Gyroscopic Portfolios Is Now Under Construction

General Discussion on the Permanent Portfolio Strategy

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KevinW
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by KevinW » Fri Jan 04, 2019 12:27 am

Thanks for this effort, it's off to a great start.

It'd be nice for this site to reprise Craig's tradition of an annual post on the PP's annual returns, with an explanation for why each of the four assets did what it did, and comparison to a couple benchmarks.

Another useful resource would be a list of PP-compatible funds, i.e. a list of all long-term treasury funds, gold funds, T-bill funds, and at least a few of the stock index funds. Also maybe a list of gold storage services and online bullion sellers.

Similarly, it would be helpful to index ex-US PP implementations (Canada, Germany, etc.).

Hosting the podcasts would be nice too.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Smith1776 » Wed Jan 09, 2019 2:42 pm

KevinW wrote:
Fri Jan 04, 2019 12:27 am
Thanks for this effort, it's off to a great start.

It'd be nice for this site to reprise Craig's tradition of an annual post on the PP's annual returns, with an explanation for why each of the four assets did what it did, and comparison to a couple benchmarks.

Another useful resource would be a list of PP-compatible funds, i.e. a list of all long-term treasury funds, gold funds, T-bill funds, and at least a few of the stock index funds. Also maybe a list of gold storage services and online bullion sellers.

Similarly, it would be helpful to index ex-US PP implementations (Canada, Germany, etc.).

Hosting the podcasts would be nice too.
Thanks for the input, Kevin. Those are great ideas and I'm going to get started on them.

I am really enjoying the this forum and the whole PP strategy. I've been familiar with the PP long enough that I know that my interest in it is not just some fad or passing fancy.

I've searched for other strategies and haven't found one better for my needs.

The only other strategy I feel comfortable with is maybe the Golden Butterfly. I have some reservations though. Many people seem to think that the GB has revealed a weakness in the PP, in that the PP simply doesn't have enough allocated to stocks. This doesn't really seem to be the case. The outperformance of the GB is almost entirely due to the SCV tilt. It's not because of the increase in allocation to stocks from 25% to 40% in an absolute sense. It's all about the factor tilt. If you have a PP with it's entire 25% stock allocation dedicated to SCV, the performance isn't really different from the GB despite it have 40% in stocks. It's all about the factors. It looks like the GB performs even better when all of the 40% is put into SCV though of course. That becomes a different story.
V = E * (8.5 + 2G)
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KevinW
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by KevinW » Fri Jan 11, 2019 7:10 pm

Glad you appreciate the site and the suggestions.

I view the Golden Butterfly as a 4x25 PP plus a variable portfolio of small-cap value. This is compatible with PP dogma for an investor who wants to tilt toward prosperity. I think the GB is fine and I don't think I'd try to talk someone out of it. It's true that historically prosperity is the most common condition so it seems reasonable to weight toward prosperity. As you'd expect the expected returns and volatility are both a smidge higher.

Personally I'm satisfied with the 4x25 allocation, just because it is more consistent with the principle that the future is totally unknowable so the allocation should be future-agnostic. Committing to that helps me fend off the temptation to tinker, or waste time overanalyzing the whole plan. Once you make one change (the fifth asset) it's a slippery slope toward overthinking things and throwing out the baby with the bathwater.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Don » Thu Feb 07, 2019 8:24 pm

KevinW wrote:
Fri Jan 11, 2019 7:10 pm
Glad you appreciate the site and the suggestions.

I view the Golden Butterfly as a 4x25 PP plus a variable portfolio of small-cap value. This is compatible with PP dogma for an investor who wants to tilt toward prosperity. I think the GB is fine and I don't think I'd try to talk someone out of it. It's true that historically prosperity is the most common condition so it seems reasonable to weight toward prosperity. As you'd expect the expected returns and volatility are both a smidge higher.

Personally I'm satisfied with the 4x25 allocation, just because it is more consistent with the principle that the future is totally unknowable so the allocation should be future-agnostic. Committing to that helps me fend off the temptation to tinker, or waste time overanalyzing the whole plan. Once you make one change (the fifth asset) it's a slippery slope toward overthinking things and throwing out the baby with the bathwater.
Great post! Kevin, are you the same Kevin who frequents the Boglehead site? If so, are you a Boglehead or a PP guy?
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by dualstow » Thu Feb 07, 2019 9:16 pm

I think that’s KevinM on BH.
Well, M...W..could be an alter ego. ;-)
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Kriegsspiel » Fri Feb 08, 2019 7:24 am

Either/or?
Boglehead principles aim at modest, simple, investment and savings plans [Check]. To invest like a Boglehead you should build a simple portfolio based on index investing [Check]. For example, a typical holding would be a stock market index tracking fund (either through a index tracking mutual fund or an exchange-traded fund), a global stock market index fund, and a bond index fund. Bogleheads, typically, do not favour alternative investments such as hedge funds [Check]. Bogleheads are also long-term investors and do not believe in trying to time the market [Check]. Bogleheads also, typically, try to minimise risk [Check] link.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by dualstow » Fri Feb 08, 2019 11:51 am

True, that's why I think it's funny that one B'Head said he used to like Harry Browne and now considers him a "crackpot." I guess anyone who adds gold is a crackpot, even though John Bogle said it was good to have *some*. Some bogleheads run a pp as part of their overall strategy.
Kriegsspiel wrote:
Fri Feb 08, 2019 7:24 am
Either/or?
Boglehead principles aim at modest, simple, investment and savings plans [Check]. To invest like a Boglehead you should build a simple portfolio based on index investing [Check]. For example, a typical holding would be a stock market index tracking fund (either through a index tracking mutual fund or an exchange-traded fund), a global stock market index fund, and a bond index fund. Bogleheads, typically, do not favour alternative investments such as hedge funds [Check]. Bogleheads are also long-term investors and do not believe in trying to time the market [Check]. Bogleheads also, typically, try to minimise risk [Check] link.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by pmward » Fri Feb 08, 2019 2:17 pm

Yes well the common advise on bogleheads also tends to vary based on the weather. The recency bias runs very strong in the bogleheads hive mind. I mean half the people there these days recommend going 100% equities. If a relatively conservative investing group like the bogleheads starts getting that bullish... well if that isn't a contrary indicator then I don't know what is... The next time we go through a bear market threads about PP, gold, treasuries, etc will all start coming out of the woodwork.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Kriegsspiel » Fri Feb 08, 2019 2:28 pm

It's definitely good to keep in mind that a bunch of people posting on an open-to-everyone internet forum are not necessarily giving sound advice.
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Xan » Fri Feb 08, 2019 2:57 pm

Kriegsspiel wrote:
Fri Feb 08, 2019 2:28 pm
It's definitely good to keep in mind that a bunch of people posting on an open-to-everyone internet forum are not necessarily giving sound advice.
That's good advice. Wait...
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Kriegsspiel » Fri Feb 08, 2019 3:14 pm

Image
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by dualstow » Fri Feb 08, 2019 10:14 pm

pmward wrote:
Fri Feb 08, 2019 2:17 pm
Yes well the common advise on bogleheads also tends to vary based on the weather. The recency bias runs very strong in the bogleheads hive mind. I mean half the people there these days recommend going 100% equities.
To be fair, most aren’t recommending it. They’re just flirting with the idea, often with a question mark. O0
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