Gyroscopic Investing

PERM is up about 6.8%
PRPFX is up about 5.25%

Source: MSN Money

Hmmm...

I'm often confused why PRPFX would be an acceptable substitute for the PP. Just found this pie chart online:

http://www.permanentportfoliofunds.com/ ... /prpfx.pdf

From what I have read, silver and Swiss Francs were in Harry Browne's original PP but he simplified it and got rid of those two pieces. He used to say on his radio programs (2004 & 2005 more or less) that by that point he considered silver an industrial metal. For what it's worth the Swiss Franc has had a great run versus the US$ over the last 40 years or so. I looked for a chart but could only find one that went back ten years.

Isn't PRPFX only recommended for young investors who don't have enough assets to be able to set up a proper PP?

Anyway, I guess I don't compare the two because there is so much difference in their asset allocations.

I think I'm going to sell my PRPFX today. Just can't justify the expense ratio.

My PERM is in positive territory now, including reinvested dividends (bought 2 years ago.)

Doesn't sound like either PERM or PRPFX are particularly attractive as one-stop shopping for the PP.  PRPFX has the silver and swiss franc issues, and its stocks are focused on natural resources which haven't done that well compared to the rest of the market.

According to etfreplay, PERM is down 2.8% since inception in 2012, while a 4-ETF PP (VTI, TLT, IAU, SHV) is up 7.6%.  The year to date numbers are 3.2% for PERM, and 5.9% for the 4-ETF PP.

I believe PERM's stock portfolio is also focused on natural resources and real estate.  That can explain some of the discrepancy, but not all of it.  I had considered PERM as an temporizing measure for my HSA until the balance builds up enough to buy 4 ETFs, but I'd rather not put my money into a fund that's doing something I can't understand.

PRPFX is weighted towards an inflationary scenario. But much of the world is mired in a deflationary/ultra low inflation depression.

sophie wrote: Doesn't sound like either PERM or PRPFX are particularly attractive as one-stop shopping for the PP.  PRPFX has the silver and swiss franc issues, and its stocks are focused on natural resources which haven't done that well compared to the rest of the market.

According to etfreplay, PERM is down 2.8% since inception in 2012, while a 4-ETF PP (VTI, TLT, IAU, SHV) is up 7.6%.  The year to date numbers are 3.2% for PERM, and 5.9% for the 4-ETF PP.

I believe PERM's stock portfolio is also focused on natural resources and real estate.  That can explain some of the discrepancy, but not all of it.  I had considered PERM as an temporizing measure for my HSA until the balance builds up enough to buy 4 ETFs, but I'd rather not put my money into a fund that's doing something I can't understand.

I believe that's one of the main "HB commandments": don't invest in anything [whose business model] you don't understand.

PRPFX looks like it will be lucky to post a break even year, significantly underperforming the 4x25% HBPP.

Ad Orientem wrote: PRPFX looks like it will be lucky to post a break even year, significantly underperforming the 4x25% HBPP.

What about it with the 10% EDV allocation?

MachineGhost wrote:

Ad Orientem wrote: PRPFX looks like it will be lucky to post a break even year, significantly underperforming the 4x25% HBPP.

What about it with the 10% EDV allocation?

That would help a lot since EDV is up by near 40% YTD. With PRPFX down by almost 8%, if 10% were in EDV your portfolio would still be in the red, but only by about 3%. I am becoming less and less enamored of PRPFX as I see the danger in it's heavy weighting towards an inflationary scenario being spelled out in big red ink numbers.

Ad Orientem wrote:

MachineGhost wrote:

Ad Orientem wrote: PRPFX looks like it will be lucky to post a break even year, significantly underperforming the 4x25% HBPP.

What about it with the 10% EDV allocation?

That would help a lot since EDV is up by near 40% YTD. With PRPFX down by almost 8%, if 10% were in EDV your portfolio would still be in the red, but only by about 3%. I am becoming less and less enamored of PRPFX as I see the danger in it's heavy weighting towards an inflationary scenario being spelled out in big red ink numbers.

