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Post by Norbert on Jul 27, 2021 5:06:26 GMT
I have never been wrong about anything. Once I thought I was wrong, but that was a mistake.
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Post by racqueteer on Jul 27, 2021 11:24:20 GMT
Another point about Dick is when he sells and holds cash it seems his crystal ball can have a cloudy day. I would guess half the time he is correct and re-enters bondish CEF land at lower prices and half the time not. I think that Cape's thing was to avoid big losses (which are not unusual in cefs); even if that resulted in taking small opportunity losses along the way. Cape seemed to be pretty quick on the trigger getting OUT, but tended to ride the positive wave going UP. In the meantime, he got the yield. Different approach than for most of us, I think. Closest to this is probably FD's approach to things.
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Post by racqueteer on Jul 27, 2021 11:32:20 GMT
I have never been wrong about anything. Once I thought I was wrong, but that was a mistake. I always thought I'D created that line; don't REMEMBER hearing it previously, but... who knows? Can this line be traced back to an original source somewhere? I figure you have as as good a chance of knowing as anyone (with the possible exception of yogi; who seems to be able to track down ANYTHING!).
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Post by Norbert on Jul 27, 2021 12:05:24 GMT
I have never been wrong about anything. Once I thought I was wrong, but that was a mistake. I always thought I'D created that line; don't REMEMBER hearing it previously, but... who knows? Can this line be traced back to an original source somewhere? I figure you have as as good a chance of knowing as anyone (with the possible exception of yogi; who seems to be able to track down ANYTHING!). I've used it for years, but don't know the source.
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Post by yogibearbull on Jul 27, 2021 12:28:27 GMT
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Post by oldskeet on Jul 27, 2021 12:54:39 GMT
Hi guys, I'm sure that there are many who will take issue with what I am about to write. But, this has worked well for me in the past with my spiff plays (special investment positions). If I am wanting to add equity ballast in a falling stock market to my portfolio I'll open a first step buy at a decline of 5% in the S&P 500 Index. My next buy step in this hypo is a decline at the 10% mark with the step purchase being 1.5 times the amount of the first. The next hypo buy step is at the 15% decline mark at 2 times the first buy step purchase. The theory is that the father the market declines the less risk there is in it's purchase. I'll continue this process of buying during the pullback and increasing the amount purchased at each buy step. Then on the way back up I'll average out at predeterminded exits points usually taking principal out and letting the gains roll. Some will say that this is a modified average down strategy and it might be but this is how Old_Skeet rolls.
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Post by yogibearbull on Jul 27, 2021 13:01:55 GMT
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Post by uncleharley on Jul 27, 2021 13:33:44 GMT
Did you ever run out of money?
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Post by FD1000 on Jul 27, 2021 13:45:32 GMT
I always thought I'D created that line; don't REMEMBER hearing it previously, but... who knows? Can this line be traced back to an original source somewhere? I figure you have as as good a chance of knowing as anyone (with the possible exception of yogi; who seems to be able to track down ANYTHING!). I've used it for years, but don't know the source. I can't get enough of myself. On a more "serious" note. If I'm right at 70% it's pretty good, and when I'm "wrong" I minimize it by selling to a better fund. When and how to switch is "the art of the switch". Then you add concentration and best of breed and it's "easy". I owned PIMIX for about 7 years (2011-18). Look at the yearly ranking below. Also see below PRWCX, at the top 30% and several years top 10%. Chances I would own VWELX are zero. and since I'm not afraid to invest higher %, if I'm convinced I get to 30-40-50%. If Bogle 2-3 funds portfolio have a big % in SP500 why can't I do the same? Why would I use 3 funds in the same category when a great one is all I need. It goes beyond. Simple example: If I want to own a LC US fund. I already know that SP500 is a great choice. When I look at other funds performance + risk attributes, I look at all 3 (growth, value, blend) since managed funds can't be accurately be in a box and I love the great exceptions. Suppose I looked at DODFX, I don't care if it's "value" or the if the ER=0 or the managers have 5 million each in the fund. SP500 is better on every level, performance (9 out of 10 years) + better SD. Chances I own DODFX in the last 10 years were zero.
