Bitcoin in the PP?

General Discussion on the Permanent Portfolio Strategy

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Smith1776
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Re: Bitcoin in the PP?

Post by Smith1776 » Wed Mar 25, 2020 8:50 pm

How long is the vetting process?

I say at least 100 legit looking posts and at least 50 of them have to be praise for Craig/Tex/PP.
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europeanwizard
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Re: Bitcoin in the PP?

Post by europeanwizard » Thu Mar 26, 2020 1:34 am

Medolark Lemon wrote:
Wed Mar 25, 2020 6:57 pm
I am honestly curious what the thought process of the risk/reward ratio is of putting 0.5%-1.0% bitcoin in one's portfolio?
Well, I for one think it's a very good idea. The PP provides for this, in some sense. Besides the Permanent Portfolio, it's advised to keep a VP = Variable Portfolio, if you would like to take up other investments.

So if I consider my PP 100%, then my additional VP consists of 2% peer-to-peer lending and 2% Bitcoin.
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Re: Bitcoin in the PP?

Post by pmward » Thu Mar 26, 2020 11:15 am

1% allocation is not enough to lose sleep over. Now, it's highly likely that it's not going to continue going up at the rate it has historically, so 1% also might not be enough to move the needle up either. But, I see no reason why someone can't allocate 1% of their portfolio to a moon shot.
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Medolark Lemon
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Re: Bitcoin in the PP?

Post by Medolark Lemon » Thu Mar 26, 2020 11:33 am

l82start wrote:
Wed Mar 25, 2020 7:23 pm
Medolark Lemon wrote:
Wed Mar 25, 2020 6:57 pm
l82start wrote:
Wed Mar 25, 2020 6:30 pm
or real person sucked in by clickbait asking an honest question? i am going to give benefit of the doubt for a moment. if the account doesn't engage in an actual conversation in a reasonable amount of time i will take care of it...
Real person asking a genuine question lol... I havent really read up on the forum rules so not sure if you aren't allowed to post links.

I am honestly curious what the thought process of the risk/reward ratio is of putting 0.5%-1.0% bitcoin in one's portfolio?
welcome to the forum... no rules against posting links, 98% of the time links on a first post are spam bots, sorry for the suspicion..
my best guess on response to bitcoin in a pp will be "bitcoin in the VP sure go for it" - "it has potential but its to young/new for pp at this point" "RUN AWAY RUN AWAY" " and "love the cripto anarchist non government money side but as an investment not so much" i personally would say 1,2,and 4..
thanks for the response, I can definitely understand the viewpoints
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Medolark Lemon
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Re: Bitcoin in the PP?

Post by Medolark Lemon » Thu Mar 26, 2020 11:38 am

europeanwizard wrote:
Thu Mar 26, 2020 1:34 am
Medolark Lemon wrote:
Wed Mar 25, 2020 6:57 pm
I am honestly curious what the thought process of the risk/reward ratio is of putting 0.5%-1.0% bitcoin in one's portfolio?
Well, I for one think it's a very good idea. The PP provides for this, in some sense. Besides the Permanent Portfolio, it's advised to keep a VP = Variable Portfolio, if you would like to take up other investments.

So if I consider my PP 100%, then my additional VP consists of 2% peer-to-peer lending and 2% Bitcoin.
Ahh i see, yeah that makes sense. I have seen a couple other people mention a "VP" and didnt know what it meant. I like that idea, have my PP to keep honest and stay away from market timing and then a VP as well as I naturally have always been interested in alternative investments as well (even if it may be sort of a moon shot)
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Re: Bitcoin in the PP?

Post by pugchief » Thu Mar 26, 2020 12:47 pm

If ML is a bot, so am I.
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Re: Bitcoin in the PP?

Post by dualstow » Thu Mar 26, 2020 12:52 pm

pugchief wrote:
Thu Mar 26, 2020 12:47 pm
If ML is a bot, so am I.
So you finally admit it.
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Re: Bitcoin in the PP?

Post by pugchief » Thu Mar 26, 2020 1:03 pm

LOL!

I am headed out to meet a potential new pug today. Will be wearing gloves and a mask, but duty calls. If it goes thru, I'll post some pics in the dawg pound thread tomorrow.
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Re: Bitcoin in the PP?

Post by Libertarian666 » Thu Mar 26, 2020 1:16 pm

I'd rather add Beanie Babies to the PP.
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l82start
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Re: Bitcoin in the PP?

