Time of Turbulence, Glassman seems to be making amends for his past indiscretion and irrational exuberance. He's now touting a more timeless strategy focused on portfolio protection.

"The basic idea of 'Safety Net' is you pay an insurance premium in reduced upside to protect yourself a lot on the downside," Glassman tells Aaron and Henry in this accompanying clip.

In "Dow 36,000", Glassman and co-author Kevin Hassett argued, essentially: "Put as much as you can into stocks, specifically into U.S. stocks., 80-90% of your portfolio," he explains. "I no longer believe that."

Glassman now believes in something closer to a 50/50 split between stocks and bonds for long-term investors of all ages. It's not necessarily the path to a quick buck but when the market is crashing all around you, as it did in 1999 and 2008, "at least you're getting some kind of peace of mind and lack of anxiety," he says.

Besides a more even asset allocation between stocks and bonds, Glassman suggests owning a bear funds, or funds that returns the inverse of the market and using option strategies to reduce downside risk.

While commodities are currently the favorite "alternative" investment of many money managers, Glassman does not recommend investing directly in hard assets. Instead he suggests buying stocks like Exxon that offer exposure to commodities but "you're also getting the benefit of the human imagination."

[bimetalaupt]

Now we are getting more information on the other end of investing .. like I told SS it is call Barbell investing 80% bonds/ risk free cash or notes and 20% very high risk stocks and calls/puts...

Value at risk = Standard deviation * asset value ... value not original investment.. so it could be more at risk then invested.

Barbell Theory

From Vintage Barbells

Barbell Theory is a very simple investment allocation where your assets are focused on the extreme ends on the risk spectrum, just like with a barbell, the weight is on the two ends. This would be much different from a standard Modern Portfolio Theory portfolio (MPT) which has become the standard method of asset allocation in the past 20 years.

In other words, if the two ends of the barbell represent opposite ends of the risk spectrum, then you would allocate all of your money between the very safe end and the very aggressive end. For example, you might allocate 80% of your money to inflation-protected treasury securities (TIPS) and 20% of your money to very aggressive small growth company stocks.

Why would you do this? Here’s why:

if you invest 100% of your money in various stocks of different risk, you will have a diversified portfolio but still be 100% exposed to downside risk (i.e. all of your investments could lose money).

If you invest in the 80/20 barbell (or 70/30 etc), your downside risk is limited only to the portion of your investment on the risky side- in our case, if the 20% invested in growth stocks lost all of their value, you’d still have the 80% of your portfolio invested in government bonds - plus interest.

Why Would This Appeal to Certain People?

The reason this appeals to some people is that a 2002, 2008, 1929 can never happen to a barbell portfolio (assuming the government bonds don’t fold!). it is also possible to mimic the returns of a fully invested MPT portfolio with a barbell portfolio with much less risk. Here’s how:

Let’s assume that a diversified MPT portfolio is expected to earn 9% annually based on historical returns and weighted expectations. Therefore we have expected return = 9%, investment at risk – 100% of portfolio.

Let’s assume an 80/20 barbell is comprised of 80% allocated to bonds with an expected return of 5% and 20% allocated to aggressive growth stocks with an expected return of 25%. In this case, the total expected return =

(0.80 x 5%) + (0.20 x 25%) = 4% + 5% = 9%.

Here we’ve mimicked the return of a fully invested portfolio with a downside floor protection plan in place limiting losses to no more than 20% of the portfolio – 4% (for interest earned on bonds) or 16% MAX LOSS risk.

Bottom line: Some people like the idea that there is an absolute maximum to what they can lose when they invest. The idea that the loss parameters are unknown and could be very high scares many away from investing in the first place. This is a way to get some people to invest with some level of comfort.

[bimetalaupt]

Mar 8, 2011 18:38:59 GMT -5 @franktheimpaler said:

Bruce the only thing wrong with MPT was that people shat themselves and did not rebalance with a different model and ahere to the structure...if the had.... they would have prospered in the down market...all they needed to do was not only rebalance but to rebalance to a complete bond portfolio and they'd be laughing now...like most of the folks who know me.