It would have taken a gutsy person to stick with the 90% PRPFX/10% EDV mix I started talking about a few years ago, but it would have worked out pretty well to help erase the significant blind spot in PRPFX's allocation, though the PP is still clearly a more appealing approach for people who like their sleep.

MediumTex wrote:

Ad Orientem wrote:

MachineGhost wrote: What about it with the 10% EDV allocation?

That would help a lot since EDV is up by near 40% YTD. With PRPFX down by almost 8%, if 10% were in EDV your portfolio would still be in the red, but only by about 3%. I am becoming less and less enamored of PRPFX as I see the danger in it's heavy weighting towards an inflationary scenario being spelled out in big red ink numbers.

It would have taken a gutsy person to stick with the 90% PRPFX/10% EDV mix I started talking about a few years ago, but it would have worked out pretty well to help erase the significant blind spot in PRPFX's allocation, though the PP is still clearly a more appealing approach for people who like their sleep.

I entirely agree. To be honest, I have become profoundly disenchanted with PRPFX over the last couple of years. On a side note, it is nice to see you MT. The forum has missed you.

Ad Orientem wrote: The forum has missed you.

Amen!

But, I realy fail to see why anyone would even consider the PRPFX.  It is pre-PP it is NOT the PP.  I believe it should be banned from talking about on here so not as to mislead new investors (just kidding, give my track record...).

MachineGhost wrote:

Ad Orientem wrote: The forum has missed you.

Amen!

But, I realy fail to see why anyone would even consider the PRPFX.  It is pre-PP it is NOT the PP.  I believe it should be banned from talking about on here so not as to mislead new investors (just kidding, give my track record...).

I never liked the over-exposure to commodities in PRPFX.  I always thought that the inflationists of the 1970s simply didn't understand how the commodities markets worked over longer periods--i.e., they always cycle between boom and bust because every boom is followed by an increase in production that sets the stage for the next bust.  This process seemed to have simply eluded them, or maybe they thought that all paper currencies were going to just collapse simultaneously, which is naive in a world where paper currencies are actually supported nicely by large standing armies.

The Swiss franc exposure was never a great idea and it became completely obsolete when Switzerland made it clear a few years back that it wasn't going to allow its currency to appreciate in a way that hurt its exporters too badly.

The silver exposure in PRPFX is also misguided, since silver and gold are subject to very different market forces.

The lack of long bond exposure in PRPFX misses an important component of the protection offered by the PP, and this has always been a flaw in PRPFX dating to its inception, which occurred just as the greatest bull market in history for LT bonds was starting.

So yes, PRPFX is deeply flawed and in some ways it is the worst imaginable PP simulation because it leans in all of the wrong directions most of the time. 

Buyer beware.

With all that said, the 90% PRPFX/10% EDV mix has done pretty well, thought not as well as the PP.

I'm still PRPFX+EDV in my IRA accounts. However, I just took a look at Yahoo Finance and learned that Facebook is one of the top 10 holdings in PRPFX.

I'm -10% in this account.

http://finance.yahoo.com/q/hl?s=PRPFX+Holdings

Khisanth wrote: I'm still PRPFX+EDV in my IRA accounts. However, I just took a look at Yahoo Finance and learned that Facebook is one of the top 10 holdings in PRPFX.

I'm -10% in this account.

http://finance.yahoo.com/q/hl?s=PRPFX+Holdings

Yeah, the manager of the Permanent Funds family has no stick picking skills whatsoever.

Khisanth wrote: I'm still PRPFX+EDV in my IRA accounts. However, I just took a look at Yahoo Finance and learned that Facebook is one of the top 10 holdings in PRPFX.

I'm -10% in this account.

http://finance.yahoo.com/q/hl?s=PRPFX+Holdings

FB up over 21% in the past year. Not so bad.