Gyroscopic Investing

I have noticed that as I have gotten more comfortable with the PP strategy, I have developed an ability to analyze and interpret the PP components far more effectively than I ever could prior to coming to the PP.

It's probably sort of like being able to walk a beam six inches off the ground that you could never walk 600 feet off the ground.

Once you squeeze the emotions out of the picture by neutralizing the effects of bad calls (i.e., you're not really making any calls by buying all of the PP assets), the world is suddenly less confusing.

For example:

- It looks like the stock market is topping out and is likely to drift sideways for a while.

- It looks like LT treasury yields are probably going to drift down for a while.

- It looks like gold has plenty of room to run from here and could easily finish the year in the $1700-$1900 range.

These are not predictions, but rather observations I am making based upon what I am currently seeing in the markets.  Could I be wrong?  Of course I could.  I'm just one person guessing, but I have noticed that the overall quality of my thinking about how the future may unfold has improved dramatically since using the PP strategy, and when I am wrong it does no damage, either financially or psychologically (which is nice).

It's almost as if once you fully and completely embrace the idea that the future is fundamentally unfathomable, the resulting "outcome agnosticism" can actually provide you with a better framework for guessing what may happen next (including great ideas for your variable portfolio).  Minimally, it can provide a good inoculation against the charms of fortune tellers.

It's probably the difference between a a die hard fan of a sports team betting on his team compared to a Vegas oddsmaker predicting the outcome of sporting events in which he has absolutely no personal or emotional interest.

That's a good point.  Before, market fluctuations were a constant cause for concern.  Now, for example, if LT bonds show weakness, I see it as a buying/rebalancing opportunity.  Funny how, in the absence of the PP mindset, we seek out bargains in so many areas of life, but recoil from assets that are on the decline.  Like a set of corrective lenses, PP helps bring the big picture into better focus.

In all honesty, asset moves that in the past would have had me saying to myself "OH SH*T!!!" now make me say to myself "wow, that's really interesting."

Unquestionably.  I think that's why this forum is a fun place for making investment predictions.  We all have our narratives that we see as more or less likely than others to occur but we don't have our financial futures wedded to our beliefs about events to come.

The analogy to walking a beam is very good, by the way.  If I have a portfolio that only does well when stocks \ precious metals \ dental fixture futures, etc. are doing well, it's hard not to look at the financial news and get investment "vertigo".  It's interesting, too, how much more financial news I used to read when I was super stock-heavy.  It's very much like that irresistible urge to look down at the ground even though you know that it's probably just going to terrify you.

So much of investing is about not screwing yourself over in a moment of overwhelming fear or greed.

MediumTex wrote: I have noticed that as I have gotten more comfortable with the PP strategy, I have developed an ability to analyze and interpret the PP components far more effectively than I ever could prior to coming to the PP.

It's probably sort of like being able to walk a beam six inches off the ground that you could never walk 600 feet off the ground.

Once you squeeze the emotions out of the picture by neutralizing the effects of bad calls (i.e., you're not really making any calls by buying all of the PP assets), the world is suddenly less confusing.

For example:

- It looks like the stock market is topping out and is likely to drift sideways for a while.

- It looks like LT treasury yields are probably going to drift down for a while.

- It looks like gold has plenty of room to run from here and could easily finish the year in the $1700-$1900 range.

These are not predictions, but rather observations I am making based upon what I am currently seeing in the markets.  Could I be wrong?  Of course I could.  I'm just one person guessing, but I have noticed that the overall quality of my thinking about how the future may unfold has improved dramatically since using the PP strategy, and when I am wrong it does no damage, either financially or psychologically (which is nice).

It's almost as if once you fully and completely embrace the idea that the future is fundamentally unfathomable, the resulting "outcome agnosticism" can actually provide you with a better framework for guessing what may happen next (including great ideas for your variable portfolio).  Minimally, it can provide a good inoculation against the charms of fortune tellers.

This is one thing that I've noticed as well.  The decisions that I've made for my variable portfolio have gotten much better since I've implemented the Permanent Portfolio.  Hindsight's always 20/20 but I wish I'd implemented the Permanent Portfolio when I heard of it in the late 90's instead of 2009.  It would have saved me a lot of time that could have been used more productively.