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Post by richardsok on Jul 27, 2021 13:52:37 GMT
I always thought I'D created that line; don't REMEMBER hearing it previously, but... who knows? Can this line be traced back to an original source somewhere? I figure you have as as good a chance of knowing as anyone (with the possible exception of yogi; who seems to be able to track down ANYTHING!). I've used it for years, but don't know the source. My father had a monumental ego; colossal. Titanic. He would make that remark when we kids were captive audience at the breakfast table. He was only half in jest.
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Post by racqueteer on Jul 27, 2021 14:12:21 GMT
We can always count on you, Yogi!
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Post by paulr888 on Jul 27, 2021 15:04:14 GMT
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Post by anitya on Jul 27, 2021 15:38:15 GMT
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Post by oldskeet on Jul 27, 2021 16:14:09 GMT
uncleharley , Hi unclecharley, Thanks for your question. On your question: "Did I ever run out of money?" Since, I carry about a 15% to 20% allocation to cash within my asset allocation of 20/40/40 (cash/bonds/stocks) my loaded step buy spiff strategy has worked well with cash to spare. In addition, my portfolio generates an income stream of about +1% per quarter. Thus far, I have not run out of cash to fund my loaded step buy spiff strategy when engagued. Generally, a 25% decline in the S&P 500 will equate to about a 5% increase to my equity allocation via spiff buys.
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Post by uncleharley on Jul 27, 2021 16:37:22 GMT
uncleharley , Hi unclecharley, Thanks for your question. On your question: "Did I ever run out of money?" Since, I carry about a 15% to 20% allocation to cash within my asset allocation of 20/40/40 (cash/bonds/stocks) my loaded step buy spiff strategy has worked well with cash to spare. In addition, my portfolio generates an income stream of about +1% per quarter. Thus far, I have not run out of cash to fund my loaded step buy spiff strategy when engagued. Generally, a 25% decline in the S&P 500 will equate to about a 5% increase to my equity allocation via spiff buys. I find it interesting that while Anita has not recieved specific answer to her question about an exit strategy, I think the posts demonstrate that ones enter and exit strategies depend on their overall investment strategy. It is no wnder that there are so many indicators. LOL
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Post by retiredat48 on Jul 27, 2021 17:08:47 GMT
I don't see what difference it makes if Capecod invests differently than me or anyone else...he still 1) buys in buckets, and 2) never averages down. This is Pyramid UP.
But OK, in my heyday of posting a decade ago, here are some more PU users...who posted in just one month time period, theIR use of PYRAMID Up (REMEMBER THESE POSTERS!?):
POSTERS USING PYRAMID UP/1st Qtr 2011
The 62 Dog...Py Up Hospitalities Properties (HPT), a second bucket addition to my dividend payers...Will Pyramid Up, or exit as the market dictates...
YinYang...Bought: VDE---VUG---VYM. Reason: Bucket purchases on all three funds pyramiding UP R48 :-)
elder...Bought second bucket of USCI. Pyramid up. Bill/
Added to DGS - pyramid up.
bythenbrs...Added another bucket of VVR yesterday, the third of four planned. Pyramid up on the third bucket on good price momentum.... Purchased final buckets of GDO and AWF. Added additional buckets of GIM and PFN.
bubbygator...Bought last bucket of MWHYX @ 8.5% yield and HIO @ 8.95% yield - continuing to put free cash to work. Each was PyUp;
dale11...Purchased another bucket of VUG, following the momentum of large cap growth...I, too, added to my small cap Brazil (BRF) holdings. Emerging markets do seem to be coming back (fingers crossed), and BRF is one of those leading the pack. This is not a strict "pyr up" bucket though.
floete...Bought second bucket of WSCVX.
SileneUK...Picked up a small position in KRE based on R48 recommendation for banks in this thread
nybrian... I made a 2nd bucket of vix and a initial bucket in my 401k consisting of small, mid, international and index 500...Because of learning more about the 200dma, I bought my first bucket of VTI...bought 3rd buckets of Small Cap and Mid Cap funds in my 401k. Pyramid up.
plainolbill...Bought a second bucket of BRKS - Brooks Automation which has been moving up nicely.
rickrmf...Action: Sold, a first bucket of BRF, Brazil Small Cap ETF
Why: NAV crossed below 200MA... reducing risk, following plan for incremental selling w/ continued down trend...on buckets: I use a modified bucket approach when pyr-up.
