Do you Fancy Yourself as a Contrarian ?....Prove it !....

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Cut-Throat
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Do you Fancy Yourself as a Contrarian ?....Prove it !....

Post by Cut-Throat » Thu Apr 25, 2013 4:18 pm

We are all Contrarians after the fact.....

Here is your chance to Prove it !

Everyone here hates Bonds currently....Interest rates have only one way to go and 'Bonds will get clobbered'.....I see the ultimate Contrarian Play right now as to go 'All in' with Bonds. Especially the 30 year Long Term Bonds.... No One likes them.....You can be a Hero... So step up to the plate..

I'm not going to, I'm just a Stupid Target Retirement Income Fund Guy....This is just for all you smart, Market Timer Guys

Rupert
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Rupert » Thu Apr 25, 2013 4:21 pm

Do you work for Pimco?

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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by rmelvey » Thu Apr 25, 2013 4:22 pm

Been doing this for 3 years now. Making money from interest rates dropping is by far my favorite way to make money. Mainly because it proves all of the market timers and neoclassical macroeconomists wrong. Unless you are reading Cullen Roche or the stuff the MMT guys are putting out, the investment world must be a very confusing place.

Even the most hardcore EMH and indexing proponents have gotten suckered into attempting to time the bond market. All I had to do was draft a reasonable investment plan that involved a deflation hedge and then rebalance...
Last edited by rmelvey on Thu Apr 25, 2013 4:25 pm, edited 1 time in total.

wriggly
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by wriggly » Thu Apr 25, 2013 4:24 pm

1. I think you might have wandered into the wrong forum, if you're looking for market timers.
2. I'm keeping my existing allocation to Total Bond - from recent posts, that's pretty contrarian, even round here.

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rmelvey
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by rmelvey » Thu Apr 25, 2013 4:26 pm

wriggly wrote:1. I think you might have wandered into the wrong forum, if you're looking for market timers.
2. I'm keeping my existing allocation to Total Bond - from recent posts, that's pretty contrarian, even round here.
Really? Every other thread I read here people are trying to time the bond market indirectly through duration.

letsgobobby
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by letsgobobby » Thu Apr 25, 2013 4:47 pm

it's hard to say that 30 year bonds are 'hated' when their prices are at an all time high. I don't get the reasoning at all.

Default User BR
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Default User BR » Thu Apr 25, 2013 4:52 pm

Cut-Throat wrote:We are all Contrarians after the fact.....
Let me look at my investing plan. Nope, nothing about being a contrarian in there.


Brian

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Cut-Throat
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Cut-Throat » Thu Apr 25, 2013 5:10 pm

Default User BR wrote:
Cut-Throat wrote:We are all Contrarians after the fact.....
Let me look at my investing plan. Nope, nothing about being a contrarian in there.


Brian
Really.......When 'Everyone is Selling', you are not 'Staying the Course'.....

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grap0013
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by grap0013 » Thu Apr 25, 2013 5:27 pm

letsgobobby wrote:it's hard to say that 30 year bonds are 'hated' when their prices are at an all time high. I don't get the reasoning at all.
+1

Let's talk about buying Europe and emerging markets if we are talking contrarian.
There are no guarantees, only probabilities.

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InvestorNewb
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by InvestorNewb » Thu Apr 25, 2013 5:31 pm

Don't contrarians also look for a "sale"? I wouldn't exactly consider bonds a sale right now.
My Portfolio: VTI [US], VXUS [Int'l], VNQ [REIT], VCN [Canada] (largest to smallest)

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Clearly_Irrational
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Clearly_Irrational » Thu Apr 25, 2013 5:35 pm

Cut-Throat wrote:I see the ultimate Contrarian Play right now as to go 'All in' with Bonds. Especially the 30 year Long Term Bonds.... No One likes them.....You can be a Hero... So step up to the plate..
I have 30% in Long US Treasuries right now, effective duration 17.17 Does that count?

Of course I don't hold them to be contrarian, rather it's a standard portion of my portfolio.

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Cut-Throat
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Cut-Throat » Thu Apr 25, 2013 5:43 pm

InvestorNewb wrote:Don't contrarians also look for a "sale"? I wouldn't exactly consider bonds a sale right now.
Please tell us 'What's on Sale' ?

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Sheepdog
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Sheepdog » Thu Apr 25, 2013 6:04 pm

My wife says I am always contrary. That is proof...just ask her.
Jim
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momar
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by momar » Thu Apr 25, 2013 6:45 pm

The contrarian position is to sell all your bonds. Prices are at historic highs.
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Fallible » Thu Apr 25, 2013 6:48 pm

Cut-Throat wrote:We are all Contrarians after the fact.....

Here is your chance to Prove it !

Everyone here hates Bonds currently....Interest rates have only one way to go and 'Bonds will get clobbered'.....I see the ultimate Contrarian Play right now as to go 'All in' with Bonds. Especially the 30 year Long Term Bonds.... No One likes them.....You can be a Hero... So step up to the plate..

