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General Discussion on the Permanent Portfolio Strategy

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mathjak107
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Re: No where to hide

Post by mathjak107 » Fri Jul 10, 2015 7:03 pm

it was less than the pp , i don't remember the exact number at the low as it was all over the place .  what did the pp in was not only the big drop in stocks but the  wicked falls in long term bonds and the drop in gold.

i only had 50% in equities and the short term bond funds hardly moved  downward .  in all fairness though there was a bit of arbitrage going on since i was selling gld and tlt before they plunged that bad and bought assets like veu and vanguard extended index which initially fell more so i got to buy them on sale .

the only big dip i took was the 350 point one which was about 13 or 14k  but i can't really say what low to low worked out to . but i did still have my older funds  which i held from the insight newsletter and of course they fell too but i can't really remember how much they were down  so i was only tracking the etf's i just bought since they changed price all day. the day of the big did i don't think i even bothered to glance at the total number .

but the important thing is i can say as of today i am only .40% away from even    while the pp still shows down  a lot
Last edited by mathjak107 on Fri Jul 10, 2015 7:13 pm, edited 1 time in total.
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Re: No where to hide

Post by buddtholomew » Fri Jul 10, 2015 7:13 pm

mathjak107 wrote: it was less than the pp , i don't remember the exact number at the low as it was all over the place .  what did the pp in was not only the big drop in stocks but the  wicked falls in long term bonds and the drop in gold.

i only had 50% in equities and the short term bond funds hardly moved  downward .  in all fairness though their was a bit of arbitrage going on since i was selling gld and tlt before they plunged that bad and bought assets like veu and vanguard extended index which initially fell more so i got to buy them on sale .

the only big dip i took was the 350 point one which was about 13 or 14k  but i can't really say what low to low worked out to .

i can say as of today i am only .40% away from even    while the pp still shows down  a lot
PP is down .41% for the week (28s/22g/23b/27c)
70/30 allocation was down 1.18% at the low of the week on 7/8
70/30 after purchasing international stocks on 7/8 is up .22%
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Re: No where to hide

Post by mathjak107 » Fri Jul 10, 2015 7:19 pm

equty's recovered nicely .  those long term bonds were really hammered this week and didn't recover .  gold i think was down too and stayed down.

lets see what monday morning brings .


i just got the news letter update .

the growth and income model  was down .30% on the week and up 2.1% ytd

the bond heavy income and capital preservation model was down .20% and up 1.1% ytd.

the growth model was down .30% too but up 4.70% ytd
Last edited by mathjak107 on Fri Jul 10, 2015 7:20 pm, edited 1 time in total.
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Re: No where to hide

Post by Cortopassi » Mon Aug 24, 2015 8:33 am

This seemed the appropriately titled topic to restart today...
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Re: No where to hide

Post by Cortopassi » Mon Aug 24, 2015 8:37 am

For posterity:

Image

At the same moment gold, up $5.90 and TLT up 1.72%
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Re: No where to hide

Post by Pointedstick » Mon Aug 24, 2015 9:04 am

As of right now, the PP sure seems like a good place to hide. :)
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Re: No where to hide

Post by buddtholomew » Mon Aug 24, 2015 9:16 am

Pointedstick wrote: As of right now, the PP sure seems like a good place to hide. :)
Not really...gold and treasuries aren't doing anything.
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Re: No where to hide

Post by Matthew19 » Mon Aug 24, 2015 9:22 am

all that money from stock sells has to go somewhere eventually. Give it a little while, like 2008.
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Re: No where to hide

Post by Tom » Mon Aug 24, 2015 9:34 am

buddtholomew wrote:
Pointedstick wrote: As of right now, the PP sure seems like a good place to hide. :)
Not really...gold and treasuries aren't doing anything.
I wouldn't say they haven't done anything.  In the last week gold has gone up about $50 an ounce an my TLT holdings have gone up by a few bucks per share.  They aren't skyrocketing immediately (that takes time for the market to decide to fiercely react or not), but they're going up and not losing - so it's making some movement to counteract and minimize losses, which is what we want.
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Re: No where to hide

