Tim Price discussing the HBPP in the current economy

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ppnewbie
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Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Mon Jan 02, 2023 11:32 pm

johnnywitt
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Re: Tim Price discussing the HBPP in the current economy

Post by johnnywitt » Mon Jan 09, 2023 5:23 pm

This Dude has, IMHO, too much of a "Chauffeur" bias himself AND he's been listening too much to Alastair MacLoed of Goldmoney. The HBPP is biased towards a high inflation/hyperinflationary environment. You would have to be able to recognize that you were in a hyperinflationary regime however & stop rebalancing.
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Re: Tim Price discussing the HBPP in the current economy

Post by boglerdude » Mon Jan 09, 2023 10:38 pm

"Charlie Munger, the billionaire business partner of Warren Buffett, frequently tells the story below to illustrate how to distinguish between the two types of knowledge: real knowledge and pretend knowledge.

At the 2007 Commencement to the USC Law School, Munger explained it this way:

I frequently tell the apocryphal story about how Max Planck, after he won the Nobel Prize, went around Germany giving the same standard lecture on the new quantum mechanics.

Over time, his chauffeur memorized the lecture and said, “Would you mind, Professor Planck, because it’s so boring to stay in our routine. [What if] I gave the lecture in Munich and you just sat in front wearing my chauffeur’s hat?” Planck said, “Why not?” And the chauffeur got up and gave this long lecture on quantum mechanics. After which a physics professor stood up and asked a perfectly ghastly question. The speaker said, “Well I’m surprised that in an advanced city like Munich I get such an elementary question. I’m going to ask my chauffeur to reply.”
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Re: Tim Price discussing the HBPP in the current economy

Post by vnatale » Tue Jan 10, 2023 7:58 am

boglerdude wrote:
Mon Jan 09, 2023 10:38 pm

"Charlie Munger, the billionaire business partner of Warren Buffett, frequently tells the story below to illustrate how to distinguish between the two types of knowledge: real knowledge and pretend knowledge.

At the 2007 Commencement to the USC Law School, Munger explained it this way:

I frequently tell the apocryphal story about how Max Planck, after he won the Nobel Prize, went around Germany giving the same standard lecture on the new quantum mechanics.

Over time, his chauffeur memorized the lecture and said, “Would you mind, Professor Planck, because it’s so boring to stay in our routine. [What if] I gave the lecture in Munich and you just sat in front wearing my chauffeur’s hat?” Planck said, “Why not?” And the chauffeur got up and gave this long lecture on quantum mechanics. After which a physics professor stood up and asked a perfectly ghastly question. The speaker said, “Well I’m surprised that in an advanced city like Munich I get such an elementary question. I’m going to ask my chauffeur to reply.”


Have read that one several times but always good to read it again.
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: Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Tue Jan 10, 2023 11:04 am

What resonates with me and seems reasonable is another simple formula. Precious metals, value stocks, and commodity trend following. The CTA's seems very interesting to me, because they are market neutral.

I have been following one CTA and were up 37 percent last year, net of fees. The only reason I did not invest in the CTA as a "non correlated asset class" in my portfolio was the amount of moving parts, which cause taxes and fees, etc...The fees were 2.5 and 25! Plus its a k-1, which I hate dealing with.
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Re: Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Tue Jan 10, 2023 11:07 am

Also I would argue that the PP is balanced to deflation as well. Long bonds and cash.
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Re: Tim Price discussing the HBPP in the current economy

Post by johnnywitt » Wed Jan 11, 2023 2:48 pm

The more I know that I don't know & the more years that I research portfolios, the more faith that I have in the HBPP to hold up during pretty much all economic regimes. I think you would have a hard time picking a better Core Portfolio.
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Re: Tim Price discussing the HBPP in the current economy

Post by Smith1776 » Wed Jan 11, 2023 3:10 pm

PP fo' life.

Risk parity rules. Other portfolios drool.
I still find the James Rickards portfolio fascinating.
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Re: Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Thu Jan 26, 2023 9:53 pm

One big take away for me is that commodity trend following (CTA) is very interesting. One CTA I follow is up 30 percent in the past 12 months. Which I think is a general direction of a lot of the CTA’s.

