Oh Come On

General Discussion on the Permanent Portfolio Strategy

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MachineGhost
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Re: Oh Come On

Post by MachineGhost » Thu Jul 07, 2016 11:43 pm

dualstow wrote:3 small things:
So, you think that the folks at GLD (or whatever etf) would get to keep their gold if ours was confiscated?
Past performance disaster is no indication of the future.
I don't think a financial crisis will cause trouble with an etf. I think it's possible that there will be a scandal due to to mismanagement. It might be uncovered by a financial crisis, I suppose.
Need I remind anyone that Chase or HSBC is one of the financial middelmen involved with GLD? How exemplanary was their honest behavior leading up to 2008? Rhetorical question.

If gold did get confiscated again under whatever implausible scenario, the very first to kowtow will be financial firms of paper gold operations. They're not going to save your gold for you. They're concerned about their survival, not yours. Just like a lawyer will throw you under the bus whenever the goverment comes knockwing. Self-preservation does not extend out to others.
"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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MachineGhost
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Re: Oh Come On

Post by MachineGhost » Thu Jul 07, 2016 11:47 pm

Kbg wrote:Possible, but I doubt it with Blackrock or State Street for example. Do you think it just might be possible that due diligence is being performed by those with a much larger piece of that 50B AUM than us which keeps them honest? Also, what possible reason could State Street (GLD's sponsor) have to put 164M annually in fees at risk?
You're really overestimating the ability of big money to be smart. Look at all the hedge funds collapsing left and right lately.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

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Kbg
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Re: Oh Come On

Post by Kbg » Fri Jul 08, 2016 12:01 am

Clearly I've hit a nerve here. :o

I will just lay my opinion out very simply. Gold has unique qualities as an asset class. These can be accessed by holding phys or an electronic medium of same. Either way the benefit/risk accrues to the holder of it. In today's monetary system under extreme SHTF (like nuclear war) scenarios I don't see phys being that useful. In such a scenario what matters is protection and producing the necessities of life which a shiny metal is incapable of doing. I am totally serious about this...if this is really a concern one has go buy some farm land and learn how to cultivate it. Saving such an extreme occurrence, the electronic form isn't going to be a problem. For the hundredth time, SPX, LTTs, STTs and Gold are not arcane derivatives that are difficult to price and illiquid.

Good heavens read a little German history people if you have this fear. In the bad parts of WWI, the Weimar years and WW2 what happened to an industrialized society in true SHTF scenarios was city people hauled their butts out into the country and traded their useful stuff or labor for food. Farmers don't need gold. They need equipment, fuel for their equipment, seed, fertilizer and maybe labor.

In short, have something actually worth bartering for.
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Re: Oh Come On

Post by stuper1 » Fri Jul 08, 2016 12:18 am

I hold some electronic gold and some physical gold. I'm endeavoring to reduce the former and increase the latter. I agree that if nuclear war hits, gold probably won't be very useful for a while. But, I think it could be tremendously useful in re-establishing one's financial life after the dust has settled a bit. All of your electronic assets at Fidelity/Vanguard/Schwab/etc. may just disappear forever in milliseconds, but if you have actual physical gold that you can access, you are going to be light years ahead of other people at some point down the road when things have settled down a bit and it's safe to start trading it. In the meantime, sure, you may want to have a short term plan for keeping yourself and your family fed and sheltered.
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Re: Oh Come On

Post by MachineGhost » Fri Jul 08, 2016 12:23 am

Kbg wrote:Good heavens read a little German history people if you have this fear. In the bad parts of WWI, the Weimar years and WW2 what happened to an industrialized society in true SHTF scenarios was city people hauled their butts out into the country and traded their useful stuff or labor for food. Farmers don't need gold. They need equipment, fuel for their equipment, seed, fertilizer and maybe labor.

In short, have something actually worth bartering for.
They didn't have any gold which is why they had to go out to the country and barter if they wanted to survive. Doh!

Gold served Iceland and Argentina very well. If an extreme SHTF is a Communist takeover which is what precipitated the German hyperinflationary crisis, then you still think gold is not useful? There's a reason you store it offshore: SO YOU CAN LEAVE! I think that would have served the persecuted Jews very well, don't you think?

If there's an extraterrestrial invasion, a doomsday weather event or something of a similar The-End-of-Life-As-We-Know-It magnitude, then I'll agree that gold won't be of much use. But that's not what we hold gold for.

