Yay PP!

[ppnewbie]

I think it’s been about four years for my GB (with some tech spice). It’s been great so far. I was down 11 percent during the last crash about what Tyler’s post showed for the GB. It worked for me then. And it also participated in the run up after the crash.

Let’s see how it goes. Cheers Bud!

[Ugly_Bird]

PP hurting bad.
Gold and LTT’s cannibalizing each other to the downside as rates rise.
Sucks for sure.

Budd, you never answered my question from a few days ago on when you got into the portfolio, and what your expectations were at that time?

I setup a taxable PP in 2010.
Took literally that one or more assets would take the reigns during each of the 4 economic climates to drive returns.
What I am witnessing is one or more assets pulling the portfolio down while stocks are on the decline as well.
I realize over long periods of time that gold and LTT’s should outperform cash but the downside far exceeds any losses when holding cash as a substitute for these assets.

So that’s interesting. There was a recent thread where folks were listing their 2021 returns and I saw a 4 percent number- which concerned me because the HBPP should consistently provide 4 percent REAL returns not nominal.

It seems you are comparing the one year result with the yearly average over long period of time.

[dockinGA]

Last post for ppnewbie.

Run far away ppnewbie, the PP is a lifetime of disappointment.

I was in Analytics/BI for 15 years at a Fortune 300 company so I understand your mental makeup. The agnostic nature of the portfolio sounds great on the surface but you lose to equities on the upside and there is no guarantee that when stocks fall, the other assets take the reigns.

Soon the board will start saying that they are so happy with their 25% in cash while the rest of the portfolio is in the toilet.

Have stocks, some gold and ITT’s and spend more time on the Bogleheads forum.

There aren't many folks on the boglehead forum telling you to hold gold. They're largely anti-gold. Another good forum, but there are lots and lots of philosophies over there, many very hostile to us PPer's.

I don't understand the fear here. This has happened before, as recently as March 2020. Things happened so quickly in that stock market crash that month-to-month data doesn't show the full picture, but there were plenty of days where everything was in decline except cash. The PP lost less than more mainstream portfolios, and a nice rebalance juiced future returns. In 2008-9, the PP lost more than 10%.

All this is to say that there is no free lunch, and the PP is no exception. However, and this is one area that the bogleheads would agree with, constantly changing your asset allocation almost certainly will not work (unless you've got insider info or get really really luck, twice). If you're in this portfolio, or a similar GB style portfolio, you signed up for long tern returns of 3-6% above rate of inflation, not a consistent 3-6%. And the portfolio has a very, very good track record of delivering on this number (in fact on the high end over the last few years). Will it continue, I don't know and neither does anyone else, but in these uncertain investing times I think it has as good a chance as any portfolio (even if it means that 3-6% over inflation means that inflation is actually negative).

[barrett]

Have stocks, some gold and ITT’s and spend more time on the Bogleheads forum.

Budd reveals the secret sauce on the way out the door! Seriously, I think that particular three-asset mix is a fine choice of asset allocation... and depending on the duration of the ITTs, really not so different from a PP. But maybe easier to hold because the ITTs are not as volatile as LTTs.

From a practical standpoint for those of us with decent but not unbelievable assets, I think cash has to be at least 10% or so. For me a 10% cash allocation in each account means that I could pull a year or so of living expenses from either taxable or tIRA (less in my case for Roths).

[GT]

Last post for ppnewbie.

Run far away ppnewbie, the PP is a lifetime of disappointment.

I was in Analytics/BI for 15 years at a Fortune 300 company so I understand your mental makeup. The agnostic nature of the portfolio sounds great on the surface but you lose to equities on the upside and there is no guarantee that when stocks fall, the other assets take the reigns.

Soon the board will start saying that they are so happy with their 25% in cash while the rest of the portfolio is in the toilet.

Have stocks, some gold and ITT’s and spend more time on the Bogleheads forum.

Budd - I hope you can take your own advance - the PP seems to torture you - life is to short - invest in something you have confidence in and go enjoy life!

[Ugly_Bird]

Last post for ppnewbie.

Run far away ppnewbie, the PP is a lifetime of disappointment.

I was in Analytics/BI for 15 years at a Fortune 300 company so I understand your mental makeup. The agnostic nature of the portfolio sounds great on the surface but you lose to equities on the upside and there is no guarantee that when stocks fall, the other assets take the reigns.

Soon the board will start saying that they are so happy with their 25% in cash while the rest of the portfolio is in the toilet.

Have stocks, some gold and ITT’s and spend more time on the Bogleheads forum.

Budd - I hope you can take your own advance - the PP seems to torture you - life is to short - invest in something you have confidence in and go enjoy life!

It is not the PP torturing him but the fact that the others hold it :-)

[buddtholomew]

Deleted

[buddtholomew]

https://www.cnbc.com/2022/02/10/january ... ected.html

We have unexpected inflation with rising interest rates.

I’m not sure the argument holds true anymore as rising rates smother any potential gains in Gold related to higher inflation expectations.

I know the relationship is messy, but it’s fairly obvious to me Gold is not what it used to be at all.

[seajay]

Have stocks, some gold and ITT’s and spend more time on the Bogleheads forum.

