New PPer needs guidance.

General Discussion on the Permanent Portfolio Strategy

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dutchtraffic
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Re: New PPer needs guidance.

Post by dutchtraffic » Mon Jun 08, 2015 4:19 pm

Reub wrote: Where is it written in stone that this can't happen?
Nowhere.
Why? Does anyone think they CAN'T drop alltogether....?
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KevinW
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Re: New PPer needs guidance.

Post by KevinW » Mon Jun 08, 2015 4:26 pm

Reub wrote: Where is it written in stone that this can't happen?
It's not written in stone anywhere, but the prosperity-recession dichotomy is consistent with the Austrian business cycle theory ( http://en.wikipedia.org/wiki/Austrian_b ... cle_theory ) and the inflation-deflation dichotomy seems to be informed by an Austrian analysis of the US' fiat currency system.
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MachineGhost
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Re: New PPer needs guidance.

Post by MachineGhost » Mon Jun 08, 2015 10:48 pm

When the economy is expanding people tend to buy stocks.
People tend to buy equity on economic expansions.  That may not always be the public stock market.  For instance, when Title III of the JOBS Act is fully implemented (where every Joe Sixpack can invest as little as $100 into seed and series A funding of startups), it may kill the overvalued public stock market while the economy is still expanding.
When inflation is rising, people tend to buy gold.
Inflating rising isn't a problem.  It's inflation being too high.  That's at the 5% point.  Above that the stock market tanks.

Sometimes I think too much emphasis is put on the PP as a whole and not that it is primarily equity that drives the PP with the rest just being hedges when "Prosperity" is anything but.
"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: New PPer needs guidance.

Post by MachineGhost » Mon Jun 08, 2015 11:02 pm

barrett wrote: This explanation makes sense to me. Does anyone disagree with MT on this? I have often thought that understanding gold's performance from 2000 to the present is really important for a PP investor. It save the PP for a decade. It's kind of important to know if that is a potentially repeatable event, no?
I do.  Gold bottomed in 2001 long before QEternity.  It was 09/11 that sparked the rally.  People lost confidence in the government.

With gold dead, a massive bond bubble and cash paying crap, y'all better pray we trounce the Internet bubble or the PP is toast.

But seriously people, the stock market has gone SIDEWAYS for six months.  Get a grip!!!  If the stock market was actually bearish, then we would see action in bonds or gold.
Last edited by MachineGhost on Mon Jun 08, 2015 11:06 pm, 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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Mark Leavy
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Re: New PPer needs guidance.

Post by Mark Leavy » Wed Jun 10, 2015 6:09 pm

Mark Leavy wrote: My last off topic post on this thread...

A very hearty thanks to all who helped spot and identify the error(s) in my modeling spreadsheet.
Barrent, Pet Hog, Tyler, MG...

I think I've come to a better understanding of what "adjusted returns" means.  I used to think it was just "split adjusted" but now know that on Yahoo it also means dividend adjusted.

PLEASE DON'T USE THE SPREADSHEET I POSTED!

Tyler's fix will cover most of the corrections, but I'm still worried now that the last few months of data are a mix of "Split Adjusted" and "Yahoo adjusted" data.

Give me a few days to do an update.  I really want the daily returns to reflect the split adjusted closing prices - and the dividends to go to cash.  That is more in line with how my personal finances work.

I'll repost once I get it fixed - as I truly appreciate the scrutiny, honesty and wealth of experience on this board.

Mark
A quick post for closure...

I scrubbed my spreadsheet to ensure that all closing numbers are not split or dividend adjusted.
I handled splits by increasing share count - the same as it would happen in your personal account.
All dividends from TLT and VTI go to SHY.
I added in dividends from SHY to SHY.
I checked it against PeakToTrough over the same period (using 1 year treasuries instead of SHY and 30 year T-Bonds instead of TLT). (15/35 bands) (dividends not reinvested). With a $10,000 starting value there was only $7 difference over the 11 years.

Again - a huge thanks to all who helped with the errors in this spreadsheet.

I'm posting an updated link, because I said I would, but really, you should just use Tyler's charts.  I think they are fantastic and I wish I had come up with them.

And of course, many thanks to PeakToTrough.

