Is The PP Good For Investing?

General Discussion on the Permanent Portfolio Strategy

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MachineGhost
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Re: Is The PP Good For Investing?

Post by MachineGhost » Fri Jan 09, 2015 10:32 am

Xan wrote: Can you tell me what search terms should have been used?

Are results from before the closing of the gold window even valid?
Hmm, try searching under "inflation 1969".

Are results before 1987 when the PP didn't exist even valid?

Besides Gosso's chart shows 1980 is almost -25% in real terms which blows away -25% in nominal.  So let's worry about that instead of 1969.
Last edited by MachineGhost on Fri Jan 09, 2015 10:35 am, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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Xan
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Re: Is The PP Good For Investing?

Post by Xan » Fri Jan 09, 2015 10:39 am

And how exactly would I have searched for 1969 in order to find out the answer was 1969?
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Re: Is The PP Good For Investing?

Post by Gosso » Fri Jan 09, 2015 12:20 pm

MachineGhost wrote: Besides Gosso's chart shows 1980 is almost -25% in real terms which blows away -25% in nominal.
I think you got that flipped around, if inflation is 5% and the nominal drawdown is -25% then the real drawdown would be -30%.  So drawdowns in real terms look worse.
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Re: Is The PP Good For Investing?

Post by LC475 » Fri Jan 09, 2015 12:22 pm

MediumTex wrote:What is your understanding of the maximum peak to trough PP drawdown that occurred in the 1981-1982 period?
My understanding is that it was not 25%.  It was, instead, less than 25%.  That is my understanding.  Thanks for asking!

I believe this is also Mr. Ghost's understanding, that he knows he doesn't have a leg to stand on with his erroneous/exaggerated/misremembered claim, because otherwise he would simply post the data showing his rectitude and we would all proceed to agree with him.  Instead, he has chosen to "dig in" and continue to lob his spurious criticism of the PP as frequently as he possibly can work it in.

The rest of us just say: Show Me the Data!

But he can't.  'Cause his claim is bogus.  He doesn't have the data.

Also, as a minor, tiny, irrelevant I'm sure, note: the biggest actual "draw-down" (you know, the kind that actually exists outside of Ghostly imaginations) for the PP came immediately after experiencing a ~18.5% gain in a single month.  It lasted for three months and at bottom amounted to a loss of ~20%.  Oh, the humanity.

Yep, gold can be volatile.  Yep, gold sure was volatile in 1980.  Yep, gold could be volatile again.  And yep, the PP smoothed things out as well as could possibly be expected when an asset amounting to 25% of it suddenly skyrockets to the moon and then just as suddenly crashes to the floor.
Last edited by LC475 on Fri Jan 09, 2015 12:23 pm, edited 1 time in total.
upside
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Re: Is The PP Good For Investing?

Post by upside » Fri Jan 09, 2015 12:32 pm

LC475 wrote:
MediumTex wrote:What is your understanding of the maximum peak to trough PP drawdown that occurred in the 1981-1982 period?
My understanding is that it was not 25%.  It was, instead, less than 25%.  That is my understanding.  Thanks for asking!

I believe this is also Mr. Ghost's understanding, that he knows he doesn't have a leg to stand on with his erroneous/exaggerated/misremembered claim, because otherwise he would simply post the data showing his rectitude and we would all proceed to agree with him.  Instead, he has chosen to "dig in" and continue to lob his spurious criticism of the PP as frequently as he possibly can work it in.

The rest of us just say: Show Me the Data!

But he can't.  'Cause his claim is bogus.  He doesn't have the data.

Also, as a minor, tiny, irrelevant I'm sure, note: the biggest actual "draw-down" (you know, the kind that actually exists outside of Ghostly imaginations) for the PP came immediately after experiencing a ~18.5% gain in a single month.  It lasted for three months and at bottom amounted to a loss of ~20%.  Oh, the humanity.

Yep, gold can be volatile.  Yep, gold sure was volatile in 1980.  Yep, gold could be volatile again.  And yep, the PP smoothed things out as well as could possibly be expected when an asset amounting to 25% of it suddenly skyrockets to the moon and then just as suddenly crashes to the floor.
This is pretty much how I see it too. Still waiting for MG's data on his 25% claim.
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Re: Is The PP Good For Investing?