Frank,
We are drilling.. I signed the drilling orders this morning so I have been hoarding cash for the last few months....better then trying to borrow from the "First Stingy bank of X".

Time will tell,
Bruce

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[bimetalaupt]

Mar 9, 2011 23:32:15 GMT -5 @franktheimpaler said:

Once we get loose can we put the geenie back in the bottle?

Frank,
If the model for the massive injection of money into the Japanese Monetary base is true then we do not have the M3 to support inflation.. or M2 also ..... We need savers to pull the economy out of the depth of the abyss..

I did a photo study of my house and the fact are we have just about anything I need. I recall when I moved from the Regional Lab to Austin with all our things in the Truck and car( On tow).

The fastest way to change technologies is to make the old system too costly. Like when they replaced coal fired steam trains with oil fired. In fact coal has more energy but cost more in 1880. There is no energy shortage, just old technology that we can replace in 10 years, If we want...

Just a thought,
Bruce

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[bimetalaupt]

Mar 10, 2011 8:27:14 GMT -5 @franktheimpaler said:

Speaking of coal...check out PCX!

Again the the rebalance system is working well to reduce total volatility!!
so I will see you at the

NEW YORK, March 10 (Reuters) - A safe-haven bid tied to euro zone debt concerns and tensions in the Middle East and North Africa, along with aggressive bidding in an auction of reopened 30-year bonds lifted U.S. Treasuries prices on Thursday.

Treasuries added sharply to gains after media reports that Saudi police had opened fire on protesters at a rally.

"It escalates the conflict in the Middle East, and Saudi Arabia is the single biggest producer in OPEC and the flow of oil could be disrupted. If it affects the U.S. economy in a negative way that would very good for bonds," said Raymond Remy, head of U.S. fixed income at Daiwa Securities in New York.

While oil prices retreated, they remain near recent highs, as escalating violence in Libya aroused fears that the country's oil infrastructure could suffer lasting damage.

"The market (is) focusing on world events more than anything and that is the unrest in the Middle East, oil prices and gold prices," said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York.

A Moody's Investors Corp downgrade of Spain's debt rating shifted the spotlight to the debt issues facing peripheral euro zone nations, complexities that have compelled countries like Portugal to offer high yields to sell their bonds.

Treasuries extended gains on Thursday after the high yield in an auction of $13 billion of reopened 30-year bonds came in below expectations, indicating investors were keen to pay up for the longer-dated debt.

"Demand filtered out to the long end, where there was talk of buying of bonds to cover curve shorts that likely contributed to the good results in this auction," said John Briggs, Treasury strategist at RBS Securities in Stamford, Connecticut.

Wednesday's $21 billion reopened 10-year Treasury note auction also drew a strong bid, while Tuesday's $32 billion sale of three-year notes had about-average demand.

Traders said it was hard to be short given the day's weakness in commodity and stock prices. Major stock indexes were each down more that one percent.

The strong reception for the 10-year note and 30-year bonds occurred despite news on Wednesday the world's largest bond fund had sold all of its U.S. government-related debt holdings. ;D ;D ;D ;D I still think UT-Austin/TAMU are better then Stanford..

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[bimetalaupt]

Frank,
We are seening a major sell off in the NIKKEI 225 of 6.1*% .. This system has worked in the past very well.. BOJ added 185Billion USD to catch the falling kniff.. I am not sure if it will work but the dedicacated workers for Tokyo Electric have use every backup they have.. Too bad they did not have an diesel driven water pump.



Just a thought,
Bruce

[bimetalaupt]

Frank,
With interest low and bonds high it is time .. yes time to sell some bonds and buy those unlived stocks..
Bang for the $$$.. Russell 2000 Small caps
next QQQQ or they are back to the original QQQ
or Hold cash until ?