I'm not going to, I'm just a Stupid Target Retirement Income Fund Guy....This is just for all you smart, Market Timer Guys
True market timers invest based on what they think the market will do. They would not invest just to be contrarian. They will go all bonds if they think that's the way to go, not because nobody's going there.
Bogleheads® wiki | Investing Advice Inspired by Jack Bogle

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telemark
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by telemark » Thu Apr 25, 2013 7:11 pm

As a committed Diversifarian, I take some quiet satisfaction from noticing that my portfolio has something unpopular in it -- if it didn't, I'd have to wonder if it was really diversified enough. By the same token, I would never go all in on anything, because that would not be diversified at all.

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nedsaid
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by nedsaid » Thu Apr 25, 2013 9:56 pm

It would take a lot of courage to go all in on long bonds right now. The bet has worked so far and will continue to work if we see the deflation that Gary Shilling talks about. I would not do it. Too risky. The diversified portfolio works for me.

I do think a bit of contrarian thinking benefits an investor. Be at least contrarian enough to not chase hot investments. Better to buy asset classes when they are hated by the markets. Go a bit against the grain of popular opinion. Buy low, sell high. What a concept.
A fool and his money are good for business.

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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Valuethinker » Fri Apr 26, 2013 6:52 am

rmelvey wrote:Been doing this for 3 years now. Making money from interest rates dropping is by far my favorite way to make money. Mainly because it proves all of the market timers and neoclassical macroeconomists wrong. Unless you are reading Cullen Roche or the stuff the MMT guys are putting out, the investment world must be a very confusing place.

Even the most hardcore EMH and indexing proponents have gotten suckered into attempting to time the bond market. All I had to do was draft a reasonable investment plan that involved a deflation hedge and then rebalance...
Actually all you had to do was read Paul Krugman.

The people who spent a lot of time thinking about Japan over the last 20 years could see this one coming (although Krugman admits he would have predicted *deflation* outright and that has not taken place (due to sticky nominal wages).

Wagnerjb
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Wagnerjb » Fri Apr 26, 2013 1:02 pm

rmelvey wrote:Even the most hardcore EMH and indexing proponents have gotten suckered into attempting to time the bond market. All I had to do was draft a reasonable investment plan that involved a deflation hedge and then rebalance...
Timing the market has nothing to do with EMH or indexing. You can do both and not be inconsistent. EMH says you believe that rational expectations are built into the market prices, and market timing is just trying to guess which way (future) events will impact prices. And you can use index funds to market time, thank you.
Andy

staythecourse
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by staythecourse » Fri Apr 26, 2013 1:10 pm

I have my whole bond component in long term treasury does this count??

BTW, you may be a contrarian, but why take on the extra risk by being 100% bonds??

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Ed 2
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Ed 2 » Fri Apr 26, 2013 1:22 pm

grap0013 wrote:
letsgobobby wrote:it's hard to say that 30 year bonds are 'hated' when their prices are at an all time high. I don't get the reasoning at all.
+1

Let's talk about buying Europe and emerging markets if we are talking contrarian.
+2
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hand
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by hand » Fri Apr 26, 2013 1:22 pm

I'm not a contrarian.

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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by YDNAL » Fri Apr 26, 2013 1:27 pm

Cut-Throat wrote:Everyone here hates Bonds currently....Interest rates have only one way to go and 'Bonds will get clobbered'.....I see the ultimate Contrarian Play right now as to go 'All in' with Bonds. Especially the 30 year Long Term Bonds.... No One likes them.....You can be a Hero... So step up to the plate..
:confused

IF one believed Fixed Income should exclude Bonds, why would one be interested in any contrarian play ?
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Phineas J. Whoopee
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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by Phineas J. Whoopee » Fri Apr 26, 2013 1:38 pm

Cut-Throat wrote:...
Everyone here hates Bonds currently....
...
This person does not speak for me.
PJW

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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by FafnerMorell » Fri Apr 26, 2013 1:38 pm

If you think you can dare a contrarian into doing something, you don't understand contrarians very well. They're probably pretty immune to reverse psychology as well - just from experience of folks tryng that angle on them. And you'd probably be horribly outmatched trying to prove yourself smarter than a 5th grader.

But the original post makes an excellent case for buying junk silver coins in bulk. (Now, that's an example of contrarianess).

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Re: Do you Fancy Yourself as a Contrarian ?....Prove it !...

Post by lazyday » Sat Apr 27, 2013 8:10 am

(1) As Fallible says for market timers, a good contrarian (few that there are) will not jump at every contrary opportunity.
IMO long bonds don't seem an especially good bet, but who knows? With deflation, they could pay off.
I personally own none, but like ibonds.

(2) As others say, they aren't really contrary. When you include institutional and sovereign investors.

(3) Again following others, it is hard to find anthing contrary today. Similiar to 2007, when everything seemed bid up in price. Today I think that ex-US equity is priced for an acceptable if below historical return, as may be a portion of US equity. I've been wrong before.
When forum policies are enforced, sometimes economics and politics are equated, so let me just say that when the recession is over, we should see reversals of what many see as the cause of lower risk premia and inflated asset prices.

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