Why We’re Changing Our Allocation In A “Permanent” Portfolio
Inside Today’s Issue
Essay: Why We’re Changing Our Allocation In A “Permanent” Portfolio
Oil Tankers: $1 Million Per Day
The Oil Crisis Has Arrived
Bond Yields Go Global
Chart Of The Day… APA
Reader Poll… Interest Rates
Today’s Mailbag
Today’s Journal is extremely serious, but let me begin with a joke.
Normally, bond salesmen never get into heaven. If you’ve never read the classic Liar’s Poker, then you may not understand why. Bond prices are opaque. That means bond salesmen can frequently get away with “murder” – taking a huge spread out of the trades they do for customers. There are a lot of bond traders without scruples who take advantage of “muppets” and sell them bonds with spreads wide enough to drive a new Ferrari through.
And so bond salesmen generally don’t get into heaven. But when 9/11 happened, God made some exceptions. An entire bond trading firm (Cantor Fitzgerald) got wiped out when the planes hit the towers. So God brought them all in. And he explained:
Look, you guys really don’t deserve to be here, okay. But I feel terrible about what’s happened to you. You’ve lost your lives, your families… your Ferraris. Everything. So, I’m willing to make an exception – this time. But I need something in return…
Well, as you can imagine, the bond traders were shocked and confused at first. But then they realized that God needed something from them. And unless they could give it to him, they were going to hell – for eternity!
The emerging-markets managing director came to his senses first. (He was the one most used to everything going to hell.) He stood up and faced God.
God, you’ve saved us. Thank you. We are all in your debt. And looking back, I understand why you don’t normally allow bond traders in here. We are all grateful and want to do whatever we can to help. What can we do for you, God?
God walked over to him. He put his arm around him and said, “Walk with me a minute.”
As they walked out of earshot of the other traders, God asked…
What do you think interest rates are going to do next year…?
We’re making a substantial change to our recommended allocation in Porter’s Permanent Portfolio. We recognize that there are lots of good reasons not to follow our advice about this change.
