The Permanent Portfolio May Be About To Break

General Discussion on the Permanent Portfolio Strategy

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craigr
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Re: The Permanent Portfolio May Be About To Break

Post by craigr » Sun Mar 08, 2020 10:06 pm

tomfoolery wrote:
Sun Mar 08, 2020 9:58 pm
craigr wrote:
Sun Mar 08, 2020 9:53 pm
tomfoolery wrote:
Sun Mar 08, 2020 9:50 pm

Hi Craig,

Welcome back! Do you have any new thoughts to your 4 year old statement regarding selling long term treasuries at 1% yield? Have you changed your mind since?
I'm likely to just rebalance according to plan. I don't have any better options or ideas right now. Each person is different and I can't offer specific advice due to varying circumstances. Ask me again when they are 0%. ;)
Futures are showing the yield has broken 1% in overnight trading. Let's schedule us for a chat on Thursday this week when they push through zero ;)
If they hit 0% we'll all be too busy rebalancing back into stocks and cash. That will be a massive haul.
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Re: The Permanent Portfolio May Be About To Break

Post by pmward » Mon Mar 09, 2020 8:57 am

craigr wrote:
Sun Mar 08, 2020 10:06 pm
If they hit 0% we'll all be too busy rebalancing back into stocks and cash. That will be a massive haul.
Truth!
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I Shrugged
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Re: The Permanent Portfolio May Be About To Break

Post by I Shrugged » Mon Mar 09, 2020 10:13 am

I'm in a box. I don't yet have 25% of LTT's, due to the outperformance of stocks in prior years, and my wide rebalance bands. So I'm sitting tight with the yield under 1%. But it's unsettling. I'd like to entertain more speculation about how this affects the PP.

It's probably fair to say that the "smart money" worldwide thinks US LTTs are the place to be right now. If so, is that encouraging? ???
I don't particularly like riding a wave of high velocity smart money. Then again, HB would say that's exactly what has to happen with one or more components during crazy times.
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Re: The Permanent Portfolio May Be About To Break

Post by pmward » Mon Mar 09, 2020 10:52 am

I Shrugged wrote:
Mon Mar 09, 2020 10:13 am
It's probably fair to say that the "smart money" worldwide thinks US LTTs are the place to be right now. If so, is that encouraging? ???
I don't particularly like riding a wave of high velocity smart money. Then again, HB would say that's exactly what has to happen with one or more components during crazy times.
You've been "riding a wave of high velocity smart money" in stocks for 12 years now. What's the difference? There will always be something being bid up, and you'll always own it. Isn't it funny how when stocks are going up and hitting all-time highs nobody questions anything. But the minute bonds hit all-time highs, we all start to question their very worth as an investment altogether (I'm guilty of questioning a bit myself in recent weeks). When bonds are down, we feel ok, but when they are up we feel panicked. Doesn't this seem backwards when we really step back and look at it? We will all likely do the same thing when gold finally hits all-time highs, whenever that inevitable day hits. We love stocks making us money, but we hate bonds and gold making us money. Why do we all (myself included) have this almost innate double-standard?
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Re: The Permanent Portfolio May Be About To Break

Post by Cortopassi » Mon Mar 09, 2020 11:43 am

pmward wrote:
Mon Mar 09, 2020 10:52 am
I Shrugged wrote:
Mon Mar 09, 2020 10:13 am
It's probably fair to say that the "smart money" worldwide thinks US LTTs are the place to be right now. If so, is that encouraging? ???
I don't particularly like riding a wave of high velocity smart money. Then again, HB would say that's exactly what has to happen with one or more components during crazy times.
You've been "riding a wave of high velocity smart money" in stocks for 12 years now. What's the difference? There will always be something being bid up, and you'll always own it. Isn't it funny how when stocks are going up and hitting all-time highs nobody questions anything. But the minute bonds hit all-time highs, we all start to question their very worth as an investment altogether (I'm guilty of questioning a bit myself in recent weeks). When bonds are down, we feel ok, but when they are up we feel panicked. Doesn't this seem backwards when we really step back and look at it? We will all likely do the same thing when gold finally hits all-time highs, whenever that inevitable day hits. We love stocks making us money, but we hate bonds and gold making us money. Why do we all (myself included) have this almost innate double-standard?
In order, the pp parts that stress me out the most:

