New interview with Craig Rowland

[Tyler]

Craig Rowland recently had an interview with Value Stock Geek on his Security Analysis substack talking about the Permanent Portfolio. Check it out!

https://www.securityanalysis.org/p/crai ... -portfolio

[dualstow]

Listening now.
thanks!

[vnatale]

Craig Rowland recently had an interview with Value Stock Geek on his Security Analysis substack talking about the Permanent Portfolio. Check it out!

https://www.securityanalysis.org/p/crai ... -portfolio

Was this the same place that had the nice interview with you?

[dualstow]

Well that was really good.

Strange that Craig is 100% in Nvidia stock now — kidding, kidding. It’s reassuring that someone in the tech world, someone who has been in tech for decades, is staying the course with the traditional HBPP of stocks (indexed), gold (physical), cash & bonds (both treasuries).

If you’re curious about comments on cryptocurrencies, it’s in the final 7 minutes. Pretty consistent with what he’s written on the forum. One thing that was new — SPOILER ALERT — was the line, “for all we know, [someone out there] has already broken the systerm.” Interesting thought!

Craig sounds more animated than I remember him sounding in the past, which is a good thing. He even chuckled once or twice. Sounds like he’s doing well.

I don’t recall hearing before that his father gave him some of his first advice about index funds when investment advisors were clamoring to manage his (Craig’s) newfound wealth after he’d sold a company.

[Tyler]

Was this the same place that had the nice interview with you?

Yep. Same place.

[Hal]

Thanks! That was interesting listening.

[dualstow]

Note also that the full transcript is embedded on the page.
Handy.

[vnatale]

I did listen to it twice and agree that it was excellent.

However, is it not in this forum that Craig stated that he was no longer a Permanent Portfolio participant?

He came across in the interview that he'd been a consistent True Believer, not addressing at all when and why he had strayed. And, inferring from the interview that he is now again a True Believer and what was his path to coming back to being a True Believer.

P.S. Listening to Lex's latest interview.

From two days ago.

https://www.youtube.com/watch?v=f_lRdkH_QoY

Tucker Carlson: Putin, Navalny, Trump, CIA, NSA, War, Politics & Freedom | Lex Fridman Podcast #414

[Tyler]

Any idea why they do such a thing?

That I do not know. I just happened across the interview during my normal browsing.

[dualstow]

…
However, is it not in this forum that Craig stated that he was no longer a Permanent Portfolio participant?

I wonder if you’re thinking of PointedStick, a well-respected, intelligent and long-time member. He went all stocks.
I don’t recall Craigr ever changing course.

[vnatale]

…
However, is it not in this forum that Craig stated that he was no longer a Permanent Portfolio participant?

I wonder if you’re thinking of PointedStick, a well-respected, intelligent and long-time member. He went all stocks.
I don’t recall Craigr ever changing course.

No. Definitely thinking of Craig R. If I was so motivated I could probably find it here. I remember it being even more striking than PointedStock since Craig was one of the book's co-authors. I'm not so clearly remembering Tex doing the same.

[Xan]

…
However, is it not in this forum that Craig stated that he was no longer a Permanent Portfolio participant?

I wonder if you’re thinking of PointedStick, a well-respected, intelligent and long-time member. He went all stocks.
I don’t recall Craigr ever changing course.

No. Definitely thinking of Craig R. If I was so motivated I could probably find it here. I remember it being even more striking than PointedStock since Craig was one of the book's co-authors. I'm not so clearly remembering Tex doing the same.

He might have bailed on LTTs when they were yielding 1%. Does that sound right?

[dualstow]

I remember him thinking out loud about the possibility of wavering on long bonds should they go lower. I asked him about it and he didn’t want to give a specific number lest anyone “blindly follow” the move. (I wasn’t going to, harumph).

That was around the time that MediumTex referred to it as a game of tennis becoming a game of table tennis.

[vnatale]

…
However, is it not in this forum that Craig stated that he was no longer a Permanent Portfolio participant?

I wonder if you’re thinking of PointedStick, a well-respected, intelligent and long-time member. He went all stocks.
I don’t recall Craigr ever changing course.

