Permanent Portfolio Forum
https://www.gyroscopicinvesting.com/forum/
https://www.gyroscopicinvesting.com/forum/viewtopic.php?t=4814
Budd! I'm surprised at you! Now eat all of your vegetables and go to your room!buddtholomew wrote:My sentiments exactly. In my own time, thank you.Pointedstick wrote:If you truly believe that, isn't getting out now the best course of action? Since you hate this portfolio and feel pessimistic about its future, why continue to torture yourself?buddtholomew wrote: This portfolio has seen its best days...
Could be a lot of places: Real estate, foreign stocks, commodities, art, corporate bonds, munis, cash--but without pushing up the yield, etc.Xan wrote:Where's the money going, then? It just about has to be in gold, bonds, stocks, or cash.buddtholomew wrote:I sincerely doubt that gold and bonds will soar in response to falling equity prices. I suspect gold declines and investors shun long-term treasuries as the current mindset is for yields to rise. This portfolio has seen its best days...
As far as I can tell, we've now had at least 2 years of negative real returns (p2t shows 1.27% cagr for the last 2 years). This is getting pretty close to my 3 year negative return alarm. I'm givig it one more year before I seriously consider a new strategy. As of now, I don't have a better one (a 50/50 bogleheads isn't seeming too hot looking forward)PP67 wrote: According to Peak2Trough, for the last 12 months, the HBPP has return of -2.89%...and there have been several calls that the HBPP is doomed...
However, over the past 42 yrs when there apparently was nothing inherently wrong with the HBPP, there have been 120 periods (which were undoubtedly less or greater than 12 months) that had a drawdown over 3%...
Am I missing something here or can one surmise that the recent (last 12 months) performance of the HBPP is nothing to get too excited about?
If I had the programming prowess of Peak2Trough or many others on this forum, I would develop a program (like Peak2Trough) that you could put your start date and let it show you how your returns for that time period rank with similar time periods over the last 42 years... That could be very enlightening...
Not sure what this means, but I enjoy vegetables and would welcome some alone time...Reub wrote:Budd! I'm surprised at you! Now eat all of your vegetables and go to your room!buddtholomew wrote:My sentiments exactly. In my own time, thank you.Pointedstick wrote: If you truly believe that, isn't getting out now the best course of action? Since you hate this portfolio and feel pessimistic about its future, why continue to torture yourself?
That's what she said. heyoooobuddtholomew wrote:Not sure what this means, but I enjoy vegetables and would welcome some alone time...
Yeah, Budd, eat your Reub-barb pie!Reub wrote: Budd! I'm surprised at you! Now eat all of your vegetables and go to your room!
So I haven't made a program for it yet, but I did use excel and found that -2.89 over a 12 month period is worse than 95% (+/- 2%) of all 12 month trailing returns. That being said, it's not super uncommon, since there are still twenty two TTM periods in which the return was worse than -2.89.PP67 wrote: According to Peak2Trough, for the last 12 months, the HBPP has return of -2.89%...and there have been several calls that the HBPP is doomed...
However, over the past 42 yrs when there apparently was nothing inherently wrong with the HBPP, there have been 120 periods (which were undoubtedly less or greater than 12 months) that had a drawdown over 3%...
Am I missing something here or can one surmise that the recent (last 12 months) performance of the HBPP is nothing to get too excited about?
If I had the programming prowess of Peak2Trough or many others on this forum, I would develop a program (like Peak2Trough) that you could put your start date and let it show you how your returns for that time period rank with similar time periods over the last 42 years... That could be very enlightening...
"If preservation is a higher priority than growth, the HBPP still appears to work as advertised..."PP67 wrote: Thanks, DJ3... I guess one perspective would be that the PP has experienced an abnormally low performance in the past 12 months that has occurred less than 5% of the time over last 40+ yrs... One could surmise that while this low performance is certainly possible, it is unlikely to be the norm going forward over an extended period... If preservation is a higher priority than growth, the HBPP still appears to work as advertised... Should be an interesting upcoming 12 months!
I can certainly give you my interpretation of it.buddtholomew wrote:"If preservation is a higher priority than growth, the HBPP still appears to work as advertised..."PP67 wrote: Thanks, DJ3... I guess one perspective would be that the PP has experienced an abnormally low performance in the past 12 months that has occurred less than 5% of the time over last 40+ yrs... One could surmise that while this low performance is certainly possible, it is unlikely to be the norm going forward over an extended period... If preservation is a higher priority than growth, the HBPP still appears to work as advertised... Should be an interesting upcoming 12 months!
