Gyroscopic Investing

Appreciate all the responses, thank you.
I bought more SCV today and I’m not sure I would have if I wasn’t invested in the PP.
I’m obviously watching too closely and it is bothering me.
Will try in the new year to stop this insanity.
Still trying to wrap my head around PP expectations, just don’t want to be caught again if/when stocks recover and Gold/LTT’s sell off.

I am a recovering Buddaholic. But today I had a good day.

I typed up a response (reaction) to Budd's latest. Accurate, filled with facts, witty, with a slight bit of snark...but then I deleted it.

Today, was a good day.

Kbg wrote: ↑Thu Dec 06, 2018 6:02 pm I am a recovering Buddaholic. But today I had a good day.

I typed up a response (reaction) to Budd's latest. Accurate, filled with facts, witty, with a slight bit of snark...but then I deleted it.

Today, was a good day.

You’ve made your point a few times already and I get it.
Thanks for being kind.

Kbg wrote: ↑Thu Dec 06, 2018 6:02 pm I am a recovering Buddaholic. But today I had a good day.

I typed up a response (reaction) to Budd's latest. Accurate, filled with facts, witty, with a slight bit of snark...but then I deleted it.

Today, was a good day.

Good one, Kbg. Your struggle is shared by many. As tiresome as the fallacies and repetition are, I guess it keeps us all sharp. But pity the fool who searches for “does the PP work?” and finds these threads.

Mr Vacuum wrote: ↑Fri Dec 07, 2018 8:07 am

Kbg wrote: ↑Thu Dec 06, 2018 6:02 pm I am a recovering Buddaholic. But today I had a good day.

I typed up a response (reaction) to Budd's latest. Accurate, filled with facts, witty, with a slight bit of snark...but then I deleted it.

Today, was a good day.

Good one, Kbg. Your struggle is shared by many. As tiresome as the fallacies and repetition are, I guess it keeps us all sharp. But pity the fool who searches for “does the PP work?” and finds these threads.

There’s a reason only a handful of investors own the PP and it’s not because it’s at the top of the pyramid year after year. I worry about those who believe the PP is the holy grail to investing when it most definitely is not. Funny how over the years others have come to the realization that a VP heavy in stocks is necessary to balance the 4x25. If you held 4x25 since 2008 how have you done? Poorly, that’s how. Now whose the fool?

The fool is the person who thought it had anything to do with the top of a pyramid.

Mr Vacuum wrote: ↑Fri Dec 07, 2018 10:32 am The fool is the person who thought it had anything to do with the top of a pyramid.

Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Cmon guys, this forum has generally been a civil place. Let's keep it that way.

Budd, we love you, but your posts CAN be a bit irritating. Day after day, more of the same. We get it, the PP ain't doing so great these days. Believe me, none of us are happy about that. The ones who are happy are the ones who only check in once a year. They get to miss all the drama.

Here's the thing, the PP was never designed to be a high-risk, high-reward portfolio. It's designed to be a low-risk, moderate-reward portfolio. Harry Browne said that it's for the money that you CAN'T AFFORD TO LOSE. That's it. It's not meant for your speculative investments that you hope will do really well, although you realize there's a chance they won't. You already realize this, because you're only 40% in the PP anyway, or something like that. So, why all the griping? It gets old after a while.

We get it, the PP ain't doing so great these days. Believe me, none of us are happy about that.

As I recall, this is the first post that actually agrees with my point of view...many, if not all others, continue to voice how pleased they are with the portfolio performance and I just can’t align with that perspective.

Like I said, I continue to invest in the 4 asset classes, just not 4x25. I was one of those youthful investors 10 years ago who challenged 4x25, only to find out that those who opposed my position either had a healthy dose of stocks or never held the PP in the prescribed allocation ever. Others have long since abandoned the portfolio or returned with a different allocation altogether. Obviously, there are some that have stayed the course.

So yes I have disdain for those “cocky” individuals especially now that the performance bears out my concerns.

Some comparisons. Portfolio 1 is the PP, 2 is 60/40, 3 is 100 stock

From my investing start, 1989. Comments. I stuck through the dot com bubble, but sold out in 2008. Regardless, although the PP is lower across the board, after a slow, steady 20 year rise of the PP, stocks collapsed to be nearly even with it, and has been on a lower trajectory since then, but still up.

We are down over 400 points again right now. Gold is up decently. Treasuries flat. So much of this is recency bias. PP is doing what it is meant to, for me at least. Keeping me calm and not caring about the breathless reporting of the "stock market plunging" which I am sure is all over the news right now.



Someone near retirement, started investing in 1974 (data only goes to 1978)



Someone at 40, start 2000:



Starting 2008:

buddtholomew wrote: ↑Fri Dec 07, 2018 11:51 am Like I said, I continue to invest in the 4 asset classes, just not 4x25.