No. Definitely thinking of Craig R. If I was so motivated I could probably find it here. I remember it being even more striking than PointedStock since Craig was one of the book's co-authors. I'm not so clearly remembering Tex doing the same.

He might have bailed on LTTs when they were yielding 1%. Does that sound right?

I think that they have been yielding less than that. And, he said that he certainly would not invest in them under those circumstances.

However, I'm seeming to remember something distinctly different which was somewhat a repudiation of The Permanent Portfolio.

However, no one else here is remembering that.

[vnatale]

I remember him thinking out loud about the possibility of wavering on long bonds should they go lower. I asked him about it and he didn’t want to give a specific number lest anyone “blindly follow” the move. (I wasn’t going to, harumph).

That was around the time that MediumTex referred to it as a game of tennis becoming a game of table tennis.

I do also remember your first paragraph.

[vnatale]

So I may have to put on the shelf my memory after reading this. Craig's second to last post here (from almost four years ago). Definitely goes counter to my memory.

https://www.gyroscopicinvesting.com/for ... 42#p202242

"But for pure simplicity I think the 25% split is pretty hard to beat. The performance differences around the edges are often negligible in real life if it allows the investor to hold the course and not panic in a market crash. Or, even worse, go into their portfolio and start tinkering all the time with different ratios thinking they are fixing things."

[Smith1776]

“FPGAs”

“Harvard and Yale MBAs”

“It’s like steering a ship … it takes a while to turn.”

It’s just like the Voluntary Life interview.

[dualstow]

I should look at the transcript, as I don’t remember if Craig commented on how gold moves in lockstep with stocks these days.

[Kevin K.]

Great to hear Craig's voice after so many years, and to learn more about how his professional background led him to embrace the PP.

I got the feeling that his nonchalant attitude towards the PP's often lackluster performance, not to mention the disastrous LTT rout in 2022, might in part be because of both having a large enough portfolio to where even just 4-5% annual returns are OK while making real money in his business. But of course that's pure speculation.

Interesting that he still cites inflation protection as a primary reason to own gold despite it being quite decisively proven that it doesn't fulfill that role, while citing fear of confiscation and having a physical stash of it in case the world goes to hell as another reason, which is even less convincing. I'm a little surprised that his thinking hasn't evolved enough to at least move in a direction like the Golden Butterfly. But I guess the symmetry and simplicity of the 4 x 25% appeals to him enough to make fine tuning not worth the trouble.

[dualstow]

…
I got the feeling that his nonchalant attitude towards the PP's often lackluster performance, not to mention the disastrous LTT rout in 2022, might in part be because of both having a large enough portfolio to where even just 4-5% annual returns are OK while making real money in his business. But of course that's pure speculation.

…

Isn’t the point of the pp, after all, that it holds money you can’t afford to lose?
As for the long bond rout — how did the overall portfolio do?

[Hal]

Great to hear Craig's voice after so many years, and to learn more about how his professional background led him to embrace the PP.
<snip>

Interesting that he still cites inflation protection as a primary reason to own gold despite it being quite decisively proven that it doesn't fulfill that role, while citing fear of confiscation and having a physical stash of it in case the world goes to hell as another reason, which is even less convincing.

I agree with you Kevin, nice to hear from Craig again. Must admit though, I am perplexed why gold has done so well in an Australian context.... Doesn't seem like there is extreme inflation here. Not that I am complaining

[Kevin K.]

…
I got the feeling that his nonchalant attitude towards the PP's often lackluster performance, not to mention the disastrous LTT rout in 2022, might in part be because of both having a large enough portfolio to where even just 4-5% annual returns are OK while making real money in his business. But of course that's pure speculation.

…

Isn’t the point of the pp, after all, that it holds money you can’t afford to lose?
As for the long bond rout — how did the overall portfolio do?

Well, checking Portfolio Visualizer, it lost ~1.11% - about on par with the performance of a plain vanilla 60:40. So while of course it's wrong to look at the returns of the PP's components in isolation, I think it's perfectly reasonable to point out that owning 30 year Treasuries when they're returning less than cash - let alone allocating a full quarter of one's nest egg to them - is a boneheaded move. IMHO Harry Browne would've stopped investing in them as soon as the yield curve inverted. The 4 x 25 PP allocation was a byproduct of the 80's when long bonds were on an unprecedented tear. Just my 2 cents...there are still a whole lot worse choices out there than the PP.

