Is the PP going to hold up?

General Discussion on the Permanent Portfolio Strategy

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technovelist
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Re: Is the PP going to hold up?

Post by technovelist » Fri Feb 09, 2018 1:46 pm

buddtholomew wrote:So what’s the threshold where the other assets move? Is it
20, 30, 40%. If that’s the case why bother with Gold and LTT’s. With those declines you should be buying stocks.

Stocks come back, Gold and LTT’s down.
Stocks go down, Gold and LTT’s flat or down.
Hmm...
So that means that gold is always worse than stocks.

Which is odd because as someone else has already pointed out, there have been 2 decades in the last 5 when gold was the best performing investment.

Have you read Bill Bernstein's article about the HBPP? Here's the URL again in case you missed it: http://www.efficientfrontier.com/ef/0adhoc/harry.htm.

But to cut to the chase (no pun intended), people who get into the HBPP because it has been outperforming for the past several years are not going to stick with it, so they won't get the benefits of its lower volatility with overall good performance.

If that sounds familiar, it should.
glennds
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Re: Is the PP going to hold up?

Post by glennds » Fri Feb 09, 2018 2:19 pm

buddtholomew wrote:Thanks Glennd’s for the reminder.
Stocks are rebounding with Gold/LTT’s selling off.
By the way, I should say I completely get and share your pain. That's what drove me to the Peak2Trough tool to look back at the history myself.

I occasionally have to remind myself of the quote in the article that Technovelist linked - "Investment success accrues not so much to the brilliant as the disciplined".
Last edited by glennds on Fri Feb 09, 2018 3:15 pm, edited 1 time in total.
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bitcoininthevp
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Re: Is the PP going to hold up?

Post by bitcoininthevp » Fri Feb 09, 2018 2:40 pm

buddtholomew wrote:
Cortopassi wrote:The only temporary issue I have with this downturn is the rapidity of the paper loss. I was at 2.66% up on 1/25, here we are 15 days later and I am -2.81% down. The PP is mitigating the downturn, but it is still a painful 5.5% turn negative.
Finally, someone coming to my point of view.
PP has provided absolutely zero benefit during this downturn.
Only reason PP is losing slightly less is the lower allocation to equities. This lower allocation comes with MUCH lower gains when stocks rise.
Dont forget. Gold went from ~$1240/oz to ~$1320/oz in the last 60 days. Thats about 6.5% up.

So not only shouldn't one be looking at gold "responding to" stocks within a couple days, but Id advocate looking weeks/months *before* as well.
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bitcoininthevp
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Re: Is the PP going to hold up?

Post by bitcoininthevp » Fri Feb 09, 2018 2:47 pm

buddtholomew wrote:
Kriegsspiel wrote:
“Why keep something in gold? It’s stable. But why keep it in gold when it stays in a $100 range, when I could buy Bitcoin when it is increasing everyday?” Salamida said.

http://fortune.com/2018/02/08/bitcoin-p ... price-buy/
bud?
Let me be clear, I am not advocating buying BTC but merely pointing out on a day where the DOW fell 1000+ points BTC rose 10% while Gold only 0.24% That doesn't seem unusual to anyone on this forum? Think about that for a moment.

Techno, not sure what you are talking about but you missed the point once again.
Appreciate bitcoin being talked about in the discussion here. :) But bitcoin is all over the place for a variety of reasons, the least of which might be external-to-crypto markets.

Reminds me of this tweet the other day:
https://twitter.com/arbedout/status/960675720296108033
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bitcoininthevp
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Re: Is the PP going to hold up?

Post by bitcoininthevp » Fri Feb 09, 2018 2:57 pm

eufo wrote: RE: Bitcoin... If anyone is selling equities to run to Bitcoin as a safe haven, I think they are making a gross error that will prove disastrous.
I agree with this.

On a related topic, I would like to put in an application for a new portfolio.

I see GB, Coffeehouse, Swensen all have their own. And I'm jealous.

I propose a portfolio which is a traditional permanent portfolio mix with a bitcoin variable portfolio sidecar.

Hows:
  • 24% gold
    24% cash
    24% stocks
    24% long term bonds
    4% bitcoin
Turns out the back testing is amazing.