That's true for many of us here, yet somehow we're able restrain ourselves from bellowing "OMG the PP sucks!" every time something happens in the markets.

flyingpylon wrote: ↑Fri Dec 07, 2018 1:09 pm

buddtholomew wrote: ↑Fri Dec 07, 2018 11:51 am Like I said, I continue to invest in the 4 asset classes, just not 4x25.

That's true for many of us here, yet somehow we're able restrain ourselves from bellowing "OMG the PP sucks!" every time something happens in the markets.

That’s my point, flyingpylon - very rare to find someone who holds 4x25. Perhaps if you did, you may understand my frustration. Nevertheless, it is over the top. That much I do understand.

Budd, I don't think you get our point. Even Harry Browne wasn't 4 x 25, and he was the inventor of the PP. He was only 4 x 25 for a certain portion of his portfolio -- the portion that he figured was too important to bet on riskier investments. Each PP investor has to figure out for themselves what that portion is.

stuper1 wrote: ↑Fri Dec 07, 2018 2:14 pm Budd, I don't think you get our point. Even Harry Browne wasn't 4 x 25, and he was the inventor of the PP. He was only 4 x 25 for a certain portion of his portfolio -- the portion that he figured was too important to bet on riskier investments. Each PP investor has to figure out for themselves what that portion is.

If you change the allocation to suit your needs, then the PP no longer exists as advertised.
What is so special about stocks, bonds, gold and cash...most investors hold ALL these assets in proportions other than 4x25%.
If there's no magic to being agnostic about the future (equal parts, 25% each for economic environments) then what the hell are we doing here.
The more you move away from 4x25, the closer you are to a traditional Boglehead portfolio with a sliver of gold.
Where's the genius and ingenuity...you're telling me it doesn't exist as HB himself only held the PP for a portion of his investments.
What a farce.

After years of under-performing a traditional 60/40 SPY/BND portfolio, the PP is now -4% lower than this allocation YTD. Please...

They say that money can't buy happiness.

However, it can buy books ... which is almost the same thing.

You could do worse than starting with some of HB's. Or the Bible. Or both.

stuper1 wrote: ↑Fri Dec 07, 2018 6:56 pm They say that money can't buy happiness.

However, it can buy books ... which is almost the same thing.

You could do worse than starting with some of HB's. Or the Bible. Or both.

You’re right, I have enough.

buddtholomew wrote: ↑Fri Dec 07, 2018 10:37 am

Mr Vacuum wrote: ↑Fri Dec 07, 2018 10:32 am The fool is the person who thought it had anything to do with the top of a pyramid.

Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Budd, this has always been a very "hands-off" forum in terms of moderation. Please help us keep it that way. "Mr Vacuum Cleaner" has decided this forum is no longer worth his effort, and based on the personal attack here I don't think I blame him for that opinion.

Xan wrote: ↑Fri Dec 07, 2018 10:15 pm

buddtholomew wrote: ↑Fri Dec 07, 2018 10:37 am

Mr Vacuum wrote: ↑Fri Dec 07, 2018 10:32 am The fool is the person who thought it had anything to do with the top of a pyramid.

Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Budd, this has always been a very "hands-off" forum in terms of moderation. Please help us keep it that way. "Mr Vacuum Cleaner" has decided this forum is no longer worth his effort, and based on the personal attack here I don't think I blame him for that opinion.

Don’t really care; nothing here for me either but smoke and mirrors. I’ve had my fair share of negativity as well and am tired of being everyone’s “joke”. I’ll leave as well so the groupthink can continue without my involvement.

A waste of a decade but a valuable lesson.
I’m a winner investing in a loser.
Took me a while to figure out but thanks for making it easy.

buddtholomew wrote: ↑Sat Dec 08, 2018 7:56 am

Xan wrote: ↑Fri Dec 07, 2018 10:15 pm

buddtholomew wrote: ↑Fri Dec 07, 2018 10:37 am

Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Budd, this has always been a very "hands-off" forum in terms of moderation. Please help us keep it that way. "Mr Vacuum Cleaner" has decided this forum is no longer worth his effort, and based on the personal attack here I don't think I blame him for that opinion.

Don’t really care; nothing here for me either but smoke and mirrors. I’ve had my fair share of negativity as well and am tired of being everyone’s “joke”. I’ll leave as well so the groupthink can continue without my involvement.

A waste of a decade but a valuable lesson.
I’m a winner investing in a loser.
Took me a while to figure out but thanks for making it easy.

Good luck to you, budd. I'm sure you'll be fine. We should revisit where things are at in mid-2019.

Anti-hedge sentiment, one of the thousand points of light (?) ringing a bell at the top. Watch this Forum for the explosion of traffic after next major bear market, when actually it will be time to get back into the market.

buddtholomew wrote: ↑Sat Dec 08, 2018 7:56 am Don’t really care; nothing here for me either but smoke and mirrors. I’ve had my fair share of negativity as well and am tired of being everyone’s “joke”. I’ll leave as well so the groupthink can continue without my involvement.

A waste of a decade but a valuable lesson.
I’m a winner investing in a loser.
Took me a while to figure out but thanks for making it easy.

