Gyroscopic Investing

With the apparent departure of mathjack this morning, I think it's important to have an honest (hopefully civil!) discussion about whether or not dissenting views of the HBPP are really welcome on this forum. My own opinion is that we discuss many different asset allocations and that most of us don't consider the 4X25 PP as sacred. But I am also giving the book "Mistakes Were Made (But Not By Me)" a re-read, and I am aware that it's possible for anyone to get really dug in and defend their own views no matter how much it seems obvious to others that they are just plain wrong.

So, what do people think?

Critical views should be there, silly question ofc (I have plenty about the PP), it's a different thing to dedicate your life to it and repeating the same (nonsense) in 489.000 posts.

I volunteer to offer another dissenting voice at times. Here's one:

We have three PP assets poised to return very little over the short-to-medium term: stocks, bonds, and cash. Gold's decline gives it a lot of room to bounce, but can it offset the rest of the portfolio? And what could reverse its decline that wouldn't bode ill for at least one other PP asset, stocks?

The following is my opinion only:

Dissenting opinions = fine
Thread jacking = Depends on the circumstance. Sometimes it happens accidentally and often times not a big deal.
Purposely thread jacking every thread = Absolutely not fine and ban-worthy

This entire forum has been a breath of fresh compared to the financial industry, and even compared to Bogleheads, which can be terribly rigid, some of the participants there are way judgmental and harsh. I've looked at a few of the threads there, and just shook my head. Constructive and civil conversations here have been extremely valuable to me from the first date I posted, and I have been into this less than a year and I have already completely re-done my financial life, and I have great hopes for the future. I think the tools here could really prevent me and many of us from ruin in the future. The most useful threads have been those which don't hew to HBPP Orthodoxy:

Mixes other than 4 x 25
Backtesting
Momentum
Risk Parity
Desert Portfolio
Tyler's Charts

and on and on...

Therefore, I'd be very sad if idea filters were to be applied which would squelch non-orthodox "dissent". That being said, I think ground rules could be established and enforced to keep the frustration level to a slow boil or less. I think it's perfectly OK to put particular members on Moderate status if their netiquette skills just aren't there. Some people of high IQ just don't have EQ, especially online.

Nobody minds dissent. Dissent strengthens our arguments and I can name a number of people who still hang out here who have decided to abandon the PP for something else and offer their opinions on the matter but are still nice and respectful. I think it's some kind of crazy delusion to imagine that this forum is and has been nothing but rah-rah cheerleading. Most of the dissent has generally been calm and constructive; maybe that's the problem. I think some people don't perceive an opinion as dissenting unless it's aggressive or angry. That's not how we like to do things here.

Great comments so far.  I don't think MJ means harm at all, but he was drastically overdoing it.  Like me, he might have a bit of addictive internet disorder in which he gets hooked on an interest area and then can't get enough of discussing it on the internet.  I've really toned that down in the past couple of years, but I did have problems with this in the past.  The problem is not the internet forums per se; but they enable and amplify the hyperfocusing on some thing of interest.

Sometimes I used to wish there could be a setting which would have limited me to one post per day.  This was elsewhere, not here.

Bottom line, we don't want groupthink.  We want free inquiry, challenging thinking, and all that.  We just can't let someone who has a problem go overboard.  I don't know if MJ stopped himself, or got banned, or what, but he does have a problem.  It's not a horrible one, but it does affect the rest of us.

barrett wrote: So, what do people think?

Mathjak appears to have a problem following proper forum etiquette, not the content of his ideas.  He comes across and acts like a n00b, but my understanding is he's been discussing other topics in other forums for at least several years, so either he stubbornly refuses to conform to social norms and/or he's trolling out of an inferiority complex.  Or possibly an addiction as I Shrugged mentioned, which seems to be very common in the newly retired.  They need to fill in their empty time.