Thought Please,
Bi Metal Au Pt
The rebalance system ( 50/50 ) is a bit more conservative then the 60/40 James Mackintosh from FT used to compare to Hedge Funds.. I think the 50/50 would have been a better comparison...

[bimetalaupt]

Frank and Rovo,
It looks like we could see a real run after the "Debt Games" plays out in the industrial average. The high tech I keep hearing about is NXPI.. A SPIN OFF FROM PHILIPS!! Any thoughts on this major player in the signal processor for credit cards.. They are making money hand over fist and the thought is they could be bought by AAPL products or the whole firm???

Also now that M3 and M2 are going about 7% per year things with high beta could be the ride of the life.. Thought on SOAP or play the EFT's like QQQ??? Low cost over the years helps any system work!!

Conservative Options are also interesting but what are the pay-off on the long side?? Future for gold looks interesting but I like the real thing..MMXII current long term projection is about 1,800 so I am Low man on the "Totem Pole" for the Lux Group.. How about Chi Town??

My son looked at the Efficient Frontier and say why not just go wild on the high beta side of stocks and let it run up and down... make more money in the long run!!! GUTS!!

Just a thought,
Bi Metal Au Pt

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[bimetalaupt]

I thought Scott was very provocative in this analysis.. Analysis to death like I have most OPTION TRADES.. WITH MONTE CARLO SIMULATIONS.. OR 3RD POSITION OF RISK FAT TAIL ANALYSIS.
Is Portfolio Theory Harming Your Portfolio?

Scott Vincent

Green River Asset Management


April 29, 2011


Abstract:
Modern Portfolio Theory (MPT) teaches us that active equity managers who use judgment to make investment decisions won’t be able to match the returns (after fees and expenses) of blindly-invested, passively-managed index funds. Data on returns supports the theory, so it’s no surprise that investors are leaving actively managed funds in droves for the better average returns of super-diversified index strategies. Yet the reality is much murkier than we’ve been led to believe.

It turns out that the portfolio theories which inspired the creation and popularity of index funds and top-down, quantitatively-driven index-like strategies, are both flawed and impractical. There’s compelling evidence, moreover, that a subset of active managers do persistently outperform indexes. However, this important fact has been lost because we allow MPT to define the debate in its own misleading terms, tilting the field in its favor and hiding the reality about active manager performance in a complex game of circular arguments.

MPT relies on a number of unrealistic assumptions including an inaccurate definition of risk. Yet this characterization of risk sets the rules for comparing active vs. passive strategies, often causing active strategies to appear more risky and less efficient than their index counterparts. The same flawed logic is used to risk-adjust returns, biasing them downward for more active, concentrated managers, and rendering this highly important measure highly suspect. Furthermore, reliance on MPT’s measure of risk pressures active managers to super-diversify. The average active fund is thus disfigured to the point where the typical "active" manager is not very active at all, casting the fund in an unfavorable light in a beauty contest versus super-efficient index funds.

Stripping away the influence of portfolio theory involves isolating and evaluating the relatively small group of equity managers who rely heavily on judgment to build concentrated equity portfolios. Empirical data from multiple studies show that these concentrated managers, in fact, persistently outperform indexes. The implications of this statement are enormous. Concentrated manager returns present the best test of whether human judgment can add value in allocating capital, and they win, convincingly. Yet while judgment has prevailed over passive investing, few have taken notice. Most investors continue to look at average active manager returns, not recognizing that these returns are minimally influenced by judgment.

Regardless of MPT’s shortcomings on both a theoretical and empirical level, its dominating influence will not easily be dislodged. MPT is deeply woven into the fabric of our financial system, its mathematical grounding and precise answers inspire confidence. Further, its application is crucial in bringing increased scale and profitability to the financial services industry. Few want to see change. As such, common sense and judgment will continue to diminish in importance as top-down, quantitative strategies and blind diversification gain investment dollars.

