Dragon Portfolio

General Discussion on the Permanent Portfolio Strategy

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jswinner
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Dragon Portfolio

Post by jswinner » Fri Apr 23, 2021 10:18 am

Bit of a PP in disguise here

How to Build a Portfolio That Outperforms For a Century Podcast: https://lnns.co/Nzwk54bvCIy

Domestic Equity (24%)
Fixed Income/Bonds (18%)
Active Long Volatility (21%)
Commodity Trend Following (18%)
Physical Gold (19%).3
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doodle
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Re: Dragon Portfolio

Post by doodle » Fri Apr 30, 2021 11:57 am

I actually just posted a Chris Cole interview above....first time running across him. Struck me as having a very Harry Browne type investment philosophy. Conversations with members here like Mathjak make me realize that many people really aren't able to see the last 40 years of equity outperformance and declining interest rates as an aberration. There is still a strong adherence that a traditional stock and bond portfolio is all you need to weather storms....because that is all most investors alive today have seen.
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doodle
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Re: Dragon Portfolio

Post by doodle » Fri Apr 30, 2021 12:01 pm

Active long volatility and commodity trend following are the two areas that seem most complicated for the average investor. Haven't heard how he proposes actually putting those into practice....any ideas?
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Tyler
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Re: Dragon Portfolio

Post by Tyler » Fri Apr 30, 2021 2:46 pm

doodle wrote:
Fri Apr 30, 2021 12:01 pm
Haven't heard how he proposes actually putting those into practice....
...Investing through his asset management firm that just happens to specialize in those particular assets.
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Re: Dragon Portfolio

Post by vnatale » Fri Apr 30, 2021 3:38 pm

Tyler wrote:
Fri Apr 30, 2021 2:46 pm

doodle wrote:
Fri Apr 30, 2021 12:01 pm

Haven't heard how he proposes actually putting those into practice....


...Investing through his asset management firm that just happens to specialize in those particular assets.


Tyler humor!!!
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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doodle
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Re: Dragon Portfolio

Post by doodle » Fri Apr 30, 2021 4:25 pm

There are other ways....commodity momentum for example VGPMX being some kind of broad commodity index
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I Shrugged
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Re: Dragon Portfolio

Post by I Shrugged » Fri Apr 30, 2021 4:49 pm

doodle wrote:
Fri Apr 30, 2021 11:57 am
I actually just posted a Chris Cole interview above....first time running across him. Struck me as having a very Harry Browne type investment philosophy. Conversations with members here like Mathjak make me realize that many people really aren't able to see the last 40 years of equity outperformance and declining interest rates as an aberration. There is still a strong adherence that a traditional stock and bond portfolio is all you need to weather storms....because that is all most investors alive today have seen.
During the past 40 years, any long term investor who stuck to any kind of conventional investing plan, or a few different ones over time, feels like a genius today. You couldn't help but succeed, as long as you stayed in. I'm very skeptical about using past performance numbers for the last hundred years. Or for any period really. But yes, it has worked for baby boomers like me.

I read the Artemis piece. I'll watch the interview tonight. I'm not too keen on the two more exotic pieces, but I don't understand much about them yet, either.
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Re: Dragon Portfolio

Post by doodle » Fri Apr 30, 2021 5:06 pm

I Shrugged wrote:
Fri Apr 30, 2021 4:49 pm
doodle wrote:
Fri Apr 30, 2021 11:57 am
I actually just posted a Chris Cole interview above....first time running across him. Struck me as having a very Harry Browne type investment philosophy. Conversations with members here like Mathjak make me realize that many people really aren't able to see the last 40 years of equity outperformance and declining interest rates as an aberration. There is still a strong adherence that a traditional stock and bond portfolio is all you need to weather storms....because that is all most investors alive today have seen.
During the past 40 years, any long term investor who stuck to any kind of conventional investing plan, or a few different ones over time, feels like a genius today. You couldn't help but succeed, as long as you stayed in. I'm very skeptical about using past performance numbers for the last hundred years. Or for any period really. But yes, it has worked for baby boomers like me.

