Our forum and viewer traffic

[moda0306]

I wish I could have felt what few did in 2008 being in the PP (I was a 100% stock plus tiny emergency fund type of guy... though I was sure to "diversify" into REITs and EM), seeing HB's theories about gold not reacting like other commodities in an economic collapse and LT bonds being the savior (hadn't really played that role to a huge degree yet) must have been a great feeling.  To see it stiff-arm a deflationary financial crisis like that must have been something else.

I wish HB would have been around to see it.

[MediumTex]

I wish HB would have been around to see it.

Most of the models telling us what was supposed to happen in 2008 failed.

HB's model in the form of the PP succeeded brilliantly.

The longer I spend with the PP, the more I realize how stubborn certain unproductive mental habits can be.  I think most people simply don't want to see the truths that the PP embraces, namely that the world is a profoundly uncertain place, no one knows the future, and what many people think of as "investing" is really just gambling.

[6 Iron]

I must say, I am impressed that the Badger and Blade shaving forum's "general discussion" section has generated 335,000+ posts.  I didn't know there was this much to be said about separating oneself from one's body hair.

And individual contributors with 1000's of posts. Our board and this concept offers so much more to discuss, yet is not in the same ballpark in terms of appeal to "average Joe" or even "above average Joseph". I agree with those who appreciate the kindness and insight of the people that we have discussing the PP, and the troll free environment. This, and its progenitor, the HB megathread have had a huge impact on me. Still, some days, when the posting is down to a slow trickle, I just want more. More insights, more opinions, even more chaps. 

[craigr]

I wish I could have felt what few did in 2008 being in the PP (I was a 100% stock plus tiny emergency fund type of guy... though I was sure to "diversify" into REITs and EM), seeing HB's theories about gold not reacting like other commodities in an economic collapse and LT bonds being the savior (hadn't really played that role to a huge degree yet) must have been a great feeling.  To see it stiff-arm a deflationary financial crisis like that must have been something else.

I wish HB would have been around to see it.

I was there. Late October/Early November was interesting (about -15% down at the worse if I recall?). Then the LT bonds took off like a rocket once people started figuring out what was going on with housing price collapses. I was pretty relaxed the rest of the year and after that I had a pretty good feeling about HB's ideas. They worked exactly as good economic theory suggested. HB was way ahead of his time. IMO.

[HB Reader]

I wish HB would have been around to see it.

I was pretty relaxed the rest of the year and after that I had a pretty good feeling about HB's ideas. They worked exactly as good economic theory suggested. HB was way ahead of his time. IMO.

Yeah, I also wish HB was still around.  I remember going into a store in Denton, Texas in 1974 to buy HB's "You Can Profit From a Monetary Crisis" book.  The store clerk said that they didn't have it, but that I really didn't need to buy it because he could sum up HB's advice in a few words: "Buy gold, silver & Swiss francs."  I sure am glad I persisted and found the book (and his earlier ones) elsewhere.  It quickly became clear to me that HB knew more about economics than any of my college professors.

Back then, I never could have imagined that several years later he would add stocks, T-Bills and LT Treasuries to the mix.  Or that the events of 2008 would occur.  Or that there would ever be anything like the internet or this forum, for that matter.

[moda0306]

For a guy who timed getting in and out of precious metals so well, as well as advocating the perfect alternative providing amazing diversification, his humility is really something to behold.

Part of me thinks the PP will be a passing fad for most based on how it's explained in articles nowadays, as so many of them talk about back-tested returns and lack of volatility, but not some of the deep macroeconomic principals that make these assets move.  Until one understands those principals (and more importantly, how other instruments are fundamentally flawed), this portfolio may seem "lucky" or "too good to be true."  As I've mentioned, I think the two most important distinctions that need to be made is the LT treasury vs corporate or muni bonds, and gold vs commodity baskets.

It's difficult for most to invest in commodities in general, but if they do it's extremely easy to fall into the logic that a commodity basket diversifies more than gold does (in fact, I once had the attitude that because of golds lack of industrial value it'd be the LAST commodity I'd want to have in a safe).  It's tough to explain how this ISN'T true.  Further, it's difficult to get people to appreciate the volatility of long-bonds (bonds are supposed to be stable!!) and once again it's very easy to fall into the logic that a "total bond fund" or a "world bond fund" is much more diversified than buying 30-year treasuries.

