Golden Butterfly Portfolio

A place to talk about speculative investing ideas for the optional Variable Portfolio

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senecaaa
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Re: Golden Butterfly Portfolio

Post by senecaaa » Sat Dec 21, 2019 7:50 am

Hal wrote:
Sat Dec 21, 2019 5:49 am

When I tried the allocation on Portfolio Charts using 25% each SCV,LT,ST,GLD I got a BL-LT return of 5.3% vs 5.5% for the GB and 4.2% for the PP as you mentioned. Its quite interesting that the PP using SCV went from a BL-LT return ranking of 14 to 3
I think 25% each SCV,LT,BIL,GLD goes to 5.0%? I assumed that the PP uses BIL for cash instead of STT?
Still a substantial improvement.
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Hal
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Re: Golden Butterfly Portfolio

Post by Hal » Sat Dec 21, 2019 9:14 am

senecaaa wrote:
Sat Dec 21, 2019 7:50 am
Hal wrote:
Sat Dec 21, 2019 5:49 am

When I tried the allocation on Portfolio Charts using 25% each SCV,LT,ST,GLD I got a BL-LT return of 5.3% vs 5.5% for the GB and 4.2% for the PP as you mentioned. Its quite interesting that the PP using SCV went from a BL-LT return ranking of 14 to 3
I think 25% each SCV,LT,BIL,GLD goes to 5.0%? I assumed that the PP uses BIL for cash instead of STT?
Still a substantial improvement.
Some people use STT instead of Cash to get a bit extra return at the expense of slightly higher volatility. Other forum members may be able to supply additional information on using BIL vs STT. Unfortunately in Australia we don't have equivalents for either :-\
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Re: Golden Butterfly Portfolio

Post by Tyler » Sat Dec 21, 2019 10:39 am

senecaaa wrote:
Sat Dec 21, 2019 3:32 am
How is the data you are using different from PortfolioCharts? Here the baseline LT return for the GB is 5.5% versus 4.2% for the PP: https://portfoliocharts.com/portfolio/portfolio-matrix/

That's quite a substantial difference. Is that just because of SCV?

PS I tried it on PortfolioCharts with a PP with 25% SCV and it returns a BL-LT return of 5%
The Portfolio Visualizer data shows the nominal CAGR from the single period from 1972 -2019. The Portfolio Charts data is different in two ways. First, it reports the real (inflation-adjusted) CAGR. And second, the baseline LT return finds the CAGR for every 15-year investing timeframe since 1970 simultaneously and reports the conservative 15th percentile number. So it has a cherry-picking prevention mechanism built in that accounts for sequence-of-returns uncertainty.
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Re: Golden Butterfly Portfolio

Post by senecaaa » Sun Dec 22, 2019 2:39 am

The difference between GB and PP-with-SCV is 0.5% on PortfolioCharts. In the graph posted above, it was only 0.34%.

So apparently the conservative (15th percentile) calculation is in the advantage of the GB. Or maybe inflation affects the PP different than the GB.
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Re: Golden Butterfly Portfolio

Post by Smith1776 » Sun Dec 22, 2019 2:07 pm

mathjak107 wrote:
Sat Dec 21, 2019 3:44 am
Smith1776 wrote:
Sat Dec 21, 2019 2:10 am
mathjak107 wrote:
Fri Dec 20, 2019 6:50 pm
Didn’t the pp come out in the 1980’s ?
Yes! Browne solidified the overall PP strategy that we know it today in the 80s. Though, I believe early iterations have roots going all the way back to the 70s.

As much as I've been singing the praises of the GB, the PP will always be my personal centre of gravity. O0
if we start at 1987 the year i started as an investor , to date , what is the pp return using a hypothetical 100k to start ?

as most know i have used the fidelity insight newsletter since then which uses a bunch of plain ole fidelity funds with an occasional fund swap ..

the growth model shows 100k is now 3.25 million and the sector model is 4.8 million . so i am curious where the pp would have landed .
Interesting question! I've never considered 1987 as the start date. Frequently I've seen people revise "fair" start dates based on when gold was legal to hold, etc.

Here's bird's eye view of the classic PP and SCV tilted PP from 1987 to today. Blue line is the classic PP. Red line is the SCV PP.


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e + 1 = 0
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Smith1776
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Re: Golden Butterfly Portfolio

Post by Smith1776 » Sun Dec 22, 2019 2:13 pm

This recent turn of conversation has me curious as to how much of the GB's outperformance over the PP is due to the SCV tilt, rather than the fact that it has more equity in an absolute sense (40% vs 25%).

I'd like to research into this more. You'd also have to control for the altered levels of gold, cash and bonds.

My first brief glance at the numbers seems to suggest the balance of GB outperformance over the PP may indeed be because of the tilt, rather than the 40% equity.

However, if that's the case, we go back to the gnarly problem of whether or not the factor premiums will persist.

If indeed a SCV tilted PP closes most of the gap in performance against the GB, it'd make me that much more content with the 4 x 25% allocation.
e + 1 = 0
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ochotona
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Re: Golden Butterfly Portfolio

Post by ochotona » Mon Dec 23, 2019 4:52 am

Another Factor tilt which is maybe easier to swallow is equal-weighted S&P 500. Run a permanent portfolio with 25% vadax. The ETF equivalents are RSP & GSEW. I use the latter.
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Re: Golden Butterfly Portfolio

Post by vnatale » Mon Dec 23, 2019 7:49 pm

Cortopassi wrote:
Wed Nov 18, 2015 11:42 pm


Been playing all night with Tyler's calculators (put a donate button up, I WILL donate!), and this 17/17/16/25/25 TSM/SCV/EM/LTT/Gold really is shining for me.  I like the additional risk/reward of the stock split, while keeping my gold level to where I really like it (20-25%)

The only thing that is obvious in all these mixes is that there is no money market/cash component.  I need to mentally adjust for that, and just separate out a rainy day cash reserve separate from this.

