Introduction - Charlie McKelvey, Bethlehem PA

[charliemckelvey]

Just wanted to briefly introduce myself to the board...  My name is Charlie McKelvey.

Best Regards and God Bless,

Charlie McKelvey
Bethlehem, PA

[MediumTex edit: The rest of your post looks a bit like spam to me and I deleted it.  Hang around the forum a while before posting information about services you would like to sell to the members here.  Thanks.]

[MediumTex]

Do you use the permanent portfolio strategy?

What brought you to us?

[charliemckelvey]

Yes.  We do have some permanent port as a core holding in our portfolio.  I am here to learn more about the overall strategy and get others opinions on it.  I recently joined a few other stock forums as well.  ~  Charles

[AdamA]

Yes.  We do have some permanent port as a core holding in our portfolio.  I am here to learn more about the overall strategy and get others opinions on it.  I recently joined a few other stock forums as well.  ~  Charles

What does your core permanent portfolio consist of? How do you hold the various assets?
What are your other holdings (core and non-core)?

[charliemckelvey]

We hold some of the Permanent Port funds as part of our overall portfolio.  We manage 60 million for 300 clients.

[BearBones]

We hold some of the Permanent Port funds as part of our overall portfolio.  We manage 60 million for 300 clients.

Why just part? When did you adopt? Before or after your clients lost money in 2008-9?

[charliemckelvey]

I would like to share more info regarding our portfolio and performance but for client privacy reasons, I am unable to do so.    Our portfolio did do very well in comparison to the rest of the market in 2008/2009.

[BearBones]

I would like to share more info regarding our portfolio and performance but for client privacy reasons, I am unable to do so.    Our portfolio did do very well in comparison to the rest of the market in 2008/2009.

Not interested in your portfolios, performance, or anything that affects client privacy. Just wondering if you adopted the Permanent Portfolio funds before or after 2008-9 (we can assume the latter, that you lost more money than did those committed to the PP prior, and that you needed an option for your clients that was less volatile, more passive, and more economically agnostic going forward).  Welcome to the forum and welcome to the concept of the PP.

[MediumTex]

I would like to share more info regarding our portfolio and performance but for client privacy reasons, I am unable to do so.    Our portfolio did do very well in comparison to the rest of the market in 2008/2009.

It sounds like you are talking about the PRPFX mutual fund as one part of a larger portfolio.

Correct?

How much do you know about how the PP is constructed or how it works?

Normally people are either really excited about the PP when they get here or are skeptical about some  specific aspects of it.  I'm not detecting either of these perspectives from your posts.

Are you here to learn about the Permanent Portoflio or to sell your firm's asset management services?

[Pointedstick]

I would like to share more info regarding our portfolio and performance but for client privacy reasons, I am unable to do so.    Our portfolio did do very well in comparison to the rest of the market in 2008/2009.

That's good to hear. Could you shed some light on how your portfolio did in comparison not against a total stock market index, but against a portfolio consisting of equal parts VTI, TLT, SHV, and GLD?

[charliemckelvey]

Thanks for all the replies fellas.  You are an active bunch and I like that!    MediumTex - you are correct, the mutual funds, not a holistic PP strategy.  Regarding my perspective on PP, honestly, I see some value but want to learn more.  Though I have been in the business for 20 years, the majority of that has been on the service side.  I am now being mentored on portfolio management and I joined several forums for that purpose.  I am not here to compare or promote my firm's portfolio.  If my initial post was misleading, my apologies.  I am looking forward to being a member here, sharing what I can, and learning from all of you.

[MediumTex]

Thanks for all the replies fellas.  You are an active bunch and I like that!    MediumTex - you are correct, the mutual funds, not a holistic PP strategy.  Regarding my perspective on PP, honestly, I see some value but want to learn more.  Though I have been in the business for 20 years, the majority of that has been on the service side.  I am now being mentored on portfolio management and I joined several forums for that purpose.  I am not here to compare or promote my firm's portfolio.  If my initial post was misleading, my apologies.  I am looking forward to being a member here, sharing what I can, and learning from all of you.

There is a new book out about the PP that people say is pretty good.

You might want to take a look at it.

There is a lot of interesting stuff to learn here.  I really like it.

[Greg]

In Charlie's Defense (even though I personally think active management is terrible), I think it is a good idea to have varying different ideas on this forum such as when we had Clive around, etc.

I look at it that it keeps us from succumbing to groupthink as easily and keeps us on our toes for delving deep into the investments themselves to truly understand them. Only through understanding can we really defend our ideas against others.

[dualstow]

In Charlie's Defense (even though I personally think active management is terrible), I think it is a good idea to have varying different ideas on this forum such as when we had Clive around, etc.

I look at it that it keeps us from succumbing to groupthink as easily and keeps us on our toes for delving deep into the investments themselves to truly understand them. Only through understanding can we really defend our ideas against others.

You have a point, Greg. I remember when I first saw Craig's posts in bogleheads, long before I had any experience with the pp, a lot of the members there just piled on. They attacked Craig and it seemed like more of a knee-jerk reaction than a gentle "I don't agree with you Craig, because x,y,z. Very dogmatic.
That being said, Charlie's wrong and there's nothing I can learn from him. Sorry, Charlie.
              (just kidding).

