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Parent - - By Ugh (*****) Date 2013-02-19 12:17
"Better re-think point 6.  When rates rise, stocks fall.  When rates fall, stocks rise. always has been that way.  Why would one leave bonds when the rates are climbing?  They leave them because rates are so low the return is almost nothing..."

Oh Dear, Bob the Expert of Everything gets it wrong again ...

"Why would one leave bonds when rates are climbing?"

Simple, my Dear Hyatt, because bond rates and bond prices are pretty much inversely correlated. When bond rates start climbing, you get the hell out of bonds because their capital value starts falling.

If you look at the URLs below you can see the inverse correlation and hos troughs and peaks more or less match.

Price of 20 year US Bonds (proxy)
http://stockcharts.com/c-sc/sc?s=TLT&p=D&yr=3&mn=0&dy=0&i=t15920942516&r=1361275502574

Yield on 10 year Treasury note
http://stockcharts.com/c-sc/sc?s=$TNX&p=D&yr=3&mn=0&dy=0&i=t52185866272&r=1361275479497
Parent - - By bob (Gold) Date 2013-02-19 18:42
The discussion was about interest rates.  I don't have a cent in bonds and don't plan on doing so.  When interest rates climb, stocks decline, and vice-versa.

Rattle on about bonds.  To me, that's irrelevant.  Interest rates were what I was talking about.  And current interest rates are at an all time low. 

Jeroen SPECIFICALLY mentioned "interest rates".  "bond" was not in the discussion.

As usual, you want to be the expert, but on a subject that was not even being discussed...  I simply commented on the point 6 statement about interest rates.  Which did not specifically say "bond interest rates"...
Parent - - By Ugh (*****) Date 2013-02-19 20:31
Bonds were in the discussion. You introduced it. Forgotten your post one back already?

What interest rate were you discussing then? Stocks don't have interest rates, btw, they have dividends (sometimes).

An interest rate usually refers to the interest on borrowed money, where the money is borrowed for a specific time period. Overnight, ten years, thirty years, three months and so on. A bond is associated with the idea of borrowing money, to be repaid on a specific date, and with a cost of borrowing, known as the interest rate. Did you have other ideas?
Parent - By bob (Gold) Date 2013-02-20 01:49
However, look at what I quoted, and the specific point I addressed.  "Interest rates".  If I misunderstood Jeroen's post, that was my fault.  But my comment was directly related to interest rates.

When interest rates or low, my money is in stocks.  When rates climb, my money goes to non-stocks.  Has worked for me for a LONG time.

Can we stop this now?

The interest rate I was discussing could be anything from the federal prime, to what banks are paying on CDs or what is being offered as the interest rate on bonds.  All related.  Of course stocks don't have interest rates.  They do have a growth rate however, which is a number I watch pretty carefully.  Growth rate is a sort of interest rate, in that your money increases at that rate, just as it does when invested in bonds or CDs or savings accounts...
Parent - - By Venator (Silver) Date 2013-02-19 16:24
Wrong. When rates start to rise, bond prices are going to drop. A rise in interest rates signals inflation. Bonds are one of the worst asset classes when inflation rises. Stocks will do very well in this environment. Especially when the ordinary people rush back from their falling bond portfolio's to stocks.

May I conclude that you are overweight in bonds?
Parent - - By bob (Gold) Date 2013-02-19 18:39
Nope.  Why would I invest in bonds with interest rates at an all time low?  As I said, the old proverb "when rates are low, stocks will grow, when rates are high, stocks will die" dictates my investing strategy.  It has worked for 40+ years now.  Higher rates don't always signal inflation.  They do signal higher rates of return in interest-bearing investments, whether it be bonds, certificates of deposit, or whatever.  Higher rates do signal that stocks are going to slow in growth or even decline, for all the usual reasons.

BTW I don't have any money at all in bonds at the moment, I have money in safe investments, and in the stock market, where a loss in stocks won't bother me much at all overall..  and a loss in the safe investments is impossible unless the entire economy in the US fails...  at that point nothing will matter anyway.
Parent - - By Venator (Silver) Date 2013-02-19 19:49
I have money in safe investments

Such as?
Parent - - By Ugh (*****) Date 2013-02-19 20:22
probably the bonds  he doesn't have a cent in ;-)
Parent - - By bob (Gold) Date 2013-02-20 01:54
Nope.  My base retirement is in the form of an annuity that is spread over stocks and such.  My supplemental retirement is controlled by me and is currently primarily in stocks.  Don't have a red cent directly invested in bonds.  Whether the annuity fund I have has some money in bonds, I don't know and don't care.  All I care about is that when I retire, I receive a fixed percentage of my average salary over 5 years, that is based on how many years I participated.  I don't go out and buy bonds, nor participate directly in bond funds...