An informed investor should welcome this shift. As highly-diversified strategies gain assets, inefficiencies become more prevalent because share prices are increasingly driven by factors other than fundamentals. Individual investors, seeking to exploit these inefficiencies and outperform indexes, should invest in several concentrated funds with strong track records. Managers of these funds have proven themselves adept at turning inefficiencies into strong returns for their investors, and persistence data demonstrates that past performance can indicate which managers are likely to continue to outperform. Concentrated fund returns may exhibit more volatility than indexes, but we now have proof that over the long-term, good judgment will be rewarded.

Number of Pages in PDF File: 14

Keywords: Modern Portfolio Theory, MPT, index funds, etf, passive management, active management, efficient market hypothesis, CAPM, criticism of portfolio theory
s Portfolio Theory Harming Your Portfolio?
Executive Summary
Modern Portfolio Theory (MPT) teaches us that active equity managers who use judgment to make investment
decisions won’t be able to match the returns (after fees and expenses) of blindly-invested, passively-managed
index funds. Data on returns supports the theory, so it’s no surprise that investors are leaving actively managed
funds in droves for the better average returns of super-diversified index strategies. Yet the reality is much
murkier than we’ve been led to believe.
It turns out that the portfolio theories which inspired the creation and popularity of index funds and top-down,
quantitatively-driven index-like strategies, are both flawed and impractical. There’s compelling evidence,
moreover, that a subset of active managers do persistently outperform indexes. However, this important fact has
been lost because we allow MPT to define the debate in its own misleading terms, tilting the field in its favor and
hiding the reality about active manager performance in a complex game of circular arguments.
MPT relies on a number of unrealistic assumptions including an inaccurate definition of risk. Yet this
characterization of risk sets the rules for comparing active vs. passive strategies, often causing active strategies to
appear more risky and less efficient than their index counterparts. The same flawed logic is used to risk-adjust
returns, biasing them downward for more active, concentrated managers, and rendering this highly important
measure highly suspect. Furthermore, reliance on MPT’s measure of risk pressures active managers to super-
diversify. The average active fund is thus disfigured to the point where the typical “active” manager is not very
active at all, casting the fund in an unfavorable light in a beauty contest versus super-efficient index funds.
Stripping away the influence of portfolio theory involves isolating and evaluating the relatively small group of
equity managers who rely heavily on judgment to build concentrated equity portfolios. Empirical data from
multiple studies show that these concentrated managers, in fact, persistently outperform indexes. The
implications of this statement are enormous. Concentrated manager returns present the best test of whether
human judgment can add value in allocating capital, and they win, convincingly. Yet while judgment has prevailed

[bimetalaupt]

I am moving this post to Super Fed-Watch for future inputs.. it is part of my long term investment system under risk management.

Bruce

[bimetalaupt]

Jan 23, 2012 21:25:02 GMT -5 @wxyz said:

Bruce

There are many people here that do not have access to Super Fed Watch. If you get the chance put some posts up here when you are able.

WXYZ,
YES.. I WANT TO SHARE WHY I THINK YOUR SYSTEM WILL BEAT MINE THIS YEAR..BOND ARE OVERPRICE BUT SO ARE SMALL CAPS.. THAT IS THE REASDON I SOLD BOTH LAST YEAR.. LARGEST CASH POSITION CHANGE WAS FEB 2011..APRIL AND SEPT WERE RE-BALLANCER SYSTEM TRADES..BROKERS LOVE THOSE.. TWICE THE PAY CHECK FOR THEM!!! YOU WILL HAVE TO BEAR WITH ME.(.BEAR= 2012 BOND MARKET AS WE ARE SEEING RIGHT NOW..THAT IS WHY I THINK BEN B. WILL DO A QE3!! WHETHER HE SAID SO OR NOT...)
I WANT TO REPEAT.. THE REASON I MOVED THIS IS LACK OF MY ABILITY TO POST JPEG SHOTS OF MMXIII NOW IN BETA 3 STAGE..

