Trump's Effect on the PP

General Discussion on the Permanent Portfolio Strategy

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Cortopassi
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Re: Trump's Effect on the PP

Post by Cortopassi » Mon Nov 28, 2016 8:07 am

sophie wrote:Or maybe something completely different from all of the above will happen. Right?
+1,000,000

Almost every time I thought I figured something out, I was burned.

Given my personal makeup, I see no other option out there better than a PP.

And now finally after years of trying, I am just starting to look at the overall gain/loss number for the whole PP, and not individual components. It helps. But I still watch gold more than I should.
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Re: Trump's Effect on the PP

Post by Cortopassi » Wed Nov 30, 2016 9:45 am

CullyB wrote:Bonds and stocks getting hurt badly again today. Equities aren't making up for it. This could be a very painful 4 or more years for this type of investing.
You meant gold, not stocks, right?

Whatever. Unless you got a 5% CD or money market I can plop my net worth in, there's nothing else I would consider doing than the PP.

All the moves every day are exaggerated both up and down in almost every type of holding. Does make it tough for those of us that like to watch daily.

I am bracing myself for December to erase the 6.5% gain I have for the year so far. If it doesn't, I will be pleasantly surprised.
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Re: Trump's Effect on the PP

Post by buddtholomew » Wed Nov 30, 2016 3:13 pm

Cortopassi wrote:
CullyB wrote:Bonds and stocks getting hurt badly again today. Equities aren't making up for it. This could be a very painful 4 or more years for this type of investing.
You meant gold, not stocks, right?

Whatever. Unless you got a 5% CD or money market I can plop my net worth in, there's nothing else I would consider doing than the PP.

All the moves every day are exaggerated both up and down in almost every type of holding. Does make it tough for those of us that like to watch daily.

I am bracing myself for December to erase the 6.5% gain I have for the year so far. If it doesn't, I will be pleasantly surprised.
Seems like gold and LTT's are in a race to the bottom wherever that may be...
It has been really tough to watch the portfolio perform so poorly since the recent highs.
It feels like we are the bag holders when everyone else is selling to escape.
Still sticking to the plan, but man this is borderline abuse.
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IDrinkBloodLOL
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Wed Nov 30, 2016 6:55 pm

WHAT THE FUCK IS THIS SHIT
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Re: Trump's Effect on the PP

Post by Kriegsspiel » Wed Nov 30, 2016 7:10 pm

I don't even the numbers.
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Re: Trump's Effect on the PP

Post by IDrinkBloodLOL » Wed Nov 30, 2016 7:34 pm

I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?
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Cortopassi
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Re: Trump's Effect on the PP

Post by Cortopassi » Wed Nov 30, 2016 9:32 pm

IDrinkBloodLOL wrote:I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?
It will. It never feels like it at these points, but it will.

What would you have done otherwise? More stock? More active trading? Just curious.
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Re: Trump's Effect on the PP

Post by rickb » Wed Nov 30, 2016 11:57 pm

Cortopassi wrote:
IDrinkBloodLOL wrote:I have now lost like 2/3 of this year's gain. Why the fuck cannot even one year work out remotely decent?
It will. It never feels like it at these points, but it will.

What would you have done otherwise? More stock? More active trading? Just curious.
I don't track year to date returns, but I'm up about 6% over the last 12 months with >90% of assets in a PP portfolio. Seems pretty good to me.

The reason I'm in a PP portfolio is 2008. I've never been an aggressive investor, but in 2008 the total assets (accumulated over 30 years of "investing") dropped by about 25%.

If you do the arithmetic, you can easily figure out I'm over 50. This involves a significant amount of money (I'll clue you in that 25% was a mid 6 figures amount).

I've been financially fucked, repeatedly (a long story for a different time). There are certainly no guarantees, but the PP has been the closest I've ever seen to a "don't get fucked" portfolio.

If you want to hit triples every year, you'll strike out (repeatedly). If you're OK with hitting singles, ...

I have serious concerns about whether the PP will survive Trump. I'm seriously considering converting my paper gold (ETFs and CEFs) to physical gold. But the structure of the PP more or less guarantees that I'll preserve at least a significant portion of my accumulated wealth no matter what kind of chaos Trump manages to create.

We could be on the verge of a nuclear WWIII. Gold should do OK.

We could be on the verge of a worldwide depression due to trade wars that makes the 1930s look like nirvana. Short term treasuries and gold should do OK.

We could be on the verge of America being great again (whatever the fuck that means). Stocks should do OK.

The whole point of the PP is that you don't get fucked. No matter what.
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Cortopassi
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Re: Trump's Effect on the PP

Post by Cortopassi » Thu Dec 01, 2016 7:20 am

rickb, exactly!

Worst thing that is going to happen right now is we get a perceived sale on gold and bonds if you rebalance in January.

At least small caps are doing well, for those doing the GB.
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Re: Trump's Effect on the PP

Post by Kevin K. » Thu Dec 01, 2016 9:52 am

Thanks rickb and Cortopassi for your comments and sentiments. I'm in the same boat vis-a-vis 2008, as I suspect a lot of us are.

We all sign on for volatile individual assets when we take on the PP, but it is indeed difficult to see two of them getting hammered every day in unison with no end in sight.

So...there's staying the course as one option, the Golden Butterfly tweak with its higher allocation to equities as another, and beyond that the only portfolios I know of that would be even remotely appealing to those looking for a PP-like "bunker" are iterations of Larry Swedroe's "Larry Portfolio" of which (for me anyway) Desert's latest iteration (60% IT Treasuries, 10% each TSM, SCV, EM and gold) is the most appealing. Its backtested numbers are if anything even more impressive than the PP's in terms of stability of returns and avoiding drawdowns, but as HB and others here (always much gratitude to Craig and Medium Tex!) have taught us one has to look at the design independent of backtesting.

My take it that the intermediate term bonds are a lot easier to deal with in a rising-rate environment while still offering plenty of protection when flight-to-safety events happen. Desert's stock allocation is straight from Swedroe's 70% stable bonds/30% super-volatile stocks playbook and IMO makes a lot more sense than U.S. large caps only given relative valuations (Swedroe's excellent book(let) "Reducing the Risk of Black Swans" has the data and logic). The 10% gold really does make a difference in the returns and reflects Desert's careful study of the PP, but 10% is a whole lot easier to live with than 25% - just enough (as he put it) for "SHTF" insurance.
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Re: Trump's Effect on the PP

Post by Jack Jones » Thu Dec 01, 2016 12:14 pm

At least small caps are doing well, for those doing the GB.
The stock portion of my PP is half SP500, and half Vanguard Small Cap (credit goes to MG for inspiring me to make this modification). I feel like it's a reasonably safe and sensible deviation from a proper PP.
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Re: Trump's Effect on the PP

Post by I Shrugged » Thu Dec 01, 2016 4:36 pm

I am also in the boat RickB described. I only had the one scary loss, in 08/09, though. But it made me go for the PP. I already believed in it, but had not really adopted it. I think the end of ZIRP will dwarf whatever the GOP may do. However ZIRP unwinds, it will be a great test for the PP. I don't love being a guinea pig, but then, at this point, what investor isn't one?
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