I read the Artemis piece. I'll watch the interview tonight. I'm not too keen on the two more exotic pieces, but I don't understand much about them yet, either.
Exactly! Boomer investor hubris

What's the saying? Pride comes before the fall?
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I Shrugged
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Re: Dragon Portfolio

Post by I Shrugged » Fri Apr 30, 2021 6:57 pm

doodle wrote:
Fri Apr 30, 2021 5:06 pm
I Shrugged wrote:
Fri Apr 30, 2021 4:49 pm
doodle wrote:
Fri Apr 30, 2021 11:57 am
I actually just posted a Chris Cole interview above....first time running across him. Struck me as having a very Harry Browne type investment philosophy. Conversations with members here like Mathjak make me realize that many people really aren't able to see the last 40 years of equity outperformance and declining interest rates as an aberration. There is still a strong adherence that a traditional stock and bond portfolio is all you need to weather storms....because that is all most investors alive today have seen.
During the past 40 years, any long term investor who stuck to any kind of conventional investing plan, or a few different ones over time, feels like a genius today. You couldn't help but succeed, as long as you stayed in. I'm very skeptical about using past performance numbers for the last hundred years. Or for any period really. But yes, it has worked for baby boomers like me.

I read the Artemis piece. I'll watch the interview tonight. I'm not too keen on the two more exotic pieces, but I don't understand much about them yet, either.
Exactly! Boomer investor hubris

What's the saying? Pride comes before the fall?
My mom always said, don't break your arm patting yourself on the back. I have to admit to often feeling smug about my investment performance. But deep down I know it would have been hard to not do well over that time frame.
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Re: Dragon Portfolio

Post by jswinner » Sat May 01, 2021 1:16 pm

Some random internet dude (https://www.investwithfire.com/dragon-p ... ur-wealth/) suggested this allocation:

Dragon Portfolio
24% Vanguard Total Stock Market ETF (VTI)
18% Long-Term Government Bonds – via the iShares Barclays 20+ Year US Treasury Bond ETF (TLT)
21% Long Volatility – (IVOL) or (TAIL)
18% PowerShares DB Commodity Index Tracking Fund (DBC)

19% via Central Gold-Trust, which holds gold bullion (GTU)
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Re: Dragon Portfolio

Post by doodle » Sat May 01, 2021 4:07 pm

The commodity is active though...so needs to incorporate some kind of moving average sell and buy signals. I'm not sure about the long volatility either as it is usually accomplished with options...that seems pricy.
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Re: Dragon Portfolio

Post by jswinner » Sun May 02, 2021 12:46 pm

Cole seems to be one of the few pointing out the risk that institutional pension funds have created with an over-reliance on equities. Average is now almost 70%. Many were in very poor shape leading into the pandemic. Here is a decent interview regarding the national debt too: https://www.readtangle.com/p/does-the-d ... rian-riedl Both use the term "uncharted waters."
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I Shrugged
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Re: Dragon Portfolio

Post by I Shrugged » Sun May 02, 2021 6:21 pm

jswinner wrote:
Sun May 02, 2021 12:46 pm
Cole seems to be one of the few pointing out the risk that institutional pension funds have created with an over-reliance on equities. Average is now almost 70%. Many were in very poor shape leading into the pandemic. Here is a decent interview regarding the national debt too: https://www.readtangle.com/p/does-the-d ... rian-riedl Both use the term "uncharted waters."
OTOH what were the pension funds supposed to do? The federal reserve policies have forced pension funds to risk it all on stocks.
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Re: Dragon Portfolio

Post by ppnewbie » Mon May 03, 2021 2:02 am

You can find more threads in this forum on the dragon portfolio if you search “The allegory of the hawk and serpent”. I was wary of investing in his fund when he asked the MacroVoices guys not to ask him about commodity trend following because it was not his expertise. His fund may have several other funds they parcel out the money to. Anyway it was too many moving parts for me.
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Re: Dragon Portfolio

Post by sophie » Mon May 03, 2021 9:39 am

jswinner wrote:
Sat May 01, 2021 1:16 pm
Some random internet dude (https://www.investwithfire.com/dragon-p ... ur-wealth/) suggested this allocation:

Dragon Portfolio
24% Vanguard Total Stock Market ETF (VTI)
18% Long-Term Government Bonds – via the iShares Barclays 20+ Year US Treasury Bond ETF (TLT)
21% Long Volatility – (IVOL) or (TAIL)
18% PowerShares DB Commodity Index Tracking Fund (DBC)

19% via Central Gold-Trust, which holds gold bullion (GTU)
Random Internet Dude vs. Harry Browne. Hmm, which one should I trust more?
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Re: Dragon Portfolio

Post by jswinner » Mon May 03, 2021 10:10 am

sophie wrote:
Mon May 03, 2021 9:39 am
jswinner wrote:
Sat May 01, 2021 1:16 pm
Some random internet dude (https://www.investwithfire.com/dragon-p ... ur-wealth/) suggested this allocation:

Dragon Portfolio
24% Vanguard Total Stock Market ETF (VTI)
18% Long-Term Government Bonds – via the iShares Barclays 20+ Year US Treasury Bond ETF (TLT)
21% Long Volatility – (IVOL) or (TAIL)
18% PowerShares DB Commodity Index Tracking Fund (DBC)