Post by l82start » Thu Mar 26, 2020 7:05 pm

Libertarian666 wrote:
Thu Mar 26, 2020 1:16 pm
I'd rather add Beanie Babies to the PP.
i actually know somebody with an extensive beanie baby collection that they inherited from their wife, and who has no idea what to do with it, how much markup can i get for brokering the deal. :D
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Re: Bitcoin in the PP?

Post by Libertarian666 » Thu Mar 26, 2020 7:22 pm

l82start wrote:
Thu Mar 26, 2020 7:05 pm
Libertarian666 wrote:
Thu Mar 26, 2020 1:16 pm
I'd rather add Beanie Babies to the PP.
i actually know somebody with an extensive beanie baby collection that they inherited from their wife, and who has no idea what to do with it, how much markup can i get for brokering the deal. :D
Got me. That was just a figure of speech. :P
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Re: Bitcoin in the PP?

Post by vnatale » Thu Mar 26, 2020 7:38 pm

l82start wrote:
Thu Mar 26, 2020 7:05 pm
Libertarian666 wrote:
Thu Mar 26, 2020 1:16 pm
I'd rather add Beanie Babies to the PP.
i actually know somebody with an extensive beanie baby collection that they inherited from their wife, and who has no idea what to do with it, how much markup can i get for brokering the deal. :D
I'd head to eBay to see what they are worth...

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Re: Bitcoin in the PP?

Post by bitcoininthevp » Fri Mar 27, 2020 7:32 am

Did someone flash the Bitcoin signal in the sky?!

I proposed a version of the PP with 24/24/24/24/4 allocation (with 4% being in Bitcoin). But it is really more for fun and also the same as a normal PP with a Bitcoin sidecar in the VP. Im a huge long term Bitcoin bull, but the only way it makes any sense in the PP context is putting the Bitcoin in the variable portfolio.

viewtopic.php?f=1&t=9347&p=167356&hilit=name#p167356

Even if you think of Bitcoin as the worlds "third favorite money" (which it isnt yet) and it eating out of some of golds value proposition, it is still a speculation.

To be completely clear Im talking specifically about Bitcoin here. Stablecoins (USD equivalents), utility tokens (like ETH), and less sound
cryptocurrency attempts at "money" (like LTC) are not valuable long term IMHO.
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Re: Bitcoin in the PP?

Post by bitcoininthevp » Fri Mar 27, 2020 7:40 am

europeanwizard wrote:
Thu Mar 26, 2020 1:34 am
Medolark Lemon wrote:
Wed Mar 25, 2020 6:57 pm
I am honestly curious what the thought process of the risk/reward ratio is of putting 0.5%-1.0% bitcoin in one's portfolio?
Well, I for one think it's a very good idea. The PP provides for this, in some sense. Besides the Permanent Portfolio, it's advised to keep a VP = Variable Portfolio, if you would like to take up other investments.

So if I consider my PP 100%, then my additional VP consists of 2% peer-to-peer lending and 2% Bitcoin.
In the radio shows or elsewhere Harry mentioned that if you are going to speculate in the VP it is best to be outsized bets with high potential returns.

via An (Institutional) Investor’s Take on Cryptoassets
https://s3.eu-west-2.amazonaws.com/john ... ets+v6.pdf

Regarding risk, an investment with a 20x – 60x upside only requires a probability of
success of between 2% to 5% to be a positive net expected value investment. Each of us can
reflect on his own view of what that the probability is of the foregoing scenario materialising.
I’m personally pretty comfortable that, given where we are today in Bitcoin’s development
and adoption, that the probability is higher than 2 – 5%, likely much higher. While there are
many technical, political, regulatory and psychological hurdles ahead, the store-of-value use
case is by far the simplest one, and already closest to reality. I would argue therefore that
here you have an investment with a downside:upside skew of -1x : 60x and a positive net
expected value. Investments with both those characteristics are extremely rare.


He is specifically talking about Bitcoin replacing a certain % of gold here. Recommended reading the full PDF if you are curious.
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Re: Bitcoin in the PP?

Post by bitcoininthevp » Fri Mar 27, 2020 7:46 am

Libertarian666 wrote:
Thu Mar 26, 2020 1:16 pm
I'd rather add Beanie Babies to the PP.
Still waiting for an intellectual criticism from you.

Every thread on Bitcoin you spin the wheel-of-bitcoin-attempted-insults-from-2013 and pull out tulips or beanie babies or some nonsense without adding any value to the thread.

Reminds me of close-minded Boglers trying to insult gold as a useless shiny rock without ever trying to understand it.

And I would add you are also devaluing any of the contributions you make elsewhere on the forum doing this.
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Re: Bitcoin in the PP?

