Backtesting the PP in Other Countries (Economies)

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aj76er
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Backtesting the PP in Other Countries (Economies)

Post by aj76er » Sun Apr 23, 2017 1:10 pm

Hi All,

For more empirical evidence of how the PP would respond to various economic conditions is there any (vetted) data on how it would have worked in other countries? Some example scenarios I'd like to see:
1. Long, deflationary conditions (Japan)
2. Transition from supplier of world's reserve currency (Britain)
3. Hyper-inflation (Argentina)
4. Economic collapse (Iceland)

These are (or were) all developed countries and so I feel like similar situations could occur in the U.S.. Thus, I'd like to see how the PP or GB holds up against real-world data as a validation of the theory.

And for FWIW, I'm considering transitioning to a GB-inspired portfolio:

1. 40% Stocks (in 2:1 split between U.S. and ex-U.S.)
2. 20% Gold
3. 20% LTT
4. 20% Cash (including I/EE-bonds)

Thanks!
aj76er
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Re: Backtesting the PP in Other Countries (Economies)

Post by aj76er » Sun Apr 23, 2017 1:11 pm

In searching the forums, I found a link to an old blog:

http://europeanpermanentportfolio.blogs ... eland.html

It appears to no longer be hosted, or has moved somewhere
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frugal
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Re: Backtesting the PP in Other Countries (Economies)

Post by frugal » Sun Apr 23, 2017 1:36 pm

Hi

Interesting but i dont know the answer.

Our PP friends know and will answer.

I think PP worked well on those countries...

Rgds
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Tyler
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Re: Backtesting the PP in Other Countries (Economies)

Post by Tyler » Sun Apr 23, 2017 5:01 pm

I've been doing some tinkering, and am starting to get the hang of modeling international portfolios. Here's a sneak preview of one country on your wish list. Long story short -- the PP is really resilient and is more than just a US portfolio.

Image
Mechanical engineer, history buff, treasure manager... totally not Ben Gates
aj76er
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Re: Backtesting the PP in Other Countries (Economies)

Post by aj76er » Sun Apr 23, 2017 6:12 pm

Wow, awesome work. I can't wait for the final product! Out of curiosity, how many country data sets are you working on? I promise I won't divulge outside this thread :)

I must admit that your site is what clued me in to the PP concept :)
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Tyler
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Re: Backtesting the PP in Other Countries (Economies)

Post by Tyler » Sun Apr 23, 2017 6:59 pm

I'm still experimenting, and nothing is set in stone. But I've long been interested in international data as well, and I'll be sure to let everyone know if/when I finally get some robust tools working.
Mechanical engineer, history buff, treasure manager... totally not Ben Gates
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Hal
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Re: Backtesting the PP in Other Countries (Economies)

Post by Hal » Sun Apr 23, 2017 7:28 pm

Well done !

I have long been interested in how (or if) gold hedges currency inflation of smaller nations.....

And soon I shall be "enlightened"
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Re: Backtesting the PP in Other Countries (Economies)

Post by AnotherSwede » Mon Apr 24, 2017 9:08 am

I did a backtest on Japan. Thinking that (demographics) is what we are all gonna go through.

I used ten year bonds and it was a decent return above cash and low risk.
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frugal
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Re: Backtesting the PP in Other Countries (Economies)

Post by frugal » Mon Apr 24, 2017 3:20 pm

Tyler wrote:I'm still experimenting, and nothing is set in stone. But I've long been interested in international data as well, and I'll be sure to let everyone know if/when I finally get some robust tools working.
TYLER

you are the best! ;)

Please don't forget to do it for EUROPE in EUROS.

Thank you my friend!
grapesofwrath
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Re: Backtesting the PP in Other Countries (Economies)

Post by grapesofwrath » Mon Apr 24, 2017 4:09 pm

Tyler, I would like to say I love your website and tools. So simple, so clean, so insightful !

PS. I would love to see Japan since its past is such a different beast (but one that not too improbably Europe and even US could follow...)
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Re: Backtesting the PP in Other Countries (Economies)

Post by tim47 » Mon Apr 24, 2017 6:37 pm

Tyler,
I seldom post, but I really want you to get what a breath of fresh air you are in a community really stuck on and attached to their personal view of asset allocation. I really honor your transparency and your obvious commitment that each of us use our own basic intelligence to dinvest in a way that works best for us. I sense no hidden agenda with you. You are a really amazing soul... bless you and thank you for all you have provided me....
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Tyler
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Re: Backtesting the PP in Other Countries (Economies)

Post by Tyler » Mon Apr 24, 2017 8:43 pm

Thanks guys. It's my pleasure.

Maybe it's the Harry Browne libertarian influence, but I've learned that trying to convince people to do something against their nature is a losing battle. Arming people with good information so that they can make educated choices is not only more constructive but also a lot more sustainable.

BTW, the beauty of the Permanent Portfolio is that the data speaks for itself. It's a really nice portfolio, and I think the consistency surprises a lot of people.
Mechanical engineer, history buff, treasure manager... totally not Ben Gates
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