Nobody believes in the Permanent Portfolio

General Discussion on the Permanent Portfolio Strategy

Moderator: Global Moderator

tim47
Junior Member
Junior Member
Posts: 8
Joined: Fri Sep 16, 2011 3:07 pm

Re: Nobody believes in the Permanent Portfolio

Post by tim47 » Wed Mar 29, 2017 7:52 pm

Well, here is one ENFP... now I know why I do not contribute to the ongoing dialogue....
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Wed Mar 29, 2017 10:43 pm

tim47 wrote:Well, here is one ENFP... now I know why I do not contribute to the ongoing dialogue....
hah! Well you're not alone. I tested as an ENFP (borderline I), not that I believe in the test.
Took the test a very, verylong time ago. I remember my dad, an ISTJ, rubbing it in that most of the book's examples of enfp's were fictional characters. O0
Sam Bankman-Fried sentenced to 25 years
modeljc
Executive Member
Executive Member
Posts: 271
Joined: Sat Feb 04, 2012 11:52 am

Re: Nobody believes in the Permanent Portfolio

Post by modeljc » Sat Apr 01, 2017 12:02 pm

Even if you add 17 Billion invested in Permanent Portfolio (PRPFX) and 60 Billion in Ray Dalio Bridgewater Assoc. All Weather portfolio you still can't find many who Believe in the Permanent Portfolio. Also the Dalio All Weather is not a pure Permanent Portfolio and PRPFX is not very close either.

This is the best face I can put on being on the outside of the investment world and maybe being on the fringe.
Libertarian666
Executive Member
Executive Member
Posts: 5994
Joined: Wed Dec 31, 1969 6:00 pm

Re: Nobody believes in the Permanent Portfolio

Post by Libertarian666 » Sat Apr 01, 2017 12:13 pm

modeljc wrote:Even if you add 17 Billion invested in Permanent Portfolio (PRPFX) and 60 Billion in Ray Dalio Bridgewater Assoc. All Weather portfolio you still can't find many who Believe in the Permanent Portfolio. Also the Dalio All Weather is not a pure Permanent Portfolio and PRPFX is not very close either.

This is the best face I can put on being on the outside of the investment world and maybe being on the fringe.
I don't let others' opinions affect my investing strategy, other than of course if they point out something I've overlooked, e. g., Harry Browne's analyses. What I care about is how well my investing strategy does for me.
User avatar
ochotona
Executive Member
Executive Member
Posts: 3353
Joined: Fri Jan 30, 2015 5:54 am

Re: Nobody believes in the Permanent Portfolio

Post by ochotona » Mon Apr 03, 2017 5:12 am

The board is really quiet. That itself could be an indication of a market top. @Thebubblebubble Jesse Colombo of Forbes notes that people are following him less on Twitter, he preaches on bubbles. We also have the University of Michigan consumer sentiment poll where more than 10% of respondents think the stock market is 100% sure to go up in coming year.

After we get a bear market, and when it bottoms, everyone will be back... then it will time to go all in, not be in the PP
brajalle
Associate Member
Associate Member
Posts: 26
Joined: Thu Jul 08, 2010 12:20 am

Re: Nobody believes in the Permanent Portfolio

Post by brajalle » Mon Apr 03, 2017 6:12 am

Libertarian666 wrote:
l82start wrote:i have seen the topic of myers brigs come up on other forums over the years and the results are similar to here, it may be that "forum posting" itself as a form of communication is the draw to intj as much or more than the forums topics are.
INTx are about 10x as common in online fora than in real life.
Looking at the poll from this forum, I'd say the ratio is something like 20-30x. The numbers given for each INT is generally in the 2% range.
Libertarian666
Executive Member
Executive Member
Posts: 5994
Joined: Wed Dec 31, 1969 6:00 pm

Re: Nobody believes in the Permanent Portfolio

Post by Libertarian666 » Mon Apr 03, 2017 9:50 am

brajalle wrote:
Libertarian666 wrote:
l82start wrote:i have seen the topic of myers brigs come up on other forums over the years and the results are similar to here, it may be that "forum posting" itself as a form of communication is the draw to intj as much or more than the forums topics are.
INTx are about 10x as common in online fora than in real life.
Looking at the poll from this forum, I'd say the ratio is something like 20-30x. The numbers given for each INT is generally in the 2% range.
Well, if it's 2% for each of INTJ and INTP, that would be 4%. 30x that would be 120%. Is this the new math? :P
JFP_SF
Junior Member
Junior Member
Posts: 6
Joined: Fri Mar 31, 2017 4:11 pm

Re: Nobody believes in the Permanent Portfolio

Post by JFP_SF » Mon Apr 03, 2017 5:43 pm

Given the big run-up in stocks over the last 8 years (and bonds too), most investors aren't really worrying about risk right now. Investing has fashions like everything else in human affairs.

