The Permanent Portfolio

grey_gym_sock

bowlhead99 wrote: »

I go even further. I really like a bit of Marmite on toast or a crumpet for a breakfast/ snack in the winter. And in the summer I like a Wall's Solero or a bowl of Ben & Jerry's ice cream.

that's interesting. some portfolios have a commodities allocation which includes foodstuffs, but i haven't heard of 1 that includes branded foodstuffs. (though there is the old favourite of using the price of a mars bar to measure inflation.)

do you have a fixed allocation to branded foodstuffs, and rebalance back to it? how do you deal with product deterioration? (have you considered using synthetics to get round that issue?)

is a basket of only unilever's foodstuffs sufficiently diversfified?

So in my self-selected individual company shares portfolio I no longer hold Unilever, as I don't want my shares plummeting at the same time as a downturn in the company causes them to stop producing some of my favourite feelgood snacks.

i see you point, but is there a clear connection between the performance of the products and the company? perhaps it's a similar question to the relationship between holding physical gold or share in gold miners. or holding bitcoins versus investing in companies involved in blockchain technology.

Shame really as I have made money from it over the years and it has a quality selection of global brands with exposure to both developed and emerging markets. But now I just let fund managers decide whether they want it within the funds part of my portfolio and don't have a separate holding of it myself.

well, quite, but of course it's the overall performance of the portfolio which counts.

kidmugsy

bowlhead99 wrote: »

I go even further. I really like a bit of Marmite on toast .

Do you have a principled objection to making uncorrelated investments or are you just being a bit of an erse?

bowlhead99

kidmugsy wrote: »

Do you have a principled objection to making uncorrelated investments or are you just being a bit of an erse?

I do have plenty of uncorrelated investments, but the above post is just an exension of the logic while being driven back from the pub on a sunny bank holiday afternoon. I can't say it was written entirely soberly so perhaps it's the latter.


We often hear people being advised not to have shares in their employer because they will be unhappy if they get laid off at the same time as the employer share price collapses.

Likewise, some people choose not to buy property funds or housebuilders because they feel their own home valuation is sufficiently exposed to the vagaries of changes in interest rates or green belt strategies.

You try to avoid buying into some of the largest or fastest growing types of business in your local area (and indeed the country) so that you don't get a double whammy if they hit a blip and your house price fails too. Which seems a little more extreme, but I could imagine someone in a town which has had 50 years of mining being the only local jobs and on the brink of extinction, being regarded foolish for having a massive punt on the coal price going up.

So seems to me it's not outrageous to choose to avoid investments in a company selling consumer goods that I really like, on the grounds that I will get a double whammy of sadness if my investments go down and I can't find solace at the bottom of a box of my favourite ice lollies.

I do generally look for uncorrelated investments and the opportunity to hedge things and get rewarded on one side when there's a negative somewhere else. For example I made quite a lot of money on betting the brexit referendum vote, not because I wanted Leave to win, nor that I thought it would win, but the odds were quite long and if Leave did win I wanted to be compensated for a potential negative impact on my job security and the UK part of my investment portfolio. It paid out.

If instead I had bet on remain and leave had won, I would have the quadruple whammy of losing a bet, potentially seeing a negative to my London property value through reduced demand, my employer potentially having to come up with a whole new strategy to access European financial services markets over time with whatever uncertainty that brought, together with increased competition for jobs when other financial sector employees who wanted to stay in London found their jobs relocated to Frankfurt. Too many potential whammies from that outcome, so I didn't bet on Remain.


So, keeping the tone light, an investment in the maker of an icecream I like or the brewer of my favourite beer or the builder of my favourite car or some shares in my favourite football team, can all result in a 'double negative' if the respective company falls upon hard times and discontinues a product line or sells it off, or the team gets relegated etc etc.

Ray_Singh-Blue

planteria wrote: »

me too. i'd rather have 100% equities. (if I had a million pound portfolio)

I'd be way more comfortable with an average house, a pension paying £13k per year index linked, £250K of savings and £250K of equity investments.

ColdIron

bowlhead99 wrote: »

I go even further. I really like a bit of Marmite on toast or a crumpet for a breakfast/ snack in the winter. And in the summer I like a Wall's Solero or a bowl of Ben & Jerry's ice cream.

I too like Marmite and Soleros but can't decide between them and don't want to get caught in a cyclical comestible trap. I'm considering a kind of creamy Marmitey blend that should strike a good balance to suit all weathers. Can anyone see a problem with this strategy?


Edit: In a remarkable coincidence ...

https://metro.co.uk/2018/05/28/an-ice-cream-parlour-is-selling-ketchup-mushy-peas-and-marmite-ice-cream-7583306/

DairyQueen

bowlhead99 wrote: »

... an investment in ... my favourite beer ... can all result in a 'double negative' if the respective company falls upon hard times and discontinues a product line or sells it off, or the team gets relegated etc etc.

Anyone know if Molson Coors is in the SP500? Since they took over the 300-year-old, English, family business that produces my favourite tipple their share price has crashed. I hadn't considered this kind of double-whammy... until now.

Note to self: add crates of the good stuff to shopping list .:beer:

bowlhead99

DairyQueen wrote: »

Anyone know if Molson Coors is in the SP500? Since they took over the 300-year-old, English, family business that produces my favourite tipple their share price has crashed. I hadn't considered this kind of double-whammy... until now.

Note to self: add crates of the good stuff to shopping list .:beer:

Market cap is only about $14bn so it is well below the weighted average company size of the S&P500 when you consider there are probably 400 companies ahead of it - and look at the size of Apple, Google or Amazon who are each closer to a trillion than ten billion.

Meaning if you hold an S&P 500 market-cap weighted tracker, probably 99.95% of your money is not going to be in Molson Coors. If it now doubles in value while everything else stands still, 99.9% of the the S&P 500 will still not be in Molsen Coors

DairyQueen

bowlhead99 wrote: »

Market cap is only about $14bn so it is well below the weighted average company size of the S&P500

Phew. Thanks for that.

Will still buy-in that stash though.

sjp999

BH99 and DQ must both be suffering from heatstroke - marmite & cider?

Here's me thinking you could trust what either of them posted, not so sure now.

Ray_Singh-Blue

Nothing wrong with that portfolio.

The cider provides liquidity, while the marmite ensures a good spread.