Mark

(30 day expiration)
https://www.dropbox.com/s/vz6engyyma981 ... .xlsx?dl=0
Last edited by Mark Leavy on Wed Jun 10, 2015 7:02 pm, edited 1 time in total.
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Re: New PPer needs guidance.

Post by vnatale » Fri Jan 17, 2020 4:47 pm

Tyler wrote:
Thu Jun 04, 2015 11:56 am
I would personally worry less about a falling knife in the PP since it has three other bandages at the ready.  And don't forget it sounds like the OP is not sitting in cash but is heavy on miners.  A timely transition may be prudent.

FWIW, with that level of assets I'd primarily be concerned with the tax implications of changing allocations.  Before you do anything, put together a transition plan to minimize taxes.  Tax loss harvesting, saving some gains for next year, etc.
A GREAT phrase (above) that deserves to be forever memorialized by being in some form of "Permanent Portfolio Creed"...…."I believe in the Permanent Portfolio.....which has three other bandages at the ready....."

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: New PPer needs guidance.

Post by vnatale » Fri Jan 17, 2020 4:59 pm

sophie wrote:
Thu Jun 04, 2015 10:46 pm
  BTW there's a stickied thread on PP spreadsheets that you might want to check out.
How do I find this?

Thanks

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: New PPer needs guidance.

Post by vnatale » Fri Jan 17, 2020 5:07 pm

Professor Disorientation wrote:
Fri Jun 05, 2015 9:09 am
Welcome Matthew,

When to begin the PP always presents a dilemma. One or more of the asset groups may seem overvalued while other asset groups are tanking and looking for a bottom. I just jumped in December 2014 and allotted my 25% to the four asset groups and I have not looked back. I checked this morning and I am down -1.5%. TLT and IAU are down for me. This doesn't mean the PP is faulty and asset groups going up and down are to be expected.
Others on the forum have been with the PP a lot longer than I have. But the issue of timing the market is anathema to the PP philosophy. What I do is put additional cash in my PP weekly and when the cash portion of my PP hits 35% then I will reallocate to the original 25% for each asset group. This keeps the spirit of the PP alive. The great plus of Harry's philosophy is that no one can time the market consistently. I believe this. That's why the PP has a valuable place in my overall financial scheme.
Good luck. No one knows what will happen in the years ahead. The PP has weathered financial shocks before and it will do it again.
Is there a poll somewhere as to how people reallocate / rebalance?

1) (as the above) whenever cash hits 35%?
2) Whenever any of the four hits 35%?
3) Whenever one hits 15%?
4) End of year?
5) Beginning of year?
6) Another date in the year, e.g., your birthday?
7) Any other?

I'm looking for responses that fit into what Harry Browne proscribed (which I always describe as classic Permanent Portfolio. Though, since the Golden Butterfly is a close cousin, those answers for the Golden Butterfly would also be good). Not looking for anything esoteric, like using some form of moving averages.

Vinny
"I only regret that I have but one lap to give to my cats."
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vnatale
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Re: New PPer needs guidance.

Post by vnatale » Fri Jan 17, 2020 5:09 pm

Pointedstick wrote:
Fri Jun 05, 2015 9:47 am
Matthew19 wrote:
buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.
Boom. Exactly the right attitude!
I am sure that rereading this is somewhat amusing for several here?

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: New PPer needs guidance.

Post by vnatale » Fri Jan 17, 2020 5:10 pm

MediumTex wrote:
Fri Jun 05, 2015 1:20 pm
Matthew19 wrote:
buddtholomew wrote: Run as far away as fast as possible...I could not be more sincere. This portfolio is not what they make it out to be. This is the 7th day of straight losses...the money you can't affort to lose...my a$$
I'm sorry for the losses but I really don't plan to run. I can appreciate that this is a strange market and while it adjusts the PP will have some short term stagnation. I don't plan to look at it daily or even weekly, I run a business and have a family, I'd rather enjoy life.
If the PP were a 10 hour international flight, budd would be the guy sitting next to you who turns to you every 30 minutes and says: "I'm pretty sure the plane is about to crash."
Just goes along with the last one!

Vinny
"I only regret that I have but one lap to give to my cats."
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