Gyroscopic Investing

Possibly they need to fudge the numbers the way that we do.

Brazilian savings accounts actually have an inflation adjustment that is in addition to the rate.  But I am not well-versed enough to know if it is equal to the rate of inflation or just a partial adjustment.

I am a fan of having some FX, but I don't count it as part of the PP cash piece.

Hi Clive,

I am flirting with that idea of holding USD assets to complement a CA PP.  My intuition would be to run a US PP in parallel, perhaps 15 to 25% US PP and 75 to 85% CA PP in total.

when looking at past data, that level of dilution of the CA PP does nt really affect return and minimally increase volatility.  I would see that as an insurance against Icelandic events.

I plead Guilty, your honor!

MG

moda0306 wrote: I seemed to offer plenty of room to breath outside my own opinion here, TBV.  Some of our discussions have had unkind characterizations and maybe flaming adjectives, but this one hadn't come close to that point. It seemed to me your post did a lot more to insult those that think like Gumby and I than to spark intellectual curiosity within someone who seems to have certain predispositions about our global financial system.  Further, we were hardly advocating a change in the PP... on the contrary, we were warning against it and just providing some fresh perspectives to someone that seemed like he may not have been exposed to them.

I have.  The problem is the rates are pathetic compared to what you can get directly in the country, especially after inflation is taken into consideration.  In the end, it just wasn't worth it.

MG

Reub wrote: Has anyone seriously looked at using Everbank to diversify into a certificate of deposit from another country? I see that the CD's offered there are FDIC insured. I noticed that a 3 month Brazilian Real CD is currently offering 4.75% and that a 12 month Australian CD is at 3.63%. What do people think of investing a small portion of the cash portfolio in something like this? I fully understand that currency depreciation is a risk here.

hogtied wrote: I'm thinking of taking a portion of my cash holdings (perhaps 3-5%) and converting them to a few foreign currency CD's with EverBank.  Mostly because I believe the dollar will continue to tank.  The CD pays 1.2% for six months and hopefully will gain on the exchange rates down the line.  What say ye?  Thanks.

Tortoise said it well...

Yoda: "You must unlearn what you have learned..."

PP Padawan: "Okay, but I think I'd be more comfortable with a commodities basket instead of just gold, and maybe I'll substitute some ST bonds for part of the LT bond allocation since yields can't possibly get any lower."

Yoda: "No! Tinker not. PP, or PP not. There is no tinker."

I will re-post a Yoda-ized speech from a while back that is responsive to a foreign currency tweak of the cash portion of the PP:



My head against the wall rather than banging because things are not unfolding the way I think they should, rather I might just buy the PP and let the world be as rational or irrational as it wants to be, and live my life without being overly troubled one way or another I would. 

Of the insights that Harry Browne offered in "How I Found Freedom in an Unfree World", one important is that these big problems that the world is facing your personal responsibility they are not.  Cause these problems you did not not, and the one in charge of solving them you are not.  The media has a way of working people into a frenzy over things that caused they did not, absolutely no control over them do they have, but left with "screwed up world fatigue" they are. 

What if all just entertainment it was, hmm?  Like you to be upset about it they would, but insulate yourself from it emotionally you must, and turn off the TV you should, hmm? 

What if you focused on your own happiness and left the problems of the politicians and central bankers to those who created them, perhaps happier you would be, hmm?  What if you set up your PP with the confidence that you would be protected whether the world got better or worse, and whether our leaders were or were enlightened not, hmm? 

This approach, would be better or worse off if you took, hmm? 

To get upset about all of this stuff is human, to care is understandable, but trouble yourself you must not.  What we are seeking is a lot simpler than we sometimes imagine, and just a certain state of mind it is we seek, or in Harry Browne's words  "well-being is a mental state."  To the extent that ruminating over some of these issues undermines your mental state of well-being, waste your time on them I would not.

Imagine, the PP offers you a ready-made means of protecting yourself from virtually any bad financial event that one could encounter.  Just put your protection in place and begin focusing on your own happiness and peace of mind and let the rest of the world do what it wants.  Is this not the way of the Force, hmm?

MediumTex wrote: I will re-post a Yoda-ized speech from a while back that is responsive to a foreign currency tweak of the cash portion of the PP:



My head against the wall rather than banging because things are not unfolding the way I think they should, rather I might just buy the PP and let the world be as rational or irrational as it wants to be, and live my life without being overly troubled one way or another I would. 

Of the insights that Harry Browne offered in "How I Found Freedom in an Unfree World", one important is that these big problems that the world is facing your personal responsibility they are not.  Cause these problems you did not not, and the one in charge of solving them you are not.  The media has a way of working people into a frenzy over things that caused they did not, absolutely no control over them do they have, but left with "screwed up world fatigue" they are. 

What if all just entertainment it was, hmm?  Like you to be upset about it they would, but insulate yourself from it emotionally you must, and turn off the TV you should, hmm? 

What if you focused on your own happiness and left the problems of the politicians and central bankers to those who created them, perhaps happier you would be, hmm?  What if you set up your PP with the confidence that you would be protected whether the world got better or worse, and whether our leaders were or were enlightened not, hmm? 

This approach, would be better or worse off if you took, hmm? 

To get upset about all of this stuff is human, to care is understandable, but trouble yourself you must not.  What we are seeking is a lot simpler than we sometimes imagine, and just a certain state of mind it is we seek, or in Harry Browne's words  "well-being is a mental state."  To the extent that ruminating over some of these issues undermines your mental state of well-being, waste your time on them I would not.

Imagine, the PP offers you a ready-made means of protecting yourself from virtually any bad financial event that one could encounter.  Just put your protection in place and begin focusing on your own happiness and peace of mind and let the rest of the world do what it wants.  Is this not the way of the Force, hmm?

Thanks guys! Now every time I'm tempted to tinker I will hear Yoda's voice in my head saying PP or PP not. There is no tinker.

We're all trying to look at this as a series of investment puzzles when really it may just be a philosophical matter.

Thinking about tinkering with the PP may be an important part of learning about it. Sometimes it is difficult to understand a system without perturbing it.

I think that most people are attracted to and adopt the PP because they are oriented toward a threat. This orientation leads them to explore weakness in the PP where it is actually strongest and consider ways to reinforce the part that is least likely to break.

The likely scenario is not that the PP will fail you. The likely scenario is that you will fail the PP, and it will happen in prosperity. And the reason is that your monkey brain will notice that the your PP consistently under performs your brother-in-law's boasting about his 100% stock allocation.

If you want to tinker you should worry about prosperity and your variable portfolio.