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by MachineGhost
Mon Nov 21, 2011 11:58 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

daily 30 year yield data since 1977 http://uk.finance.yahoo.com/q/hp?s=^TYX I can't figure out how to convert daily yields to total return data.  The resulting numbers seems to be on orders of magnitude 2x-3x actual reality, even a simple division by 365.25.  Furthermore, Excel 2003 will not deal w...
by MachineGhost
Mon Nov 21, 2011 11:53 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

I still don't understand why you are backtesting during periods prior to 1971.  The PP is only designed to work in a post-gold standard world.  Testing it in a gold standard era is like testing a BMW on a dirt track--it's simply not designed for those conditions and shouldn't be expected to perform...
by MachineGhost
Sat Nov 19, 2011 3:18 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

2. If interest rates go significantly higher my assumptions are    Gold prices  go down    LT Bond prices go down    Stock prices  go down The only asset that provides some increase is Cash (perhaps in the form of CDs or others). So eliminating Cash may be undesirable I agree that it is undesirable...
by MachineGhost
Sat Nov 19, 2011 3:12 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

I used the Vanguard funds since 1990 because the dividends were reinvested as opposed to ETF's.  However, the data was daily, just the reporting was done in monthly for the annual totals.  Yahoo will have the historical data at daily. You will not find 30-year T-Bond monthly data except at the FRED ...
by MachineGhost
Sat Nov 19, 2011 3:00 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

I would like to add a quick point in support of MediumTex's preceding post.  Gold was chosen as the "hard asset"for the PP because it has for 6000 years served as a store of value and money.  Many of the other proposed "real assets" would fall more under the heading of "collectibles" than a univers...
by MachineGhost
Sat Nov 19, 2011 2:44 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

Anything but treasuries for the cash allocation is going to introduce counterparty and interest rate risk.  Some of the suggestions above are, IMHO, not suitable for "money you can't afford to lose." It seems to me counterparty risk is everywhere in the portfolio, short of holding physical possessi...
by MachineGhost
Wed Nov 16, 2011 11:04 pm
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Re: Improving on the Permanent Portfolio

Fascinating contributions, guys! I forgot to mention that in real terms, the maxium drawdown in the 25x4 during 1938 to 1951 was around 25%.  That's a jaw-dropping amount of net worth & purchasing power to have lost, especially outside the actual Great Depression.  Using the S&L rates for the given ...
by MachineGhost
Sun Nov 13, 2011 9:10 am
Forum: Variable Portfolio Discussion
Topic: Improving on the Permanent Portfolio
Replies: 142
Views: 36566

Improving on the Permanent Portfolio

Intuitively, the HBPP concept made sense to me, but I've always had a nagging feeling in my gut that the risk of the portfolio was understated for purposes of "dumbed down" simplicity for conveying the concept to mainstream investors.  In no way shape or form could a simplistic allocation of 25%x4 b...
by MachineGhost
Sat Nov 12, 2011 3:10 pm
Forum: Permanent Portfolio Discussion
Topic: Physical Stock Certificates as Part of PP?
Replies: 11
Views: 2429

Re: Physical Stock Certificates as Part of PP?

Policing for Profit: The Abuse of Civil Asset Forfeiture chronicles how state and federal laws leave innocent property owners vulnerable to forfeiture abuse and encourage law enforcement to take property to boost their budgets.  The report finds that by giving law enforcement a direct financial sta...
by MachineGhost
Sat Nov 12, 2011 10:48 am
Forum: Permanent Portfolio Discussion
Topic: Some Questions about the Permanent Portfolio from a Newbie
Replies: 14
Views: 4952

Re: Some Questions about the Permanent Portfolio from a Newbie

1. The list is outdated.  Under $50K you are better off buying cheap bullion or low-premium semi-numismatic gold coins.  Over 50K you can look at storage options in insured private vaults.  Do note that in the U.S., bank deposit boxes are not insured. 2. Stocks are still the primary driver of long t...
by MachineGhost
Sat Nov 12, 2011 10:11 am
Forum: Permanent Portfolio Discussion
Topic: Thoughts on PP if the dollar becomes gold/silver backed again
Replies: 24
Views: 5724

Re: Thoughts on PP if the dollar becomes gold/silver backed again

With Ron Paul running for President and wanting the US currency to be backed by gold (and probably silver as well) - I was wondering if the impact of the change has been considered as far as the asset allocation for HB PP is concerned. I searched around a little but did not find much on this subjec...
by MachineGhost
Sat Nov 12, 2011 9:41 am
Forum: Permanent Portfolio Discussion
Topic: Rebalancing/backtesting software?
Replies: 9
Views: 4364

Re: Rebalancing/backtesting software?

beafet wrote: Does anyone know of some software or a website that can be used to experiment with different rebalancing bands and timing?
http://code.google.com/p/mypersonalindex/

MG