Budd reveals the secret sauce on the way out the door! Seriously, I think that particular three-asset mix is a fine choice of asset allocation... and depending on the duration of the ITTs, really not so different from a PP. But maybe easier to hold because the ITTs are not as volatile as LTTs.

From a practical standpoint for those of us with decent but not unbelievable assets, I think cash has to be at least 10% or so. For me a 10% cash allocation in each account means that I could pull a year or so of living expenses from either taxable or tIRA (less in my case for Roths).

I agree. ITT's have performed very similarly to a LTT/Cash barbell. It's mostly about the average duration.

Adding in a Larry Portfolio twist (shift bond risk over to the stock side i.e. more volatile stock (SCV) and shift LTT into STT) PV

[t-bear52]

“ Adding in a Larry Portfolio twist (shift bond risk over to the stock side i.e. more volatile stock (SCV) and shift LTT into STT) PV”

Years ago Clive suggested another Larry twist which I took to heart with one of my PP’s. He suggested using the typical PP as the “bond” portion in the Larry portfolio and large cap value for the “stock” portion in Larry portfolio. His backtesting indicated this provided more consistent withdrawal rate over 30 year periods. Clive did testing of 35/65 split. PP being the 65%. I looked at like an oversized variable.

[buddtholomew]

Why does value outperform during the current economic environment?

[seajay]

“ Adding in a Larry Portfolio twist (shift bond risk over to the stock side i.e. more volatile stock (SCV) and shift LTT into STT) PV”

Years ago Clive suggested another Larry twist which I took to heart with one of my PP’s. He suggested using the typical PP as the “bond” portion in the Larry portfolio and large cap value for the “stock” portion in Larry portfolio. His backtesting indicated this provided more consistent withdrawal rate over 30 year periods. Clive did testing of 35/65 split. PP being the 65%. I looked at like an oversized variable.

Sounds similar to Tyler's GB. I think you meant Craig who from my understanding moved to New Zealand and both him and Tex haven't been heard from much since?

[dualstow]

Clive was a very prolific poster in the olden days. He put out some good content, graphs and insight, but he had a curious habit of deleting his posts. New members were like who is this mysterious Clive? Is this an inside joke? And now he is all but forgotten.

[yankees60]

Clive was a very prolific poster in the olden days. He put out some good content, graphs and insight, but he had a curious habit of deleting his posts. New members were like who is this mysterious Clive? Is this an inside joke? And now he is all but forgotten.

Question.

When someone requests to have themselves removed .... I know that removes any posts that they originate. However, I'm assuming that any replies that they made to someone else's original posts would still remain?

[I Shrugged]

This place has had more un-persons than East Berlin.

[dualstow]

Question.

When someone requests to have themselves removed .... I know that removes any posts that they originate. However, I'm assuming that any replies that they made to someone else's original posts would still remain?

Clive was actively deleting his own posts even before he thought of leaving (or getting asked to leave). If someone exits the forum, sometimes they request for their posts to be removed, but I don’t know that there’s anything automatic about it. My knowledge of forum software is about the same as yours: rudimentary. All I know is, I have better things to do.

But since you mentioned it, I think there are still quotes of Clive in existence, which is what led to the mystique.
It’s not like twitter, where you see a lot of people quoting a box that says “THIS TWEET HAS BEEN REMOVED.”

see here - Warren Buffett: Why stocks beat gold and bonds

This place has had more un-persons than East Berlin.

so true

[Don]

Question.

When someone requests to have themselves removed .... I know that removes any posts that they originate. However, I'm assuming that any replies that they made to someone else's original posts would still remain?

Clive was actively deleting his own posts even before he thought of leaving (or getting asked to leave). If someone exits the forum, sometimes they request for their posts to be removed, but I don’t know that there’s anything automatic about it. My knowledge of forum software is about the same as yours: rudimentary. All I know is, I have better things to do.

But since you mentioned it, I think there are still quotes of Clive in existence, which is what led to the mystique.
It’s not like twitter, where you see a lot of people quoting a box that says “THIS TWEET HAS BEEN REMOVED.”

see here - Warren Buffett: Why stocks beat gold and bonds

This place has had more un-persons than East Berlin.

so true

Clive, Machine ghost, that whiz kid who went to work for a financial institution, and Gumby should all be in this forum's Hall of Fame.

[williswine]

I'm down a bit over 3% for the YTD. OMG what a disaster!!!! Good portfolios don't go down!!!!

But over 10 years I'm up about 87%, after allowing for the cash flows. That's a rough number: (Ending balance + net cash out - Starting balance) / Starting balance. My IRR for 10 years has been 6%. No regrets, none.

IRR of 6% is a beautiful thing. Here is a nice graphic on investor psychology from the Mutiny Fund. Admittedly, this is not a GB or a HBPP but a good illustration on why perceptions can be misleading

Screen Shot 2022-01-24 at 2.33.50 PM.png

Do you have a link to the graphic? I can't figure out how they arrived at only +166.1%. Instead I have:

Even better for a diversified portfolio.png (49.74 KiB) Viewed 6279 times

[ppnewbie]

I’ll see if I can dig it up.