Gyroscopic Investing

I was looking around a box of old books in 2006 when I ran across Robert J. Ringer's 1970s classic "Winning Through Intimidation." 

After reading Ringer's period piece (a lot of this sort of stuff was written in the 1970s) I Googled Ringer's name to see how the decades of intimidating others had worked out for him.  The first hit I saw was Ringer writing of the recent death of Harry Browne and how influential Browne's thinking had been on him.

Ringers' description of Browne piqued my interest and it was immediately obvious to me that his thinking made sense and I began reading and listening to everything Browne-related I could find.  I found out about the PP, argued with myself about it for a while, finally adopted it and have been happy about it ever since.

Bogleheads forum...
Poking around and running into that nice PP thread a few times, I finally decided to read through the whole thread. Took me a bit to go read that thead, because the PP looked a bit ridiculous at first glance :-)

In January of this year, I was searching through the internet - trying to investingate modern portfolio theory and find some strategy which worked well when back-tested.  I came across the PP thread where Craigr describes the PP and it's historical return...

Initially I thought I could "improve" upon it by going with ST corp. bonds, REIT's, Intl. Stocks, and GLD.  This was a huge improvement from my initial portfolio of 100% SCB stocks.  Then I read more into the reasoning behind the portfolio - and have since converted to a more traditional PP...

bogleheads forum

I learned of Harry Browne when he was a presidential candidate.  I learned of the permanent portfolio through this interview with Kevin and Erin Knox,

http://retireearlylifestyle.com/kevin-e ... erview.htm

Did a little more looking around after reading the interview and eventually found the Crawling Road website.

bogleheads forum for me as well... i had ended up with a boglehead style total stock market + total bond + cash + gold portfolio and the most of the + gold posters were pp enthusiasts

I think I read a post on a blog that reviewed lazy portfolios.
I've never managed to find that post again.

l82start wrote: bogleheads forum for me as well... i had ended up with a boglehead style total stock market + total bond + cash + gold portfolio and the most of the + gold posters were pp enthusiasts

Is that still your preferred portfolio allocation?

I'd like to ask a follow-up question to everyone - how long ago did you change to a PP or to an asset allocation you designed after learning of the PP?

Reido wrote:

l82start wrote: bogleheads forum for me as well... i had ended up with a boglehead style total stock market + total bond + cash + gold portfolio and the most of the + gold posters were pp enthusiasts

Is that still your preferred portfolio allocation?

I'd like to ask a follow-up question to everyone - how long ago did you change to a PP or to an asset allocation you designed after learning of the PP?

it is what i still have -- if i could i would move further into a pp and add LT and maybe some treasury money market,  but i got started late in life and am dealing with such a small amount and slow additions that fund minimums, and available tax deferred space complications are making me wait for now....

Reido wrote: I'd like to ask a follow-up question to everyone - how long ago did you change to a PP or to an asset allocation you designed after learning of the PP?

I began to switch over to the PP in 2008, shortly after reading "Fail Safe Investing." 

I was not accustomed to discovering things that I could not improve upon by tinkering.  Thus, it took me a while to finally see that the PP really is a turn-key solution.

Reido wrote:

l82start wrote: bogleheads forum for me as well... i had ended up with a boglehead style total stock market + total bond + cash + gold portfolio and the most of the + gold posters were pp enthusiasts

Is that still your preferred portfolio allocation?

I'd like to ask a follow-up question to everyone - how long ago did you change to a PP or to an asset allocation you designed after learning of the PP?

I knew Browne from his presidential runs. I didn't even know he was an investing author until several years back when I was looking to reduce risks in my portfolio. I spent months of researching things before I made my conversion in the 2006/2007 timeframe.

Prior to that I was a index stocks/bonds investor. However I became very uncomfortable with the exposure of that kind of portfolio to extreme events and inflation. I decided to explore other options before I finalized on the permanent portfolio. 

A freind of mine was sold the PRPFX by his investment advisor, after the 08-09 meltdown of course.    He gave me a data sheet describing the mutual fund.  I was interested, so I googled and found the official Harry Browne site, Craigs site, and the motherlode - Boglehead thread.

