I'm noticing a lack of threads about how terrible the PP is

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Tom
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I'm noticing a lack of threads about how terrible the PP is

Post by Tom » Thu Feb 11, 2016 6:17 pm

Interesting. 
dragoncar
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by dragoncar » Thu Feb 11, 2016 6:23 pm

The PP is still lagging over my invested period by 6% annually.  Until it closes the gap back to the "expected" underperformance of 1-2%, I'm still not happy w/ it.
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by MediumTex » Thu Feb 11, 2016 6:45 pm

The PP is having a good 2016 so far.  Historically, when the PP has had a few soft years it will have a couple of years with above average returns.

I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.

Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.

The money has to go somewhere.  Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines."  There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Only strength can cooperate. Weakness can only beg.
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by Dieter » Thu Feb 11, 2016 7:16 pm

My gold is still underwater.

Back to normal?

:)
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lordmetroid
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by lordmetroid » Fri Feb 12, 2016 3:16 am

I only got 3 quarters of a Permanent Portfolio at the moment, I am not entering stocks until the moving averages indicates a change in the trend. I am well aware that I am risking a sudden unexpected huge swing back. However, I am more psychologically comfortable not seeing part of my portfolio rapidly deteriorating.

Because the Permanent Portfolio model isn't as steadily "permanent" outside of USA.

Swedish Permanent Portfolio(OMXS30 stocks / Gold / 3 month bills / 2-10 years bonds):
[img width=500]http://i.imgur.com/g0C3ujk.png[/img]

Japanese Permanent Portfolio:
[img width=500]http://4.bp.blogspot.com/-jLZBJlSnvMI/U ... _Japan.png[/img]
Last edited by lordmetroid on Fri Feb 12, 2016 4:35 am, edited 1 time in total.
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technovelist
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by technovelist » Fri Feb 12, 2016 6:30 am

MediumTex wrote: The PP is having a good 2016 so far.  Historically, when the PP has had a few soft years it will have a couple of years with above average returns.

I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.

Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.

The money has to go somewhere.  Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines."  There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Let's say you have a share of stock that is bid at 1000.

Now suppose there is bad news about the stock and it is now bid at 500.

Where did the "other 500 points" go? Does something else have to go up in price to compensate for the "lost 500 points"?
Another nod to the most beautiful equation: e + 1 = 0
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by lordmetroid » Fri Feb 12, 2016 6:50 am

The points dissipated in the collective demand and supply for the asset.
Your speculation turned out to be a loss in this case. You have something that fewer people wants to buy compared to when you bought.
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by buddtholomew » Fri Feb 12, 2016 7:44 am

lordmetroid wrote: I only got 3 quarters of a Permanent Portfolio at the moment, I am not entering stocks until the moving averages indicates a change in the trend. I am well aware that I am risking a sudden unexpected huge swing back. However, I am more psychologically comfortable not seeing part of my portfolio rapidly deteriorating.

Because the Permanent Portfolio model isn't as steadily "permanent" outside of USA.

Swedish Permanent Portfolio(OMXS30 stocks / Gold / 3 month bills / 2-10 years bonds):
[img width=500]http://i.imgur.com/g0C3ujk.png[/img]

Japanese Permanent Portfolio:
[img width=500]http://4.bp.blogspot.com/-jLZBJlSnvMI/U ... _Japan.png[/img]
Sorry lord, but you still haven't grasped the concept of the PP.
Buy and hold all 4 assets.
Market time in the VP.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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technovelist
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by technovelist » Fri Feb 12, 2016 10:03 am

lordmetroid wrote: The points dissipated in the collective demand and supply for the asset.
Your speculation turned out to be a loss in this case. You have something that fewer people wants to buy compared to when you bought.
So in other words, the points weren't transferred to someone else. They just disappeared.

Which of course was my point.
Another nod to the most beautiful equation: e + 1 = 0
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by dragoncar » Fri Feb 12, 2016 10:08 am

technovelist wrote:
MediumTex wrote: The PP is having a good 2016 so far.  Historically, when the PP has had a few soft years it will have a couple of years with above average returns.