THE TWO SYSTEMS WE HAVE TALKED ABOUT ARE NARROW AND BROAD DISTROBUTION.. THE NARROW FOCUS NEEDS TO BE STRONGLY NEGITIVE CORRELATED TO THE BONDS.. MY LARGE HOLDING IN DUK IS NOT CORRECT.

DISCOUNT FROM CENTRAL TENDENCY FOR DJIA IS 31.0683600685%
VS FOR THE DJ TOTAL MARKET OF ONLY 9.9293618573%
QQQ DISCOUNT IS ONLY 5.7652054129%
AND RUSSEL 2000 (SMALL CAPS) IS ABOUT ZERO IE ONLY 0.5451173506%..

WE USE A DISCOUNTED MODEL AND THIS MEANS BOTH DIVIDENDS AND SHARE BUY BACK ARE USED TO DISCOUNT AGAINST TIME ( FROM NEW YORK UNIVERSITY PROFESSOR OF EVALUATIONS).. YOU CAN ALSO USE THE SYSTEM AT VALUE-PRO BUT THEY DO NOT HAVE UPDATED DATA..

IF YOU WANT A COPY OF THE LATEST OUTPUT FROM MMXIIIBETAIII PM MOON..
LET HER KNOW OF HER KNOW ... ALSO AHAMBERGER(A++) OR ME(BIMetal),,
I will go into more detail on SFW Where I can post the very detailed Output of MMXIIIBETAIII

Thank-you for your attention..
BiMetalAuPt

[bimetalaupt]

Jan 23, 2012 21:25:02 GMT -5 @wxyz said:

Bruce

There are many people here that do not have access to Super Fed Watch. If you get the chance put some posts up here when you are able.

WXYZ,
YES.. I WANT TO SHARE WHY I THINK YOUR SYSTEM WILL BEAT MINE THIS YEAR..BOND ARE OVERPRICE BUT SO ARE SMALL CAPS.. THAT IS THE REASDON I SOLD BOTH LAST YEAR.. LARGEST CASH POSITION CHANGE WAS FEB 2011..APRIL AND SEPT WERE RE-BALLANCER SYSTEM TRADES..BROKERS LOVE THOSE.. TWICE THE PAY CHECK FOR THEM!!! YOU WILL HAVE TO BEAR WITH ME.(.BEAR= 2012 BOND MARKET AS WE ARE SEEING RIGHT NOW..THAT IS WHY I THINK BEN B. WILL DO A QE3!! WHETHER HE SAID SO OR NOT...)
I WANT TO REPEAT.. THE REASON I MOVED THIS IS LACK OF MY ABILITY TO POST JPEG SHOTS OF MMXIII NOW IN BETA 3 STAGE..

THE TWO SYSTEMS WE HAVE TALKED ABOUT ARE NARROW AND BROAD DISTROBUTION.. THE NARROW FOCUS NEEDS TO BE STRONGLY NEGITIVE CORRELATED TO THE BONDS.. MY LARGE HOLDING IN DUK IS NOT CORRECT.

DISCOUNT FROM CENTRAL TENDENCY FOR DJIA IS 31.0683600685%
VS FOR THE DJ TOTAL MARKET OF ONLY 9.9293618573%
QQQ DISCOUNT IS ONLY 5.7652054129%
AND RUSSEL 2000 (SMALL CAPS) IS ABOUT ZERO IE ONLY 0.5451173506%..

WE USE A DISCOUNTED MODEL AND THIS MEANS BOTH DIVIDENDS AND SHARE BUY BACK ARE USED TO DISCOUNT AGAINST TIME ( FROM NEW YORK UNIVERSITY PROFESSOR OF EVALUATIONS).. YOU CAN ALSO USE THE SYSTEM AT VALUE-PRO BUT THEY DO NOT HAVE UPDATED DATA..

