Zippyjuan was WRONG!

[helmuth_hubener]

Inspired by the popularity of my definitive Peter Schiff was WRONG thread, here is one featuring the brilliant advice and predictions of one of our own.

Long term bonds are very risky- if interest rates rise their value could fall considerably (unless the bonds are kept until they mature) since bond prices move inversely with interest rates (higher rates mean lower bond prices). With both inflation and interest rates so low, that means higher risk. If you do buy and hold (or use a fund which buys and holds) and inflation gets higher you start losing more money.

Personally, I would not be putting 25% of my money into long term Treasuries. If you intend to keep them, you are locking in very low returns for a very long time. 30 year notes currently yield about three percent.

If you trade them, rising interest rates could lead to large losses. Lots of risk going forwards in them.

Do you think interest rates will be falling in the future?

With rates near zero- how much lower can they go?

"How low... can-they-go? How low... can-they-go?...."

Vanna, show me some a' those very low returns I locked in:

(This is a chart of TLT, a long-term Treasury ETF)

Bam! Long term bonds, keep those very low returns comin'!

[Ronin Truth]

Zippy wrong AGAIN? What are the odds?

[surf]

no need to talk crap about zippy

janet loves ya.

[Brian4Liberty]

Inspired by the popularity of my definitive Peter Schiff was WRONG thread, here is one featuring the brilliant advice and predictions of one of our own.

Calling out another user in a thread title like that is bad form.

Why don't you fill us all in as to why you didn't think that the stock market (DOW, S&P) was due for a correction several weeks ago?

[AuH20]

Sure, they have to keep bond rates down to keep this sham going, but at what point do investors finally flee? I think we're getting closer to that moment.

[helmuth_hubener]

Calling out another user in a thread title like that is bad form.

What? I don't think so. All in good fun. Zippy doesn't like LTTs; LTTs are zooming upward today and have been all year.

It's just another illustration of an important point to internalize regarding investing.

Why don't you fill us all in as to why you didn't think that the stock market (DOW, S&P) was due for a correction several weeks ago?

Yes! Thank you for asking! The answer to that question is the important point I'm trying to make, the very one! Pop quiz: what is that point, Brian?

[Brian4Liberty]

Yes! Thank you for asking! The answer to that question is the important point I'm trying to make, the very one! Pop quiz: what is that point, Brian?

That you really wanted to start a thread that said "helmuth_hubener was WRONG!" and say that no one can predict the markets, especially in the short run?

[helmuth_hubener]

That you really wanted to start a thread that said "helmuth_hubener was WRONG!" and say that no one can predict the markets?

Ding, ding, ding! Exactly!

No one knows the future. No one even fully understands what's happening in the present. Furthermore, no one even fully understands the past!

Now I have not made any prediction about the stock market correcting or not, you may be thinking of someone else, but if I had you'd better believe I'd be wrong too! Why? For presuming to know the future! It's just bad methodology. Even if I had got lucky and the stock market had done whatever I'd said it would do, I would still not be right, I would be wrong, fundamentally wrong.

Likewise, even if bonds had tanked, Zippy's fortunetelling would still be fundamentally wrong. But it's a better illustration when the prediction doesn't come true.

The message of this thread is that nobody knows the future. The experts have all "known" for years now exactly what Zippy "knows": "Bonds have nowhere to go but down! Interest rates have nowhere to go but up!" And yet, year after year after year, they continue to be W-R-O-N-G wrong! So my advice is you simply ignore these people, stay the course, keep your money safe, and protect yourself from a depression by buying 30 year bonds. If it turns out we are in a depression right now, ten years from now you'll look back and be glad you owned those bonds.

[heavenlyboy34]

Ding, ding, ding! Exactly!

No one knows the future. No one even fully understands what's happening in the present. Furthermore, no one even fully understands the past!

Now I have not made any prediction about the stock market correcting or not, you may be thinking of someone else, but if I had you'd better believe I'd be wrong too! Why? For presuming to know the future! It's just bad methodology. Even if I had got lucky and the stock market had done whatever I'd said it would do, I would still not be right, I would be wrong, fundamentally wrong.