Post by buddtholomew » Mon Aug 24, 2015 9:39 am

Tom wrote:
buddtholomew wrote:
Pointedstick wrote: As of right now, the PP sure seems like a good place to hide. :)
Not really...gold and treasuries aren't doing anything.
I wouldn't say they haven't done anything.  In the last week gold has gone up about $50 an ounce an my TLT holdings have gone up by a few bucks per share.  They aren't skyrocketing immediately (that takes time for the market to decide to fiercely react or not), but they're going up and not losing - so it's making some movement to counteract and minimize losses, which is what we want.
It's so minimal you might as be fully invested in equities if this is the way gold (down) and treasuries (slightly positive) respond when the DOW falls 1000 points in a day...
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Re: No where to hide

Post by Pointedstick » Mon Aug 24, 2015 9:45 am

You're welcome to become "fully invested in equities" if it would make you feel better. Today would certainly be a good day to start!
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Re: No where to hide

Post by buddtholomew » Mon Aug 24, 2015 9:51 am

Pointedstick wrote: You're welcome to become "fully invested in equities" if it would make you feel better. Today would certainly be a good day to start!
Better than losing on the way up AND on the way down, no? It's not like the PP is offsetting losses...you just have less in equities.
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Re: No where to hide

Post by dutchtraffic » Mon Aug 24, 2015 9:52 am

buddtholomew wrote:
Tom wrote:
buddtholomew wrote: Not really...gold and treasuries aren't doing anything.
I wouldn't say they haven't done anything.  In the last week gold has gone up about $50 an ounce an my TLT holdings have gone up by a few bucks per share.  They aren't skyrocketing immediately (that takes time for the market to decide to fiercely react or not), but they're going up and not losing - so it's making some movement to counteract and minimize losses, which is what we want.
It's so minimal you might as be fully invested in equities if this is the way gold (down) and treasuries (slightly positive) respond when the DOW falls 1000 points in a day...
Yes, because we all know the volatility of 100% equities has exactly been the same as the PP...right?

You get 3 heartattacks when your portfolio is down 0.02%, and now you want to switch to 100% equities?

I'm really thinking this guy is a troll, cannot be serious.
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Re: No where to hide

Post by buddtholomew » Mon Aug 24, 2015 10:06 am

Maybe the PP is showing you something it's not showing me.

The only difference between a stock heavy allocation and the PP during this downturn is the percent allocated to equities.

Gold is DOWN
LTT's up .26%

DOW down 500
Last edited by buddtholomew on Mon Aug 24, 2015 10:07 am, edited 1 time in total.
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Re: No where to hide

Post by Pointedstick » Mon Aug 24, 2015 10:16 am

Budd's most immediate problem is that he's invested in a portfolio that he doesn't trust. As a result, whenever it fails to deliver the promised goods even over an unreasonably short period of time (i.e. the day-to-day noise), he sees this as evidence that the portfolio is broken and its promoters are brainwashed fools affected by groupthink.

Budd's deeper problem is that he wants the upside potential of equities without their downside risk. He believed that the PP offered this, but was mistaken, and now, having realized his mistake, he subscribes to the sunk-cost fallacy and is so loss-averse that he doesn't want to exit the PP even though he now realizes it doesn't do what he says it does.
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Re: No where to hide

Post by Tom » Mon Aug 24, 2015 10:19 am

buddtholomew wrote: The only difference between a stock heavy allocation and the PP during this downturn is the percent allocated to equities.

