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The Permanent Portfolio Is Still Working Perfectly
Dropped a "perfect" 1.54% yesterday - more than the Dow, S&P or NADAQ. Oh, I know, the record is impressive & one day does not a market or a fund make. Still, not exactly a calm ride on a ripple-less pond. And, thanks for the good article Tony.
Other funds dropping 1.5% or more were Matthews Asia Small Companies, Matthews Pacific Tiger, US Global Investors Global Resources. Harbor International dropped 2.5%. No one is guaranteed a calm ride.
I want to qualify any notion that this fund is still working perfectly with some language that it works fine in a well-defined role in the context of a diversified, thoughtfully monitored portfolio. See BobC's comment in the recent thread triggered by David's commentary (and references) -- all worth a read, by the way: http://www.mutualfundobserver.com/discussions-3/#/discussion/comment/10384 .
Many of us here have used PRPFX within different portfolios for a while now -- not necessarily three decades, but several years and more. (I was swayed by rono and BobC, after my own skeptical questions.) I have never heard anyone here make a serious argument for actually adopting any variation of a "Permanent" strategy as the whole plan. In general, I don't even see a lot of advocacy for any "set-it-and-forget-it" approach. Some of this may be selection bias of course --any set it and forget it true believer doesn't need to visit mutual fund discussion boards.
Set-it-and-forget-it either tacitly or explicitly assumes the whole investment environment has been modelled adequately. I am not aware that any model got all that close on the way the last five years played out. I see no reason to buy into any particular set of prognostications for the next five.
I tend to invest now in different "sleeves", which represent different strategies. I essentially am diversifying my convictions across different strategies (and sometimes different managers within strategies). I do let some short-term consensus views in -- like the whole world, it seems, I've leaned in the direction of shortening duration on bonds -- but I'm also aware that the consensus is creating profits for some clever folks on the other side of those trades. So I still let the passive strategies that ignore that consensus run. So my short-term views never amount to more than a lean.
It's dull, but for me in all things moderation. When I get really strong evidence that PRPFX is breaking down as one component of what I am doing, I will reexamine it --until then, no.
Reply to @GregFromBoston: Greg, Thanks for some excellent perspective ..... Any implied criticism of PRPFX by me is triggered by a recent small investment ..... Appreciate the article & comments on this thread, as well as comments by David, Bob C & Rono over the years.
Comments
Regards,
Ted
Many of us here have used PRPFX within different portfolios for a while now -- not necessarily three decades, but several years and more. (I was swayed by rono and BobC, after my own skeptical questions.) I have never heard anyone here make a serious argument for actually adopting any variation of a "Permanent" strategy as the whole plan. In general, I don't even see a lot of advocacy for any "set-it-and-forget-it" approach. Some of this may be selection bias of course --any set it and forget it true believer doesn't need to visit mutual fund discussion boards.
Set-it-and-forget-it either tacitly or explicitly assumes the whole investment environment has been modelled adequately. I am not aware that any model got all that close on the way the last five years played out. I see no reason to buy into any particular set of prognostications for the next five.
I tend to invest now in different "sleeves", which represent different strategies. I essentially am diversifying my convictions across different strategies (and sometimes different managers within strategies). I do let some short-term consensus views in -- like the whole world, it seems, I've leaned in the direction of shortening duration on bonds -- but I'm also aware that the consensus is creating profits for some clever folks on the other side of those trades. So I still let the passive strategies that ignore that consensus run. So my short-term views never amount to more than a lean.
It's dull, but for me in all things moderation. When I get really strong evidence that PRPFX is breaking down as one component of what I am doing, I will reexamine it --until then, no.