Likewise, even if bonds had tanked, Zippy's fortunetelling would still be fundamentally wrong. But it's a better illustration when the prediction doesn't come true.

The message of this thread is that nobody knows the future. The experts have all "known" for years now exactly what Zippy "knows": "Bonds have nowhere to go but down! Interest rates have nowhere to go but up!" And yet, year after year after year, they continue to be W-R-O-N-G wrong! So my advice is you simply ignore these people, stay the course, keep your money safe, and protect yourself from a depression by buying 30 year bonds. If it turns out we are in a depression right now, ten years from now you'll look back and be glad you owned those bonds.

Why are bonds superior to PMs, real estate, and other investments?

[AuH20]

Why are bonds superior to PMs, real estate, and other investments?

backed and GUAR-RON-TEED by the U.S. Federal Government. ROFL

[Brian4Liberty]

The message of this thread is that nobody knows the future. The experts have all "known" for years now exactly what Zippy "knows": "Bonds have nowhere to go but down! Interest rates have nowhere to go but up!" And yet, year after year after year, they continue to be W-R-O-N-G wrong! So my advice is you simply ignore these people, stay the course, keep your money safe, and protect yourself from a depression by buying 30 year bonds. If it turns out we are in a depression right now, ten years from now you'll look back and be glad you owned those bonds.

It seemed more like your intent was to gloat over your earnings and rub it in the face of another member.

Inspired by the popularity of my definitive Peter Schiff was WRONG thread, here is one featuring the brilliant advice and predictions of one of our own.
...
Vanna, show me some a' those very low returns I locked in:

Edit: Nothing wrong with reviewing predictions (past and present) and looking at the performance of various assets in threads, but a thread titled "XYZ was wrong", where XYZ is another member, is a bit different.

[Spikender]

I have been here for three years and I still don't understand Zippo's purpose of being on this site.

That's all I wanted to say.

[brandon]

What is that even a graph of?

[Spikender]

What is that even a graph of?

It's a graph of a line.

Come on now, even I could've told you that.

[Madison320]

Inspired by the popularity of my definitive Peter Schiff was WRONG thread, here is one featuring the brilliant advice and predictions of one of our own.

I think this is one of the few times that Zippy was right. Don't you see how it's playing out? All the experts think the Fed is going to start raising rates and unwinding the balance sheet. Now that the market is tanking the talk is already reversing, I'm already hearing the "experts" talk about the possibility of QE4. At some point we're going to overdose on QE and at that point your long term treasuries are going to be good for one thing. Kindling.

[helmuth_hubener]

Why are bonds superior to PMs, real estate, and other investments?

They aren't! They aren't superior at all!

http://www.ronpaulforums.com/showthr...ad-quot-Assets

[helmuth_hubener]

What is that even a graph of?

Yikes, sorry! Nasdaq.com doesn't label their jpgs, I guess.
TLT, which actually understates my own returns because I directly own bonds of longer average duration. Here's ZROZ (up 39% YTD); 30 years would be somewhere in between the two:

[helmuth_hubener]

I think this is one of the few times that Zippy was right. Don't you see how it's playing out? All the experts think the Fed is going to start raising rates and unwinding the balance sheet. Now that the market is tanking the talk is already reversing, I'm already hearing the "experts" talk about the possibility of QE4. At some point we're going to overdose on QE and at that point your long term treasuries are going to be good for one thing. Kindling.

And you said that last year. And the year before. But guess what? You were wrong. Will you ever admit it? What would it take for you to ever admit it?

I mean, it might not matter for you because you don't have a significant amount of money invested, but if you did, it would behoove you to think more coldly and rationally about this. Will you ever, ever, ever at any point question your strategy if it is losing you your life savings? Or will you double down? It's something to think about.

