Trying to make sense of PRPFX performance

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CT-Scott
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Trying to make sense of PRPFX performance

Post by CT-Scott » Sat Mar 28, 2020 8:47 am

Many years ago when I first read Harry Browne's book about the Permanent Porfolio I had a particular 401k account that allowed me to invest my funds in just about anything, and I moved the money to PRPFX. I understood that the fund diverged from HB's approach, but it seemed like it might be the closest thing to a "set it and forget it" PP approach.

I moved our money into PRPFX around 08/26/2011, and would later move it all out of it around 5/6/2016. Looking back at some of my records, I see that there were some dividends paid out that were automatically reinvested back into PRPFX. Over the course of the ~5 years I had my money in PRPFX, it looks like it might have grown a total of about 10% (including dividends). That doesn't seem very good. Looking at the Stock app on my iPhone for this timeframe, it actually looks like PRPFX was down about 23% over that timeframe. That seems pretty awful, so did the dividends really account for a 10% gain over that timeframe? Or do you think I may have made a mistake somewhere in tracking my account balances?

Flash forward to today...looking at the Stock app on my iPhone, I see VTSAX down about 25% from 2/21 (approx the start of the COVID-19 US stock crash) to 3/27 (yesterday, as of the date of this post). PRPFX appears to be down about 15% over that same timeframe.

Does that seem accurate? I'm not sure how dividends might compared between VTSAX and PRPFX, so if you have some insight into that, please let me know.
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Re: Trying to make sense of PRPFX performance

Post by dualstow » Sat Mar 28, 2020 10:48 am

Does PRPFX still hold a lot of real estate? That got hit pretty hard.
loot "goods taken from an enemy, etc.," 1839, Anglo-Indian, from Hindi lut, from Sanskrit loptram, lotram "booty, stolen property,"fm. PIE root *reup- "to snatch"
curfew - early 14c., curfeu, "evening signal, ringing of a bell at a fixed hour" as a signal to extinguish fires and lights, ... from Old French cuevrefeu, literally "cover fire"
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Re: Trying to make sense of PRPFX performance

Post by vnatale » Sat Mar 28, 2020 12:14 pm

dualstow wrote:
Sat Mar 28, 2020 10:48 am
Does PRPFX still hold a lot of real estate? That got hit pretty hard.
So that explains the another part of my equity holdings drop in value? My holdings in the Vanguard index REIT fund?

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AdamA
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Re: Trying to make sense of PRPFX performance

Post by AdamA » Sat Mar 28, 2020 4:01 pm

CT-Scott wrote:
Sat Mar 28, 2020 8:47 am
That seems pretty awful, so did the dividends really account for a 10% gain over that timeframe? Or do you think I may have made a mistake somewhere in tracking my account balances?
It paid out pretty steep dividends in 2013 - 2015, so it's probably close to accurate.

It's hard to track PRPFX.

I'd be interested to see a chart of it's annual returns since inception versus the DIY.
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Re: Trying to make sense of PRPFX performance

Post by Smith1776 » Sat Mar 28, 2020 8:44 pm

PRPFX has been something of a thorn in my side when I'm trying to sell people on the PP strategy.

They often do Googling and point to the performance of PRPFX as a reason not to invest. I always have to remind them that PRPFX is not the true PP.
For the money you can't afford to lose, why would you invest it in anything other than the PP? ???
Check out the Goldsmith PP: https://www.gyroscopicinvesting.com/forum/viewtopic.php?f=1&t=9613
The government causing inflation and giving us TIPS is like breaking our legs and giving us crutches.
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Dieter
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Re: Trying to make sense of PRPFX performance

Post by Dieter » Sat Mar 28, 2020 10:15 pm

Smith1776 wrote:
Sat Mar 28, 2020 8:44 pm
PRPFX has been something of a thorn in my side when I'm trying to sell people on the PP strategy.

They often do Googling and point to the performance of PRPFX as a reason not to invest. I always have to remind them that PRPFX is not the true PP.
That find just annoys me. So much active management and various allocations (at least, back when I looked at it ) owned it for a bit a number of years ago).

Would be nice to have a decent so in one.

I did invest dinner in PERM, but starting a PP ETF in a 10+ year but market was a tough sell and IIRC, it went under.
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Re: Trying to make sense of PRPFX performance

Post by Xan » Sat Mar 28, 2020 10:26 pm

Dieter wrote:
Sat Mar 28, 2020 10:15 pm
Smith1776 wrote:
Sat Mar 28, 2020 8:44 pm
PRPFX has been something of a thorn in my side when I'm trying to sell people on the PP strategy.

They often do Googling and point to the performance of PRPFX as a reason not to invest. I always have to remind them that PRPFX is not the true PP.
That find just annoys me. So much active management and various allocations (at least, back when I looked at it ) owned it for a bit a number of years ago).

Would be nice to have a decent so in one.