P.S. You and technophobe completely crack me up. Talk about opposite sides of a [gold] coin!!!
"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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dualstow
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Re: Oh Come On

Post by dualstow » Fri Jul 08, 2016 8:05 am

I tend to agree with you, kbg, and stuper1 when it comes to SHTF scenarios, which I don't think about very often. My only real comment about it here, posted years ago, was that you won't be trading gold or junk silver. You'll be shot in the face. End of story. Yes, someone might be able to trade it after the dust settles.

Just speaking for myself, it has nothing to do with why I like gold coins. I like the fact that even in the case of identity theft, it would be hard for a crook to get it out of my safe deposit box, because I have the key.

One of these days when I'm back overseas, depending on the country, maybe I'll just take a gold coin with me instead of traveler's checks and buy local currency with it.
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Re: Oh Come On

Post by Kbg » Fri Jul 08, 2016 8:16 am

Tha, tha, tha, that's all folks! I'm out. This horse has been beat sufficiently. :)
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Re: Oh Come On

Post by Libertarian666 » Fri Jul 08, 2016 10:14 am

dualstow wrote:I tend to agree with you, kbg, and stuper1 when it comes to SHTF scenarios, which I don't think about very often. My only real comment about it here, posted years ago, was that you won't be trading gold or junk silver. You'll be shot in the face. End of story. Yes, someone might be able to trade it after the dust settles.
I don't know anyone who advocates using gold for purchases during a "reset". Gold is for holding wealth through the reset.
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Re: Oh Come On

Post by dualstow » Fri Jul 08, 2016 10:18 am

Libertarian666 wrote:
dualstow wrote:I tend to agree with you, kbg, and stuper1 when it comes to SHTF scenarios, which I don't think about very often. My only real comment about it here, posted years ago, was that you won't be trading gold or junk silver. You'll be shot in the face. End of story. Yes, someone might be able to trade it after the dust settles.
I don't know anyone who advocates using gold for purchases during a "reset". Gold is for holding wealth through the reset.
Makes sense. My definition of "through", though, would be many generations after I'm dead, which is why I don't think about SHTF too often.

I just wanted it to be clear to Kbg that if that's why s/he thinks we buy gold coins, that it doesn't apply to all of us, and that there are other, less extreme-minded reasons to hold physical gold.
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Re: Oh Come On

Post by dragoncar » Fri Jul 08, 2016 12:33 pm

it's killing me

I must have PP Stockholm syndrome at this point
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buddtholomew
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Re: Oh Come On

Post by buddtholomew » Fri Jul 08, 2016 2:40 pm

Sorry to derail the conversation and return to the thread topic..."oh Come On"

Imagine being a nubile PP investor and putting all your eggs into the basket on 1-1-2016. You'd vote for HB in the next election.
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Re: Oh Come On

Post by iwealth » Fri Jul 08, 2016 3:05 pm

buddtholomew wrote:Sorry to derail the conversation and return to the thread topic..."oh Come On"

Imagine being a nubile PP investor and putting all your eggs into the basket on 1-1-2016. You'd vote for HB in the next election.
Pretty darn remarkable what continues to transpire. Stocks, bonds, gold, REITs...only thing I see that didn't rally was oil. This is the best worst economy one can possibly hope for.
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Re: Oh Come On

Post by dualstow » Fri Jul 08, 2016 3:08 pm

iwealth wrote: This is the best worst economy one can possibly hope for.
right! :D
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Re: Oh Come On

Post by barrett » Fri Jul 08, 2016 3:17 pm

buddtholomew wrote:Imagine being a nubile PP investor and putting all your eggs into the basket on 1-1-2016. You'd vote for HB in the next election.
I don't think I've seen the word "nubile" on this forum before and I am pretty sure I have never heard the term "nubile investor." But, yes, 1/1/16 was a great start date. Now I must spend the weekend pondering if I should go all to cash! What a nice run this has been.
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Re: Oh Come On

Post by dragoncar » Fri Jul 08, 2016 3:18 pm

To those who were thinking of abandoning the PP during the dark times, I have some advice: believe in yourself

https://www.youtube.com/watch?v=F2ZShmt19uQ
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Re: Oh Come On