I'm starting to see this statement more frequently and would like further explanation. I was under the assumption that PP historical returns (1972-current) were similar to a 60/40 AA with less volatility. Doesn't this suggest that the portfolio can provide both preservation of capital and growth?
But in deflationary times the portfolio may go down, and still maintain purchasing power.DragonJoey3 wrote:Preserving still means growth however, because without some growth it will lose to inflation.
DragonJoey3 wrote: I'm at work at the moment, so I haven't much time to clean this up, but here is the TTM return of the PP from 1971 through August 2013.
https://docs.google.com/file/d/0B2wKDjK ... sp=sharing
You'll see that this isn't too uncommon, and happens about every 5-8 years. Bearing in mind that inflation plays a big role in the returns, so real returns looks a bit different from that.
Still you should get the idea, of how this isn't exactly "panic time" just yet.
Yes actually. My plans to leave the PP essentially revolve around it behaving in a way that I would feel doesn't fit with expectations. Some of those might be:frugal wrote: You have any plan to quit PP if something occurs?
Yes, there was one from late 1980 through mid 1982. You can almost see it in the data on crawlingroad (https://web.archive.org/web/20160324133 ... l-returns/).robg wrote: DragonJoey-- do you happen to know from your analysis if there was every a PP drawdown over say 5% that didn't correlate with a similar or larger drawndown in either a 100% stock or 60/40 portfolio?
Uh, wasn't there one this year?robg wrote: For a significant drawdown to occur with the PP, it almost certainly means that there is more than 1 asset class involved. And that means almost every "conventional" portfolio would be affected even more. This year certainly tests my patience with owning Gold (which is the part I was least interested in), but even with the huge drawdown in Gold, my portfolio is only down a few percent.
DragonJoey-- do you happen to know from your analysis if there was every a PP drawdown over say 5% that didn't correlate with a similar or larger drawndown in either a 100% stock or 60/40 portfolio?
thanks for postingDragonJoey3 wrote:Yes actually. My plans to leave the PP essentially revolve around it behaving in a way that I would feel doesn't fit with expectations. Some of those might be:frugal wrote: You have any plan to quit PP if something occurs?
1. A draw down of 25%+ lasting longer than a single day panic (perhaps 2 weeks).
2. A 5 year rolling real return that is less than -3% (lowest in PP history based on CPI data was -1.43% in July 1978).
3. A 1 year real return of -15% or less
Mostly I expect a decent amount of volatility, but not huge draw downs that last a long period. For some perspective on the draw downs, here is what I have for 2008 in terms of draw downs per month.
Month% diff All Time High
2008-010.00%
2008-020.00%
2008-03-0.05%
2008-04-1.69%
2008-05-2.44%
2008-06-2.54%
2008-07-1.26%
2008-08-2.52%
2008-09-4.31%
2008-10-3.61%
2008-11-13.13%
2008-12-7.96%
2009-01-0.17%
2009-02-4.62%
2009-03-6.98%
2009-04-4.36%
2009-05-6.03%
2009-06-2.68%
2009-07-3.44%
2009-08-1.40%
2009-09-0.20%
2009-100.00%
So you'll notice that the worst draw down (as measured at the beginning of the month) was 13% off all time high (as measured at beginning of the month). I would expect that 30% may occur on a day or two, but consistent losses would be cause for worry. This draw down period shown here is one of the worst in the portfolio history, and understandably so, because 2008 was a lousy year.
I agree. Harry Browne always said 'this is the best way, as far as I know, as far as I've been able to figure out.' Maybe something better will come along. Who knows?Pointedstick wrote: The only really sane reason to quit the PP is if you've found a different asset allocation that you feel suits you better.
You are not alone. Porter Stansberry has indicated that $1200 or below is a fantastic price to pick up some gold. At that price, he would like to buy a 2-foot-long solid gold bar:dualstow wrote: Gold's down to US$1225 as I type and I'm chomping at the bit here.
I see what you did there...dualstow wrote: Some don't like the idea of buying more of a "losing asset." For me, it'll feel gold to reduce my average cost.