IF YOU WANT A COPY OF THE LATEST OUTPUT FROM MMXIIIBETAIII PM MOON..
LET HER KNOW OF HER KNOW ... ALSO AHAMBERGER(A++) OR ME(BIMetal),,
I will go into more detail on SFW Where I can post the very detailed Output of MMXIIIBETAIII

Thank-you for your attention..

[bimetalaupt]

Jan 24, 2012 19:30:37 GMT -5 bimetalaupt said:

Jan 23, 2012 21:25:02 GMT -5 @wxyz said:

Bruce

There are many people here that do not have access to Super Fed Watch. If you get the chance put some posts up here when you are able.

WXYZ,
YES.. I WANT TO SHARE WHY I THINK YOUR SYSTEM WILL BEAT MINE THIS YEAR..BOND ARE OVERPRICE BUT SO ARE SMALL CAPS.. THAT IS THE REASDON I SOLD BOTH LAST YEAR.. LARGEST CASH POSITION CHANGE WAS FEB 2011..APRIL AND SEPT WERE RE-BALLANCER SYSTEM TRADES..BROKERS LOVE THOSE.. TWICE THE PAY CHECK FOR THEM!!! YOU WILL HAVE TO BEAR WITH ME.(.BEAR= 2012 BOND MARKET AS WE ARE SEEING RIGHT NOW..THAT IS WHY I THINK BEN B. WILL DO A QE3!! WHETHER HE SAID SO OR NOT...)
I WANT TO REPEAT.. THE REASON I MOVED THIS IS LACK OF MY ABILITY TO POST JPEG SHOTS OF MMXIII NOW IN BETA 3 STAGE..

THE TWO SYSTEMS WE HAVE TALKED ABOUT ARE NARROW AND BROAD DISTROBUTION.. THE NARROW FOCUS NEEDS TO BE STRONGLY NEGITIVE CORRELATED TO THE BONDS.. MY LARGE HOLDING IN DUK IS NOT CORRECT.

DISCOUNT FROM CENTRAL TENDENCY FOR DJIA IS 31.0683600685%
VS FOR THE DJ TOTAL MARKET OF ONLY 9.9293618573%
QQQ DISCOUNT IS ONLY 5.7652054129%
AND RUSSEL 2000 (SMALL CAPS) IS ABOUT ZERO IE ONLY 0.5451173506%..

WE USE A DISCOUNTED MODEL AND THIS MEANS BOTH DIVIDENDS AND SHARE BUY BACK ARE USED TO DISCOUNT AGAINST TIME ( FROM NEW YORK UNIVERSITY PROFESSOR OF EVALUATIONS).. YOU CAN ALSO USE THE SYSTEM AT VALUE-PRO BUT THEY DO NOT HAVE UPDATED DATA..

IF YOU WANT A COPY OF THE LATEST OUTPUT FROM MMXIIIBETAIII PM MOON..
LET HER KNOW OF HER KNOW ... ALSO AHAMBERGER(A++) OR ME(BIMetal),,
I will go into more detail on SFW Where I can post the very detailed Output of MMXIIIBETAIII

Thank-you for your attention..

The largest Hedge Fund in the world (120 Billion USD) Bridgewater made 23% betting on T-Bonds,,, esquiring mind want to know!!
Just a thought,
Bruce
The world's biggest hedge fund is also one of the best performers.

Bridgewater Associates, which manages nearly $120 billion, posted returns of 23 percent in 2011 - a year when the average hedge fund portfolio lost 5 percent.

Against the backdrop of fear over European debt and stagnant global growth, the hedge fund, led by one of Wall Street's more enigmatic titans, Ray Dalio, sidestepped the mess. The fund did it with bets on United States Treasuries, German bonds and the Japanese yen, according to people familiar with the firm's investment strategy, who spoke on condition of anonymity because the information is private.