Me, I worry all the time :)
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 3:04 am

JFP_SF wrote:Given the big run-up in stocks over the last 8 years (and bonds too), most investors aren't really worrying about risk right now. Investing has fashions like everything else in human affairs.

Me, I worry all the time :)


so when all the assets move in the same direction as they have been every time there is a sniff of rate increase you must still worry all the time .

with the historical interest rate average of 6.30% on the us bond index from 1963 to 2016 which stands at 2.48% today , if you believe in reversion to the means you may still got a whole lot of worrying to do . i know my golden butterfly has been moving as much as a 100% stock portfolio at times .

in fact my golden butterfly now holds the distinction of racking up the biggest one day loss and the biggest one day gain in dollars i have experienced since toning my portfolio down for retirement more than 10 years ago ,

these kind of risk paired portfolio's only do their job when conditions are such that assets don't move together .

the catch 22 situation is that long term these things smooth out and eventually the draw down shrinks . but we use these portfolio's because we are not really interested in the long term gains as much as we are the shorter term and mitigating those temporary drops and swings . .

long term over decades equity's almost always win out . but we want to avoid the wild swings in the shorter term so we are not 100% equity's .

but think about the logic .

we are trying to mitigate the temporary short term drops and swings with assets that can try do that but if you are a longer term investor that mitigation permanently hurts long term gains .

so if these risk paired portfolio's do swing as much in the short term when assets correlate then we are not getting what we signed on for and are merely just giving up long term gains in the end from other assets like equity's . .

these are really unconventional times and we don't really know what to expect from our investments anymore . nothing can be counted on to act like it used to as we have some awful strange bedfellows now .

to be honest , i signed on to the butterfly concept because of all the uncertainty and i wanted to mitigate the shorter term volatility while holding on to the lovely gains i had accumulated in my other portfolio over the last few years . but so far in the months i have been using it i have seen more volatility and less gains than my other model i typically follow . so , the jury is still out as far as the portfolio doing it's job over the time frames you would want it to do it's job best .

i find the dilemma is you want the portfolio because you are more interested in the short term volatility than maximizing gains in the long term yet right now you are getting the volatility of going for maximum gains but not getting them so you say to yourself "whats the point ?" i may as well do what i always did if i have to wait for the long term for the volatility to smooth out anyway . . .

these risk paired portfolio's seem to be more a fair weather friend that stays a friend as long as the expectations are not for continuing of rising rates going back towards the historical norm . otherwise they can't do some of their job's properly like mitigating that volatility in the short term . .
modeljc
Executive Member
Executive Member
Posts: 271
Joined: Sat Feb 04, 2012 11:52 am

Re: Nobody believes in the Permanent Portfolio

Post by modeljc » Tue Apr 04, 2017 9:34 am

mathjak107 wrote:
JFP_SF wrote:Given the big run-up in stocks over the last 8 years (and bonds too), most investors aren't really worrying about risk right now. Investing has fashions like everything else in human affairs.

Me, I worry all the time :)


so when all the assets move in the same direction as they have been every time there is a sniff of rate increase you must still worry all the time .

with the historical interest rate average of 6.30% on the us bond index from 1963 to 2016 which stands at 2.48% today , if you believe in reversion to the means you may still got a whole lot of worrying to do . i know my golden butterfly has been moving as much as a 100% stock portfolio at times .

in fact my golden butterfly now holds the distinction of racking up the biggest one day loss and the biggest one day gain in dollars i have experienced since toning my portfolio down for retirement more than 10 years ago ,

these kind of risk paired portfolio's only do their job when conditions are such that assets don't move together .

