Month: March 2021

Then and Now

This is a brief reflective post about the past and future of this blog.

It has been about 3.5 years since I started writing here. The journey has been fantastic. When I first started posting, it was primarily as an outlet for “takes” I was not able to express professionally. Over time, the blog has mutated into more of an online notebook or idea journal. Some of the early themes it turns out I merely needed to “write out of my system.” Some of my interests have changed over time. And, of course, some of the things I thought I would be interested in writing about publicly, I realized I am more interested in discussing directly in small group settings either online or offline.

Going forward, I will be writing more frequently at https://ensofinance.blog/. The new site is meant to be more of a focused platform, specifically devoted to meditations around personal finance and investing. If that kind of thing is in your wheelhouse, check it out! For now, my target posting cadence is once per week, on Mondays.

I will continue to write here. However, it will likely be less frequent and relatively unfocused going forward (this has been the trend over the past couple of years). This site will continue to serve more as an idea journal and platform for self-expression. If you follow my leveraged permanent portfolio updates, rest assured I will continue to provide those on a monthly basis.

The hot takes and snark will continue on Twitter via my @demonetizedblog account.

If you are a longtime reader and online friend, thank you for your time and interactions! I have made more wonderful online friends and connections through this process than I ever would have thought possible. I look forward to many more years of the same.

03/21 Permanent Portfolio Update

Now here is a spicy update.

Current allocation:

This is about 118% notional exposure due to the leverage in NTSX.

From an attribution perspective, the main pain YTD has been in gold and bonds, with some ancillary pain from my growth equity tilt. I don’t have a lot of Deep Thoughts about this other than that I think what we are seeing is a reflationary trade post-Covid. I would expect this to be bad for Treasuries and bad for gold in the short term, and for the bond pain to ease up a bit as rates find their footing again.

A historical comp to this kind of behavior would be 2013. That was another period where the markets were wrestling with a reflationary dynamic. Here is historical data on a plain vanilla permanent portfolio. The 2013 return is a mere 1.23% (market cap weighted US equities returned 33%; bonds -2.26%; gold -28.33%). So if the dynamic we are experiencing YTD in 2021 continues through year-end, I would not expect much performance-wise.

I shall leave you with the below words of encouragement. This gets at the philosophy underlying the permanent portfolio concept.

There is a Taoist story of an old farmer who had worked his crops for many years. One day his horse ran away. Upon hearing the news, his neighbors came to visit. “Such bad luck,” they said sympathetically.

“Maybe,” the farmer replied.

The next morning the horse returned, bringing with it three other wild horses. “How wonderful,” the neighbors exclaimed.

“Maybe,” replied the old man.

The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy for what they called his “misfortune.”

“Maybe,” answered the farmer.

The day after, military officials came to the village to draft young men into the army. Seeing that the son’s leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out.

“Maybe,” said the farmer.