Patientplatypus was overly kind in describing this as a stretch. It hinges on an obscene misrepresentation of the intent behind safety spaces and total ignorance as to what goes on inside them.
Discussing safe spaces without mentioning trauma and PTSD is evidence of disinterest in investigating the topic at best and deception at worst. The purpose of content warnings and taking care to use respectful language is not about shielding participants from learning that bad things happen or that our everyday language encodes bias about the relative value of human beings. The participants whose well-being it seeks to promote already have this knowledge to a greater degree than Colin Fleming ever will.
Content warnings about rape matter because almost every classroom has a few women who've been raped, very possibly by someone in the classroom. PTSD evokes strong physiological responses that are more likely to be manageable with advanced warning.
Similarly, derogatory language about LGBTQ people is often delivered with the threat of violence or actual violence. I don't know a queer person who hasn't experienced some anti-queer violence. My wife worked in a LGBTQ center and had to hit the floor when someone emptied a gun into it from a car. The initial trauma is deepened by subsequent threat and fear.
So what goes on in safe spaces? I'm a Boomer, so I don't spend much time in classrooms, but I do spend a lot of time in spaces like activist conferences. Let me tell you, none of the discussions I see elsewhere are as passionate or as vigorously contested. This is a benefit of safety, not a casualty of it. I see the same thing at work when I succeed in creating psychological safety for my teams: passionate discussion in engaged teams.
Even for large organizations, the most compelling argument for the cloud is capital structure and the risks associated with holding assets that may not prove to be productive. We inherently understand the advantage of the cloud for startups. It preserves capital and can be used to links expense to generated value (user engagement, etc) if not actual revenue. What may be less obvious is that the same math applies for at least some activities of larger organizations. What goes into a corporate data center is effectively a distressed asset the instant the capacity isn't needed. Forecast risk is very real, and even conservative estimates of that risk can radically change the risk adjusted return on the capital investment.
It is not quite as easy as you suppose. The Bank Holding Company act of 1956 (as amended in 1970) places any company that owns 25% or more of a bank under the regulatory supervision of the Fed. The holding company rules for Broker/Dealers (investment banks and retail/institutional brokerages) are less airtight but not insignificant.
I worked on Wall Street for years, many of the them on the business side. Fed supervision is no joke.
The only acceptable usage mode is a (preferably short) learning phase with the "cloud". After that you disconnect and preferably deactivate all wireless connectivity with a physical switch so that nobody can mess with it.
This under-represents the risks of bond investment. While it's true that the credit risk of treasuries is incredibly low, interest rate and inflation risk needs to be addressed more seriously than it is in this post.
In today's market, it's easy to think of holding a bond until maturity under adverse interest rate movements as "not losing money". This is a false model. For example, a ten year treasury purchased at issue in mid-2016 is paying less than the current rate of inflation. When interest rates increase, bond holders lose money. Holding the bond just changes the accounting (and exposure to future swings).
Diversification of bond duration is important in terms of risk management and not just cash flow concerns. Prudent portfolios include equities as well as debt.
While I'm currently in tech, I worked on Wall Street for years (both the trading business and IT).
Thanks for the comment. I was trying to make clear this is a short-term strategy in a rising rate environment where you eventually want the principal back and don't want to take much risk. In accounts with longer term goals like retirement accounts you'd probably mix equities and more diversified bond funds.
Is there a way you think the strategy and when it's appropriate could be made more clear?
It's a good article and the strategy is appropriate as part of a more diverse portfolio. My point wasn't that the article was bad, but that holding till maturity only gives the illusion of bypassing interest rate risk.
"The only real risk to principal is being locked in to a rate that's lower than inflation for an extended period."
> Is there a way you think the strategy and when it's appropriate could be made more clear?
I think it's a useful strategy as part of a diversivied portfolio. As the GP mentioned:
> Prudent portfolios include equities as well as debt.
Your guide to building a treasury ladder would be useful to someone implementing Harry Browne's Permanent Portfolio concept, which holds 50% of its assets in US Treasuries. However, building a diversified portfolio is likely outside the scope of your guide.
At least personally, I'm reading article as an alternative for a subportion of my portfolio, where the options are basically CD ladders and savings accounts. Which have roughly the same interest rate risk as bonds of equal duration. The more interesting question from this perspective is comparing interest rate risk versus the premium you're earning. Ally savings' APR is at like 1.8, their 'no penalty' CDs are at 1.9, and 1 year treasuries are at 2.5. How far would rates have to go up before the risk outweighs reward, etc.
So buy TIPS? But the elephant in the room is that inflation isn't the same for everyone. It's calculated based on a basic basket of goods, but if you're high income, it may not replicate your spending habits. Private school isn't factored into the CPI.
Over a long timeframe, the investment with the lowest risk of underperforming against inflation is broad-market equity index funds. Bear markets and corrections happen, sure, but the nigh-inevitable performance during bull markets more than covers for that. Over something like 30 years, the only question is whether your investment will outperform inflation or massively outperform it.
Like, the 5th percentile worst result is definitely worse for stocks compared to bonds over a one-year timeframe. But, the advantage of a better compound annual growth rate means that as you add more and more time to your investment timeframe, worst-case results for stocks get better compared to bonds. IIRC, the crossover point is very roughly 20 years out - at this point, the risk of stock corrections has been completely absorbed by having superior expected returns.
