harry brownes permanent portfolio

[mathjak107]

one of my favorite authors harry browne recently passed away.harry was the creator of the "permanent portfolio"..
he would simply divide all the serious money into 4 piles..25% in treasury bills,25% in the most diversified fully invested as a policy mutual funds,30 year treasuries and gold bullion and coins...the idea was each pile would respond very strongly to each of the economic cycles and although each one was so volitile on its own that it would be considered a speculation on its own,each catagory could only go to zero under horrific conditions for that asset class while other offetting asset classes could double triple or go 100x if economic events warranted it...a simple balance once a year and that was it....with the out look for the future so iffy im wondering if harrys advice might be right on....i had tried this 20 years ago and found it not only boring but the heavy gold weight dragged the performance down.....although my return was still positive thru the crash of 1987 from following it.........in fact with 1 exception down 2% the mix was positive every year although no year was very good in comparison to my more conventional mix...........so heres the question ,how would you adopt and alter harrys bullet-proof plan...i think i would knock gold down to say 10-12% instead of a 25% stake as he figured..........getting closer to er im getting more and more gun shy of big drops with years to come back.....

 

[unclemick]

Yep

1980's I was heavily influenced by Mr Browne - with up to 15% VG PM at times plus experimenting with closed end foriegn fixed(only remember Putnam) and VG Trustee's co-mingled International and of course - pssst Wellesley. Way too compilicated AND 'readjusted asset balances' periodically.

Lot higher RE (raw land and rental) in those days also. 401k was much smaller index/GIC's.

Guess who won in the end? Plunka plunka DCA - 401 index of course.

heh heh heh heh heh heh - Bogle's 1994 book plus Ben Graham(reread one more time) were the one's that stuck with me.

Sorry to see him pass - interesting fella. I believe I had an 8 plie version - RE, gold/pm stock, foreign fixed, foreign stock,US fixed, US stock, cash, coins/ rocks(semi precious stones).

 

[ash]

so heres the question ,how would you adopt and alter harrys bullet-proof plan...i think i would knock gold down to say 10-12% instead of a 25% stake as he figured..........getting closer to er im getting more and more gun shy of big drops with years to come back.....

Sorry, old thread resurrection.

My thoughts are along the same lines as yours. I enjoyed Failsafe Investing by Harry and agree with most of his principles, but I couldn't quite handle the 25% gold thing either. I'm roughly 60% stocks 25% cash, 15% gold.

Sad to see Harry go, he really challenged me to think about long held beliefs.

 

[Patrick]

Is this the same Harry Browne who wrote "How I Found Freedom In an Unfree World?" Good book.

 

[mathjak107]

yep thats ole harry. i liked his book why the best layed investment plans usually go bad

 

[Merlin]

I bought his newsletter for a year back in the late 80s. It was very interesting reading. I just glanced over to my bookshelf and I still have a copy of The Economic Time Bomb published in 1989.

I suppose I would not have ever bought any gold if I had not read Harry's book. I never came anywhere close to his recommended 25% but I believe I was up to 10% for a while. His book also got me interested in zero coupon treasury bonds which have been good investments for me for the last 16 years.

Harry Browne was the Libertarian nominee for President in 1996 & 2000.