Combine all the preferred stock, junk bond, muni bond, TIPS, REIT, and EM options out there, and the ability to be disguised by "mirage diversification" is extremely high to those that don't understand the PP.  Most articles that float the PP out there don't properly explain this.  They give passing mention to the 4 economic cycles, but don't explain how other assets fall-short.  I was fully comfortable considering my house my inflation hedge until maybe a year ago.  Wishful thinking and groupthink can turn investing strategy's into one giant house of cards, and it's difficult to wash away the pre-conceived notions that are reinforced by those two phsychological enemies.

[TBV]

PP adherents encounter skepticism from those who ridicule the asset mix, while ignoring the fact that it is, in fact, a mix: one which delivers returns and security not associated with its individual components in isolation.  Other skeptics point out that the PP's returns are not as good as properly timed speculative investments.  True enough, but these same people cannot explain how to successfully speculate prospectively, especially over several decades.  Looking back, it seems that the 4x25 strategy attracts more followers when times are tough, but not when prosperity reappears. So be it.

Centuries ago, some societies were convinced that human sacrifice was a reliable strategy for ensuring a bountiful harvest. Today, we take other, equally suspect measures to try to stimulate the economy.  However, in investing as with economic prognostication, only results matter.  HB's PP has done well, but perhaps not well enough to suit everyone's taste. So be it.

Just as some people spend their free time relaxing while others go bungee jumping, our risk/reward outlooks can vary substantially.  The sad thing is when people pursue an approach which fails to satisfy their needs, needs they may not have been fully aware of at the start.  So much of investing is about self-awareness.  How much risk can we tolerate?  How much are we really committed to long term results?  Is the "action" more thrilling than whether we win or lose? Is a bird in the hand really better in our minds than two in the bush?  For many who already know the answers to these questions, the PP is a wise choice.

[LifestyleFreedom]

Part of me thinks the PP will be a passing fad

I agree with you and so does noted financial author William Bernstein (http://www.efficientfrontier.com/ef/0adhoc/harry.htm): There’s nothing wrong with Harry’s portfolio—nothing at all—but there’s everything wrong with his followers, who seem, on average, to chase performance the way dogs chase cars.

Bernstein is approaching The Permanent Portfolio from Modern Portfolio Theory, where asset allocation explains much of the investment return.  Harry Markowitz wrote the defining paper on Portfolio Selection back in 1952 (http://www.gacetafinanciera.com/TEORIARIESGO/MPS.pdf) and was awarded the Nobel Prize for it in 1990 (which gave the concept a lot of publicity).  The idea is that by picking a portfolio of volatile assets that are minimally correlated, the volatility of the overall portfolio is reduced because the volatility of the various assets cancel each other out to some extent.  Some assets zig, while others zag, in other words.

Browne tried to explain the non-correlation of stocks, bonds, gold, and cash in terms of macro-economic cycles, while other practitioners of asset allocation look at historical correlation to make the portfolio selection.  Because of the madness of crowds, investors jump on something that works, which makes it not work, and then they move on.  When a lot of people buy and sell the same non-correlated assets all at the same time, the assets start become correlated to each other.

I suppose this means one should "buy and hold" the Permanent Portfolio, and re-balance accordingly, to build and preserve wealth because it means one is ignoring the crowds and their fads over a long period of time.

[brajalle]

I think part of the reasons the traffic isn't higher is because of the simplicity of the portfolio and the conversations around it.  Inevitably, once tweaks are brought up, it ends up coming back to - just stick to 4x25.  Not that it's bad, but it sort of makes lively discussion of the portfolio a bit slower and less exciting.  I mean, you can pretty much predict the content of each of our forums in large part. 

One of the reasons bogleheads has so much traffic for example, is because it covers such a broad range of topics, same with fatwallet, etc.  This site is very narrow, without much deviation beyond simple PP stuff, so the discussion and audience is much smaller. 

If the goal is a broader, more lively audience, the topics must diversify, as right now, the audience size and traffic is probably fairly appropriate when it comes to Harry Browne's Permanent Portfolio. 

[fnord123]

I'd like to add my voice to the chorus of thanks to craigr, MT, and really pretty much the entire population of the forum.  The maturity people have shown in debating some pretty hot topics continues to impress me, and it is great to have a place that is dedicated to the PP.

[steve]

Our topic should be how to not get shaved financially by brokers and high expenses and others who try to remove you from your money.

I agree. These forums are an oasis amidst a sea of cacophony!

We definitely need a shaving section though. 

For example, I saw a link on the boglehead forum to a site dedicated to safety razors,

http://badgerandblade.com/vb/