I really hope he reconsiders leaving, but if he's going to view everything as a personal attack on his ideas, he may not perceive the real problem and fix his dishonorable behavior.

mj has made some valuable contributions, one of the benefits of having a laser like obsessive focus, is the interesting things it allows you to dig into in a level of detail that no one else would bother to pursue, it also has resulted in similarly  excessive amount of bad internet etiquette, MJ is not banned he is being asked to refrain from thread jacking, insulting and using ad hominem attacks against fellow members, no different than what is asked of all pp forum members.

dissent is encouraged... civil, educational, polite, fun, dissent.... as much as you want,

as a matter of good forum netiquette when answering new members questions please help new members understand the PP its concepts its philosophy and the practical ins and outs of investing completely before diving into (or just link to) advanced debates about contrarian ideas, this form has a tradition of being a helpful and informative place for beginners ...that it is up to us to maintain..

I agree MJ made some good comments, but at least in the threads I read he would constantly assert something and never bring any proof/data to the table. There is no real proof for anything when it comes to financial stuff, but you can bring data, an academic article, a blog post...something to back up what you are saying.

Pointedstick wrote: Nobody minds dissent. Dissent strengthens our arguments and I can name a number of people who still hang out here who have decided to abandon the PP for something else and offer their opinions on the matter but are still nice and respectful. I think it's some kind of crazy delusion to imagine that this forum is and has been nothing but rah-rah cheerleading. Most of the dissent has generally been calm and constructive; maybe that's the problem. I think some people don't perceive an opinion as dissenting unless it's aggressive or angry. That's now how we like to do things here.

+1 from a PP heretic. 

I very much like dissenting opinions. No point in having a discussion with a bunch of yes-men in an echo chamber.

Note: I've completely rewritten this post from the original.  After sleeping on it, I realized the tone was inappropriate and unhelpful.  This is what I wish I would have said from the beginning.

...

Like financial advisers who pontificate about their track record but use a heavy dose of survivorship bias with their choice of examples, I think the full story is important when evaluating their advice.  I offer the following info not as an attack (it's actually quite impressive the more you read) but as a bit of perspective when discussing certain posters as victims of groupthink. 

Many here might be surprised to learn that according to his posts on other forums, Mathjak was at one time a strong supporter of the PP (they even called it the “Mathjak 25x4”) and claims to have invested in it for decades alongside his Fidelity Insights portfolio.  In fact, he provides some of the best explanations of the PP you’ll find anywhere.  Why this differs from his account here where he claims to have not used it for decades before trying it for a few weeks this year and changing his mind is anyone’s guess, and perhaps he’ll explain that sometime. 

Everyone has a right to change their mind, and I have no problem with that.  But I think Mathjak shares a lot more in common with the average PP user than he has let on so far, and he’s definitely not an investing outsider too sober to drink the Permanent Portfolio kool-aid.  The full story of his "dissenting opinion" is a lot more interesting than that, and frankly the Mathjak you read elsewhere is quite a different character than you see here.  He’s super insightful and surprisingly balanced, and if we saw more of that here we wouldn’t be having this discussion.

I read, but don't participate, very much in this forum exactly because it is by and large, unfriendly if not downright intolerant, of viewpoints that do not jibe with the Late Saint Harry Brown's opinions. From my outsider's point of view, these forums are completely predictable in their virulently negative response to any outside ideas that do not tow the line to the PP religion as espoused by HB.

I am actually a big fan of Harry Brown, and the PP - but I also recognize certain flaws in HB's logic and reasoning that are dangerous to my financial well being. Blindly adhering to HB's opinions have cost many of you very dearly in your investments in certain asset classes. I refer you to the "Gold Scream Room". It is completely unnecessary to suffer losses in an asset class as many of you have. It is possible to determine when is is probably a good time to exit an asset class, and when it is probably a good time to re-enter. Not perfectly, not without an occasional mistake. But with far better results than maintaining a death grip on the joystick as you head towards oblivion. Parachutes were invented for a reason you know. Just because you can't figure out how to do it, doesn't mean it can't be done. People do it all the time. It is even possible to know when there are better asset classes to invest in, other than the four uncontestable pillars of the PP.

