Important News: A New Permanent Portfolio Book Is On The Way!

[Alanw]

After dealing with a serious medical issue in 2008 (the same time Lehman failed), I realized my long time financial planner really didn't know what he was talking about.  In early 2009 when I was recovering from cancer treatments, I fired my financial guy and started educating myself on the investments and "The Market".  I researched the internet, read books by financial gurus, subscribed to internet investment newsletters, set up my investment accounts using ETF's and stocks.  After a short time and a few sleepless nights, I realized that beating the market was near impossible and that this wasn't for me.  In early 2011, one of my investment newsletters emailed an article titled "Harry Browne was right".  The article went on to describe the 4 pronged, passive investment approach advocated by Harry Browne.  Never having heard of Harry Browne, I Googled HB and the Permanent Portfolio which led me to the Crawling Road site and various other postings regarding the Permanent Portfolio.  Being skeptical, I did further research which included reading many postings on this site.  Finally in mid 2011, I decided to invest in the PP and went "all in" .  Well sort of.  I still wanted to slightly overweight my portfolio towards stocks and bonds so I set upa VP.  Being the risk taker that I am my VP consists of 20% VWINX.  How's that for risk taking.  I might add that I am semi-retired and draw on the PP for living expenses.  Unfortunately, I am still in the early stages of the PP and check the results daily.  I'm sure this too will pass.  Thanks to all the contributors of this site.  You have been a great help and inspiration.

[Indices]

Will the book reveal MediumTex's true identity?

[MediumTex]

Will the book reveal MediumTex's true identity?

Yes, I think that will be part of it.

Craig Rowland and MediumTex would sort of sound like a ventriloquist and his dummy.

[PP67]

Did you ever wonder why we always knew who Tonto was but never the Lone Ranger?

[Alanw]

Will the cover of the book be a picture of Craig sitting on a stool with MT on his lap?

By the way, congrats on the new book.  I look forward to purchasing a copy when available.

[dualstow]

Did you ever wonder why we always knew who Tonto was but never the Lone Ranger?

Tonto didn't have an embarrassing cross-dressing incident in his past. Besides *one* of them had to surrender a passport at hotels.

[craigr]

Will the book reveal MediumTex's true identity?

Won't all of you be surprised to learn that he actually is Bruce Campbell as his avatar shows.

[jackely]

"I am happy to announce that myself and Medium Tex were contacted many months back to write a book...."

I only have a high school education so I'm probably not qualified to comment on this but "myself and Medium Tex" just doesn't sound right to me.

My only advice would be to drop the "lifelong financial security in 30 minutes" claim that HB made in his title (or was it his publisher who made him do it?).

I hope to get it down to 30 minutes some day but right now I spend more time than that every week browsing this forum.

[craigr]

"I am happy to announce that myself and Medium Tex were contacted many months back to write a book...."

I only have a high school education so I'm probably not qualified to comment on this but "myself and Medium Tex" just doesn't sound right to me.

My only advice would be to drop the "lifelong financial security in 30 minutes" claim that HB made in his title (or was it his publisher who made him do it?).

I hope to get it down to 30 minutes some day but right now I spend more time than that every week browsing this forum.

I changed it. Myself thinks you are correct. Thanks.

[jackely]

"I am happy to announce that myself and Medium Tex were contacted many months back to write a book...."

I only have a high school education so I'm probably not qualified to comment on this but "myself and Medium Tex" just doesn't sound right to me.

My only advice would be to drop the "lifelong financial security in 30 minutes" claim that HB made in his title (or was it his publisher who made him do it?).

I hope to get it down to 30 minutes some day but right now I spend more time than that every week browsing this forum.

I changed it. Myself thinks you are correct. Thanks.

When I was young I fantasized about writing a book some day and as I have gotten older and nearing retirement I have returned to the same fantasy. Then I take a look at things I have written, like posts in this forum, and I think, where is my grammar? She died many years ago.

I'm pretty sure "Medium Tex and I" is correct for what it is worth.

I still think the important thing is what you have to say. I'm sure the two of you will do fine. Presumably you will have an editor (nazi?).

[craigr]

I'm sure the two of you will do find. Presumably you will have an editor (nazi?).

Definitely. There will be several of them at least.

[DonM]

That overly wordy commentary I wrote some months ago might best say how I came to the Permanent Portfolio.  I think translating Harry Browne's ideas to today's investment products (like ETFs), the tax deferred investment plans, how the PP mutual fund developed to where it is (where it leads and diverges from the HM PP and what it manages to accomplish that individuals have a tough time with).  Tools for readjustment, the approach to withdrawing at 'retirement' from the cash portion and re-balancing around that is just too cool.  Advantages (if there are any) of using one or more ETF or fund families.  And a good smattering of current Libertarian thinking along with some HB truisms. 
I can see that I already have some year's Christmas shopping done.

[SmallPotatoes]

Interesting development, guys. 

I will be curious to see what of these forums (and others) becomes the content, and what new information will be published.  When this does become a reality I hope it will be as efficient as Harry's original, perhaps with a chapter devoted to Clive.

[stone]

I'd like to second what KevinW said about-

"- the rebalancing bonus a.k.a. Markowitz theory a.k.a. why gold and cash add more to the portfolio than their historical averages alone would indicate"

Perhaps it would be good to have "boxes" that explained things  in different ways. It would be a shame to put anyone off by making it seem complex but at the same time it would be a shame if someone ignored the PP because they thought it had just had a flukey run rather than having sound arithmetic at its heart. Having optional boxes with charts and calculations etc might catch both camps?