the catch 22 situation is that long term these things smooth out and eventually the draw down shrinks . but we use these portfolio's because we are not really interested in the long term gains as much as we are the shorter term and mitigating those temporary drops and swings . .

long term over decades equity's almost always win out . but we want to avoid the wild swings in the shorter term so we are not 100% equity's .

but think about the logic .

we are trying to mitigate the temporary short term drops and swings with assets that can try do that but if you are a longer term investor that mitigation permanently hurts long term gains .

so if these risk paired portfolio's do swing as much in the short term when assets correlate then we are not getting what we signed on for and are merely just giving up long term gains in the end from other assets like equity's . .

these are really unconventional times and we don't really know what to expect from our investments anymore . nothing can be counted on to act like it used to as we have some awful strange bedfellows now .

to be honest , i signed on to the butterfly concept because of all the uncertainty and i wanted to mitigate the shorter term volatility while holding on to the lovely gains i had accumulated in my other portfolio over the last few years . but so far in the months i have been using it i have seen more volatility and less gains than my other model i typically follow . so , the jury is still out as far as the portfolio doing it's job over the time frames you would want it to do it's job best .

i find the dilemma is you want the portfolio because you are more interested in the short term volatility than maximizing gains in the long term yet right now you are getting the volatility of going for maximum gains but not getting them so you say to yourself "whats the point ?" i may as well do what i always did if i have to wait for the long term for the volatility to smooth out anyway . . .

these risk paired portfolio's seem to be more a fair weather friend that stays a friend as long as the expectations are not for continuing of rising rates going back towards the historical norm . otherwise they can't do some of their job's properly like mitigating that volatility in the short term . .

I think you need to worry ALL THE TIME if rates ever go back to the 6% level. Cash will lose the least but that won't save us.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Tue Apr 04, 2017 9:46 am

When it comes to investments, I don't worry at all.
I'll leave that to the wise folks.
Sam Bankman-Fried sentenced to 25 years
farjean2
Executive Member
Executive Member
Posts: 284
Joined: Thu Feb 23, 2017 12:51 am

Re: Nobody believes in the Permanent Portfolio

Post by farjean2 » Tue Apr 04, 2017 9:54 am

I looked at my Golden Butterfly portfolio yesterday and it was up 2.7% on the year which is just fine with me. If there were a lot of up and down swings on the way I didn't notice and don't care. I also don't care if it's losing out to other portfolios YTD right now (the pure HBPP is probably beating it).

When you say "shorter term volatility" just what time frame are you talking about?
mathjak107 wrote:
JFP_SF wrote:Given the big run-up in stocks over the last 8 years (and bonds too), most investors aren't really worrying about risk right now. Investing has fashions like everything else in human affairs.

Me, I worry all the time :)
in fact my golden butterfly now holds the distinction of racking up the biggest one day loss and the biggest one day gain in dollars i have experienced since toning my portfolio down for retirement more than 10 years ago ,

these kind of risk paired portfolio's only do their job when conditions are such that assets don't move together .

the catch 22 situation is that long term these things smooth out and eventually the draw down shrinks . but we use these portfolio's because we are not really interested in the long term gains as much as we are the shorter term and mitigating those temporary drops and swings . .

long term over decades equity's almost always win out . but we want to avoid the wild swings in the shorter term so we are not 100% equity's .

but think about the logic .

we are trying to mitigate the temporary short term drops and swings with assets that can try do that but if you are a longer term investor that mitigation permanently hurts long term gains .

so if these risk paired portfolio's do swing as much in the short term when assets correlate then we are not getting what we signed on for and are merely just giving up long term gains in the end from other assets like equity's . .

these are really unconventional times and we don't really know what to expect from our investments anymore . nothing can be counted on to act like it used to as we have some awful strange bedfellows now .

to be honest , i signed on to the butterfly concept because of all the uncertainty and i wanted to mitigate the shorter term volatility while holding on to the lovely gains i had accumulated in my other portfolio over the last few years . but so far in the months i have been using it i have seen more volatility and less gains than my other model i typically follow . so , the jury is still out as far as the portfolio doing it's job over the time frames you would want it to do it's job best .

i find the dilemma is you want the portfolio because you are more interested in the short term volatility than maximizing gains in the long term yet right now you are getting the volatility of going for maximum gains but not getting them so you say to yourself "whats the point ?" i may as well do what i always did if i have to wait for the long term for the volatility to smooth out anyway . . .