I knew about him from his presidential runs and was only vaguely aware of his investment writing. I read Fail-Safe Investing when it came out in 1999, but it seemed way to conservative. Why would you put all that money in cash when you could make so much more in the stock market?

I opened my first IRA the following year. March of 2000. I think I bought biotech stocks. That didn't go well.

I probably broke even over the next eight years, or close to it, but by the end of 2008 I was looking for something less haphazard. I found Crawling Road somehow and listened to the radio shows and reread Fail-Safe Investing. It seemed a lot more reasonable the second time around.

It was about six months between rediscovery and deployment.

Otto wrote:I probably broke even over the next eight years, or close to it, but by the end of 2008 I was looking for something less haphazard. I found Crawling Road somehow and listened to the radio shows and reread Fail-Safe Investing. It seemed a lot more reasonable the second time around.

That's wisdom right there.

I'm just happy that I learned of the PP before losing any MORE money trying to win in what is basically a casino.  I think, too, that a person has to be ready for something like the PP, and for many people the only way to really get ready is to bang their head against a wall losing money until they get serious about trying to find a better way.

It's amazing how few investors actually have success in managing their own money.  Looking at things through the lens of the PP, I realize that there is a "blind leading the blind" quality to much of retail investing, but for whatever reason many people keep going back for more. 

I think also that many retail investors simply don't have a strong grasp of their own risk tolerance.  By failing to anticipate how they will react to losses, they are not emotionally prepared to deal with them when they come and they wind up selling near the bottom.  I think that most people begin to sweat after seeing their investments go down in value about 15%, but I think many of these same people would tell you that they wouldn't start to sweat until their investments lost 30%-40%.

MediumTex wrote:
I'm just happy that I learned of the PP before losing any MORE money trying to win in what is basically a casino.  I think, too, that a person has to be ready for something like the PP, .....

In the 90's, I was an indexer, but after a job change in 2000, I thought that my finances had become complicated enough to justify professional assistance. By 2008, I felt that the management costs exceeded the benefits and counsel and started to reevaluate by studying investment strategies, including the bogleheads website. There, I first looked for a few seconds at the HB PP thread, and wrote it off as nutbaggery in a few thoughtless seconds. Came back in late summer 2009, after seeing the permanent portfolio discussed on another website that I cannot recall. The more I learned, the more sense it made. And that is still true.

I voted for HB twice, but like others didn't know anything about the finance side of HB.

I stumbled upon a website earlier this year that mentioned the approach http://www.mymoneyblog.com/the-permanen ... rowne.html and eventually found the Boglehead thread.  The 4x4 pie chart in article from the link really captured my attention. 

I had already bought some gold and was looking to add more bonds and cash to my portfolio so I guess it was a fairly easy sell for me.  Within two months of discovery I moved 50% of my assets into the PP.  If I had found the PP earlier it might not have resonated.

I read his book, "How to find freedom in an unfree world" back in the late 1970s/early 1980s.  It was an interesting (and controversial) read, so I read some of his personal finance books.  That's when I first ran across the PP, but back then I was still in school and did not have any money. 

I knew that he had run for political office, but I never really considered him a true candidate for president.  To me he was more a protest candidate--someone who runs for office primarily to make a point about governmental mischief.

I never considered the PP again until a couple of years ago, when I decided it was time for a more secure strategy for dealing with my investments.

My dad had several of Harry's books, dating back to when I was in high school or just out.  Dad was big into libertarianism back in the 70s.  He saw Harry speak back then, got to meet him, the usual seminar stuff.  Dad made a nice bit of change buying gold in the 70s due to the advice of Harry and others.

I didn't pay any attention to any of it but one day much later, probably in the late 90s, I decided to borrow "How I found freedom..." from my dad.  I loved it.  It changed my life.  At some later date I found Harry was doing radio shows on the internet.  One on politics and one on investing.  I listened to both, and that is how I found out about the PP.

PP recommended by http://chaostan.com/