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Q: In your model portfolio you have TLT and BND at target allocations. Given that interest rates can only go up from here, what kind of returns can we expect from these funds over the next ~5-10 yr timeframe?

Also can you elaborate on why you have a larger allocation for the longer duration fund (TLT)

J: “Given that interest rates can only go up from here…” I think that’s a false premise. Our rates are still the highest sovereign yield in the developed world.

Q: Do you see any credible opinions with the opposing point of view? I will appreciate if you include those as well.

J: I haven’t seen any though I’ve been asking for months.

Q: When you discuss charts this week I am sure you will hit on gold, but wondering why you still like GG and the others which has given all and more of our gains back. I know they are long term but when do you look at them and say they were a mistake and sell some and buy back maybe at a later date. How can gold sentiment not be at the low end? I know the market earnings for stocks etc are not good and understand the Fed is useless but when do you trade around these stocks and also our shorts are getting hit. Trying to really understand on the charts when to trade. As I write this maybe by days end gold will turn for I know once Fed raises it should be good for gold but in the meantime losses over last several years are mammoth. Seems like biggest mistake I have made over last 5 years is believing in gold for my losses are growing. I agree with fleck, fred and you but almost wish had never heard of gold. It is my fault not anyone else. Want to sell all of the positions and if I don’t know what would every convince me to add more. I am sure you are frustrated, too. Sorry to vent but these last years are painful.

J: I’m not frustrated with the gold stocks at all. This is exactly how bottoms are formed and the pain you currently feel is exactly what it takes to flush out all the buyers so a new bull trend can begin.

Q: Where would one find your Business Insider blogs on your Premium Member site?

J: Business Insider just republishes my blog at It’s all there.

Q: I am really doing some soul searching here. My clients have been in 15-25% CASH since 2014 . This biz SUX!! They all want Large Cap tech growth (QQQ) What are we missing? Emerging Markets are coming back online and it seems like Central Banks can plug any and all economic misfires with their fat fingers. I have been in tune with the markets since 2009-2013 and then it went to SHIT. Trading is for idiots, just buy and hold high quality dividend growth stocks right??? Earnings were DOWN and next year’s estimates are a joke. Nothing really works any more. Oscillators, MAverages, PE’s etc….I am just throwing my hands in the air in disgust!! Bonds are now seeing the trend momentum guys jump on the short train and they will finally indicate that the economy is doing better as my long/intermediate treasury holdings get crushed. This has been no fun and I am looking at the job market to go back to work for someone else. My work is useless. Very depressed down south.

J: Just like in life, the right thing to do in the markets is usually the hardest thing to do.

Q: Mr. Druckenmiller’s performance, along with most hedge funds for latest quarter was -3.3%, decidedly below the benchmark SP’s performance. Hedge funds in October lost $7B- worst month since Oct 2008. Glenview -20%, Einhorn -17%, Pershing -11% just from Sept.

So the concept of following Hedge fund mgrs picks may be flawed. Indeed Marketwatch article today notes Hedge funds’ concentration
into just a few stocks can have devastating impact on mkt downturns, as we’ve witnessed with such bets as Valeant, where Sequoia had 30% of its portfolio in it, losing $1.87B on that holding alone).

I’m not sure I’d follow Ackman, Icahn, or Druckenmiller’s lead as they’ve stumbled badly in this very volatile mkt.

J: Considering he generated 30% annual returns after fees for over a decade, I’m willing to look past one quarter’s performance numbers 😉

Q: You may cover this in this weeks report, but I was curious if you are still as doubtful of a fed rate hike?

J: No. I think they will probably be forced to hike now. If the November jobs report is really bad then that may change things but the markets have certainly priced in a rate hike at this point.