Gyroscopic Investing

A complex investment world does not require a complex response, either in the nature of the investment organization or the particular investment strategies chosen. The cockroach lives in a very, very complex environment with one of the best long-term success rates of any creature. Yet it has only one defense mechanism -- running in the opposite direction from a puff of air. The equivalent for the investment world is, at the core, a very simple structure founded upon public market diversification with one basic defense mechanism: see a volatile movement, and react in the opposite direction (i.e., rebalance into it). A simple structure and strategy, if adhered to, has one of the best chances of surviving for many decades.

blue_ruin17 wrote: ↑Fri Dec 29, 2023 9:15 pm I was browsing through passages that I highlighted years ago in the book Family Wealth Management (2013) and I came across a paragraph that perfectly encapsulates the classic PP approach. I thought I'd share it because it made me laugh, but also because it reminded me that the seemingly dumb simplicity of the PP strategy is actually the reflection of a highly evolved survival mechanism.

A complex investment world does not require a complex response, either in the nature of the investment organization or the particular investment strategies chosen. The cockroach lives in a very, very complex environment with one of the best long-term success rates of any creature. Yet it has only one defense mechanism -- running in the opposite direction from a puff of air. The equivalent for the investment world is, at the core, a very simple structure founded upon public market diversification with one basic defense mechanism: see a volatile movement, and react in the opposite direction (i.e., rebalance into it). A simple structure and strategy, if adhered to, has one of the best chances of surviving for many decades.