I guess different people have different mindsets but for me the PP is all about the arithmetic that a 50% loss takes a 100% gain to get even, so if the assets are treading water, halving and doubling as the years go by, you can get a rebalancing bonus by taking from the leaders and adding to the laggers. Perhaps some simple charts and numerical examples would help demonstate that arithmetic. Perhaps extreme examples of rebalancing between two assets that are very very volatile, uncorrelated and in long term bear markets and yet give strong rebalancing profits would be a good way to make the case (something like cotton and sugar with cash or whatever over some historical period).

Then make the clincher that the nature of the PP assets -because of their link to the economic conditions- means that they very seldom all fall together. Perhaps some statistics would help to make that case over and above the basic logic that prosperity and depression are hard to have at the same time?

It might also help to talk about scenarios where everything falls together in a liquidation panic such as happened briefly in 2008 and has happened on a couple of days this past year and explain why such dips are by their nature likely to be short lived. The cases of strongly above inflation short term interest rates causing down years for the PP (such as USA 1981? and Brazil 2011) are also worth going over so that people can see just how atypical they are.

Gumbys inflation adjusted total returns of PP versus SP500 is also great. Including a 60:40 stock:bond portfolio in that would also be good.

The point Craigr made about it being nonsense to claim that a long time horizon reduces risk is also essential. If your time horizon is anything less than infinity, then a given risk is just as bad whether the time horizon is one day or 70 years. Your stock portfolio could halve in value on the last day of your 70 year saving period.

I also second the things people have said about international examples. Even if you are aiming entirely for a US market, it would still be a powerful point to show the four assets working nicely together in very diverse countries. Japan, USA, UK, Germany, Australia, Brazil, Iceland etc. That would show that the PP can cope with all sorts.

[steve]

I think the book is a great idea. One topic that I think that has not been covered in detail to my satisfation is tax loss harvesting. Every book Boogleheads etc just touches the surface. For a mostly taxable investor in the PP It would be interesting to explore set tax loss harvest rebalance bands and replacement funds that could stand IRS challenges.
Another topic Regarding Gold and closed end gold funds like GTU many readers ask for help in filling out Paperwork for closed end Gold funds.  I think that a good explanation and filled out examples maybe helpful for some.

[clacy]

One thing I've learned in business is that you can't be everything to all people.  So don't try to cram every single component or scenario into this book.  It's a relatively simple concept, so keep the book fairly straight forward.

Make it closer to a 2012 version of "Fail-Safe" as opposed to "Why the Best Laid Investments", IMO. 

Save some material for a follow up version or two that get more in depth into niche topics.

You have to remember what appeals to a handful of posters on this board, won't necessarily make for good reading to people that are new to the PP.

[melveyr]

If this book was a democratic process (I know it's not), I would vote to not be afraid to get advanced with some of the topics. Many people see the four way split as "unsophisticated." I think the PP deserves a very thorough argument in print. Besides, people expect investments to get slightly complicated. It is very important stuff.

[barry barnitz]

Hi all:

I posted the announcement of the new book on the Bogleheads Forum: http://www.bogleheads.org/forum/viewtop ... 10&t=88386.

regards,

[AdamA]

Hi all:

I posted the announcement of the new book on the Bogleheads Forum: http://www.bogleheads.org/forum/viewtop ... 10&t=88386.

regards,

Should be interesting to read the responses.

[stone]

I really do think that the blind spot that prevents wide acceptance of the PP is that people don't get the concept of "passive" volatility capture from rebalancing. IMO if you can explain that in a way that the most innumerate connect with, then you will have sold the PP. Then every one will follow the PP strategy. That will stop the PP from working because it gets its rebalancing gains from other people buying high and selling low .

[stone]

You will really know you've done a good job if  Clive reads it and then starts a PP .

[craigr]

Hi all:

I posted the announcement of the new book on the Bogleheads Forum: http://www.bogleheads.org/forum/viewtop ... 10&t=88386.

regards,

Thanks Barry. I posted a background there as well that I repost here:


My name is Craig Rowland.

My background in brief:

I am a software entrepreneur and sold my previous company to Cisco Systems, Inc. in 2002. I was also an early stage employee with successful acquisitions in 1998 of WheelGroup Corporation to Cisco Systems and early stage consultant to TippingPoint Technologies which sold in 2004 to 3Com Corporation. My background at these companies was in computer and network security and I hold several patents in the area and have done other interesting research in the field. I currently volunteer for a local technology incubator as a start-up coach and help turn ideas into businesses. I have experience in executive management, venture capital fund raising, public speaking, marketing, sales, engineering management and development.

I use the ideas of the Permanent Portfolio to maintain, protect and grow my life savings and provide living expenses as I work on different projects. Today I split my time on investing/money management and working with new start-ups/angel investing.

[gap]

To reiterate melveyr's point and to use an oft repeated quote of Einstein

“Everything should be made as simple as possible, but no simpler.”?

[AdamA]

To reiterate melveyr's point and to use an oft repeated quote of Einstein

“Everything should be made as simple as possible, but no simpler.”?

I'm sure that Craig and MT will give very simple and concise explanations of everything they discuss.

My hope is that they do decide to include some of the more esoteric things discussed on this board, maybe in a separate section or something. 

[craigr]

We are thinking the book will fall between Fail-Safe Investing and Why The Best Laid Plans Usually Go Wrong. We are looking to provide solid understandings of the basics and core implementation issues. We are going to present portfolios that are dead simple to implement all the way up to more sophisticated applications involving geographic diversification, etc.