I did invest dinner in PERM, but starting a PP ETF in a 10+ year but market was a tough sell and IIRC, it went under.
How hard can it be to start a fund? Can we group together and offer a new PERM?
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Smith1776
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Re: Trying to make sense of PRPFX performance

Post by Smith1776 » Sat Mar 28, 2020 10:37 pm

Xan wrote:
Sat Mar 28, 2020 10:26 pm
Dieter wrote:
Sat Mar 28, 2020 10:15 pm
Smith1776 wrote:
Sat Mar 28, 2020 8:44 pm
PRPFX has been something of a thorn in my side when I'm trying to sell people on the PP strategy.

They often do Googling and point to the performance of PRPFX as a reason not to invest. I always have to remind them that PRPFX is not the true PP.
That find just annoys me. So much active management and various allocations (at least, back when I looked at it ) owned it for a bit a number of years ago).

Would be nice to have a decent so in one.

I did invest dinner in PERM, but starting a PP ETF in a 10+ year but market was a tough sell and IIRC, it went under.
How hard can it be to start a fund? Can we group together and offer a new PERM?
Let's make it interesting.

We make our own version of PERM and it buys a share in our bunker and a complementary bug-out bag!
For the money you can't afford to lose, why would you invest it in anything other than the PP? ???
Check out the Goldsmith PP: https://www.gyroscopicinvesting.com/forum/viewtopic.php?f=1&t=9613
The government causing inflation and giving us TIPS is like breaking our legs and giving us crutches.
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Re: Trying to make sense of PRPFX performance

Post by vnatale » Sat Mar 28, 2020 11:37 pm

Xan wrote:
Sat Mar 28, 2020 10:26 pm
Dieter wrote:
Sat Mar 28, 2020 10:15 pm
Smith1776 wrote:
Sat Mar 28, 2020 8:44 pm
PRPFX has been something of a thorn in my side when I'm trying to sell people on the PP strategy.

They often do Googling and point to the performance of PRPFX as a reason not to invest. I always have to remind them that PRPFX is not the true PP.
That find just annoys me. So much active management and various allocations (at least, back when I looked at it ) owned it for a bit a number of years ago).

Would be nice to have a decent so in one.

I did invest dinner in PERM, but starting a PP ETF in a 10+ year but market was a tough sell and IIRC, it went under.
How hard can it be to start a fund? Can we group together and offer a new PERM?
It may be easy to start the fund. However the administrative costs are attached it are not small. I believe Craig addressed this in one of old posts. I think I read somewhere that you need a ton of investment just to cover your fixed regulatory costs. That explains why a lot of the mutual funds have expense ratios in the 1% range (or even higher). They do not have any economies of scale.

All the sad facts seem to be here:

http://www.pfsfunds.com/cost.html

VInny
Cost

The cost of securing the necessary expert help in getting a mutual fund started and keeping it running is now within reach of nearly any fee advisor or investment manager who wants to start their own fund.

Initial setup cost for a mutual fund through our service is approximately $20,000 to $25,000. This includes legal fees, prospectus and SAI development, SEC filings, contracts for service providers, 500 investor packages (prospectus, application, return envelopes) and web page development. Setup costs typically run between $75,000 to $100,000, and up for other service providers.

The annual costs of running a mutual fund primarily consist of bank custody fees, legal services, annual auditing fees, transfer agent and accounting fees, fund administration fees, trustee fees, state registrations and printing/mailing cost. Below is a typical list of the annual operating costs for running a mutual fund with $10 million in assets through our services group.




A $10 million fund with a total operating expense ratio of 1.5% generates $150,000 per year in revenue netting approximately $24,993 in revenue after expenses. As the fund grows, the net income to the advisor dramatically increases as a percentage of operating cost increases at a much lower rate. Actual expenses and net income are for example purposes only.
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dualstow
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Re: Trying to make sense of PRPFX performance

Post by dualstow » Sun Mar 29, 2020 8:33 am

As long as there’s no bitcoin in it, no leveraging, and the cash portion isn’t skipped.
loot "goods taken from an enemy, etc.," 1839, Anglo-Indian, from Hindi lut, from Sanskrit loptram, lotram "booty, stolen property,"fm. PIE root *reup- "to snatch"
curfew - early 14c., curfeu, "evening signal, ringing of a bell at a fixed hour" as a signal to extinguish fires and lights, ... from Old French cuevrefeu, literally "cover fire"
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Re: Trying to make sense of PRPFX performance

Post by MarketIfTouched » Sun Mar 29, 2020 8:15 pm

dualstow wrote:
Sat Mar 28, 2020 10:48 am
Does PRPFX still hold a lot of real estate? That got hit pretty hard.
Looks like PRPFX has a target of 15% for Real Estate/Natural Resources. As of 12/31/2019 looks like they were over allocated a bit.

From the PRPFX website:

Image
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