these risk paired portfolio's seem to be more a fair weather friend that stays a friend as long as the expectations are not for continuing of rising rates going back towards the historical norm . otherwise they can't do some of their job's properly like mitigating that volatility in the short term . .
Last edited by farjean2 on Tue Apr 04, 2017 1:58 pm, edited 3 times in total.
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 3338
Joined: Mon Feb 24, 2014 2:28 pm
Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html

Re: Nobody believes in the Permanent Portfolio

Post by Cortopassi » Tue Apr 04, 2017 9:59 am

dualstow wrote:When it comes to investments, I don't worry at all.
I'll leave that to the wise folks.
Yes. I read these comments by MJ and others thinking that any of us have the skill to know what bucket to place our money into given the current state of the world and think they are fooling themselves. For sure, I know people who've done it successfully. Not me, and that's why I am here.

Can rates ever get back to 6%+? I personally think long before that we will be in another recession/collapse and the Fed will need to drop rates again.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 10:03 am

i don't think we will see 6% for a while but all we need is just to keep seeing these tiny hikes and that may keep assets moving together .

it isn't a question of guessing what is next . it is merely the fact that the volatility is there no matter what you do it seems , like it or not . in the short term it is what it is and longer term protecting against short term dips becomes irrelevant since it is the short term we would like to mitigate . .

my point is that we can't control the potential scenario's and there will be times like now that these risk pairing portfolio's are actually more volatile than conventional portfolio's .
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Tue Apr 04, 2017 10:38 am

mathjak107 wrote:these risk pairing portfolio's
I like it! I mean, I think it's supposed to be risk-paring, cutting down risk as with a paring knife.
But in a way, we're pairing risks against each other. You accidentally invented a cool new term.
We won't get into the apostrophe. :(
Sam Bankman-Fried sentenced to 25 years
Jack Jones
Executive Member
Executive Member
Posts: 522
Joined: Mon Aug 24, 2015 3:12 pm

Re: Nobody believes in the Permanent Portfolio

Post by Jack Jones » Tue Apr 04, 2017 12:37 pm

dualstow wrote:
mathjak107 wrote:these risk pairing portfolio's
We won't get into the apostrophe. :(
O0
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 3338
Joined: Mon Feb 24, 2014 2:28 pm
Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html

Re: Nobody believes in the Permanent Portfolio

Post by Cortopassi » Tue Apr 04, 2017 1:31 pm

A major part of the PP is to specifically invest in volatile assets, and rebalance out of one into others based off bands or time.

I started buying gold in 2008. If instead of the investing I did, I went right into the PP in 2008, peak to trough shows that I would have rebalanced because of:

Bonds in 11/2008, due to increase
Gold in 4/2011, due to increase
Stocks in 7/2015, due to increase

This is telling me that the rebalancing bands are working to everyone's favor in the PP and volatility should be welcomed.

The bond rebalance came at a transitory top in late 2008. The gold rebalance ticked nearly the exact top of gold around $1900. The most recent stock rebalance captured a lot of the gain along the way.

Sure, Jan 2008 is arbitrary, and I chose it because that's when I made my first gold purchase.
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Tue Apr 04, 2017 1:40 pm

Cortopassi wrote: I started buying gold in 2008. If instead of the investing I did, I went right into the PP in 2008, peak to trough shows that I would have rebalanced ...
I think I get it but could you clarify? Does this mean you eased into the PP because you were easing into gold?
Sam Bankman-Fried sentenced to 25 years
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 3338
Joined: Mon Feb 24, 2014 2:28 pm
Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html

Re: Nobody believes in the Permanent Portfolio

Post by Cortopassi » Tue Apr 04, 2017 1:58 pm

I got sick of my investing style from 1989 to 2008 (one word: haphazard) and a buddy turned me onto gold, so I started buying it, since I had none, and miners (stupid). Went great for quite some time, until 2011, when I was riding high, and then gold started dropping like a rock and has yet to recover.

I spent 2011-2014 pretty much in cash, watching the market rise. Getting burned in 2008 and dumping most everything at the exact wrong time and buying into the "sure thing" of gold at the time made a lot of sense, until getting burned from gold and miners.

