Gyroscopic Investing

Harry Browne would have enjoyed this radio show:
http://freakonomicsradio.com/hour-long- ... ction.html

I found the link to the show on Barry Ritholtz blog: The Big Picture.

It's funny and pertinent for PP investors, and it made me ask myself a question I'll ask you:


What would it take to convince you that you are wrong about the Permanent Portfolio?
1) Some empirical evidence?
2) Something theoretical?
3) You're right, so there is no need to worry about being wrong.

cowboyhat wrote: It's funny and pertinent for PP investors, and it made me ask myself a question I'll ask you:

What would it take to convince you that you are wrong about the Permanent Portfolio?
1) Some empirical evidence?
2) Something theoretical?
3) You're right, so there is no need to worry about being wrong.

1. Yes.  A rolling three year period of negative returns would make me re-evaluate the PP strategy.

2. Yes.  If a fifth ecoomic condition was identified I would want to re-think the four scenario PP paradigm.

3. I test my theories against reality every day.  "Right" is what works.  I just like the PP because it has worked so well to date.

Note that the only prediction that the PP makes is that the world will remain unpredictable.

I'd say that if somehow the "greater fools" game we play with gold eventually lost hold... but the thing is, it usually loses hold during times of disinflationary prosperity and solid balance sheets.... the game kicks right back in again when things don't look so rosey.

So do I think gold will act wildly outside its normal behavior given the other assets?  No.  But that's my biggest doubt with the PP.