Post by dragoncar » Fri Jan 09, 2015 2:04 pm

I have no reason to doubt MG, but I am continually surprised that he doesn't just post the data.  It's like when Fox news kept asking for Obama's birth certificate.  It's all silly, but here we are.  Just post the data and put the haters to bed.
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Coffee wrote: P.S. The PP is the super safe car that doesn't have enough horse power to get out of its own way and ends up getting creamed by a big rig truck that has, "Market Returns" painted on the side.
+100

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KevinW
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Re: Is The PP Good For Investing?

Post by KevinW » Fri Jan 09, 2015 2:09 pm

dragoncar wrote: I have no reason to doubt MG, but I am continually surprised that he doesn't just post the data.  It's like when Fox news kept asking for Obama's birth certificate.  It's all silly, but here we are.  Just post the data and put the haters to bed.
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Re: Is The PP Good For Investing?

Post by Reub » Fri Jan 09, 2015 2:31 pm

MG please don't post the data. Your word is good enough for me. ;)
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Re: Is The PP Good For Investing?

Post by MachineGhost » Fri Jan 09, 2015 10:41 pm

dragoncar wrote: I have no reason to doubt MG, but I am continually surprised that he doesn't just post the data.  It's like when Fox news kept asking for Obama's birth certificate.  It's all silly, but here we are.  Just post the data and put the haters to bed.
Well, if a certain Low Class dickhead hadn't acted like one, because I was on the threshold of doing so... <shrug>

As I've said several times already and am repeating myself one more time, use Peak2Trough's backtester from 1968 with annual rebalancing and throw in a few percents to account for different rebalancing dates.  That is my final word on the subject.  If you got a problem with a -25% nominal (1969) or -25% real (1980), take it up with your own psychology, NOT ME.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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Re: Is The PP Good For Investing?

Post by upside » Sat Jan 10, 2015 9:03 am

MachineGhost wrote:
dragoncar wrote: I have no reason to doubt MG, but I am continually surprised that he doesn't just post the data.  It's like when Fox news kept asking for Obama's birth certificate.  It's all silly, but here we are.  Just post the data and put the haters to bed.
Well, if a certain Low Class dickhead hadn't acted like one, because I was on the threshold of doing so... <shrug>

As I've said several times already and am repeating myself one more time, use Peak2Trough's backtester from 1968 with annual rebalancing and throw in a few percents to account for different rebalancing dates.  That is my final word on the subject.  If you got a problem with a -25% nominal (1969) or -25% real (1980), take it up with your own psychology, NOT ME.
Are you 12?
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Re: Is The PP Good For Investing?

Post by Kbg » Sat Jan 10, 2015 9:39 am

Well since I have real money in this I care about the answer...and using several sources here's what I come up with for 1969 which is the year in question:

- DJI: -26% (Jan 69 6276, Jan 70, 4648)
- Gld: -17.4% (Jan 69 42.30 mo avg, Jan 70, 34.94 mo avg. Kitco London spot monthly average)
- TBonds: ~-12.5% (Jan 69 yield 5.74, Jan 70 yield 6.81, assume 6% coupon rate avg and roughly -12.5%...FRED data has the 10 yr at -5.01% for the year.)
- TBills: + 6.5% (Annual return, several sources/FRED)

And the final math is...-12.35% for the year. Looking at the prices for both gold and stocks by month both pretty much went straight down from Jan to the end of the year. So the draw down absolutely was not worse by much. In every case of the above, I assumed/took the worst prices.

So MG...show us the data. I'll grant you a couple of percent more if you can prove the T-Bonds different from what I posted. Other than that and greater than 25%, no way. If you have a backtest showing that, categorically you have bad data somewhere. Of this I am positive. One maybe able to squeak out a little bit more down from Jan-Jul 70 as the stock mkt kept going down; however, this is counterbalanced by both T-Bonds and gold going up during the same time period. Thus, Dec was likely the nadir.

Case closed w/o you posting data and sources.
Last edited by Kbg on Sat Jan 10, 2015 9:53 am, edited 1 time in total.
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Re: Is The PP Good For Investing?

Post by Pkg Man » Thu Jan 15, 2015 8:11 pm

MediumTex wrote:
...
Are you saying that we might see regular posters just disappear for months and post nothing?

Seems unlikely.
Yes, unlikely indeed  :)
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