In late 2013 I happened upon Craig's book, changed all holdings into the PP in early 2014 and have been in the PP ever since.

It doesn't matter that I am giving up potentially larger gains by not being in stocks, or that I should have less bonds because of interest rates having nowhere to go but up, or why am I holding a barbarous relic.

Everyone I have ever listened to, and adjusted my strategy because of, has been lopsided wrong, either in the stock, bond or gold direction. You can still find hundreds of shills out there telling the latest sucker the end of the world is coming, you need to get into gold and silver. Or conversely, get out of bonds. Or the market can't go any higher (or won't stop going up ever).

Figured it was time in 2014 to drop the emotions and get a little piece of the action in all those assets, and I can attest under oath that I have never been calmer or less stressed when it comes to money.

I applaud those who have been able to make the right calls, or have the balls to stick it out through a rough patch like 2008. That is not me, and the PP has saved my ass.

When I'm driving home and the business report comes on to try to explain what drive the latest rise or fall in the markets, I just laugh.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 2:11 pm

well it does not mean today you are any better insulated . like i said with all asset classes moving together in these big up swings or down swings the volatility and losses may be worse .

as i said the growth and income model i follow as well as the butterfly is doing better and so far has smaller swings .

in the end discipline will determine how you do . to date over the long term no one would have lost a penny in the markets over a typical accumulation stage except for poor investor actions
User avatar
dualstow
Executive Member
Executive Member
Posts: 14232
Joined: Wed Oct 27, 2010 10:18 am
Location: synagogue of Satan
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by dualstow » Tue Apr 04, 2017 2:14 pm

mathjak107 wrote:well it does not mean today you are any better insulated . like i said with all asset classes moving together in these big up swings or down swings the volatility and losses may be worse .
OP's friend Charles thinks we are "doomers."
If Keith Jarrett is a musician's musician, do posts like these make mathjak our resident doomer's doomer? O0
Sam Bankman-Fried sentenced to 25 years
User avatar
Cortopassi
Executive Member
Executive Member
Posts: 3338
Joined: Mon Feb 24, 2014 2:28 pm
Location: https://www.jwst.nasa.gov/content/webbL ... sWebb.html

Re: Nobody believes in the Permanent Portfolio

Post by Cortopassi » Tue Apr 04, 2017 2:22 pm

MJ, I would take issue with your assessment that all asset classes are moving together. Here's a 1 year chart of the major ones we are talking about, which have a delta from about -8% to 21% returns. Seems reasonably uncorrelated. I put silver in there because it is 5% for me.

I would say esp. since Trump, we've become quite uncorrelated.

Image
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 2:36 pm

who cares what was happening last year . tell us what is happening now almost daily . that is all that matters .

all that matters is i swapped part of my investments for a model with "supposedly lower volatility " i got lower gains and higher volatility so far for my efforts . that is all that matters , at least to me .

lets see what more time brings us but so far it is not doing the job the way it should behave because of the rising rate fears . . the idea was to be less volatile , not more . after all that is the idea of having opposing assets .
Last edited by mathjak107 on Tue Apr 04, 2017 2:41 pm, edited 1 time in total.
User avatar
buddtholomew
Executive Member
Executive Member
Posts: 2464
Joined: Fri May 21, 2010 4:16 pm

Re: Nobody believes in the Permanent Portfolio

Post by buddtholomew » Tue Apr 04, 2017 2:41 pm

mathjak107 wrote:who cares what was happening last year . tell us what is happening now almost daily . that is all that matters .

all that matters is i swapped part of my investments for a model with "supposedly lower volatility " i got lower gains and higher volatility so far for my efforts . that is all that matters , at least to me .

lets see what more time brings us but so far it is not doing the job the way it should .
Yeah, because you switched to the GB after SCV had increased 40+%.
See a pattern here?
User avatar
mathjak107
Executive Member
Executive Member
Posts: 4456
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 2:43 pm

i owned a small cap value fund prior to slyv last year . fcpex was up 22% last year . i also bought slyv after it came down prior to the election when i decided to do some proactive protection in the gb and it was actually one of my best gainers . it had a great run up after the election until it gave a bunch back
Last edited by mathjak107 on Tue Apr 04, 2017 2:47 pm, edited 1 time in total.
Locked