GtrHtr...Why? I re-read R48s introductory post on bogleheads over the weekend and decided it was time to get off my backside and put more of my cash to work.
Vagabond...Sold VDE as R48 explained, it was high above 200dma and started sloping down. Got some profits there.
awstauffer...Bought my first buckets in each of the following ETF's...Reason- Starting the program.
Rosemarie...Bought 100 shares of GE at $20.86 on 2/7/11.
Why?
I already had 200 shares of GE at $16.98. Thought I was pyramiding up.
---------------------------------------------------------------------------------------------------------------------------
r48
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Post by yogibearbull on Jul 27, 2021 17:18:08 GMT
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Post by Chahta on Jul 27, 2021 17:22:32 GMT
I buy at $32.Goes to $35. Backtracks to $33. Starts up again. Where is the buy point for PyrUp?
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Post by uncleharley on Jul 27, 2021 17:53:04 GMT
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Post by uncleharley on Jul 27, 2021 17:54:09 GMT
I buy at $32.Goes to $35. Backtracks to $33. Starts up again. Where is the buy point for PyrUp? Maybe $36
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Post by paulr888 on Jul 27, 2021 18:21:44 GMT
R48 ... Let me conclude with this. I see value in your Pyr Up during my working wealth accumulation stage when I just had a bag of investments and more money coming in to deploy. In retirement, I am quite different. I am fully invested and have a very structured portfolio asset allocation with tight % targets. In good times I simply rebalance. In bad times I simply do nothing and wait for natural market recovery. I am not going to change. I have no interest or need for Pyr Up.
This did bring back memories and gave me chuckle:
elder...Bought second bucket of USCI. Pyramid up. Bill/
I owned this commodity fund for awhile and it was a loser. Nothing would have helped this, not even Pyr Up.
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Post by anitya on Jul 27, 2021 19:20:53 GMT
No worries. You can use she, he, or it but please no “they”.
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Post by FD1000 on Jul 27, 2021 19:30:04 GMT
I buy at $32.Goes to $35. Backtracks to $33. Starts up again. Where is the buy point for PyrUp? It starts easy and get complicated because you must look at the whole thing. Let's look at Joe young investor that is 100% in the market because he should be. If Joe wants to buy something, he has to sell first. If Joe concluded to sell, R48 would say you sell in buckets. So, Joe sold 10% in fund A and buy 10% in fund B at $32. He also decides to add every 5-6% (or another % you like) let's make it simple and say every $2. Next time Fund B is at $34, Joe sells 10% of A and buy B again. This time Fund B price stays below $36 for the next 6 months. Joe will have 30% in Fund A and 20% in fund B for months. Suppose after a year you don't like fund C and wants to buy instead fund D. You may end up with 4 funds now. Suppose fund A+B dive in price, you lose on both. If Joe likes Fund B much more than A and especially when A is a loser, why wait? R48 also said lump sum is better than DCA so why would you use buckets? Either you believe in what you do or not. Wear the big pants and take responsibility. This is what I do. The reason I don't like Fund A is a good reason and why I prefer B. I sell all A and buy B. No buckets, no complications, done. Any time I want to switch, I do a full switch in most cases. The "wrong" choice: suppose I switched from A to B and 6 months later I think fund C is better, just switch again, from B to C. The key, of course, is, do you want to trade or not? You can just trade 10% of your portfolio. You can decide to make a switch only every 12 months. Furthermore, you make all rules you like. Write down the rules, follow them and test them in real life. Then tweak. Just like swimming, you can't just read about it, you actually have to do it in real life.========= I use buckets only in one occasion as I did after March 2020. I was at 99+% cash, the market was down over 30%, risk is high and difficult to know what is next. I never buy when price goes down, never. I want to see a rebound from the bottom and the SP500 (the market) goes above 50-100 days moving average. Then, select a couple of your best funds you like and buy a bucket. Several days later, if it's still good, buy another bucket. Several days later, if it's still good, buy your final bucket. This is only a special occasion, I'm in pretty quickly and I buy 20-30% each time, these are not 1-2% buckets. Basically, this has nothing to do with PyrUp it's the best rapid way FOR ME to be invested at 99+%. BTW, I hardly "buy the dips" which are small down declines, after all I'm in almost all the time. I use smaller decline 8-15% for a quick trade of hours-days. Completely another story.