19% via Central Gold-Trust, which holds gold bullion (GTU)
Random Internet Dude vs. Harry Browne. Hmm, which one should I trust more?
That was simply one persons idea of how to implement it in the retail space. I started this thread to point out Chris Cole's additional research and podcast interview. The PP and Dragon are a quite similar philosophically in aligning investments to different economic regimes. Nice to hear additional research on the principal.
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Re: Dragon Portfolio

Post by johnnywitt » Thu Jun 10, 2021 10:29 pm

No way the unaccredited investor can do a Dragon Portfolio. The closest a Punter can do is... wait for it...the PP.
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Re: Dragon Portfolio

Post by ppnewbie » Wed Nov 17, 2021 7:57 pm

doodle wrote:
Fri Apr 30, 2021 12:01 pm
Active long volatility and commodity trend following are the two areas that seem most complicated for the average investor. Haven't heard how he proposes actually putting those into practice....any ideas?
I saw red flags when the Macro Voices guys said they would not ask him any Commodity Trend Following questions because that was not his expertise. And the long vol stuff is not trivial (at least to me).
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Re: Dragon Portfolio

Post by seajay » Thu Nov 18, 2021 4:50 pm

vincent_c wrote:
Thu Jun 10, 2021 11:23 pm
Okay, so if our starting point is the PP and we make a presumption that forum members can accept that because the future performance whether relative or absolute of each asset’s market at any time is uncertain so for an abundance of reasons a 4x25% allocation is a reasonable starting point, then any deviation from this allocation one has to pose a question.

If the deviated asset underperforms significantly to the point where the following conditions occur:

1) That asset reaches a low rebalancing point.
2) That the total portfolio is near its historical maximum drawdown.
3) That technical and fundamental analysis for the asset are both bearish.

Do you believe you can still stay the course and also rebalance and can you defend such decisions with the same reasons you chose to deviate from the PP to start with.
Some see LTT's as a no-go at present valuations. However the PP tends to nearly always be holding one out of favor asset. 1980 and the Dow/Gold ratio was near 1.0. It's then price of $590/ounce progressively declined to $290 at the end of 1999. A PP (accumulation) would have seen ounces of gold being held expanded nearly 11-fold over those years, whilst the PP provided 4.3% annualized real rewards. Having accumulated 11 times more ounces of gold by the end of 1999 over the next decade or so the price of gold rose 5-fold+, early 2011 and gold was back to its inflation adjusted 1980 price level, whilst the PP held around 5 times as many ounces of gold as in 1980. You might say that whilst gold price annualized 0% real 1980 to 2011, PP saw gold having annualized 5% real through active trading.

Forward time it may be a similar situation with LTT's, prices might drop, buy more (cost-average) .. repeatedly until one day you hold many more bond certificates and see the price/value of those bonds rise sharply. Active long volatility. The PP also incorporates commodity (gold) trend following, in addition to commodity value averaging.
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Re: Dragon Portfolio

Post by Smith1776 » Thu Nov 18, 2021 9:22 pm

I see portfolios such as this Dragon Portfolio as attempts to overcomplicate and fix things that don't need to be tinkered with.
I still find the James Rickards portfolio fascinating.
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Re: Dragon Portfolio

Post by johnnywitt » Fri Nov 19, 2021 1:40 pm

Smith1776 wrote:
Thu Nov 18, 2021 9:22 pm
I see portfolios such as this Dragon Portfolio as attempts to overcomplicate and fix things that don't need to be tinkered with.
Yes, it's a proprietary portfolio and, of course, only the proprietor can implement and run it for you and to further complicate, one would have to be an accredited investor for this to happen.
I stopped listening to this guy a while back as I personally believe that some variant of the PP would serve most small time investors best over time.
The constantly trying to invent a better mousetrap with regard to your retirement accounts will, most likely, lead to a poor investment outcome for most punters like myself.
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Re: Dragon Portfolio

Post by Tyler » Thu Mar 09, 2023 10:28 am

It was recently brought to my attention that Artemis Capital Management (the firm run by Chris Cole that promoted the Dragon Portfolio) appears to have closed shop. If you go to their website, most of the pages are empty and even the famous "The Allegory of the Hawk and the Serpent" paper points to a dead link. Does anyone have any insight into what happened?
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Re: Dragon Portfolio

Post by ppnewbie » Thu Mar 09, 2023 10:47 am

I recall it was closed to retail investors but still open. But…if all the marketing material is gone it may have gone then it could have out of business.
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