Gyroscopic Investing

Are the Amish like the trees?

Do they really care about our nonsense?

Maybe, I should become Amish.

What would happen if the American economy stopped growing? If economic growth stayed steady, and population growth stayed steady, would it be a bad thing? If so, why?

doodle wrote: Medium Tex,

I like your allusion to Shakespeare..but

When actors are between plays

what do we eat and drink?

There is a nourishment app for the Ipad.

What do you mean what do we eat and drink?  Food and water, of course.  Something a little fancier if you've got the coin--the gold coin, I mean.

doodle wrote: Are the Amish like the trees?

Do they really care about our nonsense?

Maybe, I should become Amish.

Humanity is like the trees.  We just don't realize it yet. 

Gumby wrote:

doodle wrote: People would do well to have a piece of land and a small cabin tucked away somewhere to retreat to if this crazy "house of cards" fell in on itself.

That's actually true. This was often discussed on this forum last year. But, a good and supportive community (like AgAu described) is also a good thing.

I don't know if this whole cabin idea is the way to go.  Browne's advice to never sacrifice the present for the future holds true, in my opinion.

If you fear a world where things might one day spin out of control, focus on what will bring you value in the present.  Get to know and trust your neighbors.  Learn a useful skill or two.  Get as lean, strong and fit as you can.  Learn to shoot, if that's something you would enjoy.  If a bit of food and water, junk silver, or FRN's in the safe make you feel better, go for it.

More than anything, make sure you are well-prepared for all possible futures, including the very good ones.

MediumTex wrote: The good news is that we are currently standing on top of the highest mountain of technological progress in the history of humanity.  Athough there may be regret and sadness at the prospect of our species not being able to continue climbing ever-higher into perpetuity, there is nothing wrong with simply enjoying the majestic view with humility and wonder.

And I don't think we're nearly done.  Humanity's sure to be buffeted by hard times in the coming decades but there's so much more we're going to discover (and subsequently take for granted as we do so much of what we have today.)

We have it so very good in this day and age.  Almost indescribably so.

If the Singularity arrives and one day my consciousness lives in a massive computer powered by a Dyson Sphere, I will put this technology to its ultimate purpose: to come back to this thread millennia into the future and say, "See??  Everything turned out fine!"  (Also, to lay down a few of the best leather chaps jokes my cybernetically-enhanced brain came up with.)

doodle wrote: What would happen if the American economy stopped growing? If economic growth stayed steady, and population growth stayed steady, would it be a bad thing? If so, why?

The current economic system is premised upon continued growth.  It's like a shark--if it stops swimming it will die.

Population growth is also problematic, since the premise behind the economic system presupposes an increasing supply of people to provide the inputs necessary to facilitate the continued economic growth and consume the junk cranked out by our industrial infrastructure.

To paraphrase Charlton Heston in "Soylent Green": The American economy is made of people.

Would the world be better off under another system?  I don't know, but I'm pretty sure we will find out sooner or later because the current system is not built to last.  Once the "least abundant necessity" begins to provide insufficient inputs for continued business as usual operations, system-wide turbulence begins to appear and it's hard to stop. 

Lone Wolf wrote:

MediumTex wrote: The good news is that we are currently standing on top of the highest mountain of technological progress in the history of humanity.  Athough there may be regret and sadness at the prospect of our species not being able to continue climbing ever-higher into perpetuity, there is nothing wrong with simply enjoying the majestic view with humility and wonder.

And I don't think we're nearly done.  Humanity's sure to be buffeted by hard times in the coming decades but there's so much more we're going to discover (and subsequently take for granted as we do so much of what we have today.)

We have it so very good in this day and age.  Almost indescribably so.

If the Singularity arrives and one day my consciousness lives in a massive computer powered by a Dyson Sphere, I will put this technology to its ultimate purpose: to come back to this thread millennia into the future and say, "See??  Everything turned out fine!"  (Also, to lay down a few of the best leather chaps jokes my cybernetically-enhanced brain came up with.)

That's a great thought Lone Wolf.

We never know how close or far we are from death, either as individuals, a society or a species.

There's no reason not to celebrate the moment with all the energy we can muster, whether we are 10 minutes or 10 million years from the end.

I can't tell the average age of the people on this board, but from the tone of the last threads its like many are in the "coming to terms" phase of their life.

