Just thought I'd remind us all how far from mainstream the PP is in the financial media... every time I read an article like this I check to see how their portfolio stacks up with the PP, and the "gold is at a high and a bad buy," and "keep maturities short" arguments seem to weasle their way through 90% of these articles. They even say to "diversify your bond portfolio between corporate and government bonds." More mirage diversification for the sheeple they write these for.
The very picture at the top of the article is a picture of prominent politicians, probably trying to get us to think that this debt-crisis (or failure-to-raise-the-debt-ceiling crisis) could be a "disaster" that we have to "proof"... yet we shouldn't buy gold.
Though she doesn't give allocations, it goes without saying her portfolio would most-likely have been in pretty rough shape in 2008.
http://kiplinger.com/columns/picks/arch ... .html?si=1
"How to Disaster-Proof Your Portfolio"
Moderator: Global Moderator
"How to Disaster-Proof Your Portfolio"
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: "How to Disaster-Proof Your Portfolio"
I would say that one way to disaster proof your portfolio is to stop reading Kiplinger's.
People give Cramer a lot of grief for making obvious points and rolling out stale information on his show, but he isn't doing anything different than the Kiplinger's and Money magazines of the world have been doing for a long time.
People give Cramer a lot of grief for making obvious points and rolling out stale information on his show, but he isn't doing anything different than the Kiplinger's and Money magazines of the world have been doing for a long time.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: "How to Disaster-Proof Your Portfolio"
Ha.
Yes... but it sure is fun to go back into the sheeple's den once in a while. Their pathetic excuse for diversification is so dim-witted (for "professionals" to be recommending to the masses) and dis-proven (after 2008) that I don't get how they ever got their job.
Yes... but it sure is fun to go back into the sheeple's den once in a while. Their pathetic excuse for diversification is so dim-witted (for "professionals" to be recommending to the masses) and dis-proven (after 2008) that I don't get how they ever got their job.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: "How to Disaster-Proof Your Portfolio"
MediumTex wrote:I would say that one way to disaster proof your portfolio is to stop reading Kiplinger's.
That's funny. But, I see your point Moda. Investing-for-Sheeple is entertaining at times. But, it's also kind of sad because I used to believe that stuff. MT is right that people need to make their mistakes before they can see the wisdom of the PP. I know I did. And you have to get to a point where you realize that mainstream investment advice is all BS before you can accept how uncertain things really are.
Last edited by Gumby on Wed Jul 20, 2011 1:20 pm, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Re: "How to Disaster-Proof Your Portfolio"
It is sad.
I use the term "sheeple" because I used to be one... and to be honest it's REALLY hard to sift through the market noise, because it all seems to make 90% sense. "Rates are low so keep durations short, "diversify" into different types of bonds, keep some dry powder, "diversify" internationally and into REIT's and emerging markets." It just sounds so "right." I could sit in front of 9/10 people and look them in the eye and give a very reasonable defense of those strategies if I wanted to and they'd believe every word. But still, in the back of everyone's mind, they know there just is something NOT right. I could feel it with most investing strategies... that somehow there's a wrench in the whole works.
Then the PP comes along and people are so accustomed to the canned thoughts on investing that they scoff at it. Spend enough time with it and the underlying macroeconomic trends, and you see that it's more-or-less the answer to all the nagging fears and we had all those years while in our 10-fund "diversified," managed portfolios that performed well most of the time and even sounded like they made sense on most levels, but let's be honest... we knew there was something wrong with them. We knew there was a chink in the armor that we couldn't put our finger on... that there were too many rosy assumptions built into the "diversification" we were attempting to build our portfolios on. We knew that, but the alternative was to lose out to inflation and accept a pathetic return, and we'd be damned if that was going to happen, so we rolled the dice.
So many people have been duped by either lazy or self-enriching advisors and its enfuriating because you're talking about someone's life savings... not some consumer product you're trying ot sell. Some guy built his retirement running an honest business, and in 2008 his Wells Fargo financial advisor is just telling him to hold on while his 10-fund portfolio isn't working like the engineers said it would. Pretty soon, the annual fee on half the funds was actually higher than the trailing 10-year CAGR on the same funds.