The only groupthink here is the idea that everyone has different goals for their investments, there can be different ways to achieve those goals, and that ultimately the individual investor has to do what feels right to them. Occasionally someone shows up that values pure financial performance above all else, which is fine, but then they blather on and on about how stupid and wrong everyone else is and how much the PP sucks.

Budd, I don’t know you at all but your behavior on the forum suggests that you lack emotional maturity. Life is not a race, you are not a “winner” and the PP is not a “loser”. Since you have plenty of money already, perhaps it would bring you more happiness to maximize the investments in other aspects of your life.

I consider the PP a "better" version of bonds. So when budd says "yea, but you need a lot of stocks in the VP" I am down with that. 60/40 stocks/PP, go for it. 50/50 like Markowitz? How about half stocks, half PP (or... 62.5% stocks, 12.5% LTTs, STTs, gold).

buddtholomew wrote: ↑Sat Dec 08, 2018 7:56 am

Xan wrote: ↑Fri Dec 07, 2018 10:15 pm

buddtholomew wrote: ↑Fri Dec 07, 2018 10:37 am Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Budd, this has always been a very "hands-off" forum in terms of moderation. Please help us keep it that way. "Mr Vacuum Cleaner" has decided this forum is no longer worth his effort, and based on the personal attack here I don't think I blame him for that opinion.

Don’t really care; nothing here for me either but smoke and mirrors. I’ve had my fair share of negativity as well and am tired of being everyone’s “joke”. I’ll leave as well so the groupthink can continue without my involvement.

A waste of a decade but a valuable lesson.
I’m a winner investing in a loser.
Took me a while to figure out but thanks for making it easy.

I hope you stick around. But if you don't you will be missed by me. You are trying very hard to get an allocation that fits. If you had to tell us the perfect allocation I would love to hear it. You have given this a lot of thought and I would be appreciative of where you are at the present time. This of course is Just a Budd allocation and it would be just for now. New effort and new knowledge might change this for the future.

buddtholomew wrote: ↑Sat Dec 08, 2018 7:56 am

Xan wrote: ↑Fri Dec 07, 2018 10:15 pm

buddtholomew wrote: ↑Fri Dec 07, 2018 10:37 am

Actually I think you are the fool.
I’ve run across people like you all my life, thinking they are superior than someone else in one way or another.
Again, humorous to me these are usually the losers of the bunch Mr. vacuum cleaner. Like the PP, you suck.

Budd, this has always been a very "hands-off" forum in terms of moderation. Please help us keep it that way. "Mr Vacuum Cleaner" has decided this forum is no longer worth his effort, and based on the personal attack here I don't think I blame him for that opinion.

Don’t really care; nothing here for me either but smoke and mirrors. I’ve had my fair share of negativity as well and am tired of being everyone’s “joke”. I’ll leave as well so the groupthink can continue without my involvement.

A waste of a decade but a valuable lesson.
I’m a winner investing in a loser.
Took me a while to figure out but thanks for making it easy.

Budd...90+ percent of the comments to you have simply been pick something you are happy with and don't expect literal daily non-correlation of assets. I can't speak for everyone on the board but the multiple Budd bursts got a bit annoying when the solution space is entirely within your span of control to do something about. We are all big boys and girls here and part of why we are here is to get some hand holding to keep the faith. And, I doubt most would mind holding yours metaphorically from time to time. But when someone thinks they are trying to assist and they get repeated face shots, at a point, one just thinks "Good lord man, just rebalance to something you can live with and let's be done with this."

Perhaps at this point we should just all move on to another subject. CraigR was correct...after awhile what else is there to say about the PP?

I also hope that both Budd and Mr Vacuum stick around. But if they don't, they're making the right choice for them.

I think Budd's is a cautionary tale. Rationally or not, I believe (and I bet many others here do too) that if I could only hit X million dollars in the brokerage account, then I wouldn't have to worry about money anymore. I could do something more productive and interesting with my life.

Budd has enough saved up for several lifetimes of comfortable living. Yet he's completely bent out of shape at the slightest loss. Not even loss: at the underperformance of his assets against some other asset he could have owned instead.

As an outsider to this situation, I can say that the right answer to Budd's money situation is to put it into, well, largely anything (apart from things that can really go to zero like a small number of individual stocks, junk bonds, etc) and then forget about it.

But would I really be able to do that if I were in that situation? Or would I be like Ebeneezer Scrooge, counting my millions every day to make sure I hadn't lost any? Or worse, counting to make sure I am growing richer as fast as I possibly can, and lamenting if otherwise?

What a pitiable life.

One thing the PP does for me is bring this "don't care" attitude into the here and now, without the millions in the bank. It's simple, it won't lose much, it will recover quickly, and its historical returns are respectable. Also because it's so smooth, I can plan on it being there in case I need to withdraw, whenever that might be. I still have to keep earning and saving, but I certainly hope that when that time is over, I will be doing other things with my life than worrying about not having maximized the gains in my savings.