Is It Time For PRPFX To Shine?

Discussion of funds that implement the Permanent Portfolio strategy

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Reub
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Is It Time For PRPFX To Shine?

Post by Reub » Tue Jun 02, 2015 5:17 pm

PRPFX has been an underperformer, mostly due to their lighter weighting in long term treasuries. With this smaller exposure to bonds (and their recent very bearish nature) and with their ownership of commodities, agriculture, silver and Swiss Francs, is this their time to outperform the vanilla PP?
Last edited by Reub on Tue Jun 02, 2015 5:21 pm, edited 1 time in total.
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buddtholomew
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Re: Is It Time For PRPFX To Shine?

Post by buddtholomew » Tue Jun 02, 2015 5:21 pm

Not sure Reub but even cash is outperforming the PP.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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Re: Is It Time For PRPFX To Shine?

Post by sophie » Tue Jun 02, 2015 7:39 pm

Dear Resident Worrier,

The PP has definitely been on a roller coaster this year, but it's hardly a disaster.  Still not tempted to jump to PRPFX either.

YTD:  PP 0.4%, PRPFX 0.7%
Last 12 months:  PP 4.4%, PRPFX -2.5%

The question is what are you comparing to?  Surely not 100% stocks (VTI YTD:  3.9%), or is it a 50/50 total stock/total bond mix (YTD 2.2%)?  These have been doing quite well, and will continue to - until they don't.

Why don't you split your portfolio between the PP and a standard stock/bond allocation of your choice?  Then you can focus on whichever one is doing well at the time, and also you will have hedged your bets.
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MachineGhost
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Re: Is It Time For PRPFX To Shine?

Post by MachineGhost » Wed Jun 03, 2015 9:55 am

sophie wrote: Why don't you split your portfolio between the PP and a standard stock/bond allocation of your choice?  Then you can focus on whichever one is doing well at the time, and also you will have hedged your bets.
Logically, it should be compared to the global financial asset portfolio which is broad 55% bonds, 45% equity.  That's the only true passive allocation since you're not making any decisions regarding subsets.

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Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
LC475
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Re: Is It Time For PRPFX To Shine?

Post by LC475 » Wed Jun 03, 2015 11:27 am

MachineGhost wrote: That's the only true passive allocation since you're not making any decisions regarding subsets.
::)
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buddtholomew
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Re: Is It Time For PRPFX To Shine?

Post by buddtholomew » Wed Jun 03, 2015 11:41 am

Sad to watch the PP perform so poorly  :(
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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Re: Is It Time For PRPFX To Shine?

Post by Reub » Wed Jun 03, 2015 2:28 pm

All of that pie is making me hungry!
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Re: Is It Time For PRPFX To Shine?

Post by Pointedstick » Wed Jun 03, 2015 3:03 pm

Reub wrote: All of that pie is making me hungry!
Hear, hear!
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Re: Is It Time For PRPFX To Shine?

Post by MediumTex » Wed Jun 03, 2015 4:38 pm

buddtholomew wrote: Sad to watch the PP perform so poorly  :(
Compared to what?
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Desert
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Re: Is It Time For PRPFX To Shine?

Post by Desert » Wed Jun 03, 2015 6:32 pm

MachineGhost wrote:
Logically, it should be compared to the global financial asset portfolio which is broad 55% bonds, 45% equity.  That's the only true passive allocation since you're not making any decisions regarding subsets.
I think you've been hanging out with Cullen lately.  :)

I think Cullen Roche is making a decent point.  There is no truly passive, all-market-encompassing portfolio.  Even the pie chart is missing a lot of categories, including gold, non-public-REIT real estate, etc.  So I agree with his general point, that we're all active investors to some degree.  But I think he's being a bit too dramatic with his discussion; maybe because of the way "passive investors" are freaking out about it.  In my view, there is a broad spectrum from "largely passive" to "hyperactive."  The PP is closer to "largely passive," even though it deviates dramatically from the "market." 
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buddtholomew
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Re: Is It Time For PRPFX To Shine?

Post by buddtholomew » Wed Jun 03, 2015 6:57 pm

MediumTex wrote:
buddtholomew wrote: Sad to watch the PP perform so poorly  :(
Compared to what?
You pick.
"The first principle is that you must not fool yourself and you are the easiest person to fool" --Feynman.
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MachineGhost
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Re: Is It Time For PRPFX To Shine?

Post by MachineGhost » Wed Jun 03, 2015 7:12 pm

Desert wrote: I think Cullen Roche is making a decent point.  There is no truly passive, all-market-encompassing portfolio.  Even the pie chart is missing a lot of categories, including gold, non-public-REIT real estate, etc.  So I agree with his general point, that we're all active investors to some degree.  But I think he's being a bit too dramatic with his discussion; maybe because of the way "passive investors" are freaking out about it.  In my view, there is a broad spectrum from "largely passive" to "hyperactive."  The PP is closer to "largely passive," even though it deviates dramatically from the "market."
Yeah, especially since he's using 2011 data rather than 2014.  But the PP is definitely an active stance to specifically protect against all economic climates as possible.  What's wrong with that?

I think one of the main benefits that gets overlooked in having a truly global financial portfolio is you never need to rebalance.  Ever.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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