I use the term "sheeple" because I used to be one... and to be honest it's REALLY hard to sift through the market noise, because it all seems to make 90% sense. "Rates are low so keep durations short, "diversify" into different types of bonds, keep some dry powder, "diversify" internationally and into REIT's and emerging markets." It just sounds so "right." I could sit in front of 9/10 people and look them in the eye and give a very reasonable defense of those strategies if I wanted to and they'd believe every word. But still, in the back of everyone's mind, they know there just is something NOT right. I could feel it with most investing strategies... that somehow there's a wrench in the whole works.
Then the PP comes along and people are so accustomed to the canned thoughts on investing that they scoff at it. Spend enough time with it and the underlying macroeconomic trends, and you see that it's more-or-less the answer to all the nagging fears and we had all those years while in our 10-fund "diversified," managed portfolios that performed well most of the time and even sounded like they made sense on most levels, but let's be honest... we knew there was something wrong with them. We knew there was a chink in the armor that we couldn't put our finger on... that there were too many rosy assumptions built into the "diversification" we were attempting to build our portfolios on. We knew that, but the alternative was to lose out to inflation and accept a pathetic return, and we'd be damned if that was going to happen, so we rolled the dice.
So many people have been duped by either lazy or self-enriching advisors and its enfuriating because you're talking about someone's life savings... not some consumer product you're trying ot sell. Some guy built his retirement running an honest business, and in 2008 his Wells Fargo financial advisor is just telling him to hold on while his 10-fund portfolio isn't working like the engineers said it would. Pretty soon, the annual fee on half the funds was actually higher than the trailing 10-year CAGR on the same funds.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: "How to Disaster-Proof Your Portfolio"
IMHO, a real appreciation for the PP requires humility, and often the only way to get this humility is to have the crap kicked out of you by the market repeatedly. When you begin to tire of this abuse, that's when something like the PP begins to make a lot of sense.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: "How to Disaster-Proof Your Portfolio"
MT,
I had little/no money in the market, but I could appreciate the gravity of losing that much wealth, and all the challenged assumptions during that time, as I was seeing what was happening.
I actually stumbled on the PP in an odd way. After 2008, I saw an article in (gasp) Money Magazine stating how LTT's had returned insanely well in 2008, but had also returned 10% over the last 25 years or so.
That got me thinking that LTT's were maybe the perfect pair to stocks... two assets that zig and zag but both return 10%? What a bad-ass arrangement.... Soon thereafter I remembered what people said about the 70's... bad stock market and bad bond market, and high inflation... so I figured I'd consider my leveraged home as a good inflation hedge and call it a day.... I didn't want to fool around with gold and didn't know another efficient inflation hedge other than ones correlated with stocks.
Somehow, this thinking got me to Craig's blog and it was all epiphany from there.
My jump into the rental housing market at the wrong time and simply seeing 2008 happen probably served me well-enough on the humility front. In fact... you should ban anyone under 25 from this forum... they need to learn the hard way like the rest of us!
I had little/no money in the market, but I could appreciate the gravity of losing that much wealth, and all the challenged assumptions during that time, as I was seeing what was happening.
I actually stumbled on the PP in an odd way. After 2008, I saw an article in (gasp) Money Magazine stating how LTT's had returned insanely well in 2008, but had also returned 10% over the last 25 years or so.
That got me thinking that LTT's were maybe the perfect pair to stocks... two assets that zig and zag but both return 10%? What a bad-ass arrangement.... Soon thereafter I remembered what people said about the 70's... bad stock market and bad bond market, and high inflation... so I figured I'd consider my leveraged home as a good inflation hedge and call it a day.... I didn't want to fool around with gold and didn't know another efficient inflation hedge other than ones correlated with stocks.
Somehow, this thinking got me to Craig's blog and it was all epiphany from there.
My jump into the rental housing market at the wrong time and simply seeing 2008 happen probably served me well-enough on the humility front. In fact... you should ban anyone under 25 from this forum... they need to learn the hard way like the rest of us!
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: "How to Disaster-Proof Your Portfolio"
I discovered the PP on Bogleheads.
