Nobody believes in the Permanent Portfolio

General Discussion on the Permanent Portfolio Strategy

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dualstow
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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
RIP Toots
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Cortopassi
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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.

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mathjak107
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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.
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buddtholomew
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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?
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mathjak107
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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.
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buddtholomew
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Re: Nobody believes in the Permanent Portfolio

Post by buddtholomew » Tue Apr 04, 2017 2:46 pm

mathjak107 wrote:i owned a small cap value fund prior to slyv last year . fcpex was up 22% last year
yes, but you didn't own it in the money allocated to the GB, correct?
your story changes to match your perspective on that particular post...
mj, just give it a rest already.
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mathjak107
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Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 2:48 pm

like i said time will tell . the results we get individually are all that matter , not charts .
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Cortopassi
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Re: Nobody believes in the Permanent Portfolio

Post by Cortopassi » Tue Apr 04, 2017 3:31 pm

Thanks, Budd.

MJ, I may be misremembering here, but I recall that the PP purposely holds volatile assets. Are they always going to be uncorrelated and volatile in opposite directions? As we have seen, no. But it seems that you like to come in and challenge whether it is a good strategy, because the assets should be uncorrelated every single day and they aren't

There have been many days that I have been happy, because all have gone up in tandem. Many other days where they have all gone down in tandem. But it is pretty clear that at least since Nov, 5 months now, there has been little correlation. And most of the time there is little correlation. **If someone has access to data, it would be interesting to see the correlation between the main assets over time**

My version of the PP is currently up 5.26% YTD, better than three of the four main components (VTI, TLT, cash). Gold, silver and international are pulling the weight right now.

I am not complaining.
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buddtholomew
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Re: Nobody believes in the Permanent Portfolio

Post by buddtholomew » Tue Apr 04, 2017 4:17 pm

Sure Corto. :)

Everything I own is positive YTD, except a sliver of IJS and REITs.
Also, the PP is performing above expectations so this is a time to rejoice and not complain about poor performance.

Many have said before its less about what you own and more about whether you can invest in the strategy for better or worse.
Its also not about having the biggest pot of Gold in retirement as more $$ does not equate to more happiness.

I enjoy the journey the PP provides more than I enjoy the roller-coaster ups and downs a 70/30 allocation can have OVER longer periods than a day or week or month or year.
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mathjak107
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Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 4:21 pm

i did not complain about poor performance at all . i said the volatility in the gb is as high as a 100% equity portfolio at times lately but the gains are not . my typical mix is under 50% and closer to 45% or so equity if i don't use the gb . i do not use 70/30 at all .

i would not classify the gb as a low volatility portfolio at this point in time and i do not recommend it for anyone who does not want a pretty wild ride at times .

that is really my point .
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buddtholomew
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Re: Nobody believes in the Permanent Portfolio

Post by buddtholomew » Tue Apr 04, 2017 4:24 pm

mathjak107 wrote:i did not complain about poor performance at all . i said the volatility in the gb is as high as a 100% equity portfolio at times lately but the gains are not .
sure, but is that the case when stocks decline.
I recall many days where stocks have declined and gold and treasuries have risen.
Gold has outperformed stocks (S&P500, Small-Cap) so the increased volatility has resulted in higher gains, no?
If you didn't hold the GB you wouldn't be invested in Gold.
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mathjak107
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Re: Nobody believes in the Permanent Portfolio

Post by mathjak107 » Tue Apr 04, 2017 4:55 pm

the volatility is different in the gb now . a 40%- 45% conventional model does not move like a 100% equity portfolio at any point in time .

that is not true in the gb as on those days many parts follow each other with the result that it behaves more like the 100% growth model i still track .

so it isn't the fact it is just volatile , it can be on par with a 70-100% equity model at times so a user needs to understand that because history on it shows it to be one of the lowest volatility wise today that may not be the case and the experience you have with it .

that may have been true over the long term or in the past but today if someone is looking at it as bit more aggressive equal to the pp as far as comfortable swings it can be far from it .

if you use it today you will experience the same swings a 70-100% equity model see's at times and potential users should be aware of that . it does not behave like a 40% equity model would be expected to.

you may think it would be even less docile than wellesley because it has opposing asset classes but it is not and i think this is important for potential users to realize .
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