Are you "staying the course"?

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 5:13 pm

I Shrugged wrote:
Wed Mar 18, 2020 1:43 pm
If you have the psychological wherewithal to buy stocks and wait what could be years, I think once the DJIA is <15,000, it's time to think about buying. If it actually happens to get down to 10,000 or less, back up the truck and fill it with stocks. If you can afford it, and if you think you can sit on them for a good long time. If we get to those levels, I will be buying.

But this is a different discussion than staying the course at these prices.

Let me be clear. I love the PP.
But there are one or two times in an investor's life where there will be a panic or value buying opportunity that makes it worth setting aside the slow and steady allocation. HB would say that's for the variable portfolio. I agree to a point. I would buy within the upper bounds of the PP bands, maybe a bit more. The stronger I believed in the value, the more I would want to be buying. If 15,000 comes and you don't believe, don't be buying.
That sounds like a good strategy.

My 401 is still in a 60/40 due to limited options. Have thought about cashing out now and then buying back in when it hits 15k. I don't see how it does not go down to 15k with all the bad news.
turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 5:14 pm

dualstow wrote:
Wed Mar 18, 2020 1:37 pm
turbo8214 wrote:
Wed Mar 18, 2020 1:11 pm
Do you all plan on staying the course?
Yes in the sense of not capitulating and selling stocks low.
I'll be buying stocks.

No in the sense of dumping munis and prime for a flight to quality (treasury mm).
Are you buying now or waiting until it goes down another 20-30%?
turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 5:22 pm

Kriegsspiel wrote:
Wed Mar 18, 2020 2:36 pm
Yup, I'm sticking with the PP philosophy. I feel pretty good with the amount I have in the PP right now. I'd been shifting some money from stocks to cash in my formerly stock-only VP; I'll be shifting that back into stocks.
You're expecting the market to go down much further? I did something similar and went from a 90/10 target fund to a 60/40 in my 401, which lessened the blow a bit. Now thinking about increasing stock to cash ratio by 5% for every 1k the dow drops. For example:

If the Dow hits 19k, move to 65/35
18k - 70/30
15k - 85/15
12k - 100% stocks

Whether I go through with that or not is another story. Easier said than done tho (especially if employment is affected).
turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 5:28 pm

glennds wrote:
Wed Mar 18, 2020 4:09 pm
It is very possible that the Permanent Portfolio has not yet shown us its shine under the present shock. If I recall correctly, when the financial crisis hit the fan, the PP dropped and then after a several weeks, both buckets of long bonds and gold took over carrying the load. The bonds I think because it was a deflationary period, and the gold I think because there was a post-trauma flight to safety and a fear that QE would prompt inflation. The point being, the nature of the correlations is not instant, there is a period of transition from one asset class pulling the train to another. The markets need time to fully react to a change in economic condition.
I do think I vaguely remember that happening (all three of them down). That is an interesting explanation for the phenomenon. It should hopefully not last long! I suspect it will change once the government stimulus checks are mailed out....and then gold starts increasing.
glennds wrote:
Wed Mar 18, 2020 4:09 pm
On the other hand, we could just head straight into a recession in which case nothing will do well and the train just slows down. But even then losses should be fairly contained in a PP.
I know it's not officially a recession until GDP contracts, but it seems like the economy is already in one with the huge unemployment spike over the past week or two.
pmward
Executive Member
Executive Member
Posts: 1177
Joined: Thu Jan 24, 2019 4:39 pm

Re: Are you "staying the course"?

Post by pmward » Wed Mar 18, 2020 5:31 pm

turbo8214 wrote:
Wed Mar 18, 2020 5:13 pm
I Shrugged wrote:
Wed Mar 18, 2020 1:43 pm
If you have the psychological wherewithal to buy stocks and wait what could be years, I think once the DJIA is <15,000, it's time to think about buying. If it actually happens to get down to 10,000 or less, back up the truck and fill it with stocks. If you can afford it, and if you think you can sit on them for a good long time. If we get to those levels, I will be buying.

But this is a different discussion than staying the course at these prices.

Let me be clear. I love the PP.
But there are one or two times in an investor's life where there will be a panic or value buying opportunity that makes it worth setting aside the slow and steady allocation. HB would say that's for the variable portfolio. I agree to a point. I would buy within the upper bounds of the PP bands, maybe a bit more. The stronger I believed in the value, the more I would want to be buying. If 15,000 comes and you don't believe, don't be buying.
That sounds like a good strategy.

My 401 is still in a 60/40 due to limited options. Have thought about cashing out now and then buying back in when it hits 15k. I don't see how it does not go down to 15k with all the bad news.
At this point it's already too late to sell stocks, imo. Most of the bad news is already priced in.
User avatar
Dieter
Executive Member
Executive Member
Posts: 377
Joined: Sat Sep 01, 2012 10:51 am

Re: Are you "staying the course"?

Post by Dieter » Wed Mar 18, 2020 5:34 pm

I know many musician / artist / part-time teacher types, and the combination of AB5 and Coronavirus has destroyed their income sources.
User avatar
dualstow
Executive Member
Executive Member
Posts: 10465
Joined: Wed Oct 27, 2010 10:18 am
Contact:

Re: Are you "staying the course"?

Post by dualstow » Wed Mar 18, 2020 5:38 pm

turbo8214 wrote:
Wed Mar 18, 2020 5:14 pm
dualstow wrote:
Wed Mar 18, 2020 1:37 pm
turbo8214 wrote:
Wed Mar 18, 2020 1:11 pm
Do you all plan on staying the course?
Yes in the sense of not capitulating and selling stocks low.
I'll be buying stocks.