Re: "How to Disaster-Proof Your Portfolio"
Ack, cut them some slack it must be a bit of a nightmare job having to crank out 1000 words to a deadline, when you have absolutely nothing to say.
The saving grace of these articles is they are so vague that you couldn't actually distill an action from them. Although I suppose that vagueness might encourage the innocent into the clutches of a moustache twiddling advisor.
The saving grace of these articles is they are so vague that you couldn't actually distill an action from them. Although I suppose that vagueness might encourage the innocent into the clutches of a moustache twiddling advisor.
Re: "How to Disaster-Proof Your Portfolio"
Hundreds of thousands--perhaps millions of people make money from dispensing their views on the financial markets. Imagine what would happen if you asked a financial advisor, fund manager, broker, quant, investment banker, economist, etc, for advice and they said "Put all your money in a permanent portfolio and don't worry about it because I honestly don't know." Wouldn't work.
Making matters worse is that nearly all of these people look to others for ideas and analysis--which leads to groupthink. No one wants to be the true contrarian and question the information dispensed from the institutions they paid $100k for their MBA.
Amplifying this is the media. How many magazines, websites and cable news programs prognosticate? They all sell advertising, subscriptions and services. Imagine if Harry Browne were to be hosted on Squawk Box....crickets. It all comes down to making money (as is usually the case). Everyone in this racket makes a lot of it--not from good investment ideas but by convincing otherwise confused people that "experts" have their best interests at heart.
Making matters worse is that nearly all of these people look to others for ideas and analysis--which leads to groupthink. No one wants to be the true contrarian and question the information dispensed from the institutions they paid $100k for their MBA.
Amplifying this is the media. How many magazines, websites and cable news programs prognosticate? They all sell advertising, subscriptions and services. Imagine if Harry Browne were to be hosted on Squawk Box....crickets. It all comes down to making money (as is usually the case). Everyone in this racket makes a lot of it--not from good investment ideas but by convincing otherwise confused people that "experts" have their best interests at heart.
Re: "How to Disaster-Proof Your Portfolio"
I literally burst out laughing.... though it's more true and sad than funny.Wonk wrote: Imagine if Harry Browne were to be hosted on Squawk Box....crickets.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
-
EM2
Re: "How to Disaster-Proof Your Portfolio"
Wonk said,
Imagine what would happen if you asked a financial advisor, fund manager, broker, quant, investment banker, economist, etc, for advice and they said "Put all your money in a permanent portfolio and don't worry about it because I honestly don't know." Wouldn't work.
Oddly enough, Richard Russell of Dow Theory Letters said almost exactly that (including admitting he honestly didn't know what was going on) on his daily site a few months ago. He strongly advised investing in PRPFX and now includes the fund in his daily report on the markets.
I started researching PRPFX because of this comment, then stumbled on Craig's site and his reference to Harry Brown's book about the PP, and realized I could just do it myself without PRPFX. I had bought some gold and energy ETFs years ago because of Russells advice, but held most everything in a treasury money market, not trusting that anybody could really foresee anything. For some reason, HB's thinking clicked with me immediately, and I went right into the PP. It was like getting religion (though I don't proselytize) in that I just sensed it would work.
Imagine what would happen if you asked a financial advisor, fund manager, broker, quant, investment banker, economist, etc, for advice and they said "Put all your money in a permanent portfolio and don't worry about it because I honestly don't know." Wouldn't work.
Oddly enough, Richard Russell of Dow Theory Letters said almost exactly that (including admitting he honestly didn't know what was going on) on his daily site a few months ago. He strongly advised investing in PRPFX and now includes the fund in his daily report on the markets.
I started researching PRPFX because of this comment, then stumbled on Craig's site and his reference to Harry Brown's book about the PP, and realized I could just do it myself without PRPFX. I had bought some gold and energy ETFs years ago because of Russells advice, but held most everything in a treasury money market, not trusting that anybody could really foresee anything. For some reason, HB's thinking clicked with me immediately, and I went right into the PP. It was like getting religion (though I don't proselytize) in that I just sensed it would work.