Mathjak! Do Safe Haven Investments Really Exist?

General Discussion on the Permanent Portfolio Strategy

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doodle
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by doodle » Mon Apr 26, 2021 2:15 pm

mathjak107 wrote:
Mon Apr 26, 2021 5:04 am

If I wasn’t so far behind in the pp I likely would have moved away from it but I think for now the damage is done ...
Sunk cost fallacy...you are violating your own philosophy of starting each day new.

It's a tough environment to invest in...I don't blame anyone for feeling uncertain about their allocation.
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by vnatale » Mon Apr 26, 2021 4:02 pm

doodle wrote:
Mon Apr 26, 2021 2:15 pm

mathjak107 wrote:
Mon Apr 26, 2021 5:04 am


If I wasn’t so far behind in the pp I likely would have moved away from it but I think for now the damage is done ...


Sunk cost fallacy...you are violating your own philosophy of starting each day new.

It's a tough environment to invest in...I don't blame anyone for feeling uncertain about their allocation.


I am not certain I agree it is an example of the "sunk cost fallacy".

I interpreted it as the gains from his former plan were missed and not likely to occur again in the near future while all the losses he incurred in the past through investing in the Permanent Portfolio are just that. In the past. And, that he's now expecting some reversion to the mean in the near future. Meaning that he believes the Permanent Portfolio has better prospects in the short-term than does his former plan.
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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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by jalanlong » Mon Apr 26, 2021 5:21 pm

I have been in the PP (more or less) for a few years and it seems to have returned about what I would have expected. This year I have seriously started questioning it going forward. I am 50 and still accumulating. In fact this is the first time in my life that I am completely debt free and able to live on one paycheck while my spouses pay goes all into investments. Having said that, I am having trouble allocating my funds to 3/4 assets that I have questions about.

It is one thing to say "well I question the future of stocks." That is a feeling you can base on some numbers, but stocks are the one asset which theoretically have no cap to the upside. Short Term Treasuries and Long Term Treasuries have definitive upside limits based on current rates. Since I am in the accumulation/growth stage, it is difficult for me to allocate 50% of my savings to ST bonds which currently have a negative to 0% real return or LT Bonds which at historically low rates have a very limited upside but a huge downside. And to top that off (as has been mentioned in the Gold discussion) Gold has a negative return this year in a year when inflation has been all the talk. Gold is such a wild card that you never know how it will react or why.

That sort of leaves me with stocks. As I said in the Gold thread:

"I am closer than ever to going back to my grandparent's old time investing ways. No Bitcoin. No NFTs. No Modern Portfolio Theory. Back to basics. 10% of my funds in cash and the rest in "safe" dividend paying stocks like JNJ or UNP etc. I will ignore the daily fluctuations, live off of the (hopefully) increasing dividends and leave the principal for my heirs."

If stocks continue to go up for the next year or so then I will be so far ahead of the PP that a downturn would still leave me ahead. As Mathjak said fear is more mental than financial. Unless we are heading into a SHTF scenario in which case I doubt any asset will really help.
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by Hal » Mon Apr 26, 2021 6:14 pm

jalanlong wrote:
Mon Apr 26, 2021 5:21 pm
I have been in the PP (more or less) for a few years and it seems to have returned about what I would have expected. This year I have seriously started questioning it going forward.

"I am closer than ever to going back to my grandparent's old time investing ways. No Bitcoin. No NFTs. No Modern Portfolio Theory. Back to basics. 10% of my funds in cash and the rest in "safe" dividend paying stocks like JNJ or UNP etc. I will ignore the daily fluctuations, live off of the (hopefully) increasing dividends and leave the principal for my heirs."
First off, congratulations on being debt-free.

Have you considered it doesn't have to be an either/or situation? How about:

1. Setting up a variable portfolio

2. Watching the Anthony Deden interview from a couple of years back where he explained how he approached similar concerns

Here are the relevant links:
https://www.youtube.com/watch?v=a4_U6bS-cU4

https://edelweissjournal.com

Let us know what you decide ;)

PS: Additional resources, Ben Graham & BelangP (Youtube)
Aussie GoldSmithPP - 25% PMGOLD, 75% VDCO
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by mathjak107 » Mon Apr 26, 2021 6:15 pm

vnatale wrote:
Mon Apr 26, 2021 4:02 pm
doodle wrote:
Mon Apr 26, 2021 2:15 pm
mathjak107 wrote:
Mon Apr 26, 2021 5:04 am

If I wasn’t so far behind in the pp I likely would have moved away from it but I think for now the damage is done ...
Sunk cost fallacy...you are violating your own philosophy of starting each day new.

It's a tough environment to invest in...I don't blame anyone for feeling uncertain about their allocation.
I am not certain I agree it is an example of the "sunk cost fallacy".

I interpreted it as the gains from his former plan were missed and not likely to occur again in the near future while all the losses he incurred in the past through investing in the Permanent Portfolio are just that. In the past. And, that he's now expecting some reversion to the mean in the near future. Meaning that he believes the Permanent Portfolio has better prospects in the short-term than does his former plan.
Exactly the point. I think with one of the main funds up 16% much of this years gains in the other models maybe water under the bridge for now.

Now the pp is being held hostage to rates .....I look at the pp today like any other portfolio with its own set of risks that can be very harmful .. the damage can be severe in both the pp if rates rise just like a portfolio dependent on equities.

Maybe even more so if rising rates move 3/4’s of the portfolio down
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by EdwardjK » Mon Apr 26, 2021 9:39 pm

"The insight model actually has surpassed the returns of vtinx the last ten years with less equities"

Mathjak, et al, kindly point me to the "insight" model to which you refer.

Thanks,

Ed
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Re: Mathjak! Do Safe Haven Investments Really Exist?

Post by mathjak107 » Tue Apr 27, 2021 3:25 am

EdwardjK wrote:
Mon Apr 26, 2021 9:39 pm
"The insight model actually has surpassed the returns of vtinx the last ten years with less equities"

Mathjak, et al, kindly point me to the "insight" model to which you refer.

Thanks,

Ed
I can point you to the newsletter but I can’t tell you the exact funds used because we all pay for that info

I use a mix of the income and growth ,model

Income model up 4% ytd , growth model up 13% , permanent portfolio still down .

they do have an older sample newsletter on the site you can read but the models have changed some holdings over time

https://www.fmandi.com/reports/sample/sample.pdf
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