131–140 of 245 posts
If you're borrowing money using a mortgage in order to invest in stocks, that's probably not particularly smart. If you're taking on debt financing to grow an already-profitable business into an even more profitable business, that might be a different kettle of fish.
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How are white males a privileged class? The top 1% sure, but the average white male? If anything, white females are a privileged class.
Being privileged doesn't mean one's life has no hardship. There are plenty of poor, white men, and Oprah Winfrey is a billionaire. The way to think about it is take one of those poor white men and imagine he is black while the other things (wealth, schooling, location, etc) remain constant. While anything might happen, statistically that person's outcome would be worse as a black poor man than as a white poor man.
This is uniquely an african american problem suggesting alternative reasoning (culture, education/values etc).
With regards to Rule 11, especially: > GOLD not only does well during times of intense inflation, it does very well. No, it does not: * https://www.nber.org/papers/w18706 * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 From Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976 : > Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “t…
Gold is the least bad currency option when compared to all the fiat currencies.
* https://www.theatlantic.com/business/archive/2012/08/why-the...
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It’s not true. And using the 70s as proof is either dishonest or lacking knowledge: gold rose in the 70s because an artificial pinning of its price was removed.
Isn’t that the point, though? It’s a hedge against inflation, a low risk, static asset to keep in place of cash. In 1970 a Carolla would have cost about 40oz of gold and today it would cost about 20oz. A barrel of crude was ⅒oz, today 1/20th oz.
It is not a good hedge against inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
From Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
What? That's exactly what I'm investing for. What the hell else should I expect to fund my retirement?
Rule #1 (your career creates your wealth) is a gem. Rule #8 (make your own decisions) lacks self-awareness, especially after you read Rule #11 (bulletproof portfolio). I have been on a quest for a truly bulletproof portfolio for years. It's not easy. TANSTAAFL. Rule #11 also contradicts Rules #6 (no trading system works forever) and #9 (only do things you understand). That criticism aside, the author did a service to…
Trading systems and asset allocations are not the same thing. Browne wrote a book explaining his portfolio in hopes that people would understand it. If you understand it and decide to use it, you're making your own decision.
Asset allocation is just a trading system that changes much less frequently and has a different belief system underpinning it. They are both fundamentally decision frameworks about how to spend your money.
The tragedy with this article is that a lot of the advice is sound. Once people get to Rule #11 they have a lot of reason to trust this author and adopt his bulletproof portfolio. And then they learn the hard way how it wasn't bulletproof.
The author really should have known better. The prescriptive recommendations in Rule #11 contradict so much of the otherwise sound advice.
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Timing the market is hard but periodically rebalancing your portfolio is easy, and generally recommended.
Rebalancing according to risk is recommended, not doing it because you think you know what the market is going to do. For instance, let's say right now, the market is headed up. When is the right time to "re-balance" to more cash? This is just assuming that the market is going to go lower than it currently is, which is just as much a gamble as thinking it'll go up for the next year. In short, don't try to guess the m…
It's not gambling, and it's not original with Browne. The percentages aren't magic, they're just anything that has worked reasonably well historically over many different economic conditions. Most fee-based financial advisors will give you a strategy like this. It's probably the most widely-accepted strategy in finance.
Rule 11 deserves a rethink. There is an official policy that cash will lose some % of its value each year! Holding 25% of your wealth in cash is planning to throwing away years of life. For this sort of dead-basic investment advice, there is no point being ready for situations where a cash position is advantageous. People are much more likely to panic, do something stupid or get ground down by inflation. It is better…
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This is an awful, overly-simplistic, unproductive, and arguably inaccurate mindset to have in life.
To each their own, but I just dropped my daughter off at university, and nearly every kid is white. I felt it may be of some interest here on HN to let people know there is a step 0 that most humans will never be able to access. I don’t mean to imply that successful people didn’t work hard. I have worked hard. But had I grown up as some of my primary school colleagues did - on the literal wrong side of the tracks - I…
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Trading systems and asset allocations are not the same thing. Browne wrote a book explaining his portfolio in hopes that people would understand it. If you understand it and decide to use it, you're making your own decision.
> Trading systems and asset allocations are not the same thing. Asset allocation is just a trading system that changes much less frequently and has a different belief system underpinning it. They are both fundamentally decision frameworks about how to spend your money. The tragedy with this article is that a lot of the advice is sound. Once people get to Rule #11 they have a lot of reason to trust this author and ado…