You can watch CNBC and see "experts" who have been saying it since the 1980s (though not as melodramatically as you... usually). Bonds are doomed. Bonds are doomed. And maybe they are. If so, gold will do well. But maybe they're not. And if not, there may be many years where it's awfully hard to get a return from anything else. Look at the last Great Depression the US had.

[Zippyjuan]

I never made a prediction but I did say that the most LIKELY direction for interest rates was higher in the longer term (long term also being important- things do move up and down in short terms) which is bad for bonds. But I a honored to have my name in a thread title. Like you, I have many times said that nobody knows the future for certain.

Long term bonds are very risky- if interest rates rise their value could fall considerably (unless the bonds are kept until they mature) since bond prices move inversely with interest rates (higher rates mean lower bond prices). With both inflation and interest rates so low, that means higher risk. If you do buy and hold (or use a fund which buys and holds) and inflation gets higher you start losing more money.

But by purchasing bonds you made a prediction (guess) that interest rates would fall so you are crowing about being right in the short term with it while saying I made an incorrect prediction and nobody can predict anything. Congratulations on being a financial genius.

[Madison320]

And you said that last year. And the year before. But guess what? You were wrong. Will you ever admit it? What would it take for you to ever admit it?

I've said many times that I'll admit I'm wrong when they raise rates and unwind QE without the economy lapsing into depression.

[Zippyjuan]

So my advice is you simply ignore these people, stay the course, keep your money safe, and protect yourself from a depression by buying 30 year bonds. If it turns out we are in a depression right now, ten years from now you'll look back and be glad you owned those bonds.

Sounds like a prediction. One that interest rates will not be higher in ten years than they are now and also that price inflation will be below three percent (the current yield on 30 year notes).

No one knows the future. No one even fully understands what's happening in the present. Furthermore, no one even fully understands the past!

[helmuth_hubener]

Sounds like a prediction. One that interest rates will not be higher in ten years than they are now and also that price inflation will be below three percent (the current yield on 30 year notes).

Yes, except for I put 25% of my portfolio betting on that prediction... and 25% of it betting on the opposite. Gold is the anti-bond. Bonds are the anti-gold. I own them both. By owning both equally, you can get some very powerful results. Together they smooth out a lot of volatility in a remarkable way.

I don't predict. I'm taking a radically agnostic position with my investments. Because I do not know what will happen, I try to be prepared for it all.

[helmuth_hubener]

I've said many times that I'll admit I'm wrong when they raise rates and unwind QE without the economy lapsing into depression.

How would that lose you any money?

You see, I think we are coming at the issue from two totally different perspectives. You are concerned about the theory (Keynesians are wrong!) and politics (gov't is evil!) of it, while I am concerned about the practical matter of actually protecting actual money. You don't care if you're up 100% 20 years from now or down 100%, as long as you can say you were right. For me, I don't care if I'm right as long as the number on my balance sheet is increasing. Or, more precisely, I would say that to me, in investing, having that number increase is what constitutes being right. That's what being right is!

[PaulConventionWV]

Inspired by the popularity of my definitive Peter Schiff was WRONG thread, here is one featuring the brilliant advice and predictions of one of our own.







"How low... can-they-go? How low... can-they-go?...."

Vanna, show me some a' those very low returns I locked in:



Bam! Long term bonds, keep those very low returns comin'!

Of all the things you could call zippy out on, I don't think bond returns are one of them. I held my small bond for ten years and got a few dollars return on it. With inflation, I lost money. That's the thing: the longer you hold bonds, the worse they do against inflation. The longer you hold stocks, the better they do against inflation.

[PaulConventionWV]

Ding, ding, ding! Exactly!

No one knows the future. No one even fully understands what's happening in the present. Furthermore, no one even fully understands the past!

Now I have not made any prediction about the stock market correcting or not, you may be thinking of someone else, but if I had you'd better believe I'd be wrong too! Why? For presuming to know the future! It's just bad methodology. Even if I had got lucky and the stock market had done whatever I'd said it would do, I would still not be right, I would be wrong, fundamentally wrong.

Likewise, even if bonds had tanked, Zippy's fortunetelling would still be fundamentally wrong. But it's a better illustration when the prediction doesn't come true.