Post by Libertarian666 » Fri Mar 27, 2020 7:50 am

bitcoininthevp wrote:
Fri Mar 27, 2020 7:46 am
Libertarian666 wrote:
Thu Mar 26, 2020 1:16 pm
I'd rather add Beanie Babies to the PP.
Still waiting for an intellectual criticism from you.

Every thread on Bitcoin you spin the wheel-of-bitcoin-attempted-insults-from-2013 and pull out tulips or beanie babies or some nonsense without adding any value to the thread.

Reminds me of close-minded Boglers trying to insult gold as a useless shiny rock without ever trying to understand it.

And I would add you are also devaluing any of the contributions you make elsewhere on the forum doing this.
I understand bitcoin just fine. Blockchain in general has the potential of revolutionizing commerce, but that doesn't mean that bitcoin is worth anything as an investment.

As soon as bitcoin as an investment has 10th of the length of the track record of gold, I'll consider it as an investment.

In the meantime, feel free to ignore my messages on this topic, as I generally ignore yours.
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Re: Bitcoin in the PP?

Post by bitcoininthevp » Fri Mar 27, 2020 8:21 am

feel free to ignore my messages on this topic
Ill ignore what has no value. Like your one line beanie baby posts that are a waste of electrons. I dont mind criticisms, discussions, or arguments as perhaps one of us learns something.
Blockchain in general has the potential of revolutionizing commerce
Ok, the blockchain not Bitcoin argument. Help me understand in what context blockchain has or can be applied that is a better context than being applied to money (Bitcoin)?

Blockchain, to me, only makes sense in a censorship resistant context. For Bitcoin (money), that means central banks inflating the money supply against the will of the users, censoring/preventing transactions of users, or confiscating/freezing funds of users. Bitcoin and blockchain "solve" these issues in the money context. (I use "solve" in quotes as I fully and humbly realize Bitcoin is a web of incentives for humans and that at some point those incentives could break down in some way)

In your example, what commerce is being censored that a blockchain will help solve? What comes to my mind are things like black market transactions where the government says you cant sell drugs or something of the sort. But with Bitcoin, as outlined above, can help get around censored transactions.

So help me understand then the context where blockchain can be applied, that isnt money, having to do with commerce being revolutionized?
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Re: Bitcoin in the PP?

Post by Medolark Lemon » Fri Mar 27, 2020 1:57 pm

bitcoininthevp wrote:
Fri Mar 27, 2020 8:21 am
feel free to ignore my messages on this topic
Ill ignore what has no value. Like your one line beanie baby posts that are a waste of electrons. I dont mind criticisms, discussions, or arguments as perhaps one of us learns something.
Blockchain in general has the potential of revolutionizing commerce
Ok, the blockchain not Bitcoin argument. Help me understand in what context blockchain has or can be applied that is a better context than being applied to money (Bitcoin)?

Blockchain, to me, only makes sense in a censorship resistant context. For Bitcoin (money), that means central banks inflating the money supply against the will of the users, censoring/preventing transactions of users, or confiscating/freezing funds of users. Bitcoin and blockchain "solve" these issues in the money context. (I use "solve" in quotes as I fully and humbly realize Bitcoin is a web of incentives for humans and that at some point those incentives could break down in some way)

In your example, what commerce is being censored that a blockchain will help solve? What comes to my mind are things like black market transactions where the government says you cant sell drugs or something of the sort. But with Bitcoin, as outlined above, can help get around censored transactions.

So help me understand then the context where blockchain can be applied, that isnt money, having to do with commerce being revolutionized?
Yeah I tend to be of the same thought process. From what I can tell a blockchain is rather inefficient, a centralized third party would probably be better for most online commerce options, but when you need an extremely secure digital ledger like money a blockchain seems useful. Also when it comes to a blockchain you literally need a token/item/money to incentivize security of the network by rewarding the miners with it so the idea of a blockchain that isn't specifically designed towards being a money doesn't make much sense to me.

I like that idea of 24/24/24/24/4.
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Re: Bitcoin in the PP?

Post by bitcoininthevp » Sat Mar 28, 2020 5:13 am

I agree with your points. And welcome to the forum! (sorry the others gave such a harsh welcome)

Blockchains are terribly inefficient. The only time youd use one is if the decentralization/censorship resistance that you require absolutely necessitate it.

A group of companies working together can form a (centralized, technologically-efficient) consortium/federation instead. If they largely trust each other.

If there is a question of being able to prove something, there are also cryptographic tools like hashes that can help with that even with a traditional database without needing a blockchain. Such techniques have been around for decades.
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