Bond rates are not particularly attractive at the moment, unless you buy low-rated ones that may well never pay off (Jefferson County Alabama Municipal Bonds offer one such example, similar to Orange County CA a few years ago).

Stocks have been doing QUITE well over time, of course.
Parent - - By Venator (Silver) Date 2013-02-20 08:02
Stocks are not a 'safe investment'. They can be quite volatile, especially when the European and/or Japanese debt crisis are hitting the main news again.

All I care about is that when I retire, I receive a fixed percentage of my average salary over 5 years

Is this retirement income going up in time (indexed, as we say in Holland)? If not, rising inflation will cost you a lot of purchasing power and your real income - corrected for inflation - will be going down.
Parent - - By Mark (****) Date 2013-02-20 12:55
Any predictions of the impact of the sequestration on the stock market?
Parent - By Venator (Silver) Date 2013-02-20 15:23
You mean the fiscal cliff deadline, that is expiring on March 1st? Could very well be a catalyst for the necessary correction everybody is waiting for. On the other hand, if there is a last minute deal, we first might go higher before a correction occurs.

The following graph shows that the Dow Jones index is way above its 50 day and 200 day moving averages:

http://stockcharts.com/h-sc/ui?s=DIA

We need a 3.5%-7% correction to go back to these averages again, so I am waiting for such a pullback.
Parent - - By bob (Gold) Date 2013-02-20 23:18
Of course it is indexed to inflation.  Even social security does that.

Stocks are a very safe long-term investment.  If stocks die, everything dies anyway.  But they are not good short-term investments.  And I have modified my strategy as I get closer to retirement, for that very reason.  I'll make more after I retire than before.  Which has been my goal.  And factoring in the reduced cost-of-living after retirement, the jump will be even higher.  I'm simply not ready, yet, but not for financial reasons at all.  I enjoy what I do.
Parent - - By Venator (Silver) Date 2013-02-22 16:26
Stocks can crash shortly before you retire. With the Fed engaged in $ 85 billion QE a month and a lot of liquidity coming to the U.S. equity markets after the Dow has set a new high, there will be a new bubble in stocks in the future. Just like 1987, 2001 and 2008.
Parent - - By Mark (****) Date 2013-02-22 17:02
The thing I've always had trouble with regarding stocks is when to sell.  Basically, I never sell any.  Ride them down and ride them back up, over and over, while continuing to dollar average.
Parent - - By Venator (Silver) Date 2013-02-22 17:38
I had the same problem: buying after a dip is easy, but it is much more difficult to time a top and sell. So I also don't sell anymore. Currently, I am simply waiting for another oversold condition of the equity markets, that's the time I will buy again.

Basically, when all people around you are buying stocks and the stock market is the number one subject at each party, it is quite likely a top is near and you need to sell :-).
Parent - - By Mark (****) Date 2013-02-22 20:02

> Basically, when all people around you are buying stocks and the stock market is the number one subject at each party, it is quite likely a top is near and you need to sell :-).


I really believe this is true.  Unfortunately, I never seem to act on it!
Parent - By Venator (Silver) Date 2013-02-23 09:10
Buying when there is fear is much easier than selling when there is greed and everybody is convinced the market can only go up! Our own greed ('just wait a little, it can still go higher') fails us to hit the sell button in time :-).

In 2010 I held a few mining stocks and at the end of 2010 they were up 25% on average. They were totally overbought and I had the gut feeling there was a correction coming. I waited and then.... within 3 days in January 2011 they tumbled, leaving me with less than 5% profit. A good lesson.
Parent - - By bob (Gold) Date 2013-02-22 18:19
As I said, as I get closer and closer, my investments are in more and more conservative things.  Pretty standard I would think...

Of course, ANYTHING can crash given the right circumstances (Black Tuesday, anyone).  But one can limit their risk in all but such dire circumstances...
Parent - - By Mark (****) Date 2013-02-22 20:07

> As I said, as I get closer and closer, my investments are in more and more conservative things.  Pretty standard I would think...


