An Attack on the PP and Craig R

[Ad Orientem]

Not going to excerpt this, just follow the link if you are so inclined. It's not a very good piece and creates lots of straw man arguments.

http://livingstingy.blogspot.com/2012/0 ... folio.html

[MediumTex]

That's a truly un-helpful article.

He clearly knows nothing about craig and only a little more about the PP.

Ironically, in the comments to his own blog post he says the PP "is not a bad strategy."

[hoost]

Interesting article.  I think he makes a good point that Craig's blog post ends the returns at 2008, which could be misleading.  It probably wouldn't hurt to update that post to keep it current, especially with the new book coming out.  I would expect more traffic and similar criticisms.  For me, a guy running a small blog doesn't have a huge financial incentive to sell the strategy, so it didn't really make me suspicious, just drove me to research a bit more.  But once you're trying to sell books, seeing the graph end at 2008 would be very suspicious; you just sort of assume something's being hidden from you.  Other than that it seems he hasn't really read much about the portfolio, but that's to be expected.

[Ad Orientem]

That's a fair point and I agree. It would perhaps be a good thing if we copied the original returns blog post and made it a sticky post on the main PP discussion forum (where this thread is posted). It could be easily updated annually.

[MediumTex]

Ironically, after 2008 the PP has had annual returns at or above the historical average.

In other words, the PP from 2009-2011 would have been a better investment than it was from 1972-2008.

[Lone Wolf]

I'm used to stepping in such half-baked dog squeeze from time to time on the internet.  Normally it's not especially annoying but the stupid insinuations about craigr weren't exactly a pleasant treat.

It seems to me that he saw the word gold and simply couldn't wait to start talking out of his turd hamper.

[brick-house]

Talk about a creature from Jekyyl Island... 

[6 Iron]

I enjoyed his filtered, and mostly self-generated comments. My guess is it is ok to read his blog, just don't disagree with him.

[Tyler]

In the time he spent ranting about deceptive chart ranges, the author could have easily:

1) Read the date of Craig's post (12/22/2008)
2) Looked up the PP returns after 2008 and concluded whether that made a difference.
3) Actually read Craig's post where he points out himself that the gold run-up in the first few years was a special occurrence that could skew the results a little, and presents corrected data.

The author did none of this. He's basically just a grumpy anti-gold troll.

[Alanw]

Like the author of this blog, I don't like gold.  I don't like LTT's either.  Hell, I don't even like stocks. Cash I have no qualms with.  What's an investor to do?  Maybe a little of each and call it a day.

[MediumTex]

Craig is one of the good guys.

For most of us it probably goes without saying, but I'm going to say it anyway--Craig is a really high quality person in every way.

[craigr]

I need to update that particular page which was first written in 2008. I have a link on there that takes you directly to performance for the following years which are (rounded to nearest tenth). These are the numbers I have directly from Ibbotson's SBBI Annual Yearbook and Kitco's Gold Spot Price which are not on those pages (They use Morningstar's data):

2009 +12.0%
2010 +12.7%
2011 +11.0%

Annualized from 1972-2011 they are 9.5%.

There is no "time machine" involved with a lot of these numbers because the portfolio has existed under empirical real world conditions since the late 1970s to early 1980s with the formation of the fund. And the simpler portfolio since 1987 or so with the 25% split.

I don't care about the attacks. If you're not being attacked then you are irrelevant and that's worse.

[gizmo_rat]

It's actually a pretty good blog, there's lots of interesting well written articles on there.

Unfortunately the PP article is the exception, even though ironically he does inadvertently lay the ground work for a PP type allocation. With a little more thought and research on correlation and I think he would have actually ended up advocating a PP.

The Seeking alpha article that he seems to be responding to was pretty poor, particularly the way that it tried to personalise the PP. I can see that if the PP allocation becomes more popular, there will be more and more attempts to brand and personalise it just to make it easier to grind out opinion pieces.  The underlying concern being that fake conflict and guru opinion comes in, rational considered decision making goes out.

[Reub]

An attack on Craigr and on the PP is an attack on me and will be dealt with as such!

[moda0306]

It's actually a pretty good blog, there's lots of interesting well written articles on there.

Hard for me to believe that this guy could write much worth reading... but I'll give you the benefit of the doubt.  I didn't read every last line but it seems to be devoid of an ounce of macroeconomic insight.