I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.

Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.

The money has to go somewhere.  Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines."  There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Let's say you have a share of stock that is bid at 1000.

Now suppose there is bad news about the stock and it is now bid at 500.

Where did the "other 500 points" go? Does something else have to go up in price to compensate for the "lost 500 points"?
I think yes.  Imagine an island economy where you've got 50 bananas and your buddy has 50 coconuts.  You buy 10 of his coconuts for 10 bananas. 

Then your buddy gets really into bananas.  He loves them and gets tired of coconuts.  But you want to sell some of your coconuts because you have similar taste.  He will only give you 5 bananas for 10 coconuts.

Now you have 45 bananas and your friend has 5 bananas and 50 coconuts.  The price of bananas in coconuts went up, and the price of coconuts in bananas went down. 

Nominally you have fewer bananas, but they are also more valuable. 

maybe this analogy is too confusing for me to draw a conclusion at this time in the morning

Maybe a monkey comes and eats all your bananas.  Bad monkey
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by technovelist » Fri Feb 12, 2016 10:12 am

dragoncar wrote:
technovelist wrote:
MediumTex wrote: The PP is having a good 2016 so far.  Historically, when the PP has had a few soft years it will have a couple of years with above average returns.

I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.

Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.

The money has to go somewhere.  Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines."  There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Let's say you have a share of stock that is bid at 1000.

Now suppose there is bad news about the stock and it is now bid at 500.

Where did the "other 500 points" go? Does something else have to go up in price to compensate for the "lost 500 points"?
I think yes.  Imagine an island economy where you've got 50 bananas and your buddy has 50 coconuts.  You buy 10 of his coconuts for 10 bananas. 

Then your buddy gets really into bananas.  He loves them and gets tired of coconuts.  But you want to sell some of your coconuts because you have similar taste.  He will only give you 5 bananas for 10 coconuts.

Now you have 45 bananas and your friend has 5 bananas and 50 coconuts.  The price of bananas in coconuts went up, and the price of coconuts in bananas went down. 

Nominally you have fewer bananas, but they are also more valuable. 

maybe this analogy is too confusing for me to draw a conclusion at this time in the morning

Maybe a monkey comes and eats all your bananas.  Bad monkey
The points still didn't go anywhere.

Let's try another analogy.

A football game score is 24-24. Then the referee announces that the last field goal by the second team was actually missed, so the score is really 24-21. Where did the other three points go?
Another nod to the most beautiful equation: e + 1 = 0
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Re: I'm noticing a lack of threads about how terrible the PP is

Post by MediumTex » Fri Feb 12, 2016 11:19 am

technovelist wrote:
MediumTex wrote: The PP is having a good 2016 so far.  Historically, when the PP has had a few soft years it will have a couple of years with above average returns.

I don't know if 2016 will be that year, but the way the PP has behaved historically suggests that it is due for a good year.

Gold is also an asset that seems due for some speculative interest with money now fleeing the stock market, the bond market offering limited potential speculative gains, and the rest of the commodity sector suffering from soft worldwide demand.

The money has to go somewhere.  Contrary to what Maria Bartiromo likes to tell us, there is no such thing as "money on the sidelines."  There are only a series of fields adjacent to one another, and if money leaves one field, it necessarily enters another field.
Let's say you have a share of stock that is bid at 1000.

Now suppose there is bad news about the stock and it is now bid at 500.

Where did the "other 500 points" go? Does something else have to go up in price to compensate for the "lost 500 points"?
Indirectly, yes.

The 500 decline in value is now in money Heaven.  It's gone.

If you decide to sell for the new price of 500 that money has to go somewhere.

However, the only reason that the 1000 stock is now 500 is that a bunch of people have been selling it (more than usual or it wouldn't have lost half its value).  The money they are taking out of the stock market has to be going somewhere else.

I'm just talking about where money goes when assets are liquidated, not where the the difference between the old price and the new price goes when an asset declines in value, though the decline in value of individual assets is one of the effects of money leaving the overall market.

Sound right?
Only strength can cooperate. Weakness can only beg.
-Dwight Eisenhower
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