I'm planning on retiring later this year, but I have a defined-benefit retirement plan based on years of service, so there's really no need for me to get too conservative with investments.
Parent - - By Scott (*****) Date 2013-02-22 20:16
One of the lucky ones, :smile: I retired 3 years ago, thought I would have a lot more time, wrong. Not because I'm dying or anything, just so many hobbies (chess!) and things keep me busier than ever. People worry about what to do with "all that time", it's easy, take up chess! :cool:
Parent - By Mark (****) Date 2013-02-22 20:22
I sure won't have any trouble filling up the day!
Parent - - By bob (Gold) Date 2013-02-24 07:36
My retirement is based on several "pieces" (common at universities).

1.  Social security, of course...

2.  A defined benefit program everyone must participate in.   We contribute around 6% per year, the university contributes more than that, with the defined benefit amount of 2.08% per year of service.  That gets multiplied by the average of your five highest years of pay.  IE after 25 years, you receive 25 * 2.08 * X where X is the average income over best 5 years.

3.  We have the ability to contribute additional pre-tax dollars that are matched by the university, up to 5%.  This gets invested as I choose.  I can go the annuity route as in (2) above for a "sorta-defined" benefit if I want to go conservative.  Or I can divide it into stocks, bonds, part to that annuity option, etc.  And I can move any non-annuity contributions around at any time, from stocks to bonds to money-market to the usual investment funds.

4.  Health insurance is part of the retirement system.

There's more to it, but that is a simplistic overview...
Parent - By Mark (****) Date 2013-02-24 13:50
Very nice!  Even more generous than my Federal pension.
Parent - By Venator (Silver) Date 2013-02-23 09:02
True, but f.e. 'safe' AAA-rated government bonds could turn out to be very bad investments in the coming years.

Anyway, everybody should invest in the assets he or she believes in and feels comfortable with. Good luck with your retirement portfolio!
Parent - By Venator (Silver) Date 2013-02-20 07:52
With zero percent interest rates, central banks engaging in currency wars and printing money to keep the debt balloon afloat, there is no such thing as 'a safe investment' right now. Real interest rates are negative, so deposits and bonds are 100% sure losers.
Parent - - By Banned for Life (Gold) Date 2013-02-18 22:10
1. Having the ability to print the world's reserve currency is a really good thing for the US because when we devalue the dollar, which we are doing to the tune of $85 billion dollars a month, we get to share the pain with the rest of the world. Over the past four years, the dollar has lost 9% of its value relative to a weighted basket of other major currencies. This is actually a short term success, because it increases exports and decreases imports. In the long run, other countries figure out what you're doing, and then everyone is devaluing as quickly as possible. Current case in point is of course Japan.

2. I suspect you're right about this. In fact, the Chinese are catching up pretty quickly in the military sphere and have expansionist tendencies (they've already claimed the entire South China Sea and are in the process of claiming a big chunk of the East China Sea), and the US is going backwards. Most countries in the EU couldn't defend themselves if they had to.

3. The main reason velocity has gone down so much is that the Fed is being very generous in giving banks (and not only US banks) funds for holding dollar reserves. If inflation picks up, the Fed will have to increase the rate they are paying. In a hyperinflation, this will break down and the hundreds of percent increase in the money supply over the past five years will become evident.

4. I don't see a good case for hoarding money during inflationary times. It wouldn't make any sense. Taxes were very high at the end of the Carter administration, and we had record inflation and interest rates.

5. Maybe. Or maybe people will take profits and there will be a major pullback. These kinds of predictions are just guesses.

6. At some point, there will be a rotation out of bonds, into something else. This may have already started. It's not obvious that 'something else' will be stocks though. Maybe it will be real estate, or even commodities. High real interest rates are very tough on a lot of companies that work with lines of credit.

7. I hope you're right, but I suspect you're wrong.

People were scared at the end of 2008. They should be scared today, with our huge debt and an administration that is unwilling to consider an cuts of any kind. But they aren't. Amazing, but true. But ignorance won't protect us from fiscal reality. It never does.
Parent - By Venator (Silver) Date 2013-02-19 16:35
The above points (in my previous posting) are the analysis of Martin Armstrong. This guy is good. Very good. He predicted the 1987 crash, the fall of Russia, the dot.com crash, oil going to $ 150, the demise of Japan and the housing crash of 2007. Already in 1998 he stated that the last stage of this crisis will be a sovereign debt crisis, which will turn ugly around 2016-2017.