Dogma is a harsh mistress. Learn to think for yourselves. That is a principle Harry Brown believed in fervently, and something that many PP adherents completely overlook.

Happy Thanksgiving.

Drewskers wrote: I read, but don't participate, very much in this forum exactly because it is by and large, unfriendly if not downright intolerant, of viewpoints that do not jibe with the Late Saint Harry Brown's opinions. From my outsider's point of view, these forums are completely predictable in their virulently negative response to any outside ideas that do not tow the line to the PP religion as espoused by HB.

Really?  I don't get that feeling at all.  Even without MJ, you've got Tyler opening my mind to other % allocations with his charts, MG doing the same with his risk parity ideas, Ochotona making me think about moving average investing, etc.  I don't think for a second there are hard core adherents to the HBPP, and if there are I haven't noticed.

I had no real problem with MJ, however the sheer volume of his writing got tiresome to me and Tyler's findings on his previous positioning is certainly interesting.

Go Bears!!!

Cortopassi wrote: Really?  I don't get that feeling at all.  Even without MJ, you've got Tyler opening my mind to other % allocations with his charts, MG doing the same with his risk parity ideas, Ochotona making me think about moving average investing, etc.  I don't think for a second there are hard core adherents to the HBPP, and if there are I haven't noticed.

It was probably more obvious when MT and craigr were still around since they were the "enforcers" of the orthodoxy.  Everyone has a different "objective function" they use as a yardstick for determining which heterodox PP is appropriate.  The Browne PP is certainly fine for "dumb money" and that was Browne's intention, after all.  A lot of what he says makes perfect sense within that context.  There's no shame in stopping the exploitation of yourself by Wall Street.

I think clive was the first dissenter; at least he was the only one I saw around here when I joined.  If this forum was not tolerant of dissenting opinions, I would have long ago been banned, believe me.

I had no idea about mathjaks multiple personality disorder, but this is an semi-anonymous forum.  You can be whoever you like.  I wouldn't lose too much sleep over it.

Mathjak never participated in the PP circle jerk and therefore had to be shunned.

Just to set the record straight, Clive was banned not because of his dissenting views, but because he repeatedly accused the admins of this site who wrote of a book about the PP of profiting from Harry Browne's death and denying rightful royalties to his widow.

If you don't want to be banned, don't repeatedly be an asshole. It's really not very hard. If lots of people are starting to put you in their Ignore lists, you're on the wrong track…

Pointedstick wrote: Just to set the record straight, Clive was banned not because of his dissenting views, but because he repeatedly accused the admins of this site who wrote of a book about the PP of profiting from Harry Browne's death and denying rightful royalties to his widow.

If you don't want to be banned, don't repeatedly be an asshole. It's really not very hard. If lots of people are starting to put you in their Ignore lists, you're on the wrong track…

To be fair to some of the people on my ignore list, sometimes they are just annoying and repetitive, not necessarily assholes per se.

Wow, the mathjak in that other forum has a similar writing style so it is surely the same person, but the posts here are showing some seriously disordered thinking.  He may have had some good ideas but unlike Tyler and others, I haven't had the patience to sort through them, after I realized he was mainly promoting different forms of market timing - and this was egging on a couple others with the same view.

My big concern was not "going against the PP orthodoxy" but rather that the negative tone of the posts, their sheer volume, and the claims that market timing is a viable replacement for (or superior to) the PP regardless of individual circumstance made it difficult to carry on the type of good discussions that attracted many of us to this forum in the first place.  They also likely confused and discouraged many people coming here for information.

Also, fyi there were plenty of threads devoted to active investing strategies, including momentum investing, before mathjak, ochotona and others got here.  They're in the Variable Portfolio section and anyone interested might want to go check them out.

Some quotes from the other site by mathjak below.  It does seem somewhere along the line, say after 2011(!!) that he got disenchanted with gold, but prior:

--all those years of buying gold as the looser paid off in the end.

--its all part of the protection..even if you bought the asset class at the peak years rebalancing over time will,make it okay..

