Stock scream room

Discussion of the Stock portion of the Permanent Portfolio

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dualstow
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Re: Stock scream room

Post by dualstow » Wed Sep 18, 2019 7:58 pm

That all makes sense, especially firewalling the pp. At first it seemed strange that new money from wages would go to the vp, but - it has to come from somewhere. (My vp came from savings/windfall, so I hadn’t thought about it much. And yes, same deal as with my question about new money- it could have gone to the pp instead).
Fri, Oct 11: Once again, I am happy for PointedStick. Last I heard, he was all in stocks.
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Smith1776
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Re: Stock scream room

Post by Smith1776 » Thu Sep 19, 2019 2:34 am

It can definitely be difficult to maintain that firewall between your PP and VP (that's what she said), even if you have an explicit plan to do so.

The temptation to replenish the VP with PP cash can also be hard to resist.

My PP components are all ETFs, while my VP components are all individual stocks. This difference in form has made it a little bit easier in my case.

If I used the same investment vehicles in both the PP and VP that might muddy the waters.
V = E * (8.5 + 2G)
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sophie
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Re: Stock scream room

Post by sophie » Sat Sep 21, 2019 7:26 am

Yes, HB did indeed caution that the PP is not to be a pool to replenish the VP when your bets go bad. You have a fixed amount of cash to start your VP, and if you lose it, c'est la vie.

If your active stock trading is 20% of your assets, then you don't have a PP - you have an actively managed portfolio that happens to include some PP assets. If you're comfortable with that, more power to you - but it really is something different from the passive investing philosophy that's at the core of the PP.

Also note - the many discussions about stock signals that have dominated the board lately were not (as now claimed) limited to VP speculation - I read these as applying also to the PP stock allocation. Please chime in if that's not correct. It would be good to clarify this because people new to the PP sometimes come here for information, and they could end up getting mixed/confusing messages.
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