Such performance adds up. Over the last 20 years, Bridgewater had annualized returns of 14.7 percent, amounting to $50 billion of gains for investors. Over the same period, the Standard & Poor's index of 500 stocks returned about 8.7 percent a year.

A big chunk of Bridgewater's gains came in recent years, a volatile period that felled many funds. As the financial crisis wreaked havoc, Bridgewater notched positive, albeit modest, returns in 2008 and 2009. The next year, the firm had gains of 45 percent versus about 10 percent for the average hedge fund.

The firm has managed to post big numbers even as assets have swollen, defying conventional wisdom and industry experience. Investors poured money into Paulson & Company in recent years, after the founder, John A. Paulson, earned billions of dollars betting against subprime mortgages. Assets at Paulson topped $38 billion at the beginning of 2011, but many of his portfolios suffered last year, with one of the main funds losing 50 percent.
finance.yahoo.com/news/punishing-hedge-funds-biggest-one-142402684.html

[bimetalaupt]

Looks like bonds again were the power horse for May!!.. Return to the high Beta to rebalance..

Takes golden balls to play this game!! Buy what every one else is selling!!
Estimated return.. Ultra High Beta are the royal (Purple) bet of the month!!

Just a thought,
BiMetalAuPt
EQUITY RETURN 10 Y 7.993057091964401728034772531828%
10 y note 1.661000000000000031974423109205%
erp 6.332057091964402140149559272686%
beta 1 erp 8.590739066526989375915945856832%
market beta 1 10.251739066526988963801159115974%
beta 1.18= high beta 11.798072098501846127760472882073%
beta 1.3 = very high 12.828960786485088974018253793474%
ultra 16.179349022430610460787647753023%
s&p 500 cost 11.457926625227896622050138830673%
projected 14.489775115777913327974601997994%

[Aman A.K.A. Ahamburger]

Lots of bond money that could go into LONG TERM stock holdings, if one likes the risk of trading that is.

[Driftr]

Heard yesterday that Gross is loading back up on Treasuries. Not sure what that means. I'm sure we'll see in the coming quarters.

[The Virginian]

I think it is for people who play currencies. Read an article on it but it was really beyond my comprehension. It has to do with Europe and people hedging their bets expecting to make a lot of money off others woes.

[bimetalaupt]

Jun 13, 2012 1:46:32 GMT -5 Aman A.K.A. Ahamburger said:

Lots of bond money that could go into LONG TERM stock holdings, if one likes the risk of trading that is.

A++,
It looks like the ECB and China are in SINK with Ben. B. The flight to safety is in full gear...The Black Swans have formed a full Bombing formation and are headed to Greece...Spain and Paris!!!
Just a thought,
Latest from Expert 50/50
EQUITY RETURN 10 Y....................7.466557433427702505923662101850%
10 y note............................................1.540000000000000035527136788005%
erp,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,5.926557433427702470396525313845%
beta 1 erp.........................................8.757118650825763239708976470865%
market beta 1..................................10.297118650825762387057693558745%
beta 1.18= high beta......................11.873400007974399983368130051531%
beta 1.3 = very high .......................12.924254246073491714241754380055%
ultra ...................................................16.339530519895536286867354647256%
s&p 500 cost ....................................11.075116758840582775746952393092%
projected return to normal PE.......14.693818654812961455036202096380%

[bimetalaupt]

Sorry gang but at 1.479% I have to say.. i thought the MMXIV and Expert 50/50 were in left field but DAM the were right on the under 1.5% call for the ten year T-Note Call.
Again Expert 50/50 is calling for a buy of 30 year T-Bond and 10 year T-Note..
NEW projection for 10/1/2013 for the 10 year T-Note < 1.00% BUY
New Projection for the 30 Y T-Bond is = or < 2.000%.. Buy
..Still in hold except for very aggressive 10% of the Risk assets.. Love alternative Investments esp NG in the Ground.,
Great Texas Merlot and some over priced French Bordeaux RED..Right Bank!!.Did I sasy banks.. Right.. Check out Citibank.. looks like the assets quality has improved at the cost of profits.. Good move VP!!!!