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Post by retiredat48 on Jul 28, 2021 0:44:05 GMT
I buy at $32.Goes to $35. Backtracks to $33. Starts up again. Where is the buy point for PyrUp? Short answer: $33 or above. With Pyramid Up, you select the number of buckets for your full purchase. Let's say 5 buckets. You also set a percentage up you will use to make subsequent buys. You do not make the next buy unless above that percent. For more conservative investors, 3-5% is common; more aggressive, use 2-3%. Let's use 3%. Thus in the case you outlined, a 3% increment, is $32.96...call it $33. So any price above $33 is a buy...hence you "buy the dips"...which I often do. Note if you buy any dip below your past purchase prices, you are likely buying in a downtrend. And if you do buy the second bucket at $33.21 for instance, your next bucket buy point is 3% above that. -------------------------------------------- Note 1)...FD, I am not even reading your posts anymore about this topic. Note 2: For very volatile funds I may increase starting buckets to more than five; also, the percent change is made larger. I also insist on a 1 day wait period...each buy. Note 3: ...I used the word "buckets" well before M* pro gurus started using it for retirement planning. R48
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Post by yogibearbull on Jul 28, 2021 1:03:01 GMT
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Post by anitya on Jul 28, 2021 1:49:49 GMT
retiredat48, I am not the one objecting to your use of ‘buckets’, though I use ‘tranche’.
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Post by paulr888 on Jul 28, 2021 2:46:02 GMT
retiredat48 , I am not the one objecting to your use of ‘buckets’, though I use ‘tranche’. Sorry anitya that you got the blame for this. It was I who suggested it. It just seems to me in a retirement investing forum one would not use a term that is used by many more than just one person in a context with a complete different meaning. I guess that way he can claim to be a fellow bucketeer.
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Post by Norbert on Jul 28, 2021 2:49:23 GMT
retiredat48, I am not the one objecting to your use of ‘buckets’, though I use ‘tranche’. I'm not objecting to his use of PyrUp either. There are many ways to get to Rome. Whatever works best for him! However, I think the benefit of PyrUp is psychological: it's reassuring to get market price confirmation before increasing a position with another bucket / tranche. The obvious problem is that it's not logical to wait for higher prices when establishing a position. It makes more sense to buy as cheaply as possible. Simple math! Knowledgeable investors buy the dips and corrections. As Buffett said, buy when others are fearful! That's how you make real money. PyrUp doesn't prevent future losses; all it does is guarantee a higher average cost. Prices may decline below the purchase price at any time in the future. For example, consider the case of an investor creating a position in oil & gas (XLE or VGENX) starting in 2011. He finally builds a full position (buys the last "bucket") by July 2014, following a strong uptrend. The problem is that July 2014 was the long-term top. It's been downhill from there. PyrUp only provides the illusion of safety, while increasing your cost base. N.
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Post by paulr888 on Jul 28, 2021 5:33:10 GMT
Another example is bitcoin. One could Pyr Up easy enough. But if Scott Minerd is correct in his prognostication, bitcoin will see $15,000 again. Not sure what his time frame is.
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Post by anitya on Jul 28, 2021 6:41:01 GMT
I know traders use PUP sometimes if it is not a high conviction buy, though they are firm believers that there is a lot of fish in the ocean. So, I want to keep an open mind about PUP for speculative investing if it comes with a reliable exit strategy. Traders sell into strength as well. But traders always have tight stops and they do not mind whipsaws.
I must say I do not enjoy averaging down speculative buys. I am more inclined to average down indices and average up speculative buys. If the price of a speculative buy goes below my initial entry price, the next buy has to be at least 10% lower if I have to average down but even then I am not a happy camper buying the second tranche. During March 2020, I made some speculative buys where the second tranche was 25-30% lower. Then I also end up selling too soon or too late. That is not the case with buying indices - once I start buying, a lower price has never bothered me.
For me, buying has always been easier than timing sells. That works for investing in indices but not for speculative buys.
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