Gyroscopic Portfolios Is Now Under Construction

General Discussion on the Permanent Portfolio Strategy

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KevinW
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by KevinW » Fri Jan 04, 2019 12:27 am

Thanks for this effort, it's off to a great start.

It'd be nice for this site to reprise Craig's tradition of an annual post on the PP's annual returns, with an explanation for why each of the four assets did what it did, and comparison to a couple benchmarks.

Another useful resource would be a list of PP-compatible funds, i.e. a list of all long-term treasury funds, gold funds, T-bill funds, and at least a few of the stock index funds. Also maybe a list of gold storage services and online bullion sellers.

Similarly, it would be helpful to index ex-US PP implementations (Canada, Germany, etc.).

Hosting the podcasts would be nice too.
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Smith1776
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by Smith1776 » Wed Jan 09, 2019 2:42 pm

KevinW wrote:
Fri Jan 04, 2019 12:27 am
Thanks for this effort, it's off to a great start.

It'd be nice for this site to reprise Craig's tradition of an annual post on the PP's annual returns, with an explanation for why each of the four assets did what it did, and comparison to a couple benchmarks.

Another useful resource would be a list of PP-compatible funds, i.e. a list of all long-term treasury funds, gold funds, T-bill funds, and at least a few of the stock index funds. Also maybe a list of gold storage services and online bullion sellers.

Similarly, it would be helpful to index ex-US PP implementations (Canada, Germany, etc.).

Hosting the podcasts would be nice too.
Thanks for the input, Kevin. Those are great ideas and I'm going to get started on them.

I am really enjoying the this forum and the whole PP strategy. I've been familiar with the PP long enough that I know that my interest in it is not just some fad or passing fancy.

I've searched for other strategies and haven't found one better for my needs.

The only other strategy I feel comfortable with is maybe the Golden Butterfly. I have some reservations though. Many people seem to think that the GB has revealed a weakness in the PP, in that the PP simply doesn't have enough allocated to stocks. This doesn't really seem to be the case. The outperformance of the GB is almost entirely due to the SCV tilt. It's not because of the increase in allocation to stocks from 25% to 40% in an absolute sense. It's all about the factor tilt. If you have a PP with it's entire 25% stock allocation dedicated to SCV, the performance isn't really different from the GB despite it have 40% in stocks. It's all about the factors. It looks like the GB performs even better when all of the 40% is put into SCV though of course. That becomes a different story.
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KevinW
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Re: Gyroscopic Portfolios Is Now Under Construction

Post by KevinW » Fri Jan 11, 2019 7:10 pm

Glad you appreciate the site and the suggestions.

I view the Golden Butterfly as a 4x25 PP plus a variable portfolio of small-cap value. This is compatible with PP dogma for an investor who wants to tilt toward prosperity. I think the GB is fine and I don't think I'd try to talk someone out of it. It's true that historically prosperity is the most common condition so it seems reasonable to weight toward prosperity. As you'd expect the expected returns and volatility are both a smidge higher.

Personally I'm satisfied with the 4x25 allocation, just because it is more consistent with the principle that the future is totally unknowable so the allocation should be future-agnostic. Committing to that helps me fend off the temptation to tinker, or waste time overanalyzing the whole plan. Once you make one change (the fifth asset) it's a slippery slope toward overthinking things and throwing out the baby with the bathwater.
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