Maybe it is just the all the talk of the wind and the trees that gives me this impression. Maybe many of you figure that you might not see the capitalist "game over"....no disrespect in any of that

I am still in the "young warrior" stage of life however and haven't acquired much wisdom yet to the ways of the world. I simply am looking for safety and security in life for me and my family. Money is of no object to me other than the security it provides.

What gives me pause however, is that I sometimes feel like the passenger in a car that is being driven by a drug riddled blind man. I know that one can never achieve total control, (an asteroid could hit my house ten minutes from now)...but I would love to feel that all of my labor and work weren't being stored and invested in a game of "extreme monopoly".

Maybe, I pine for the feeling of knowing that with the exception of mother nature or an act of God, I control my future and that of my family. Currently, I have little feeling of control, and when I look at those who have more than me (politicians) it makes me queasy.

Does anyone share this sentiment, and has anyone acted on it besides using the Permanent Portfolio?

doodle wrote: I can't tell the average age of the people on this board, but from the tone of the last threads its like many are in the "coming to terms" phase of their life.

Maybe it is just the all the talk of the wind and the trees that gives me this impression. Maybe many of you figure that you might not see the capitalist "game over"....no disrespect in any of that

Nah.  I'm not all that concerned about where I'm at in my own life.  I'm 40, which is both plenty young and plenty old.  What I sense we are about to see a "coming to terms with" is some of the elements of the political and economic systems we have created for ourselves.  If I have a note of grief in my tone, it is grief for ways of life that we have all come to enjoy perhaps changing very dramatically in the future.

I am still in the "young warrior" stage of life however and haven't acquired much wisdom yet to the ways of the world. I simply am looking for safety and security in life for me and my family. Money is of no object to me other than the security it provides.

The way a young warrior gets to be an old warrior is by cultivating a sense of humility and skepticism about what people think of as conventional wisdom.

What gives me pause however, is that I sometimes feel like the passenger in a car that is being driven by a drug riddled blind man. I know that one can never achieve total control, (an asteroid could hit my house ten minutes from now)...but I would love to feel that all of my labor and work weren't being stored and invested in a game of "extreme monopoly".

Maybe, I pine for the feeling of knowing that with the exception of mother nature or an act of God, I control the my future and that of my family. Currently, I have little feeling of control, and when I look at those who have more than me (politicians) it makes me queasy.

Does anyone share this sentiment, and has anyone acted on it besides using the Permanent Portfolio?

Sure, and overcoming this feeling was a large part of the point of Harry Browne's work.  If you haven't read it yet, take a look at "How I Found Freedom in an Unfree World."

You're not the first one to be worried about living in a world run by morons.

MediumTex wrote: There's no reason not to celebrate the moment with all the energy we can muster, whether we are 10 minutes or 10 million years from the end.

100% agreed.  People marvel at lottery winners that can't seem to find happiness and understand how damn lucky they are.  But look at us!  To borrow from Humphrey Bogart in Casablanca: of all the atoms in all the galaxies in all the possible universes in all the times throughout the billions years of history, here I am.  My atoms got arranged into the shape of a healthy, (semi-)sentient creature in the most prosperous time in history in a country with the best system of government we've ever seen, flaws and all.

My reading of the history of this planet alone convinces me that any problems I think I have are all crap.  It's dizzying to realize that I've already won the lotto 1000 times over.

doodle wrote: I can't tell the average age of the people on this board, but from the tone of the last threads its like many are in the "coming to terms" phase of their life.
...
Maybe, I pine for the feeling of knowing that with the exception of mother nature or an act of God, I control my future and that of my family. Currently, I have little feeling of control, and when I look at those who have more than me (politicians) it makes me queasy.

Does anyone share this sentiment, and has anyone acted on it besides using the Permanent Portfolio?

I'm 33 and plan to be around for as long as I possibly can.  My sincerest advice is to please do the best you can to remove the worry from your mind and experience the present moment.  The people we love are living their lives, growing old and dying right now.  Don't let thoughts of some future that may not happen take you away from today.

If I would recommend three chief things, it'd be these:

• Accept that you don't know precisely what the future holds.  Do the best you can with what you do know and never sacrifice the present for an uncertain future.
• Read How I Found Freedom in an Unfree World.  It is a wonderful antidote to these feelings of helplessness and confusion.  (Looks like MT beat me to this one, so let me second it.  It is an important book.  Clear your mind and read it.)
• Take a one week "news fast".  Don't watch or read any news of any kind.  Find something else that you enjoy and do that instead.