There's a lot more to the PP than finding 4 assets that have done well in the past... and I'd like to see exactly how he'd want to diversify more.  Not that I think it can't be done (I think some infusion of foreign stocks, bonds, and/or cash could be beneficial), but that usually it's completely arbitrary and not real diversification.  More assets doesn't give you more diversification, necessary. 

[Khisanth]

The part about paying down debt just felt like he was trying to find anything to nitpick. It seems like he was quite close-minded about the Permanent Portfolio. Talk about flying off a tangent.

Obviously, paying down debt is a great way to "invest" seeing as there aren't any non-risk assets at the moment that pay more than the interest rate of loans. I just don't see it as part of an investment portfolio. Bogleheads taught me that much. Get out of debt first, then start building your nest egg.

He also apparently is aggressively deleting posts contrary to his viewpoint, as all but one of the comments on the article are of himself.

[Ad Orientem]

An attack on Craigr and on the PP is an attack on me and will be dealt with as such!

Don't you just long for the good old days?

[steve]

When I first read Fail Safe Investing it made sense to me, my wife also was in total agreement. We knew that the PP was for us. So its simple we follow it, if you don't like it invest how you want. When I found Craig R crawling road site and now this site I also found a place where I feel at home.  Attacking a succesfull investment philosophy makes no sense and attacking a person who is good natured enough to share well thought out opinions also is senseless.

[Reub]

An attack on Craigr and on the PP is an attack on me and will be dealt with as such!

Don't you just long for the good old days?

Yes. This would settle it nicely! jk

[Ad Orientem]

An attack on Craigr and on the PP is an attack on me and will be dealt with as such!

Don't you just long for the good old days?

Yes. This would settle it nicely!

People were much more polite in era when bad manners could get you killed.

[gizmo_rat]

... and I'd like to see exactly how he'd want to diversify more. 

Well he does post his own personal portfolio;


Which I could live with if I'd built it over a good few years at opportune prices, but would leave me a gibbering wreck otherwise. I was being generous when I said he could probably benefit from some research into correlation. But hey ho a man is free to follow his own convictions and be obnoxious on his own blog.

[jackely]

There's a lot more to the PP than finding 4 assets that have done well in the past... and I'd like to see exactly how he'd want to diversify more.  

He has a link to his portfolio so you can see exactly how he invests. He's almost 50% in real estate and about 35% in mutual funds. You can also tell from the comments on the PP article that he's worth 1.6 million because he said he wouldn't want to invest 400k in gold.

Interesting that he says "If you want to invest this way, just invest.  But don't pay someone to do this for you." I assume he's talking about PRPFX and might be giving some good advice. But it's interesting that he's 35% in mutual funds himself.

Actually didn't think the article was that bad until the comment at the end where he got a little nasty.

(PS. I see someone beat me to it with the chart while I was writing this)

[blackomen]

Quote from another forum:

The point is, that by the time you realize your folly....you'd have lost considerably sums. The pattern here replays again and again... Something gets popular, people flock to it which pushes up the price...but as the price goes up it takes more and more demand to achieve appreciation. At some point demand is inefficient to support prices and prices stagnant, then they slowly decline...and then adherents slowly sale their holdings (usually at a loss) one by one.

Indeed, if this pattern wasn't so predictable, professional traders/investors would have a harder job!

Source (#8)

[Tortoise]

The author of that blog post seems to be discussing the PermPort as if it were a product being pushed rather than what it really is: a concept.

Harry Browne's PermPort as discussed in his writings and on his radio shows was a concept, not a product for sale. The mutual fund PRPFX is a product, and HB was on its payroll, but to insinuate that anyone advocating the 4x25% concept must secretly be a gold dealer or on the payroll of a gold-heavy fund like PRPFX strikes me as a bit paranoid.

Ultimately, though, I'm glad that the guy wrote a blog post about the PermPort, even if much of what he critiqued was taken out of context. More publicity, whether good or bad, will cause more people to seek further information about the PermPort concept. And when they do, they're bound to find the high-quality, accurate resources like HB's books, Craig's blog, and this discussion forum.

[Greg]

So is anyone else thinking we should all go in for 50% of our portfolios in Real Estate? It's a guaranteed win!