Gyroscopic Investing

Posted: **Sun Mar 15, 2015 11:30 am**

Many of you may be aware of Ray Dalio's all weather portfolio. 30% Stocks, 15% Int.Bond, 40% LT Bond, 7.5% Gold, 7.5% Commodities.

AWP is kinda sorta similar to PP (especially when you consider that PP assets can move away from their initial 25% allocation until next rebalance). And similar to PP, AWP has a long track record of low volatility (with -4% being the worst year in 2008) and similar returns as PP (and slightly better sharpe than PP - although that's not the point of my current post

).

Anyway, last November Tony Robbins released his "MONEY Master the Game: 7 Simple Steps to Financial Freedom" book.
http://www.amazon.com/MONEY-Master-Game ... 1476757801

Tony is a well known author and motivational speaker (again, not trying to debate Tony's validity here) and based on Amazon rankings (#57 in Books, and #3, #4 in sub-categories) and the reviews, it seems to be hugely popular and Tony mentioned the AWP in his book, and is recommending people to implement that portfolio.

Considering that PP hasn't been the most well-known of portfolios so far (at least for average working Americans), and considering that the AWP is bound to grow in popularity now because of this mainstream book, what (if any) effect do you think will AWP's popularity have on PP's future prospects?

Will PP's performance go down if average people start implementing PP-like portfolios in their retirement accounts and such?

Posted: **Sun Mar 15, 2015 5:34 pm**

More power to him.

Posted: **Sun Mar 15, 2015 7:17 pm**

JayT wrote: Considering that PP hasn't been the most well-known of portfolios so far (at least for average working Americans), and considering that the AWP is bound to grow in popularity now because of this mainstream book, what (if any) effect do you think will AWP's popularity have on PP's future prospects?

Will PP's performance go down if average people start implementing PP-like portfolios in their retirement accounts and such?

The PP would probably do great in the short term if a lot of people started buying LTTs and gold for their portfolios. Most individuals hold none of either of those assets but demand is always good for prices.

It may have been MG but I am pretty sure that one poster opined a while back that a portfolio with 40% in LTTs was backward looking... that of course it did well in a 30-year bond bull market.

That all said, I don't see a day anytime soon when a lot of people will actually implement anything close to a PP. Most investors are still fixated on stocks being the only way to go. Also the PP takes a lot of effort to really wrap your head around.

Posted: **Mon Mar 16, 2015 12:26 am**

Having Gold and LTT get such wide exposure as part of a diversified portfolio should be a positive. The AWP doesn't look that different from conservative portfolios like 30/70 VG Target Retirement Income - take 15% from Bonds into inflation/uncertainty/crisis hedges, extend bond duration to make up for that 15%.

Plus 7.5% in gold is more palatable than 25% for most, so likely to get more investors. If Gold does well, some may look for a portfolio with more gold....

Will be interesting if interest rates rise just as folks get into LTTs in a big way - THAT could hurt future interest. Unless a "low" 25% allocation to LTT is seen as appealing, with gold and STT doing ok and the PP outperforming the AWP.

Posted: **Mon Mar 16, 2015 10:02 pm**

Dalio lowered AWP's bond allocation due to the flack they received over the bond losses in 2013.

Equal weight has a lot going for it for not being predictive. You may not be the prettiest woman at the dance, but you won't be the ugliest one either. No drama either way.

Posted: **Tue Mar 17, 2015 9:55 pm**

MachineGhost wrote: Equal weight has a lot going for it for not being predictive. You may not be the prettiest woman at the dance, but you won't be the ugliest one either. No drama either way.

Well said. The AWP may be a case of data snooping bias that did well in the past.

Will be interesting to see how AWP plays out and if/how it affects PP in the coming years.

Posted: **Wed Mar 18, 2015 8:11 am**

The AWP is a rip-off of the PP. I don't know if Dalio ever acknowledged his debt to Browne.

Compare the 10 yr performance of both portfolios and the correlation is 1:

http://www.myplaniq.com/LTISystem/jsp/p ... rtfolio%2C

Posted: **Wed Jan 20, 2016 2:14 pm**

The Dow is down 431 points this morning- and S&P500 down 10.46% YTD! The Ray Dalio
All Seasons strategy I teach in my book down 0.46% YTD!

Posted: **Wed Jan 20, 2016 2:27 pm**

frugal wrote: The Dow is down 431 points this morning- and S&P500 down 10.46% YTD! The Ray Dalio
All Seasons strategy I teach in my book down 0.46% YTD!

Tony Robbins twitter

Tony Robbins is on the AWP (i.e., PP in drag) bandwagon now?

Hmm.

Posted: **Wed Jan 20, 2016 4:58 pm**

I had interviewed at Tony Robbins company some years ago. Over dinner, the president of the company acknowledged that "Tony is in the entertainment business."

You go to one of his seminars and you come out feeling better about yourself, but in a week you are back to where you started. Seems to me that Tony is continually remaking himself to stay relevant, and the new book is supports that view.

I wouldn't rely on Tony for investment advice.

Posted: **Wed Jan 20, 2016 6:29 pm**

EdwardjK wrote: You go to one of his seminars and you come out feeling better about yourself, but in a week you are back to where you started. Seems to me that Tony is continually remaking himself to stay relevant, and the new book is supports that view.

I wouldn't rely on Tony for investment advice.

MT had a great post about this way back... something like "attending a Tony Robbins seminar is akin to renting a good feeling about yourself."