Post by buddtholomew » Fri Jul 08, 2016 3:26 pm

barrett wrote:
buddtholomew wrote:Imagine being a nubile PP investor and putting all your eggs into the basket on 1-1-2016. You'd vote for HB in the next election.
I don't think I've seen the word "nubile" on this forum before and I am pretty sure I have never heard the term "nubile investor." But, yes, 1/1/16 was a great start date. Now I must spend the weekend pondering if I should go all to cash! What a nice run this has been.
oops...spell check changed nube ("noob") to nubile...naughty.
I had the same thoughts barrett, but that would be a major mistake.
If the PP has taught us anything, its holding all four assets at all times is the "best" way to allocate your investments.
One or more assets will turn down, but the PP will continue to do its thing.
I just didn't realize that the portfolio composition had the potential to drive such powerful gains.
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Re: Oh Come On

Post by MachineGhost » Fri Jul 08, 2016 7:14 pm

Remember, kiddies, its not how much you make... its how much you keep!!!
"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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Re: Oh Come On

Post by buddtholomew » Fri Jul 08, 2016 7:23 pm

MachineGhost wrote:Remember, kiddies, its not how much you make... its how much you keep!!!
As long as we are balanced (4x25), the total value of our portfolio should be irrelevant.
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Re: Oh Come On

Post by JohnnyFactor » Fri Jul 08, 2016 9:29 pm

MangoMan wrote:Oooh, what a great idea! A wealth tax.
Canada implemented a wealth tax this year when the Liberal government was voted in. If you make over $200,000, you will be in a newly created tax bracket.

http://www.taxtips.ca/taxrates/canada.htm

(I've been lurking too long, and just had to respond to this thread so I registered. Hi everybody.)
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Re: Oh Come On

Post by JohnnyFactor » Fri Jul 08, 2016 9:38 pm

buddtholomew wrote:Imagine being a nubile PP investor and putting all your eggs into the basket on 1-1-2016. You'd vote for HB in the next election.
I'm a PP noob and discovered Harry Browne over the Christmas holidays while looking for a sensible plan. I took my modest savings and went all in this January. In May, I decided to split the equity portion 50/50 domestic/international and diversified globally right at the bottom. My portfolio is up 7.3% and green across the board. Yeah, I'm a Harry Browne fan.
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Re: Oh Come On

Post by MachineGhost » Fri Jul 08, 2016 10:16 pm

buddtholomew wrote:
MachineGhost wrote:Remember, kiddies, its not how much you make... its how much you keep!!!
As long as we are balanced (4x25), the total value of our portfolio should be irrelevant.
True, so don't be surprised if you give back 50% of the PP's gains this year.
"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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Re: Oh Come On

Post by sophie » Fri Jul 08, 2016 10:19 pm

Welcome Johnny, and boy what a welcome you got from the PP! Unlike the 2013-2015 period, it's been all sunshine and puppies this year. We're pretty happy too. By the way you deserve special congratulations for buying the bonds and gold at that time, when everyone thought they were headed for the doghouse.

Some wise soul in another thread observed that portfolios in general are in drawdown about 70% of the time. That's a lot of enduring, but if you don't stick with your chosen portfolio through those drawdowns, you won't be around for the times when it's doing well. By the time you realize a portfolio is doing well, it's mostly or all the way through its growth spurt, and you'd be buying into it just in time to watch it turn around and head back down, or stagnate. So unfortunately it doesn't work to treat investing like a football game. It's more like getting through the Tour de France, with the finish line about 30 years away.
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Re: Oh Come On

Post by JohnnyFactor » Fri Jul 08, 2016 10:34 pm

Thanks! I got some historical perspective by reading both of the epic PP threads at Bogleheads. It took three weeks to get through them, but I saw the sentiment and results from the credit crisis of 2008, the gold top of 2011, and the gold crash of 2013. I've read all of the Harry Browne economic books and listened to his radio show. I feel prepared for whatever may come but it sure is nice to have a booming start.
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Re: Oh Come On

Post by dualstow » Fri Jul 08, 2016 11:25 pm

I kind of like the image of a "noobile" investor.
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Re: Oh Come On

Post by koekebakker » Sat Jul 09, 2016 3:17 am

Performance has been amazing this year, and pretty unexpected too!

EU-PP is up 10.4% YTD. Inflation 0%.

The long term euro-gov bonds are up 25%, yielding absolutely nothing...
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