Gyroscopic Investing

I think the fund is down about 6% YTD. That's a hard drop but not surprising since it was down with the market up before gold got wacked. I am still happy with my ten year return on the fund. I hope it can make up some ground and get back to something like 48.00 a share but would need to see gold recover for that to become a reality.

I'm actually surprised PRPFX isn't down more, with its exposure to the Swiss franc, gold, silver and the miners.

MediumTex wrote: I'm actually surprised PRPFX isn't down more, with its exposure to the Swiss franc, gold, silver and the miners.

All true but PRPFX also has that extra 5% in stocks. And a lot of the stocks it holds (real estate and natural resources) have been among the hottest sectors in the recent bull market. I just can't overcome my aversion to paying the extra ER or I'd probably just toss it all into PRPFX. Honestly I think Cuggino is lucky that Vanguard hasn't decided to create a Permanent Portfolio mutual fund. He'd be reduced to selling those tacky souvenir spoons down on the Fisherman's Warf inside of a year.

PRPFX should have a nice day today.

Excepting those heavily short-selling, I'm having a hard time thinking of a portfolio that won't have a good day.

MediumTex wrote: PRPFX should have a nice day today.

It did. But PERM beat it by +1.1%.

PRPFX up .72%.

Even valuing gold earlier in the day, I'm not sure how that happens with the asset mix PRPFX has.

Weird.

Do they value gold at the day's close or earlier in the day?

Reub wrote: Do they value gold at the day's close or earlier in the day?

Late A.M. as I recall.

Does anyone know how they value the gold? For example, they have a mixture of bullion and coins as I understand it. Are they valued at X oz of bullion and coins times the COMEX price of gold/oz or do they include the actual premium for the physical vs paper price? What about any semi-numismatic value? I am trying to see if they say anything about it in the prospectus, but haven't found it yet. Same question for the silver holdings.

number5858 wrote: Does anyone know how they value the gold? For example, they have a mixture of bullion and coins as I understand it. Are they valued at X oz of bullion and coins times the COMEX price of gold/oz or do they include the actual premium for the physical vs paper price? What about any semi-numismatic value? I am trying to see if they say anything about it in the prospectus, but haven't found it yet. Same question for the silver holdings.

Not sure how they value their PMs but I'm fairly sure they eschew anything with numismatic value. That is really hard to quantify and it just muddies things up.

I wasn't talking about true numismatic value, but rather semi-numismatic value. For example, suppose that PRPFX has purchased X oz of gold American Eagle coins each year. Often times, the actual premium paid for one year may be slightly higher or lower than other years. I bet that they don't account for the true premium by year when they price the gold each day. The real liquidation value may be higher than represented in the daily financials. This makes perfect sense when they have no intent to liquidate the gold, but it could make the true value of the fund higher. Suppose that they hold 100K 1986 gold American Eagles, and that these go for $10 each more premium than 2013 gold American Eagles. The 100K*$10=$1 million more in true value.

It's a good question, number5858.  How do they value the gold?  "Market value".  You can see in the annual report for 2013, they valued the gold bullion at $1240.10/oz, and the one-ounce coins at $1270.85/oz.

So while your theory was good and very interesting ("I bet that they don't account for the true premium by year when they price the gold each day. The real liquidation value may be higher than represented in the daily financials.") I don't think that it turns out to be the case.  At least in the annual report, the coin premium is accounted for.  Probably in the daily share price it is as well.

http://permanentportfoliofunds.com/pdfs ... 140131.pdf