Gyroscopic Investing

Sideways


What's next?

BREAKUP BULL PP 

The fundamentalist inside me is still screaming that the equity markets are ovevalued and we're due for a correction that'll bring P/E's down to the mid single digits (like what happened in 1973 and 1982.)  A long and sustained bull market followed in both cases.

Who knows when this is gonna happen (if at all) so I'm still intent on sticking with PP..  but if it does happen, it's very likely I'll shift to an Equity-heavy VP. (30-50% equities vs. 25% in PP).

here we goooooooooooooooooooooooooooooo !

EUROPE IS FALLING

ooooohhhhh my EU PP

Have you considered emigrating for a decade or so?

RuralEngineer wrote: Have you considered emigrating for a decade or so?

Why RuralE?

PANIC!

Okay, it seems that implemention risk is overlooked by the muppet PP cheerleaders, but it is a risk factor.  Just wait it out.

MachineGhost wrote: Okay, it seems that implemention risk is overlooked by the muppet PP cheerleaders, but it is a risk factor.  Just wait it out.

Hmm my google fu is waning, at the risk of being the fall guy; What's implementation risk?

gizmo_rat wrote: Hmm my google fu is waning, at the risk of being the fall guy; What's implementation risk?

It's the risk of when you implement a portfolio, i.e. it will be varying degrees away from the worst possible time.  With three long-term non-correlated assets going up simultaneously, it's probably more suspectible than normal.  Your maximum drawdown will vary depending on your implementation risk.

frugal wrote:

RuralEngineer wrote: Have you considered emigrating for a decade or so?

Why RuralE?

It was a half serious suggestion that waiting out the apparent collapse of the EU somewhere other than Europe might be advisable.

why GOLD is falling like crazy?

frugal wrote: why GOLD is falling like crazy?

The threat of deflation is back on the table.  I think gold's freefall should worry stockholders as well because as soon as the QE drug wears off.... look out below (IMO of course).

Shaken...

... but not stirred?



Bam!!

Committing to an investing strategy is like committing to a marriage: You're in it for the ups and the downs.

Now, if you have 3+ bad years, then maybe it's time to start re-evaluating things.  But you've been in the PP for what??? Six months? 

Are you really gonna dump your chick because you just got married and found out that marriage is hard sometimes?

Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

Coffee

superb words!

Just arrived today my PP BOOK during the worst drawdown day of my portfolio

Now I will read the book.

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

Jesus... how much are we talking about?  - 1.89% ?  Are you really telling me that a one day drop of -1.89% is going to keep you up at night?  On $100,000 ... that's about $1900.  You've probably spent more on your TV.  And in five years, your TV won't be worth anything.  In less than a year, that -1.89% will probably be +4%.  Maybe even within a month. 

Go take your Ms. Moneypenny for a roll in the hay and forget about it. 

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

It's just noise.  Goldman Sachs is doing its thing in the gold market right now, which probably means a few months of higher than usual volatility for gold, but it's still all just noise.

MediumTex wrote:

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

It's just noise.  Goldman Sachs is doing its thing in the gold market right now, which probably means a few months of higher than usual volatility for gold, but it's still all just noise.

Come on, man... You gotta stick with the Bond theme.  What kind of noise is it?

Coffee wrote:

MediumTex wrote:

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

It's just noise.  Goldman Sachs is doing its thing in the gold market right now, which probably means a few months of higher than usual volatility for gold, but it's still all just noise.

Come on, man... You gotta stick with the Bond theme.  What kind of noise is it?

It's the noise made by a tree falling in the woods when no one is within earshot.

MediumTex wrote:

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

Yep, Goldfinger was a good one.

And remember the scene where 007 is tied, spreadeagled, to a steel plate while a robotic laser beam is cutting through the steel, slowing advancing toward a sensitive area of his anatomy?

Bond: "Do you want me to talk?"
Goldfinger: "No, Mr. Bond. I want you to die!"

But all was well in the end as the hero triumphed over evil, just as our portfolios will do as the PP works its magic in today's chaotic markets. (But we might have to give it some time.)

buddtholomew wrote: Goldfinger...my favorite bond movie of all...

I have been invested in the PP since 2010 and today is by far the largest draw down that I have personally witnessed. Others may see this decline as a purchasing opportunity, but I am more cautious and will wait until a re-balancing band is triggered. This pullback has shaken my resolve, but now I get to test whether I can invest in this portfolio for the foreseeable future. Time will tell.

Well, consider the alternatives.

Lost in the noise of the gold sell off today is that the stock market had a horrible day as well.  The PP lost 2.57%, while VTI  basically matched that by losing 2.43%.

No need to be the man with the golden gun to your head.  As a former stock bug, I still find the PP diversification to be pretty solid even in tough times.

Coffee wrote: ... but not stirred?



Bam!!

Committing to an investing strategy is like committing to a marriage: You're in it for the ups and the downs.

Now, if you have 3+ bad years, then maybe it's time to start re-evaluating things.  But you've been in the PP for what??? Six months? 

Are you really gonna dump your chick because you just got married and found out that marriage is hard sometimes?

3 Bad YEARS

-30%

-40% total ? How much is necessary to get out of HBPP?

I read MT also said the same.

3 years can achieve -50% for example... Is it tolerable?

frugal wrote: 3 Bad YEARS

-30%

-40% total ? How much is necessary to get out of HBPP?

I read MT also said the same.

3 years can achieve -50% for example... Is it tolerable?

As craigr has so often said in the past when the jitters come out, what would be your alternative? The PP invests in 4 wildly different assets at equal ratios. For the PP to have 3 straight bad years and shrinking 50% would mean some pretty catastrophic events have unfolded.

I will posit that, should the PP have lost 50% in 3 straight years, there will probably be many more portfolios out there nursing even larger losses, with perhaps only a lucky few winning out. Now I don't have anything to back up this opinion except there were other threads that speculated what would happen when rebalancing into a constantly shrinking asset, and the consensus there was that if such circumstances occurred, there would be a reevaluation of the Permanent Portfolio strategy.

The four assets offset each other and generate a remarkably stable porfolio while somehow still outpacing inflation in the long run. Thus, if the PP has indeed lost 50% of its value, there is a very good chance you're still doing well when compared with other portfolios.