Gold is DOWN
LTT's up .26%

DOW down 500
Depends on how heavy the stock heavy allocation is.  The PP is down 1.66% YTD where as stocks are down 6.56% YTD.  Also to consider is the month to month psychology of it.  This month PP is up .75%, stocks have dropped 8.9% - a lot of that in just the last few days.  You can't discount the psychological factor of watching 8.9% of what you own going away in a few days (I know it's less in allocated portfolio that's heavier on stocks).
Last edited by Tom on Mon Aug 24, 2015 10:21 am, edited 1 time in total.
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Re: No where to hide

Post by dualstow » Mon Aug 24, 2015 10:40 am

The Dow was down as much as 1,000 points for a while this morning.
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Re: No where to hide

Post by Tom » Mon Aug 24, 2015 11:05 am

buddtholomew wrote:
Tom wrote:
buddtholomew wrote: Not really...gold and treasuries aren't doing anything.
I wouldn't say they haven't done anything.  In the last week gold has gone up about $50 an ounce an my TLT holdings have gone up by a few bucks per share.  They aren't skyrocketing immediately (that takes time for the market to decide to fiercely react or not), but they're going up and not losing - so it's making some movement to counteract and minimize losses, which is what we want.
It's so minimal you might as be fully invested in equities if this is the way gold (down) and treasuries (slightly positive) respond when the DOW falls 1000 points in a day...
Didn't see this comment and said this in my last post, but to your point of it being minimal - if you were 100% in equities you'd be down 6.56% as opposed to 1.66% in a 4x25 HBPP.  Perhaps you consider that minimal to relative to the potential gains.  Most here wouldn't and is why we do what we do.  We'll accept less return for less volatility and less risk.
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Re: No where to hide

Post by iwealth » Mon Aug 24, 2015 11:31 am

By far the most volatile market day I've ever witnessed.

Some examples of prints we saw this morning. It'd have been tough if not impossible to catch these, but they were definitely buyable on the way up:

SPY ETF: $182.40
VTI ETF: $93.00
QQQ ETF: $84.74

Apple: $92.00
Netflix: $85.50
Gilead: $86.00
McDonalds: $87.50
Verizon: $38.06 (!)
Pepsi: $76.48
General Electric: $19.47

It was common to see buyable 15-20% drops in some very blue chip names. Last time it happened was the 2010 flash crash. But that was significantly different in that it was driven by a fat finger mistake further compounded by algorithmic selling. This time looked to be a total liquidity crunch...probably massive selling by funds compounded by margin calls compounded by stop losses, etc., etc.

Just wow.
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Re: No where to hide

Post by mathjak107 » Mon Aug 24, 2015 11:37 am

amazingly market down 163 as of now . phew! what a swing .
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Re: No where to hide

Post by dutchtraffic » Mon Aug 24, 2015 11:43 am

mathjak107 wrote: amazingly market down 163 as of now . phew! what a swing .
That's the PPT, the reason for the drop is still very much there.
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Re: No where to hide

Post by Cortopassi » Mon Aug 24, 2015 11:48 am

Somebody, somewhere, sold when the market was being drawn down 1000, 900, 800, 400 points because of fear.

PP is doing the job of minimizing this.

And as dutch says, not like it's all hunky dory all of a sudden, we had a 6% or 7% drop, recovered and hey, the correction is over.  This seems to be the start of an even more very volatile period.
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Re: No where to hide

Post by Tyler » Mon Aug 24, 2015 12:24 pm

Cortopassi wrote: Somebody, somewhere, sold when the market was being drawn down 1000, 900, 800, 400 points because of fear.
I feel sorry for people who got hammered by stop losses this morning.  Trying to get in and out of a volatile market, even semi-passively, just doesn't always work out the way you planned. 
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Re: No where to hide

Post by dualstow » Mon Aug 24, 2015 1:22 pm

Cortopassi wrote: Somebody, somewhere, sold when the market was being drawn down 1000, 900, 800, 400 points because of fear.
There's a recent tweet from Garry Shandling that reads
please buy my stock tomorrow
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Re: No where to hide

Post by LC475 » Mon Aug 24, 2015 1:33 pm

buddtholomew wrote: Is anyone disputing the fact that a US-centric equity allocation outperformed (past tense) the PP over an arbitrary period of time?
Over any arbitrary period of time?  Of course I would disagree with that, only because it's clearly not true.  I would not actually dispute such a claim, because it's so obviously and easily verifiably not true that it's not worth my time to actively dispute it.
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