--Gold, when it goes down.
--Stocks, when they go up
--Bonds and cash, I never even give a second thought

I know, strange.
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Re: The Permanent Portfolio May Be About To Break

Post by Kbg » Mon Mar 09, 2020 11:46 am

Cortopassi wrote:
Mon Mar 09, 2020 11:43 am
In order, the pp parts that stress me out the most:

--Gold, when it goes down.
--Stocks, when they go up
--Bonds and cash, I never even give a second thought

I know, strange.
I believe long bonds are going to be the most "interesting" part of the portfolio going forward, by a long shot.
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Re: The Permanent Portfolio May Be About To Break

Post by pmward » Mon Mar 09, 2020 12:10 pm

Kbg wrote:
Mon Mar 09, 2020 11:46 am
I believe long bonds are going to be the most "interesting" part of the portfolio going forward, by a long shot.
+1
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Re: The Permanent Portfolio May Be About To Break

Post by Tortoise » Mon Mar 09, 2020 12:41 pm

pmward wrote:
Mon Mar 09, 2020 12:10 pm
Kbg wrote:
Mon Mar 09, 2020 11:46 am
I believe long bonds are going to be the most "interesting" part of the portfolio going forward, by a long shot.
+1
Long bonds have already been the most "interesting" part of the portfolio for the past 10 years that I've been a PP investor.

They always seem to pop up out of nowhere and carry the portfolio when nobody expects them to. Each time, I think it's the last, yet it keeps happening.
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Re: The Permanent Portfolio May Be About To Break

Post by johntaylor » Mon Mar 09, 2020 7:38 pm

Very pleased to meet you Craig. Two years into german PP now and your book is always near me.
craigr wrote:
Sun Mar 08, 2020 9:53 pm
I'm likely to just rebalance according to plan. I don't have any better options or ideas right now. Each person is different and I can't offer specific advice due to varying circumstances. Ask me again when they are 0%. ;)
I can tell you from negative yielding Germany everything still holding strong ... sofar. But unlike you PP is keeping me up at night right now :(
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Re: The Permanent Portfolio May Be About To Break

Post by pmward » Mon Mar 09, 2020 8:22 pm

johntaylor wrote:
Mon Mar 09, 2020 7:38 pm
Very pleased to meet you Craig. Two years into german PP now and your book is always near me.
craigr wrote:
Sun Mar 08, 2020 9:53 pm
I'm likely to just rebalance according to plan. I don't have any better options or ideas right now. Each person is different and I can't offer specific advice due to varying circumstances. Ask me again when they are 0%. ;)
I can tell you from negative yielding Germany everything still holding strong ... sofar. But unlike you PP is keeping me up at night right now :(
Let me ask you this, is there a portfolio you would sleep better with? Is the the bonds specifically that keep you up at night? Or is it the negative interest rates in general, and other economic uncertainties that keep you up?
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Re: The Permanent Portfolio May Be About To Break

Post by johntaylor » Tue Mar 10, 2020 3:20 am

pmward wrote:
Mon Mar 09, 2020 8:22 pm
johntaylor wrote:
Mon Mar 09, 2020 7:38 pm
Very pleased to meet you Craig. Two years into german PP now and your book is always near me.
craigr wrote:
Sun Mar 08, 2020 9:53 pm
I'm likely to just rebalance according to plan. I don't have any better options or ideas right now. Each person is different and I can't offer specific advice due to varying circumstances. Ask me again when they are 0%. ;)
I can tell you from negative yielding Germany everything still holding strong ... sofar. But unlike you PP is keeping me up at night right now :(
Let me ask you this, is there a portfolio you would sleep better with? Is the the bonds specifically that keep you up at night? Or is it the negative interest rates in general, and other economic uncertainties that keep you up?
I guess it is a combination of it. And: I am new to investing. Till two years ago I just had my savings in a savings account.
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Re: The Permanent Portfolio May Be About To Break

Post by KevinW » Tue Mar 10, 2020 2:03 pm

Just stick to the plan. Weeks like this are where the adage about "you should be able to read the newspaper without worry" comes into play.
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