[Kevin K.]

Another comment spurred by reading the transcript of the interview with Craig is that he lauds the PP for not having large drawdowns and thus always being there when you need funds. But what he's doing is conflating low volatility (of the portfolio as a whole, mind you - PP'ers are told that a high level of volatility among the 4 assets is proof that it's truly diversified and thus "working") with what investors actually need - namely, duration-matched "layering" of their assets.

Cullen Roche has done a great job of explaining this concept, which in a way is the old "bucket" approach carried to its logical conclusion:

https://www.pragcap.com/new-white-paper ... investing/

So for example the problem with a classic 60:40 - which showed itself in 2022 and bit a lot of Bogleheads in the ass in so doing - is that it contains only 60% of an 18 year duration asset (stocks) and 40% of a ~6 year duration asset (total U.S. bond market) - meaning it contains nothing to match shorter-duration, more immediate needs, thus forcing those who hold it to sell at a loss in order to generate cash during times when stocks and bonds both decline simultaneously.

The PP meanwhile is even more extreme: 25% T-bills (0 duration), 25% TSM (18 years), 25% gold (28 years) and 25% 30-year bonds (which you're supposed to sell regularly so as to keep the duration as close to 30 years as possible!).

Here's an except from comments in an email from Roche ( it was about the Golden Butterfly but obviously is even more applicable to the PP): "I've always liked "lazy portfolios", but the problem there is they don't always bucket allocations in a sensible manner which creates a lot of uncertainty. Specifically, I'd argue that 20% in long-term bonds is way too much. Long bonds and gold are like insurance in a portfolio. Your portfolio should never be comprised of 40% insurance. Instead, I'd bucket it out with T-Bills and something like VGSH for the short-term bonds, keeping insurance assets like gold and long-term treasuries to 10% or less."

[ArthurPooh]

Another comment spurred by reading the transcript of the interview with Craig is that he lauds the PP for not having large drawdowns and thus always being there when you need funds. But what he's doing is conflating low volatility (of the portfolio as a whole, mind you - PP'ers are told that a high level of volatility among the 4 assets is proof that it's truly diversified and thus "working") with what investors actually need - namely, duration-matched "layering" of their assets.

I read the linked article and this duration-matching seems to me like a gimmick designed to sell personalized investment plans. The main problem with it is the unpredictability of life. I would prefer to never sell the investments I'm making right now. But tomorrow an emergency might force me to spend it all. Herein lies the attraction of a portfolio (such as PP, GB, and some other "all-weather" concepts) with large drawdowns. It gives you flexibility.

[dualstow]

Well, checking Portfolio Visualizer, {HBPP} lost ~1.11% - about on par with the performance of a plain vanilla 60:40. So while of course it's wrong to look at the returns of the PP's components in isolation, I think it's perfectly reasonable to point out that owning 30 year Treasuries when they're returning less than cash - let alone allocating a full quarter of one's nest egg to them - is a boneheaded move.

It’s definitely a bummer, Kevin. And, on a personal note, it’s part of the reason I’ve always had to keep a large VP. I find it difficult to sell treasuries at a loss, let alone buy more. Edit: Add PP+VP and I guess I’m following Cullen Roche’s guideline, albeit accidentally, about keeping under 10% each in gold and treasuries.

IMHO Harry Browne would've stopped investing in them as soon as the yield curve inverted. The 4 x 25 PP allocation was a byproduct of the 80's when long bonds were on an unprecedented tear. Just my 2 cents...there are still a whole lot worse choices out there than the PP.

I suppose, but while Harry adapted to a broad stock index in Fail-Safe Investing (moving away from that list of growth stocks in the 80’s), I don’t think he changed anything with the long bond portion. I could be wrong. I only remember that he liked TLT, which he mentioned on his radio show, even though it was just 20+ years and he recommended selling 30-year bonds when there were only 20 years left on them.