Also, it sounds like you're still hesitating on putting together a PP.  I always recommend a PP, of course. 

So there aren't any proactive measures other than a permanent portfolio that anyone has taken?

My brother is trying to convince me to move to Fiji with him (he spent 3 years finishing Phd there)...that would certainly be proactive!

"I must have posted just after the above came, post was written....thanks Lone Wolf"

doodle wrote: So there aren't any proactive measures other than a permanent portfolio that anyone has taken?

My brother is trying to convince me to move to Fiji with him (he spent 3 years finishing Phd there)...that would certainly be proactive!

Reduce debt.

Reduce desire for material things.

Learn to live in the moment.

Turn off the TV.

Moving to Fiji sounds like a great adventure.  Do it.

doodle wrote: Maybe, I pine for the feeling of knowing that with the exception of mother nature or an act of God, I control my future and that of my family. Currently, I have little feeling of control, and when I look at those who have more than me (politicians) it makes me queasy.

Does anyone share this sentiment, and has anyone acted on it besides using the Permanent Portfolio?

I think this is actually a fairly common feeling in a post-industrial capitalist society.  Due to economies of scale, the most efficient arrangement is for everyone to work for large organizations in extremely narrow fields, and outsource every other part of their life to other narrow specialists working for other large organizations.  While economically efficient, this leads to a sense of alienation and powerlessness.

IMO most people experience that insecurity on a subconscious level which causes much of the ugliness in middle class life: vindictive HOAs, road rage, helicopter parents, etc.  It's an attempt to grasp at SOMETHING, ANYTHING that can be completely understood and controlled.

+1 on "How I Found Freedom in an Unfree World."  Actually we all have quite a bit of control over our surroundings and how our life works.  I share your need to feel in control of my destiny, and along with the PP, I try to arrange things to have as few external dependencies as possible.

For instance, I am loathe to buy anything that requires batteries.  And I really hate proprietary batteries that can only be bought by one manufacturer.  Almost everything in my life runs on human power or 120V.  I never have that experience of being stuck with a device that doesn't work, and only one vendor that can fix it.

I love an Indian dish called kheema but only know of one restaurant that serves it.  So I did some research and figured out how to make it myself.  Now I'm not beholden to that restaurant and can still get kheema if I move somewhere else.

These may seem like trivial examples, but if you're systematic about confronting and eliminating dependencies, pretty soon you do feel in control of the things that matter to you.

I totally agree with that post doodle.

I love cooking for myself because it is so empowering. It gives you total control over the most important aspect of your life: food. Our body is comprised of what we put into it, therefore outsourcing the function of cooking is uncomfortable to me.

Its similar to why we all manage our own money. Because no one cares about your money more than you do.

In a world that imposes specialization onto us, it is very liberating to develop a sense of self-reliance.

I have yet to read How I Found Freedom in an Unfree world but this thread is sparking me to pull the trigger.

doodle wrote: I can't tell the average age of the people on this board, but from the tone of the last threads its like many are in the "coming to terms" phase of their life.

Doodle, I'm in my mid-30s, but my stumbling upon the PP, HB and this board has finally given me a wonderful perspective on life. The last 15 months have been a long journey for me in terms of life and investing. I started my journey with confidence...realized I was clueless...morphed into disbelief...transformed into doubt...which lead to more questioning of the ways of the world...had a little bit of fear...and then acceptance. (About halfway through that journey I was convinced, like you, that we were all going to die from too much debt.)

And I have to tell you. After taking that journey, I've never been happier.

Here...Let's take a look back at what I posted when I first started my PP:

http://www.bogleheads.org/forum/viewtop ... 664#703664

It's funny to look back at that time now. You can see that I was incredibly nervous. Buying gold at the all time high (I think it was like $1100). Investing in LT Bonds even though I hated them at the time.

And there was MT (hat tip), and other PP veterans, providing much needed support as I felt like I was going to puke my guts out with all these ridiculously overpriced assets.

So, I began reading about the "case" for each asset. Why will bonds win? Why will stocks win? Why will bonds lose? Why will Gold lose? Why will Stocks lose? Why will Gold win? Why is cash good? Why is cash bad? and so on...

And what I found is that there is a legitimate argument for every single one of those. And there are people who are willing to stake their entire reputation on each of those arguments.

