Gyroscopic Portfolios Is Now Under Construction

[Smith1776]

Hello my fellow PPers!

A number of months ago I posted about resurrecting Craig's old Crawling Road website. I hit a few life snags in the interim that took me out of commission for a while, so I didn't start on the project as soon as I had hoped.

However, I have now started the project. I would like the new website to be a kind of main "repository" for Permanent Portfolio information, as well as a fairly regular blog in terms of how the PP relates to current events, our lives, and even underlying philosophy. What I'm basically thinking of is Craig's old website but bigger and even better.

You can guys can check out the design and layout so far here:

https://www.gyroscopicportfolios.com/about/

https://www.gyroscopicportfolios.com/ha ... adio-show/

I'd really enjoy your guys feedback about what you'd like to see regarding a PP dedicated website as I move forward. Here's some ideas I have.

- Regular blog posts about recent PP performance
- A page dedicated to explaining the overall strategy
- Model implementations of the PP that are country specific with real world funds
- Links to the original epic PP thread at Bogleheads
- A page for PP books and links to the Voluntary Life interviews done with Medium Tex and CraigR
- A page for related sites like this forum and maybe the Permanent Portfolio Family of Funds
- A section explaining PP history and how it has evolved.
- An "editorial" section where people from this forum can contribute. (or maybe they can just make blog posts and I can credit them.)
- A section with insightful posts from "thought leaders" in the PP community. (too similar to above?)
- A section for related portfolios that are also gyroscopic in nature such as Ray Dalio's All Seasons portfolio
- Variable portfolio ideas

That's all I can think of for now. Your feedback on what you'd like to see is verrry much appreciated.

[ochotona]

It's always more useful to have performance graphs with a logarithmic scale...

[Smith1776]

Agreed. The change has been made.

[dualstow]

Nice-looking website, Smith!

[barrett]

Nice-looking website, Smith!

I agree but I'd like to see the returns in real (inflation-adjusted) terms. I suspect the "flattening" that we see over the last ten years or so is at least partly due to inflation being low during that entire period.

Check out this page from Ryan Melvey's site:

http://www.stableinvesting.com/2011/04/ ... hmark.html

Alas, Ryan hasn't been updating that site so the data only goes through 2011 or so.

[Smith1776]

Nice-looking website, Smith!

I agree but I'd like to see the returns in real (inflation-adjusted) terms. I suspect the "flattening" that we see over the last ten years or so is at least partly due to inflation being low during that entire period.

Check out this page from Ryan Melvey's site:

http://www.stableinvesting.com/2011/04/ ... hmark.html

Alas, Ryan hasn't been updating that site so the data only goes through 2011 or so.

Thanks everyone for your comments so far. I've done some updates to the site that you can checkout in addition to a maiden post.

I've integrated your guys' feedback in regards to real returns.

[Don]

Nice-looking website, Smith!

I agree but I'd like to see the returns in real (inflation-adjusted) terms. I suspect the "flattening" that we see over the last ten years or so is at least partly due to inflation being low during that entire period.

Check out this page from Ryan Melvey's site:

http://www.stableinvesting.com/2011/04/ ... hmark.html

Alas, Ryan hasn't been updating that site so the data only goes through 2011 or so.

Ryan no longer believes in the P.P.

[Tortoise]

Ryan no longer believes in the P.P.

[Smith1776]

Nice-looking website, Smith!

I agree but I'd like to see the returns in real (inflation-adjusted) terms. I suspect the "flattening" that we see over the last ten years or so is at least partly due to inflation being low during that entire period.

Check out this page from Ryan Melvey's site:

http://www.stableinvesting.com/2011/04/ ... hmark.html

Alas, Ryan hasn't been updating that site so the data only goes through 2011 or so.

Ryan no longer believes in the P.P.

Well he's a silly billy then.

William Bernstein was right about The Permanent Portfolio and its adherents. Everybody seemed to flock to the strategy when the market was tanking during 2008 and its aftermath. Now that the market has been on a ten-year bull run it's the opposite. The strategy is good, the problem is investor psychology.

It takes a really disciplined investor to stick to any given strategy when it is out of favour. (And all given strategies go out of favour from time-to-time.) Very few investors have the right stuff to stay the course.

I'm equally confident that many in typical 60/40 and Three Fund portfolios will abandon their strategy when times are tough for their given approach as well.

[Tortoise]

It takes a really disciplined investor to stick to any given strategy when it is out of favour. (And all given strategies go out of favour from time-to-time.) Very few investors have the right stuff to stay the course.

I guess the question is which psychological force is more potent: The fear of loss, or the fear of missing out on gains being enjoyed by others?

[dualstow]

Yep, Michael Cuggino of PRPFX — I know he takes a lot of flak here — has talked about how people abandon the fund during the lean years.

Not so many new all-stock threads at Bogleheads right now.

[Smith1776]

I'm on the same page as you guys.

Remember the original epic PP thread over at the Bogleheads forum? I've read the whole thing from start to finish -- multiple times. With perhaps the biggest exception being the brief scuffle between MediumTex and Larry Swedroe, everyone seemed so gung ho on the strategy. It was amazing to see the tenor and the "energy" of the conversation change as the timeline went from the depths of the 2008 crisis to present.

In the beginning the arguments against gold were meek at best. Bonds were the belle of the ball. Stocks were radioactive. Look now how it's changed. How easily people get swayed after a few years in a bull market!

Maybe there's something I'm not seeing, but I'm just as enthusiastic about the PP strategy now as I have ever been. I don't feel any FOMO about equity bull markets. Maybe it's a personality thing, because unlike many in my age cohort I don't feel FOMO when I see big party or vacation photos posted on social media either. I just don't care. Heh.

[KevinW]

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.

[Smith1776]

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.

[KevinW]

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.

[Don]

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?

[dualstow]

I think that’s KevinM on BH.
Well, M...W..could be an alter ego. ;-)

[Kriegsspiel]

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.

[dualstow]

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.

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.

[pmward]

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.

[Kriegsspiel]

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.

[Xan]

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...

[Kriegsspiel]

[dualstow]

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.

[KevinW]

Great post! Kevin, are you the same Kevin who frequents the Boglehead site? If so, are you a Boglehead or a PP guy?

Thanks; and no, that's someone else on Bogleheads.