Basically it seems like they are zigging when a lot of stuff is zagging.
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Re: Tim Price discussing the HBPP in the current economy

Post by johnnywitt » Thu Feb 02, 2023 2:11 pm

ppnewbie wrote:
Thu Jan 26, 2023 9:53 pm
One big take away for me is that commodity trend following (CTA) is very interesting. One CTA I follow is up 30 percent in the past 12 months. Which I think is a general direction of a lot of the CTA’s.

Basically it seems like they are zigging when a lot of stuff is zagging.
Chris Cole's Dragon Portfolio looks really good too, but is basically impossible to run if you're not an accredited investor.

Possibly better off just sticking to a HBPP, or the GB for all regular investor types.
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Re: Tim Price discussing the HBPP in the current economy

Post by joypog » Sun Mar 05, 2023 6:20 pm

ppnewbie wrote:
Thu Jan 26, 2023 9:53 pm
One big take away for me is that commodity trend following (CTA) is very interesting. One CTA I follow is up 30 percent in the past 12 months. Which I think is a general direction of a lot of the CTA’s.

Basically it seems like they are zigging when a lot of stuff is zagging.
Yeah CTA's are showing a lot of leg right now. I've got 3% of my portfolio in them...and if I like how they work over time, I might add 1% each year and make my portfolio a 1/7 setup (along with cash, LTT, Gold, US-LCG, US-SCV, and Intl-SCV) It would basically make my portfolio a complicated version of the GB, with 42% in stocks and the rest of the money in the mix of defensive investments.
1/n weirdo. US-TSM, US-SCV, Intl-SCV, LTT, STT, GLD (+ a little in MF)
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Re: Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Sun Mar 05, 2023 8:48 pm

Also I think CTA’s zag when other zig, I believe they performed poorly for the last several years when the market essentially averages up in a tight range. But would be happy if someone sanity checked my perception.
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Re: Tim Price discussing the HBPP in the current economy

Post by ppnewbie » Sun Mar 05, 2023 9:05 pm

These are answers to questions I had from Mutiny fund.

1. Our investors get a K-1 every year.

2. Example of a fee structure: our sub-managers charge their own fees. 1.5/15 would be on the high side for one of them and we charge 1/10. That would be a total of 2.5/25 in this example. All returns that we show live or backtested are after all fees, commissions, and other trading costs. There is also a high water mark, meaning we can only charge the incentive fees on new profits above previous high profit mark.

3. There are currently 4 managers in the Trend fund, we will be adding a fifth very soon. As AUM grows we will be adding more. For example we have 15 managers now in our Long Volatility fund.

4. They are all automated. But, I would argue there is a bit of discretion in every strategy no matter how automated.

5. A good benchmark is the SocGen CTA Trend index. (Yet, it is non-tradable)

6. I assume you are asking about the churn of the individual instruments in each managers strategy? Other than trading costs, this is irrelevant for taxes given the answer to next question.

7. Taxes are based on 1256 contracts that have a favorable 60/40 tax assessment. 60% long term capital gains and 40% short term capital gains. No matter if the manager trades 10 times a day or twice a year, it’s the same 60/40 tax treatment. Changing managers does not effect this tax treatment either. The percentage tax reduction to returns is then dependent on each individuals tax situation.

8. I appreciate you calling us young, I’m 43. We built our strategy around things were personally wanted to manager our families savings for the long term. We joint ventured our back office with RCM Alternatives, so that we have a institutional backbone to the firm. We also offer monthly liquidity, so if for any reason the firm were to shut down, we just give investors their money back.

9. As you know, I’m a big fan of permanent portfolio and I believe we have built the best modern version of it with our Cockroach fund. If your group is into PP, I highly recommend our Cockroach fund even more than just our Trend fund. I know people like to DIY but it is much more efficient for us to run the Cockroach fund in-house. We do all the rebalancing and use the implicit leverage of 1256 contracts to be capital efficient.

I also wanted to send over our Offerings Page (password: mutiny) which contains links to all our materials for accredited investors. The Deep Dive Questionnaires linked from there cover common questions around investment strategy, fees, taxes, risks and the logistics of making an investment.

Offerings page mentioned above:

https://mutinyfund.com/offerings/

ps. I did not invest because the fees freaked me out a bit and then add on the yearly tax hit on gains plus the headache of a K1. But it is something that I think I should continue to consider as a real diversifier.
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