You're talking strictly US index funds. Have you taken a look at Japan? What if the characteristics of the US markets turn into something more like Japan? Your entire thesis would be wrong, and you could lose a lot of money.
You're right about that, but Thrustvectoring is right too. The lowest risk investment that will make you the most over the long term, at least historically, has been index funds. Of course, environments change, and past performance is not a guarantee of future results. As you correctly imply.
I think most responsible advisors would not say, "Put everything here!" Or, "Put everything there!"
You need to diversify a bit, and that diversification should be informed by your own personal appetite for risk. If you have a low appetite for risk, TIPS are the way to go. Maybe some small percentage of your assets diversified across other asset classes.
Conversely, if you have a high appetite for risk, I believe a responsible advisor would still recommend some smaller percentage in TIPS, and then maybe the majority of your holdings diversified across other asset classes.
This is just an argument for diversification. Hold the world at market cap and you'll only lose money if the whole world's markets crash and stay down for decades. And if that happens, I'm not sure bonds are going to keep you from hurting.
None of what you're saying is wrong, but remember the context here when using the historical performance of markets to talk about these kinds of hard-and-fast rules. The period for which we have market data also spans: the period with the fastest growth in global population, including population growth in developed markets; the outbreak of extended peace between world powers; and roughly tracks human exploitation of fossil fuels.
Which is not to say that this is for sure coming to an end (hopefully not peace!), but it's impossible to know that there will be similar growth going forward. Population may level off (in advanced economies, this appears to have happened), and while we may well find new energy sources and technologies, it's not likely any will offer the massive productivity gains seen in the advent of fossil fuel and the the internet.
If things are bad enough that the 30-year treasury outperforms global stocks at maturity, then the correct hedge is canned food, guns, and ammunition. The most pessimistic long-term outlooks cannot be mitigated by any sort of market mechanism because that level of pessimism implies a breakdown of the market itself.
But what you're talking about isn't guaranteed. There's a lot of room between "stocks rip higher forever" and "societal collapse".
I'm not saying the right call is 100% t-bonds, but when you say things like "Over something like 30 years, the only question is whether your investment will outperform inflation or massively outperform it", you're making guarantees based on data from a narrow slice of history that is also the most economically favorable period just about ever.
Equities are the residual claim on assets, and their outperformance is predicated on growth. Economic growth comes from growing population and productivity. Neither of those is a given.
There's no world in which economic growth is low enough that 30 year bonds win out over equities, yet high enough that the US can afford to pay their debts in full without inflating them away. Economic growth isn't a given, sure, but there basically isn't a plan that works for that pessimistic of market conditions. If there isn't enough economic activity to support retiring a large majority of your generational cohort, then unless you save extraordinarily large amounts of money you simply don't get to retire.
This is really underappreciated. I'm a big fan of diversification, and it can be very important to lower your risk-appetite if you're relying on your investment income in a short-medium timeframe (e.g. if you're planning on retiring in 5 years, being all-in equity is just silly, or if you're saving for a downpayment on a home in a few years, stock investing isn't the primary instrument to use), but in the long-term (e.g. a 25 year old thinking about early retirement someday) it just doesn't make sense to take too little risk.
And in part it's precisely because of the worst case scenario happens where worldwide stocks don't outperform treasury bonds, you're likely living in a world where your money isn't legal tender anymore anyway, and any stock/bond investment decision you ever made basically irrelevant.
So if decisions regarding the extreme downside risk are irrelevant, you might as well optimize for the upside.
Do note that there is a maximum amount of aggressiveness, beyond which you basically guarantee that you go broke while making trades with positive expected value. If you flip a coin that wins you twice as much as you lose, and you bet your entire bankroll, you'll eventually lose the coin flip and with it your entire savings.
For broad-market equity indexes, this point is at roughly 140% stocks / -40% cash. So it's not close to being an issue with current market expectations for a 100% equity portfolio, but generally speaking there is a level beyond which you cannot further optimize for upside at the expense of downside.
Global market-cap weighted equity investment has done fine since 1989. And anyhow, Japan's lost decade is more of a central bank policy failure than anything else, and one that is unlikely to be repeated.
The pre-Soviet Russian stock market is probably a better example.
It did about what you'd expect out of a national stock market - that is, until the Soviets seized the means of production, at which point you had literally nothing.
If you're implying that the Fed can rig official inflation rates, that's not really true. The bond markets would treat inflation-rate fibbing as a quasi-default, so the Fed has more to lose than gain from doing this.
The input constraints might have been realistic 10+ years ago, but there aren't a lot of performance sensitive parsing problems that can safely do without either escaping or Unicode support.
True, but irrelevant— hes experiments apply perfectly to finding escape characters and bit sequences that indicates the following x bits should be parsed by ICU. He is testing ideas and concepts, I look forward to an update. Would like a way to subscribe.
Use SSH keys generated and stored on some sort of PKCS11/PIV hardware device. It’s relatively easy to do now. Don’t trust a general purpose computer to keep your keys secure.
Better yet, use U2F where you have control of how you are authenticated.