I may be the only person on here who actually read the book! Ray Dalio was only one of the people he interviewed and there wasn't anything in there that hasn't been discussed on this forum in depth. It wasn't a bad read but there were lots of exclamation points!!!!!

Posted: **Wed Jan 20, 2016 6:40 pm**

barrett wrote:
EdwardjK wrote: You go to one of his seminars and you come out feeling better about yourself, but in a week you are back to where you started. Seems to me that Tony is continually remaking himself to stay relevant, and the new book is supports that view.

I wouldn't rely on Tony for investment advice.
MT had a great post about this way back... something like "attending a Tony Robbins seminar is akin to renting a good feeling about yourself."

I may be the only person on here who actually read the book! Ray Dalio was only one of the people he interviewed and there wasn't anything in there that hasn't been discussed on this forum in depth. It wasn't a bad read but there were lots of exclamation points!!!!!

Tony Robbins should change his name to "Tony Robbins!!!".

Posted: **Wed Jan 20, 2016 6:47 pm**

I personally find the portfolio he discusses in the book to be generally good advice and I appreciate how he explains Harry-Browne-like economic theory to the masses, even if his salesmanship is characteristically overboard and his timeframe for comparing results is noticeably -- convenient. BTW, I have data for it and wrote a little about it here.

I have not read the book. But here's a reasonably brief synopsis of the portfolio in Robbins' own words.

Posted: **Wed Jan 20, 2016 8:26 pm**

Has Ray Dalio ever acknowledged that he lifted his portfolio from St. Harry Browne?

Posted: **Wed Jan 20, 2016 8:34 pm**

goodasgold wrote: Has Ray Dalio ever acknowledged that he lifted his portfolio from St. Harry Browne?

Dalio has always claimed that the idea came to him while listening to Yes's 1973 album Tales From Topographic Oceans, but I always assumed that he lifted it from Browne one way or another.

What I have always found amusing about Dalio and the AWP is that Wall Street-types love to mock the simplicity of the PP, but when Dalio rolls out basically the same thing it's fruit from the mind of a genius.

Posted: **Wed Jan 20, 2016 8:47 pm**

I don't recall is it's been posted before, but Ray Dalio has a personal manifesto titled "Principles" that everyone who works in his shop has to read.

It's a little tedious, but it's an interesting take on how we make decisions and how we evaluate our own thought process.

Here it is in PDF.

Posted: **Thu Jan 21, 2016 4:39 am**

MediumTex wrote:
barrett wrote:
EdwardjK wrote: You go to one of his seminars and you come out feeling better about yourself, but in a week you are back to where you started. Seems to me that Tony is continually remaking himself to stay relevant, and the new book is supports that view.

I wouldn't rely on Tony for investment advice.
MT had a great post about this way back... something like "attending a Tony Robbins seminar is akin to renting a good feeling about yourself."

I may be the only person on here who actually read the book! Ray Dalio was only one of the people he interviewed and there wasn't anything in there that hasn't been discussed on this forum in depth. It wasn't a bad read but there were lots of exclamation points!!!!!
Tony Robbins should change his name to "Tony Robbins!!!".

I was curious so I went into our book text. I might have missed a few, but I counted only 26 exclamation points. Some chapters even had no exclamation points at all. We should have put more in.

Posted: **Thu Jan 21, 2016 6:19 am**

craigr wrote: I was curious so I went into our book text. I might have missed a few, but I counted only 26 exclamation points. Some chapters even had no exclamation points at all. We should have put more in.

Nah, 26 is about right.

Elaine from Seinfeld had a tendency to overuse them as illustrated in this one-minute clip:

https://www.youtube.com/watch?v=VSKn8RlD7Is

Posted: **Thu Jan 21, 2016 10:30 am**

JayT wrote: Many of you may be aware of Ray Dalio's all weather portfolio. 30% Stocks, 15% Int.Bond, 40% LT Bond, 7.5% Gold, 7.5% Commodities.

AWP is kinda sorta similar to PP (especially when you consider that PP assets can move away from their initial 25% allocation until next rebalance). And similar to PP, AWP has a long track record of low volatility (with -4% being the worst year in 2008) and similar returns as PP (and slightly better sharpe than PP - although that's not the point of my current post ).

Anyway, last November Tony Robbins released his "MONEY Master the Game: 7 Simple Steps to Financial Freedom" book.
http://www.amazon.com/MONEY-Master-Game ... 1476757801

Tony is a well known author and motivational speaker (again, not trying to debate Tony's validity here) and based on Amazon rankings (#57 in Books, and #3, #4 in sub-categories) and the reviews, it seems to be hugely popular and Tony mentioned the AWP in his book, and is recommending people to implement that portfolio.

Considering that PP hasn't been the most well-known of portfolios so far (at least for average working Americans), and considering that the AWP is bound to grow in popularity now because of this mainstream book, what (if any) effect do you think will AWP's popularity have on PP's future prospects?

Will PP's performance go down if average people start implementing PP-like portfolios in their retirement accounts and such?

HB PP is the foundation... all this AWP is slight change in the chemical composition... if oil keeps crashing this year i am sure AWP will be more popular then PP...

HB PP shines in high inflation and deflation/depression enviroments.

Gyroscopic Investing

Effect of Ray Dalio portfolio's popularity on PP?

Effect of Ray Dalio portfolio's popularity on PP?

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