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With these inflation linked bonds usually there is not much of a gain after taxes but that's fine, if there is a real return that goes to 0% after-tax, at least the person earned the inflation rate. The purchasing power of the currency was protected

Of the countries in the store of value index, only Switzerland doesn't offer inflation linked bonds but I think that's fine, its such a stable country/currency that short-term bonds/deposit rates probably will keep up with inflation over long periods of time To measure changes in the index I...

This Taleb approach is something I had thought about in the past. I thought about it once I was thinking about the IMF's "drawing rights". These drawing rights are a unit of account of wealth that involve a basket of currencies. I don't necessarily agree with the weightings and the components of...

Taleb talking about his portfolio strategy. In the 90% in 'safe' assets, he owns a diversified pool of inflation linked bonds in different currencies along with gold (I believe) and other metals. That's a very 'balanced' type approach, just designed to have less returns and less fluctuations

And the answer finally appears. It was just what I suspected, Taleb diversifies. He does not sit on US T-Bills (which only a moron would do). He says: "I have a collection of currencies and metals". "So its a combination of inflation linked currencies and metals". I assume he meant inflation...

I'm building a 'dynamic' excel backtester that will be able to run tests (with rebalancing or not) on pretty much any return(s) stream quickly. It will adjust almost automatically to new data with just a few manual inputs. This will make the process for backtesting new data (new countries, or...

Thought I run an additional test with Greek returns. The effect of adding cash as an 'asset class' at the rule of thumb 15% allocation (and the returns are the inverse of the inflation rate). Its an idea that I suspect Dalio implements in his All-weather fund (he talks about how they monitor...

A rule that can be derived from that paper is to make sure you look at both expected arithmetic and geometric returns (as well as historical) before making an invesment decision. As well as understanding the differences between both. There might be discrepancies that will lead to a poor decision...

Read an important paper that talks about the dangers of using Compounded Rates of Return to make investment decisions http://www.bfjlaward.com/pdf/25968/65-76_Chambers_JPM_0719.pdf "The expected compound rate of return is a misunderstood measure of performance, because it focuses on rates and...

Looks like Pabrai is not doing so well ever since he got famous and increased his AUM https://www.dropbox.com/s/p2h51kc4i7ybl4c/Pabrai%20Funds%202015%20Annual%20Letter.pdf?dl=0 And by his statements he lost more in 2016. That's always an annoying risk to HF investors. To find a fund that you...

Of course, that's assuming one can reinvest the coupons at the same interest rate which is as it turn out, didn't happen. But even a lower reinvestment rate would still produce an attractive final return

Is it too late to get involved in Greece? In the bond market, maybe, yields are now at 7%, still a decent return but its more balanced with the risk now. There is probably still some room (since these bonds are far from a popular investment and depressions bring risk premiums up as people need...

This was such a sweet setup for anyone in Europe looking to retire. I dont care how scared they were, if you got something like €500K, in situations like this, it pays to close your eyes and buy (putting something like €75K). If you are wrong, you lose maybe half your money, if you are right...

According to the central bank data, the 30y Greek bond was yielding 16% by the end of March 2012 (after the debt reestructuring). Assuming a expected low inflation rate of 1%, these bonds were paying 15% real for 30 years €100,000 invested in these bonds would turn into €6.6M after 30 years, all...

But how huge a buy where Greek bonds after the reestructuring? I need to get more familiar with EU markets and fundamentals, that was a huge opportunity. In 2012 they switched those Greek law bonds to English law, cut down domestic debt to GDP dramatically (the paper talks about a €100B gift to...

Greek Computer portfolio returns vs asset classes (€100 invested adjusted for inflation) Its easy to see why the rebalancing was harmful. The portfolio kept selling a rising gold allocation to plow into a collapsing bond and stock market. This might work out in the end (over the coming...

This market is powerful, I covered IWM short and will reasses if the market reverses. Market is not afraid of anything Trump is doing

I try to only be glued to the screen for the first hour (the best hour), after that I even force myself to leave the room, go do other things. I dont want to spend my life watching charts every day for 6 hours for the rest of my life. It just feels like a waste

For my Greek backtest I'm getting 2 results for the Computer allocation (68% 10y Bonds, 20% stocks 12% gold). One with Bloomberg data using 10y bond yields with the 2012 'patched' up using my NPV loss but changing it to reflect a bigger rally according to the data. So instead of -21% I used -19%...

This 15% allocation as a rule of thumb for optimum diversification/rebalancing benefits is likely to be true only when there is a small menu of asset classes avaliable. When there is more, the % is smaller. Indeed, Dalio talks about in Market Wizards how 80% of the volatility can be cut with 15...