The message of this thread is that nobody knows the future. The experts have all "known" for years now exactly what Zippy "knows": "Bonds have nowhere to go but down! Interest rates have nowhere to go but up!" And yet, year after year after year, they continue to be W-R-O-N-G wrong! So my advice is you simply ignore these people, stay the course, keep your money safe, and protect yourself from a depression by buying 30 year bonds. If it turns out we are in a depression right now, ten years from now you'll look back and be glad you owned those bonds.

In any case, you certainly shouldn't get your trading wisdom from talking heads, but markets aren't always unpredictable. They maybe more or less risky based on unforeseen circumstances, but nobody claims absolute knowledge. Under a certain set of conditions which we can reasonably expect won't change within a certain period of time, however, the markets can be predicted with some accuracy.

[PaulConventionWV]

How would that lose you any money?

You see, I think we are coming at the issue from two totally different perspectives. You are concerned about the theory (Keynesians are wrong!) and politics (gov't is evil!) of it, while I am concerned about the practical matter of actually protecting actual money. You don't care if you're up 100% 20 years from now or down 100%, as long as you can say you were right. For me, I don't care if I'm right as long as the number on my balance sheet is increasing. Or, more precisely, I would say that to me, in investing, having that number increase is what constitutes being right. That's what being right is!

I will agree with you on that point. New investors who think they can trade on principle and always be right are very naive. There are things they don't consider, like the amount of time they are willing to lose money before they gain. It could take decades for gold and silver to make new highs. Investing is not an easy thing. My dad has a penchant for investing things in the peak of their fame. I forgive him because he's getting old and he doesn't know anything about investing. For instance, he wanted to invest in Litecoin (LTC) when it was at its peak of $48. If he had done that, he would have suffered about 90% losses. Who knows if he would've ever made any gains. He only knows that he starts reading about things on the internet that are touted as "the next big thing" and he wants to get in before it's too late, but it doesn't work like that.

You can't trade on principle and call yourself a savvy investor. Even if you believe in the very core of your soul that something is going to gain in value over time, it is just not as simple as buying and waiting. You have to take into account the times you might need that money you just invested and the amount of time you're willing to let go of it and the point at which you begin to question whether it was ever worth it in the first place. After all, if you wait 20 years to make a profit and you DO make a profit, was it worth being without that money for 20 years? Think of all the things you could do with that money in 20 years besides waiting to see if it gains in value. Is 20 years without that money worth twice the amount? Is 20 years worth 3 times the amount? Is 20 years worth a couple hundred bucks?

People who think they can just buy and hold at any point and grow their wealth are deluding themselves.

[Madison320]

Of all the things you could call zippy out on, I don't think bond returns are one of them. I held my small bond for ten years and got a few dollars return on it. With inflation, I lost money. That's the thing: the longer you hold bonds, the worse they do against inflation. The longer you hold stocks, the better they do against inflation.

And the future risk of inflation is off the charts.

[Madison320]

How would that lose you any money?

You see, I think we are coming at the issue from two totally different perspectives. You are concerned about the theory (Keynesians are wrong!) and politics (gov't is evil!) of it, while I am concerned about the practical matter of actually protecting actual money. You don't care if you're up 100% 20 years from now or down 100%, as long as you can say you were right. For me, I don't care if I'm right as long as the number on my balance sheet is increasing. Or, more precisely, I would say that to me, in investing, having that number increase is what constitutes being right. That's what being right is!

I'm diversified, except for fiat currency.

[LibForestPaul]

You keep thinking the future is unpredictable. Those with the power know they create the future.

[PRB]

Long term bonds are very risky- if interest rates rise their value could fall considerably (unless the bonds are kept until they mature) since bond prices move inversely with interest rates (higher rates mean lower bond prices). With both inflation and interest rates so low, that means higher risk. If you do buy and hold (or use a fund which buys and holds) and inflation gets higher you start losing more money.

Inflation didn't get higher, so you didn't lose money. DUH.