No in the sense of dumping munis and prime for a flight to quality (treasury mm).
Are you buying now or waiting until it goes down another 20-30%?
For now, I'm merely throwing a few hundred dollars into it every day, rain or shine. If it goes down another 20% or so, I might take $10K at a time from T-bills and *really* buy. Variable Portfolio stocks. Just have to make sure I have enough cash remaining to call it an emergency fund because:
• The virus could come back, like just when Vinny thought he was going to play basketball in September.
• Some other calamity could hit: Al Qaeda shenanigans, natural disasters, who knows.
I'm definitely not a doomer, but who knows when we'll really be out of the woods.
Karl Popper: Paradox of Tolerance
User avatar
Kriegsspiel
Executive Member
Executive Member
Posts: 2600
Joined: Sun Sep 16, 2012 5:28 pm

Re: Are you "staying the course"?

Post by Kriegsspiel » Wed Mar 18, 2020 5:56 pm

turbo8214 wrote:
Wed Mar 18, 2020 5:22 pm
Kriegsspiel wrote:
Wed Mar 18, 2020 2:36 pm
Yup, I'm sticking with the PP philosophy. I feel pretty good with the amount I have in the PP right now. I'd been shifting some money from stocks to cash in my formerly stock-only VP; I'll be shifting that back into stocks.
You're expecting the market to go down much further? I did something similar and went from a 90/10 target fund to a 60/40 in my 401, which lessened the blow a bit. Now thinking about increasing stock to cash ratio by 5% for every 1k the dow drops. For example:

If the Dow hits 19k, move to 65/35
18k - 70/30
15k - 85/15
12k - 100% stocks

Whether I go through with that or not is another story. Easier said than done tho (especially if employment is affected).
I dunno. If it does, I'll probably just rebalance in my PP because I'll have hit 15% stocks, or somewhere close to that. Your strategy isn't bad either.
There's this very disturbing set of studies where about half the articles printed in Science and Nature magazines, the two leading publications, involved experiments that could not be repeated by anybody.
- Peter Thiel
User avatar
mathjak107
Executive Member
Executive Member
Posts: 2770
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Are you "staying the course"?

Post by mathjak107 » Wed Mar 18, 2020 6:11 pm

Dieter wrote:
Wed Mar 18, 2020 5:34 pm
I know many musician / artist / part-time teacher types, and the combination of AB5 and Coronavirus has destroyed their income sources.
The 50th anniversary tour I was doing some shows in has been suspended for now ....my buddy was right in the middle of a worldwide Bowie alumni tour and it was suspended .....they worked with Bowie when he did the glass spyder tour ....they got together ,got new singers and booked arenas world wide selling out shows ...

My one day a week job is suspended too
turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 6:14 pm

pmward wrote:
Wed Mar 18, 2020 5:31 pm
turbo8214 wrote:
Wed Mar 18, 2020 5:13 pm
I Shrugged wrote:
Wed Mar 18, 2020 1:43 pm
If you have the psychological wherewithal to buy stocks and wait what could be years, I think once the DJIA is <15,000, it's time to think about buying. If it actually happens to get down to 10,000 or less, back up the truck and fill it with stocks. If you can afford it, and if you think you can sit on them for a good long time. If we get to those levels, I will be buying.

But this is a different discussion than staying the course at these prices.

Let me be clear. I love the PP.
But there are one or two times in an investor's life where there will be a panic or value buying opportunity that makes it worth setting aside the slow and steady allocation. HB would say that's for the variable portfolio. I agree to a point. I would buy within the upper bounds of the PP bands, maybe a bit more. The stronger I believed in the value, the more I would want to be buying. If 15,000 comes and you don't believe, don't be buying.
That sounds like a good strategy.

My 401 is still in a 60/40 due to limited options. Have thought about cashing out now and then buying back in when it hits 15k. I don't see how it does not go down to 15k with all the bad news.
At this point it's already too late to sell stocks, imo. Most of the bad news is already priced in.
It seems to be the beginning of the crisis with ways to go yet. Someone in the administration had a baseball game analogy and said we're in the second inning or something to that affect.

I just figured why not sell now to stop the bleeding and then buy back in once it is down further.

Something told me I should have sold a few weeks ago but I kept thinking "stay the course". At the time, it seemed like the market could also go back up. I don't think anyone expected this much of the economy to be shut down.
turbo8214
Associate Member
Associate Member
Posts: 44
Joined: Tue Mar 10, 2020 10:14 am

Re: Are you "staying the course"?

Post by turbo8214 » Wed Mar 18, 2020 6:20 pm

Dieter wrote:
Wed Mar 18, 2020 5:34 pm
I know many musician / artist / part-time teacher types, and the combination of AB5 and Coronavirus has destroyed their income sources.
Those government stimulus checks should hopefully help. They are talking about $1000 in April and another $1000 in May. How can anyone live on that though? As much as I agree with Harry's philosophy, the government does need to step in here.
User avatar
Dieter
Executive Member
Executive Member
Posts: 377
Joined: Sat Sep 01, 2012 10:51 am

Re: Are you "staying the course"?

Post by Dieter » Wed Mar 18, 2020 6:22 pm

turbo8214 wrote:
Wed Mar 18, 2020 6:20 pm
Dieter wrote:
Wed Mar 18, 2020 5:34 pm
I know many musician / artist / part-time teacher types, and the combination of AB5 and Coronavirus has destroyed their income sources.
Those government stimulus checks should hopefully help. They are talking about $1000 in April and another $1000 in May. How can anyone live on that though? As much as I agree with Harry's philosophy, the government does need to step in here.
Yup, that would help a lot.
Post Reply