[MediumTex]

I hope Charlie will feel comfortable making any case he wants to make for active management.

[charliemckelvey]

Thanks fellas.  You guys are fun.  And don't worry.  I think I'll stick around awhile so you'll have plenty of time to pick on me. 

[MediumTex]

In Charlie's Defense (even though I personally think active management is terrible), I think it is a good idea to have varying different ideas on this forum such as when we had Clive around, etc.

I look at it that it keeps us from succumbing to groupthink as easily and keeps us on our toes for delving deep into the investments themselves to truly understand them. Only through understanding can we really defend our ideas against others.

I wish that we still had Clive around as well.  I feel sort of like one of those battered spouses who for whatever reason still misses her husband after the police cart him off.

Frankly, I wouldn't have thought it was possible for someone to get banned from here who wasn't a spammer.  It would have seemed about as likely as Andy Taylor and Barney Fife delivering a Rodney King-style beatdown to Otis.

Trust me when I say, though, that if anyone ever committed "Suicide by Moderator", it was Clive.

[dualstow]

You're a good sport, Charlie.

And if anyone misses Clive, you know where to find him. Bashing the pp on other forums in the gold threads.
He does have interesting ideas, though, and continues to create fine graphs.

[MachineGhost]

Trust me when I say, though, that if anyone ever committed "Suicide by Moderator", it was Clive.

He must have really had an axe to grind.  That doesn't strike me as him being emotionally secure in his anti-PP stance.

[smurff]

I have a cat named Charlie.  He's a cool cat.

[WiseOne]

I'm rather impressed that someone who makes a living as a professional investment advisor has come to this board for information about investing.  Welcome, Charlie.

It does tell me, though, that it's not likely that we're risking our money by managing it ourselves rather than taking it to a professional.  Not to say that the finance profession isn't worthwhile, just that self-education plus a forum to bounce ideas around and correct thought errors works pretty well in this particular arena.  Plumbing and contracting would probably be the same, except that most of us don't remodel our kitchens often enough to make it worth our while to learn these skills.

[dualstow]

It does tell me, though, that it's not likely that we're risking our money by managing it ourselves rather than taking it to a professional. 

I think one theme that keeps coming up here and perhaps in the threads featuring articles on pro management is that non-DIY'ers need some kind of help. Does help = pro management? Well, not necessarily.

Charlie has argued -- correct me if I'm wrong -- that you cannot just buy some index funds and be done with it. Let's assume for now that that's true. I think you (C.M.) also mentioned that you have clients that tend to be older folks. I've got a friend who runs what he calls a money management business, also for older folks. Some of them used to do it all themselves but can no longer read a computer screen. Some never learned to use computers. And some just don't know how to save or manage money.

He doesn't usually tell people what to invest in, even if they ask. What he does do is go through their mail and make sure their bills are received and paid on time. He may check their pre-existing investments and help them understand performance and fees. He might give advice and answer questions about applying for mortgages or other loans. (My dad did the same, for free, for Catholic Charities).

Now, if pressed, he may do something approaching active management, but it is more clerical than anything else. In other words, he could help them get set up with something like Vanguard Wellesley or Wellington, or to buy those dreaded index funds. If it's the latter choice, he has to help them rebalance with bonds or some non-stock investment, but this would be fixed to a calendar date or rebalancing bands. In any case, he charges a flat fee for all of this.

Just my opinion, but I think the above is what non-DIY'ers need. Perhaps it is just hard to find someone like my money manager friend and the alternative is to go to a pro, someone who will take care of all the investments and charge a fee, including a percentage of profits.

[AdamA]

Just my opinion, but I think the above is what non-DIY'ers need. Perhaps it is just hard to find someone like my money manager friend and the alternative is to go to a pro, someone who will take care of all the investments and charge a fee, including a percentage of profits.

I think a financial advisor or money manager could be very successful using the PP and charging a small percentage of profits on winning years and no fee on losing years.

[BearBones]

I think a financial advisor or money manager could be very successful using the PP and charging a small percentage of profits on winning years and no fee on losing years.

I do too, not matter how the fee schedule is arranged. Especially if managing portfolio that is fairly pure (bonds, bills, and gold). Just read through the bond section and you can see that there are a lot of us out there who do not really know what we are doing. I started reading back through many of the bond threads and I am amazed how many times, when a tough question is raised, the thread dead ends.

Everyone posts about how the PP is so simple. The theory behind it is indeed. But in its purest form, I disagree that it is easy to set up and manage. Especially for an investing novice, especially when balancing and rebalancing assets between taxable and tax-deferred accounts, and especially when you get into things like tax loss harvesting, filing form 8621, and doing such things as WiseOne's short term treasury trickery.

[MachineGhost]

Everyone posts about how the PP is so simple. The theory behind it is indeed. But in its purest form, I disagree that it is easy to set up and manage. Especially for an investing novice, especially when balancing and rebalancing assets between taxable and tax-deferred accounts, and especially when you get into things like tax loss harvesting, filing form 8621, and doing such things as WiseOne's short term treasury trickery.

I'd say the problem is the lack of portfolio management sofware for the PP that takes all that into consideration.  We are lazy; we don't want to do the heavy lifting if the PC can do it for us, as it should.