gold to sell........2020.93523659.........94.586863%

Just a thought,
BimetalAuPt

EQUITY RETURN 10 Y.......................7.293406361997156750476278830320%
10 y note................................................1.478999999999999870325950723782%
erp...........................................................5.814406361997156658105723181507%
beta 1 erp..............................................8.673487664173869404748984379694%
market beta 1.......................................10.152487664173868608941120328382%
beta 1.18= high beta............................11.713715443725163822819013148546%
beta 1.3 = very high .............................12.754533963426032627808126562741%
ultra .........................................................16.137194152453837148186721606180%
s&p 500 cost ..........................................10.890650194084091850754703045823%
projected ................................................14.530345386036453092515330354217%

[bimetalaupt]

Jul 12, 2012 14:01:48 GMT -5 bimetalaupt said:

Sorry gang but at 1.479% I have to say.. i thought the MMXIV and Expert 50/50 were in left field but DAM the were right on the under 1.5% call for the ten year T-Note Call.
Again Expert 50/50 is calling for a buy of 30 year T-Bond and 10 year T-Note..
NEW projection for 10/1/2013 for the 10 year T-Note < 1.00% BUY
New Projection for the 30 Y T-Bond is = or < 2.000%.. Buy
..Still in hold except for very aggressive 10% of the Risk assets.. Love alternative Investments esp NG in the Ground.,
Great Texas Merlot and some over priced French Bordeaux RED..Right Bank!!.Did I sasy banks.. Right.. Check out Citibank.. looks like the assets quality has improved at the cost of profits.. Good move VP!!!!

We have a few reduction earning for Q2.. again the is a Monte Carlo simulation with 2MM passes

EQUITY RETURN 10 Y....................7.173727689676903551685427373741%
10 y note.............................................1.500000000000000000000000000000%
erp........................................................5.673727689676903551685427373741%
beta 1 erp...........................................8.417830396157532035772419476416%
market beta 1.....................................9.917830396157532035772419476416%
beta 1.18= high beta ...................11.433039867465886629815940978006%
beta 1.3 = very high ......................12.443179515004791468868461379316%
ultra ..................................................15.726133369506229087164683733135%
s&p 500 cost ...................................10.632642887755668681393217411824%
projected .......................................14.134350329890473574323550565168%

gold to sell........2020.93523659.........94.586863%

Just a thought,
BimetalAuPt

EQUITY RETURN 10 Y.......................7.293406361997156750476278830320%
10 y note................................................1.478999999999999870325950723782%
erp...........................................................5.814406361997156658105723181507%
beta 1 erp..............................................8.673487664173869404748984379694%
market beta 1.......................................10.152487664173868608941120328382%
beta 1.18= high beta............................11.713715443725163822819013148546%
beta 1.3 = very high .............................12.754533963426032627808126562741%
ultra .........................................................16.137194152453837148186721606180%
s&p 500 cost ..........................................10.890650194084091850754703045823%
projected ................................................14.530345386036453092515330354217%

[bimetalaupt]

Latest Back Propagation did not flow as well as before due to the higher Black Swan factors,
AKA 3rd Derivative of position...Big Iron was at it again....Now it is in the BEAR Mode for the learning curve

EQUITY RETURN 10 Y..................6.375525391002281772045989782782%
10 y note...........................................1.439999999999999946709294817992%
erp.....................................................4.935525391002282269425904814852%
beta 1 erp........................................6.599151874816132412604474666296%
market beta 1..................................8.039151874816132803402979334351%
beta 1.18= high beta.....................9.226999212283034879078513768036%
beta 1.3 = very high ...................10.018897437260971372552376124077%
ultra ..............................................12.724549705935586985106056090444%
FB Cost for ISV...........................18.682475096937867675706002046354%
projected ....................................11.212651480957649852143731550314%