A few weeks later, on April 11, 2010, I read an article that was the lead story on the front page of the New York Times. It made my stomach churn. The article was titled, "Interest Rates Have Nowhere to Go But Up." The article wasn't even in the Business Section. Again, this was the lead story on the front page of the New York Times — a very big headline, spanning two columns with a big chart on the front! And because I read it, I was convinced that it was true, because the article was written as if it were a solid fact that interest rates had to rise starting right then.

And here I was with 25% of my wealth in LTTs, freaking out that I'm going to lose a ton of money. Oh, and here was my freakout, recorded for everyone to see:

http://www.bogleheads.org/forum/viewtop ... 765#708765

It turns out that interest rates only went down, from almost the day that article was written. Greece happened, the Flash Crash happened, investors fled stocks, LTTs went up 20%! I finally realized that even the smartest people in the room have no idea what they're talking about. And more importantly, I realized how irresponsible it is for media outlets to make any sort of predictions. Think about the poor suckers who actually believed that article. I was almost one of them!

And that made me feel great. Finally it was OK to be clueless. I didn't have to be right anymore. And the world just started to look different. I realized that the point of life was not to worry about what direction interest rates were headed. The point of life was to be happy and enjoy ice cream, and baseball games, and your kids, and splashing in the pool, and investing in your career, and taking a nice vacation once in awhile, and so on.

Life is short. We're all going to die at some point. It may be tomorrow, or it may be in 50 years. But, damned if I'm going to sit around worrying about the banking system and all its flaws, each day. The PP's biggest dividend has been the ability to forget all that stuff and just enjoy life.

We can watch scary videos about monetary theory, or cite articles from journals or economists, but they are all just theories and agendas that may or may not come true.

And if you, or anyone else, shows me an article about how we are all destined for one outcome, I'm going to show you a legitimate opinion that says just the opposite. Not because I'm trying to be an ass... but because I'm trying to show you that everyone wants you to think they have it figured out, but almost no one does.

Jim Rogers is a hack. Paul Krugman is a hack (who happens to have a Noble Prize). We're all hacks. We're all clueless. The monetary system is much, much to complex for any individual to figure out. Even the people who run it don't fully understand it. And there's nothing wrong with that unless you buy into whatever future someone is making the case for.

What Harry Browne has given us is an option to opt-out of all that bullsh!t. We can hold four opposing assets that let us drown out the market noise like Bose Noise-Reduction headphones. And to be honest, I love those things, even if they are made in China

Oh, and Doodle, I did finally discover what money really is...

THE ONION: U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy.

"Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…" said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. "You know what? It doesn't matter. None of this—this so-called 'money'—really matters at all."

"It's just an illusion," a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. "Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless."

According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, "Oh my God, he's right. It's all a mirage. All of it—the money, our whole economy—it's all a lie!"

Screams then filled the Senate Chamber as lawmakers and members of the press ran for the exits, leaving in their wake aisles littered with the remains of torn currency.

As news of the nation's collectively held delusion spread, the economy ground to a halt, with dumbfounded citizens everywhere walking out on their jobs as they contemplated the little green drawings of buildings and dead white men they once used to measure their adequacy and importance as human beings.

Gumby,

That's a really outstanding post above about interest rates and your PP experience.

I hope lots of people read it and think about it.

Reading some of those posts in the BH thread you linked to was like a trip down PP memory lane.

MediumTex wrote: Gumby,

That's a really outstanding post above.

I hope lots of people read it and think about it.

Reading some of those posts in the BH thread you linked to was like a trip down PP memory lane.

If I haven't said it enough, thanks again for all your guidance. At the time the PP felt difficult, irrational and intriguing at the same time. It wasn't really that long ago, but it's already difficult to remember what it felt like to be in that situation. These forums are an oasis in a sea of cacophony.

Gumby wrote:

MediumTex wrote: Gumby,

That's a really outstanding post above.

I hope lots of people read it and think about it.

Reading some of those posts in the BH thread you linked to was like a trip down PP memory lane.

If I haven't said it enough, thanks again for all your guidance. At the time the PP felt difficult, irrational and intriguing at the same time. It wasn't really that long ago, but it's already difficult to remember what it felt like to be in that situation. These forums are an oasis in a sea of cacophony.

I went through all the same stuff when I first came across the PP as well.

Once you get it, it makes perfect sense.  Before that, it just looks crazy.