I think Jan 1 I will start rebalancing to this allocation.  I also am open to thoughts.  I have no specific loyalty to the PP, it is still better than what I was doing, and this setup allows a lot of my current holdings to remain similar without having to trade out.
Have just started on page 1 of all the 35 pages of posts related to this topic. As I keep reading through to the end I'm looking forward to seeing how you evolved from this over the last four years since this post.

Vinny
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Re: Golden Butterfly Portfolio

Post by vnatale » Mon Dec 23, 2019 7:51 pm

mathjak107 wrote:
Thu Nov 19, 2015 5:43 am
that is the issue spending down from the pp.

all well and good you have 25% cash but now that you spent it down  below your rebalance point you have to rebalance and refill selling volatile assets . it may be  no different from leaving the cash and spending it down equally from the  other parts  right from the get go ..

in a typical bucket system you exhaust the cash , then refill from short and  intermediate term bonds which are no where near as volatile as stocks would be like long term bonds are. finally many years later sell equity's to refill bonds and cash

so instead of refilling from short and intermediate term  bonds which may be down a little you are selling long term bonds which are  something as volatile as the stocks  or selling stocks or gold which run an equal chance of being down as much you are trying to avoid selling at a bad time .

with the pp you do not really have a non volatile 2nd line of defense to draw from if rates rise . .

i think anyone spending down from the pp has to examine this and find away to provide a secondary source for spending without selling assets as volatile as stocks are .

perhaps an income annuity may add time to allow other assets to  at least recover before they are needed  and prolong rebalancing to cash .

i don't know , how it would shake out as i never looked at the pp in that regard .
I think you may have written the above prior to you being retired and now you are? If so, how have you solved the problems you describe above?

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: Golden Butterfly Portfolio

Post by vnatale » Mon Dec 23, 2019 8:01 pm

mathjak107 wrote:
Thu Nov 19, 2015 8:56 am
no one knows what to expect this  time around . these are uncharted times with things right now so i would trust nothing but real time monitoring .

could we have a decade of rising rates back to the historic norms ?  could stocks be dead another 15 years and could gold go no where but down with rising rates ?

all very possible so any spending down plan needs a plan B .  WHICH MEANS Access to another level of just slightly more volatile assets once cash runs low . .

i wouldn't want plan b to have to decide whether to take a beating on gold , stocks or those long term volatile treasury's .

more and more i like what i see when running simulations with the various types of income annuty's as a base . but we are still a bit to young and rates to low for laddering them .

the new fidelity retirement planner has simulations you can add with various annuity types .

if someone is not retiring today or in the short term , this may all go away and resolve . but with the first 5 years of ones retirement being especially crucial  before the cushion of a run up there are no do overs if things do not go as planned  .

i had a very comprehensive consultation with my team at fidelity on monday and gave them lots of homework .  they are running all kinds of simulations for me with various social security points , pulling from  different  types of accounts and using various annuity products . 

we were supposed to meet again  on monday but they needed more time so i will report back .
1. Annuities. Aren't they basically bonds wherein you are relying upon the creditworthiness of the annuity provider? And, with rampant inflation a fixed annuity would be worthless, unless you purchased as escalating annuity which is more expensive and starts at lower payouts? Plus, you are giving up control of your money?

2. Was that "comprehensive consultation with my team at fidelity" fee or no-fee?

3. As I keep reading these posts (I'm now on page 3 of 35) I look forward to reading about your "report back". It's somewhat like watching an old TV series wherein instead of having to wait a week for the next episode you can watch as many as you want with no wait.

Vinny
"I only regret that I have but one lap to give to my cats."
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Re: Golden Butterfly Portfolio

Post by vnatale » Mon Dec 23, 2019 8:27 pm

MachineGhost wrote:
Fri Nov 20, 2015 9:11 am
ochotona wrote: Desert Modified tests great... but so much Emerging Markets. So much Petrobras, Lukoil, Rosneft, China National Something-or-Other,...  :-\
Emerging today is NOT emerging of yesterday.  It is frontier. 

And ETF's that focus on value don't focus on true value just buying all the dreck on the bottom of the barrel which are now all overpriced.

The past is not predictive of the future. 

Use your brain.
I think this is the second or third post from MachineGhost I've seen in this topic (so far). And, see that he's had by far the most posts by anyone in this forum. Yet his last post was over three years ago. I think in the last few months I've read some references to him (or her!). Does anyone know why MachineGhost is seemingly no longer with us?

Vinny
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Re: Golden Butterfly Portfolio

Post by vnatale » Mon Dec 23, 2019 8:37 pm

Jack Jones wrote:
Mon Nov 23, 2015 6:17 pm
MachineGhost wrote: If you haven't seen it, look for my thread on how to cosntruct a micro-to mega market cap agnostic equity allocation with just four ETF's traded free at Schwab.  That will give you all market caps and all value and growth.
Man, you're lazy. Is this it?

http://gyroscopicinvesting.com/forum/st ... #msg117010
How do messages become unavailable in this forum? Was it a casualty of the forum moving?

Vinny
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