--like i said even if you bought the gold at 1000 bucks back in the 80,s with rebalancing you ran a compounded average return of 9.2% today vs doing the samething with the s&p 500 and getting 9.8% today.

--the permanent one always has these asset classes flying fighter cover whether you think its going to play out or not.

--one reason the permanent portfolio concept did so well over 40 years is because it takes out of the equation what we think....

--but out of the package they can be a wild speculation. same thing with gold. i would never put 25% into gold, unless accompanied by all the other parts that temper its swings and volatility as well as its sensitivity to only certain economic outcomes. you cant pull out the individual parts and choose what you think is a good deal ,you will end up with a bunch of speculations that count only on certain economic outcomes..... you either take the 4 part package or your back to betting on what you think will happen rather then profiting on whatever happens.

My bold on the past one.

My guess is he compared his net total, PP + VP, to what his total would have been had he not followed the PP (for 20+ years), discovered he would have been $1M or more ahead by going all in with his VP, and is/was suffering from a rather extreme case of buyer's remorse.

His basic message is that over a long enough time frame (28 years in his case?), with a stock-heavy portfolio you end up in a better place (with more money) than with the PP.  The PP avoids the volatility, but the stock market (even with its volatility) ends up winning.

sophie wrote: Wow, the mathjak in that other forum has a similar writing style so it is surely the same person, but the posts here are showing some seriously disordered thinking.  He may have had some good ideas but unlike Tyler and others, I haven't had the patience to sort through them, after I realized he was mainly promoting different forms of market timing - and this was egging on a couple others with the same view.

My big concern was not "going against the PP orthodoxy" but rather that the negative tone of the posts, their sheer volume, and the claims that market timing is a viable replacement for (or superior to) the PP regardless of individual circumstance made it difficult to carry on the type of good discussions that attracted many of us to this forum in the first place.  They also likely confused and discouraged many people coming here for information.

Also, fyi there were plenty of threads devoted to active investing strategies, including momentum investing, before mathjak, ochotona and others got here.  They're in the Variable Portfolio section and anyone interested might want to go check them out.

I grudgingly respect yours and craigr's negative "dumb money" experiences with so-called market timing, but a limited, biased subset is not the entire enchilada of experience.  So I think those of us who dissent don't feel the Variable Portfolio is the appropriate place to discuss heterodox PP approaches.  Browne had a very specific role for the VP in mind which was essentially not taken seriously and isn't really fair or just to sweep everything non-orthodox into that cubbyhole.  Like Rodney Dangerfield, it just gets no respect.  And it's hard enough to fight the PP orthodoxy but especially so when you have to fight the war on two fronts.

OTOH, I do feel guilty and bad about the newbie threads getting polluted.  I'd feel better if we had a separate Beginner's forum and an Advanced forum.  It's fun to be both helpful as well as tinker under the hood.

In general some people swing from extreme to extreme and some people covertly encourage conflict amongst others to satisfy their own needs. It would probably be unreasonable to expect otherwise, particularly on an investment forum.

Hello to all!

I've been reading/lurking for some time now, and this is my first post.  I'd like to offer my summary of what I've seen (hope it's respectful enough to long-time users).

Most of the criticisms/complaints about the PP seem to be based on a misunderstanding of what it's supposed to do, and/or who it appeals to.
Valid questions about the strategy are generally responded to with open consideration/discussion.

Personally, I've found the notion of an "agnostic" portfolio intriguing, particularly one that used asset classes that responded to different economic conditions.  I'm a pretty well-educated person, but have never understood the financial talk from various sources, and didn't have much confidence in my ability to spot winners/losers.

For me, though, even the PP is a bit too complex, and gold is a complicated/confusing issue (it seems to be the most controversial element).  So I looked at a sort of boglehead/pp hybrid - a two fund portfolio of PARWX/TLT (50/50), re-balanced annually on portfolio visualizer.  It hasn't lost anything over the last 9 years, and has a reasonable CAGR.  I know that's a short time span, but it does cover some very volatile periods.

If we ever have some "play money", I'd be tempted to try it out.