Desert Portfolio vs PP

General Discussion on the Permanent Portfolio Strategy

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jalanlong
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Desert Portfolio vs PP

Post by jalanlong » Thu Mar 26, 2020 10:18 am

Any ideas as to why the Desert Portfolio as outeperformed the PP so handily since 1983? Is it strictly the drag of 25% gold vs 10% gold?
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jhogue
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Re: Desert Portfolio vs PP

Post by jhogue » Thu Mar 26, 2020 10:45 am

I could be wrong, but I believe that a Desert Portfolio generates more taxable interest and dividends than an HBPP. The charts do not account for that real world problem.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
pmward
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Re: Desert Portfolio vs PP

Post by pmward » Thu Mar 26, 2020 11:13 am

Since 1983 we have had the greatest bond and stock bull markets in history. So a portfolio that had more bonds and stocks won over that period. The question to ask, is 1983 to 2019 the exception or the rule?
WhiteElephant
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Re: Desert Portfolio vs PP

Post by WhiteElephant » Sat Mar 28, 2020 5:11 am

There has been some discussion about treasury duration for the Desert Portfolio, but I think it the duration was 5 years instead of 10. That would reduce the outperformance somewhat.
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Smith1776
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Re: Desert Portfolio vs PP

Post by Smith1776 » Sat Mar 28, 2020 7:12 pm

The desert portfolio... particularly one with factor tilling in the equity, is what I consider to be a gateway drug to the PP.

25% gold is too bitter a pill to swallow for many people. 10% just gets them in the door.

So I guess 10% gold is marijuana. 25% gold is hardcore Breaking Bad levels of drug abuse?
e + 1 = 0
Anything is a server if you're brave enough.
The Permanent Portfolio will be safe enough to walk away from and forget about completely only if it allows for more than just the problems and hazards that are obvious today. It will have to allow for all of the unforeseeable events of the next 5, 10, 15, or 20 years.
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