You can argue whether his points (they were not mine) are true or not, but his track record is extremely good and he is not just 'guessing'.
Parent - - By Venator (Silver) Date 2013-02-20 09:52 Edited 2013-02-20 10:06
3. The main reason velocity has gone down so much is that the Fed is being very generous in giving banks (and not only US banks) funds for holding dollar reserves. If inflation picks up,

Inflation can manifest itself in the CPI, but also in asset prices and in commodity prices. The $ 85 billion the Fed is currently printing each month, does not go into the economy. They end up in inflating asset prices. So there *is* inflation, but not in the CPI. If the depression continues - and there is no reason to believe otherwise, looking at the coming government debt crisis - velocity will not pick up.

4. I don't see a good case for hoarding money during inflationary times. It wouldn't make any sense. Taxes were very high at the end of the Carter administration, and we had record inflation and interest rates.

It has been proven that in depressions people are hoarding. Not only Armstrong has written about this phenomenon, also Turroni in his book 'The economics of inflation'. Analysing the hyperinflation in Weimar from 1919-1923, Turroni writes:

'In spite of continual depreciation of the currency, great quantities of notes were continually hoarded. Even in 1922 a bank director asserted that the German population preserved considerable quantities of notes.'

In 1922 the inflation in Weimar was huge, still people were hoarding bank notes.

5. Maybe. Or maybe people will take profits and there will be a major pullback.

There always will be pullbacks. Berlusconi winning the Italian elections coming Sunday could be a reason, or fear of the temporary debt ceiling problem in the U.S. It would be very healthy when the stock market corrects reaching the all time high. Then we go back to oversold, more capital goes into stocks buying the pullback and it is a matter of time until a new high is being made. This new high will be major news in all media and a catalyst for higher stock prices.

6. At some point, there will be a rotation out of bonds, into something else. This may have already started. It's not obvious that 'something else' will be stocks though. Maybe it will be real estate, or even commodities.

A new high in the U.S. stock market will attract a lot of new capital. There is no reason to believe that capital from bonds will not go into stocks. Of course it is logical that other asset classes will profit, too.

7. I hope you're right, but I suspect you're wrong.

Armstrong has confidently predicted a new all time high in stocks until the government debt crisis explodes. He still thinks that the government debt crisis starts to go ugly around 2016-2017 and that stocks will make a new major high at the end of 2015. The bond market is huge compared to the stock market, so if a rotation starts from bonds to stocks and capital from all over the world is attracted by a new high in the Dow Jones, we can have a big up move. Note: this is Armstrong's analysis, not mine.
Parent - By Ray (****) Date 2013-02-20 17:23
Can't you guys take these discussions somewhere else ?? They have zero relevance to the title of the thread.
Parent - - By Venator (Silver) Date 2013-02-20 08:06
After BRIC (Brasil, Russia, India, China) and PIIGS (Portugal, Italy, Ireland, Greece, Spain) we now have FISH.

FISH = France, Italy, Spain and Holland. According to large U.S. investors these countries represent a risk to invest in. So for the first time my own country, the Netherlands, has the dubious experience of ending up in such alphabet soup :-).
Parent - By Chess_Rambo (***) Date 2013-02-20 16:34
I have my own abbreviation for the three big US rating agencies: SHIT :lol:
Parent - - By Nelson Hernandez (Gold) Date 2013-02-17 15:19
But Vas *is* alive and responsive!  However, it does take seven weeks for emails to be received and responded.  3 1/2 weeks each way at the speed of light, by my calculations, puts him about 394,321,737,000 miles from Earth, which puts him somewhere outside of our solar system in interstellar space, about twice as far away from us as Voyager 1.

NH email to VR, 4 Nov 2012:

"Request comment on...Rybka 5 plans."

VR email to NH, 23 Dec 2012:

"Sorry, I'll comment when I am ready." 

That was the full extent of his email.

Notice the apologetic "sorry", which suggests a degree of sympathy.  Note the "I'll comment", suggesting he will actually comment, though he does not use the word "shall", which has legal undertones.  Note the "when I am ready" suggesting there is a future time and condition under which he will comment.

I find his reply extremely energizing and brimming with hope.  In my next email to him I will ask if he has any plans to return to Earth.
Parent - - By Labyrinth (*****) Date 2013-02-17 15:38
Notice the choice to abbreviate "I will" as "I'll", but not abbreviate "I am" as "I'm". What could it mean????!!! :-P
Parent - By Fulcrum2000 (****) Date 2013-02-17 15:52
Maybe he meant : Sorry, I'm ill :wink:
Parent - - By Banned for Life (Gold) Date 2013-02-17 16:01
Sorry, I'll comment when I am ready.