Just to emphasize how hard it is to predict the future, on 4/5/2010 Gumby wrote

It was pretty tough to bring myself to buy Gold out this outlandish price.

and a lot of other people felt that gold was overpriced at that time.  That day GLD closed at $115.36.  Today GLD closed at $156.12 --- up 35%.

I don't intend this to be a knock against Gumby, but rather another example of how you really, really, can't predict these things.

KevinW wrote: Just to emphasize how hard it is to predict the future, on 4/5/2010 Gumby wrote

It was pretty tough to bring myself to buy Gold out this outlandish price.

and a lot of other people felt that gold was overpriced at that time.  That day GLD closed at $115.36.  Today GLD closed at $156.12 --- up 35%.

I don't intend this to be a knock against Gumby, but rather another example of how you really, really, can't predict these things.

This reminds me of one of my first posts on the megathread:

Posted: Tue Nov 03, 2009 11:24 pm   


Getting started is difficult, as the only aspect of the plan that I am at present not invested in to some extent is gold. Between the massive buy in through ETF's in the last couple of years, not to mention the news out of India today, it is hard to pull the trigger, when your gut tells you that you are buying high. Still, I come back to the wisdom of the plan, and Mr. Browne: the reality is that I just do not know. Period. That, and the fact that my investment style has always been focused on reasonable return at low risk, although last year was certainly an eye opener

My ability to sniff out the top in gold is only slightly more impressive than my suicide portfolio. And Gumby, thanks for the link. I have been meaning to restore my avatar.

doodle wrote: Maybe, I pine for the feeling of knowing that with the exception of mother nature or an act of God, I control my future and that of my family. Currently, I have little feeling of control, and when I look at those who have more than me (politicians) it makes me queasy.

Does anyone share this sentiment, and has anyone acted on it besides using the Permanent Portfolio?

I consider money to be a way of keeping score.  I learned this back in the 1980s when I studied the characteristics of entrepreneurs.  In other words, I have self-established goals to accomplish and self-defined activities to do to get me to my goals.  My bank balance tells me how well I'm executing, but it's the thrill of planning and executing that get my juices flowing rather than the actual amount of money I have.  I only keep score with myself and not relative to how my neighbors or "rich people" do.  All I need is enough investment income to exceed my frugal living expenses by a healthy margin of safety, and I am financially free (which amounts to "infinite wealth" on my part, even though I own very few "toys").

I also take responsibility for the results I get.  I learned this a few years ago when I read Safe Strategies for Financial Freedom by Van Tharp.  I can't control what the market does, but I can control how I interact with and react to the market.  Since the market (both stock and job) have hiccups every now and then, I have to plan for these eventualities and deal with them when they occur.  The Permanent Portfolio is part of my approach to dealing with the asset market hiccups, although only a small percentage of my investments are in it right now (in the form of the PRPFX mutual fund, which I'm "test driving" as a proxy for putting a greater amount of money into a self-managed Permanent Portfolio at some point in the future).

As such, I feel in control of my future.  I can't control what Congress does or what my clients do (or what the market does), but I have planning premises to use and various preparations in place as a hedge against the possibilities I think might happen.  Of course, I could be wrong and perhaps I've overlooked something.  If so, I will deal with it when it happens.  Planning and preparing ahead of time and then improvising as necessary as events unfold have worked well for me in the past.

The financial meltdown of 2008 and 2009, for example, caught me by surprise.  But I had enough slack resources in place from preparing (perhaps even over-preparing) for my planning premises at the time, that I was able to take advantage of the meltdown and ride through the crisis OK (I converted my Traditional retirement account to the Roth version and paid "half price" on the income taxes that were due).  I could not have afforded the taxes to do this conversion if the meltdown had not happened.  The value of my retirement account has since recovered to its pre-meltdown level.  If the United States undergoes an economic collapse should it be unable to get its fiscal house in order (a worst-case scenario), then I will have wished I had invested in "beans, bullets, bullion, and a bunker" rather than a retirement account conversion, but perhaps the United States will muddle through this crisis somehow (it could happen).

Even though money is my way of keeping score, money to me are numbers on a computer screen.  I receive all of my incomes electronically and pay almost all of my bills electronically.  My investments show up as numbers on a computer screen (since they are publicly traded and marked-to-market every day).

If an apocalyptic event occurs, I can only hope I go quickly and painlessly.  My religious beliefs will have to deal with such a possibility.