Ill need your help with the name.
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dualstow
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Re: Is the PP going to hold up?

Post by dualstow » Fri Feb 09, 2018 3:06 pm

Budd, if I recall correctly, you are quite well off. (Publicly stated). You should be relaxing, and not sweating this at all.
Failing that, I just want to know if you simply feel like venting and don't actually need a response, or if you are looking for answers that you haven't gotten yet. I'm asking sincerely, not sarcastically.
NYC apartment vacancies hit record high — CNBC
Jo Jorgensen was once Harry Browne’s running mate
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buddtholomew
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Re: Is the PP going to hold up?

Post by buddtholomew » Fri Feb 09, 2018 3:09 pm

bitcoininthevp wrote:
buddtholomew wrote:
Cortopassi wrote:The only temporary issue I have with this downturn is the rapidity of the paper loss. I was at 2.66% up on 1/25, here we are 15 days later and I am -2.81% down. The PP is mitigating the downturn, but it is still a painful 5.5% turn negative.
Finally, someone coming to my point of view.
PP has provided absolutely zero benefit during this downturn.
Only reason PP is losing slightly less is the lower allocation to equities. This lower allocation comes with MUCH lower gains when stocks rise.
Dont forget. Gold went from ~$1240/oz to ~$1320/oz in the last 60 days. Thats about 6.5% up.

So not only shouldn't one be looking at gold "responding to" stocks within a couple days, but Id advocate looking weeks/months *before* as well.
Sure, but let's not forget LTT's are down almost 8% YTD.
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buddtholomew
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Re: Is the PP going to hold up?

Post by buddtholomew » Fri Feb 09, 2018 3:14 pm

dualstow wrote:Budd, if I recall correctly, you are quite well off. (Publicly stated). You should be relaxing, and not sweating this at all.
Failing that, I just want to know if you simply feel like venting and don't actually need a response, or if you are looking for answers that you haven't gotten yet. I'm asking sincerely, not sarcastically.
DS, I'm not sweating the losses at all since they are minor in comparison to the gains we have seen in the PP.
If the threshold is > 20% decline before Gold and LTT's respond then I need to rethink whether the PP is for me.
With a 20% decline I am exchanging into stocks and may never benefit from Gold or LTT's if Stocks continue to fall (I will be re-balancing into stocks).
Maybe its just Stocks and Cash.
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dualstow
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Re: Is the PP going to hold up?

Post by dualstow » Fri Feb 09, 2018 3:16 pm

Makes sense.
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eufo
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Re: Is the PP going to hold up?

Post by eufo » Fri Feb 09, 2018 3:27 pm

bitcoininthevp wrote:
eufo wrote: RE: Bitcoin... If anyone is selling equities to run to Bitcoin as a safe haven, I think they are making a gross error that will prove disastrous.
I agree with this.

On a related topic, I would like to put in an application for a new portfolio.

I see GB, Coffeehouse, Swensen all have their own. And I'm jealous.

I propose a portfolio which is a traditional permanent portfolio mix with a bitcoin variable portfolio sidecar.

Hows:
  • 24% gold
    24% cash
    24% stocks
    24% long term bonds
    4% bitcoin
Turns out the back testing is amazing.

Ill need your help with the name.
"Bittersweet"?

I like the concept, btw.
Don't agree with me too strongly or I'm going to change my mind
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ochotona
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Re: Is the PP going to hold up?

Post by ochotona » Fri Feb 09, 2018 4:04 pm

The Little Bit portfolio
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Re: Is the PP going to hold up?

Post by Mr Vacuum » Fri Feb 09, 2018 8:02 pm

dualstow wrote:
I'll be nibbling at stocks on a regular (weekly) schedule, but I think the dumbest thing I can do is make that equity-heavy fantasy a reality, even if stocks continue to drop. My thought for the day is stay the course.
dualstow, I forget your plan. Is that nibble a long term increase plan or micro rebalancing or what?

I so badly want to buy some whenever it drops a few percent, but that has never once worked out for me—even in late 2008, already way farther down than a few percent, it just kept going down. So that is my stay the course self admonition.
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