I think you have misinterpreted Vas' response. It does not suggest that he will actually be commenting or that he will ever be ready. It is more likely this would translate to "Fcuk you, leave me alone!", albeit in a friendlier format. This in turn may indicate that Vas is already semi-retired, where this type of expression is substituting for the more American: "Get off my lawn, you damn kids!!!".

So it may be time for Vas to go into seclusion. Maybe he could rent out the penthouse suite at the Desert Inn. Oh, no, too late!
Parent - - By Nelson Hernandez (Gold) Date 2013-02-17 16:25
I see schisms developing among the ranks of Rajlichologists.  They fall into the following general groups:

1)  Rybka 5 is coming; Vas is a rebel-hero!
2)  Rybka 5 is never coming; Vas is a quitting, code-copying asshole.
3)  I don't give a damn; Vas is irrelevant now.
4)  Vas is definitely up to something but only he and maybe one or two people sworn to secrecy, including Iweta, knows what it is.

Somebody ought to put up a poll.  Count me in #4.
Parent - By keoki010 (Silver) Date 2013-02-17 17:32
:lol: > Somebody ought to put up a poll.  Count me in #4.

count me in #5
Parent - - By Dragon Mist (****) Date 2013-02-18 01:06
Note also the disturbing absence of "... soon ..."
Parent - - By Lusakan (*) Date 2013-02-18 14:09
[quote]I find it mind boggling that people like Lucas Cimiotti, Jeroen Normen, and Felix Kling are as much in the dark about Vas' whereabouts and plans as I am. (Lusakan)

You have inside knowledge on this,how do you know they just keep their mouths shut and have plenty insiside knowledge.

On information i get i keep my big trap shut.

btw,it is Lukas.[/quote]

Ok, so Lucas, You are saying Vas has been open and transparent to you his friends, but the information he has shared with you, say about Rybka 5 or his future in computer programming, is so privilaged you cant dare say to another living soul? This is more mind boggling than I thought, because I was attributing the mystry around Rybka to the unusual character of one man, but now it turns out to be a group thing. I thought Rybka and its future were items of public interest, has it sunk to the level of an item known only by members of a secret society sworn to silence?
Parent - - By Nelson Hernandez (Gold) Date 2013-02-18 15:55
It's a cult consisting of concentric rings.  There are circles and inner circles and more-inner circles, with ever-increasing security and loyalty demands.
Parent - - By Geomusic (*****) Date 2013-02-23 07:07
Nelson next time you talk to Kasparov can you ask if he ever visited FICS back in the 90s? My girlfriend wants to know she used to be an admin there. The guy in question told her he was Kasparov, and they had some sort of conversation. Needless to say if true I'm jealous.
Parent - By Geomusic (*****) Date 2013-02-23 07:10 Edited 2013-02-23 07:17
BTW why doesn't everyone try and find their next girl friends on online chess servers? LOL!!
Parent - By Banned for Life (Gold) Date 2013-02-23 07:39
It's more likely to have been the Tooth Fairy or the Easter Bunny than Kasparov...
Parent - By Nelson Hernandez (Gold) Date 2013-02-23 16:00
I've never talked to Kasparov, though one time I was standing in a hallway and he walked right past me, an arm-length away.  That was April 2000 as I recall; he was still champion then.
Parent - - By RFK (Gold) Date 2013-02-21 01:00
:red:
Parent - - By Labyrinth (*****) Date 2013-02-23 13:57
Letters in "The Vas enigma" can be rearranged to spell:

"she meT Vagina"

Does that count as being on topic :-p
Parent - By RFK (Gold) Date 2013-02-23 15:52 Edited 2013-02-23 15:57
There is no reason to be on topic anymore! :wink:

You can say -do- what ever you like!:surprised::cool::twisted:

Show referenced archival Rybka  memorabilia in symbolic form! :yell:
Parent - By albitex (***) Date 2013-03-16 00:01
We think about what has given this forum to the chess engines world.
This is a point of reference for the impassioned ones of engines.
It is one of the forums more frequented.
A profit tool to exchange ideas, knowledges, techniques.
This to me is enough!
The men pass, ideas stay.
Parent - - By Nelson Hernandez (Gold) Date 2013-03-26 22:13
There is news from Rajlich!

Iweta is expecting their second child in July. 

And Vas cryptically says "I'll be back" in a Czech, not Austrian, accent.
Up Topic Rybka Support & Discussion / Rybka Discussion / The Vas enigma
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