Gyroscopic Investing

I have 35% of investments in PRPFX. I plan to allocate the remaining 65% in a 4x25 HB. My software allows me to calculate PRPFX's last published allocation and include it in the overall total. However I am more inclined to leave the PRPFX portion by "itself" and allocate 4x25 to the balance, then track to see what performs better.
Any thoughts?

There's several reasons why I dont like PRFPX. However if I were to use it, I would completely isolate it from the other 25x4. It would be too hard to figure out what ratios of PRPFX are allocated to LTT, for example, and then count that portion towards the total. Since PRPFX has other stuff like swiss francs, it's going to be impossible to hit 4x25 anyway looking at the whole.

The only one instance I would use PRPFX is if I had a 401k that offered it, and no other appropriate funds that could be used as portions of the 4x25. Almost all 401ks have MMFs of some kind, and lately stock index funds, so that seems like a non-issue.

Mdraf wrote: I am more inclined to leave the PRPFX portion by "itself" and allocate 4x25 to the balance, then track to see what performs better.
Any thoughts?

It sounds like a good plan to me.  It's a good way to get some institutional diversity.

Mdraf wrote: I have 35% of investments in PRPFX. I plan to allocate the remaining 65% in a 4x25 HB. My software allows me to calculate PRPFX's last published allocation and include it in the overall total. However I am more inclined to leave the PRPFX portion by "itself" and allocate 4x25 to the balance, then track to see what performs better.
Any thoughts?

This is my plan. I started to invest in PRPFX/EDV. At the same time I slowly convert my portfolio to HBPP.

But I keep these two separate.

I think I have posted a similar comment before but PRPFX does offer  world wide holdings which I do not think HB anticipated in his 1999 book. What he said a few years later and before his death I do not know. Also, i believe PRPFX has outperformed the classic pp for the last 10 years but it did have a rocky start before 1999/2000.. Coggino seems to be doing a good job.

For example, the 10% Swiss franc holdings makes good sense to me, possibly it would have to HB. It would not be difficult to do a pp in a 401, with SHY and other ETF's available -  would not be hard. I think I would add some foreign equities. One could even buy foreign currency. ie FXA and FXF.

Pardon the repeating of some of this but it seemed appropriate.

I do hold PRPFX, but really you have to consider it completely separate from your HBPP.  The two are quite different.  I'm also starting to believe that PRPFX's out-performance in the last 10 years, will likely set it up for under-performance in the next decade.

clacy wrote: I'm also starting to believe that PRPFX's out-performance in the last 10 years, will likely set it up for under-performance in the next decade.

Out or under-performance of what?

Here is how I would break down PRPFX's holdings for the purpose of weaving it into a larger HB PP allocation:

30% - stocks (this one is easy)

20% - long term treasuries (just an arbitrary division of PRPFX's 35% in treasury holdings based upon a look at the average duration)

20% - cash (I am including the remaining 15% of the treasury holdings and 5% of the Swiss franc assets--this is not perfect, I realize that)

30% - gold (this is the 20% gold, 5% silver and the other 5% of the Swiss franc assets in PRPFX)

You can, of course, keep PRPFX separate from your HB PP, but if you wanted to combine them, the method above might be a good starting point.

You never know. This is a quote from Jon Nadler today at kitco.com. He's right, too!

"Elliott Wave short-term update issued on Monday evening noted conditions in the gold market as having shaped up in a manner whereby “because of the exponential, bowl-shaped advance [in gold], Wall Street’s talking heads uniformly agree that gold NEEDS to be “a part of a balanced portfolio.”? If the same people said this about gold back in 2001, they would have been classified as nuts.”? EW goes on to opine that gold is “now the last of the red-hot manias,”? even as it refrains from being “too aggressive about calling a top.”? Current tally: 16% up – one month""

pershing,

Be careful with the Elliott Wave stuff.  People normally walk into the Elliott Wave parlor full of hope and money.  They normally walk out with a lot less money and some hard-earned skepticism about investment tarot card readers like Robert Prechter and voodoo like Elliott Wave theory.

MediumTex wrote: pershing,

Be careful with the Elliott Wave stuff.  People normally walk into the Elliott Wave parlor full of hope and money.  They normally walk out with a lot less money and some hard-earned skepticism about investment tarot card readers like Robert Prechter and voodoo like Elliott Wave theory.

I would second that. 

As I read Why the Best Laid Investments Plans Usually Go Wrong, I noticed Browne referring to "a certain advisor" on a number of occasions.  I think at least a few times he was referring to Robert Prechter. 

Adam1226 wrote:

clacy wrote: I'm also starting to believe that PRPFX's out-performance in the last 10 years, will likely set it up for under-performance in the next decade.

Out or under-performance of what?

What I meant was relatively good performance compared with most investments.  It has done very well compared to the S&P in the past 10 years for instance.  But that likely won't last forever.