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Q & A:

February, 2008

Q: I have watched the U.S. market turbulence and ‘loss of elevation’…?

Q: Sometime last year, I aligned all of my investments with the PPP.  I have watched the U.S. market turbulence and ‘loss of elevation’ without trepidation while my portfolio has risen precipitously.  I am very blessed to have benefit of your study, analysis, insight and advice.

A: Thank you for your kind comments.  I receive a number of e-mails each month from subscribers and most of them are positive.  That is great, because that’s the reason I’m doing this.  I want to help people be better individual investors.  Everyone should want to achieve that goal.  If the things I write help you navigate that path, then I have been successful.

The run ahead will be challenging.  At the risk of being overly apocalyptic,  we have “come to the place where the road and the sky collide.”  When you come to this place, it is easy to get disoriented.  This sometimes happens when you’re skiing.  In skiing, it’s much better to look far down the mountain than to look down at your skis.  The same is true for individual investors.  We’ve run into a double black diamond in a whiteout and we just need to get down it.  We’re not worried about style or form, we’re just trying to survive so we can enjoy après ski.

It will be critical for investors to focus on their long-term goals.  We have had a good run so far (a nice blue cruiser with fresh powder), and I am convinced that it is the best path to lead us to where we want to be in the future, but now things are going to get bumpy.  If the level of bumpiness is disturbing to you (as it is for me), buy some CD’s.  Even though cash is not part of the PPP, it is definitely not trash.  I must admit, however, that my favorite cash is still gold.

Long-suffering readers know I’ve been bearish for quite a while.  I think most would agree that the things I have discussed are now coming to pass and that I discussed them sooner than most other analysts.  Now, as I said, we’re on the double black diamond slope in blizzard conditions.  We need to try to get down without getting hurt, but there is no need to get fancy in the process.

Thank you again for your kind comments, and I hope I will continue to be a good ski tour guide.

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  • Article Review:

    September, 2011

    Going to the Johns–Mauldin and Hussman

    I’ve mentioned John Mauldin many times in the past and it’s time to do it again.  John publishes a free weekly letter that I never miss.  It requires registration, but I never receive junk mail as a result of having registered.  His latest letter, Preparing for a Credit Crisis, is reason enough to sign up.  In this latest missive, John gives us an up-to-the minute overview of the problems and costs facing Europe, the increasing likelihood of a U.S. (global) recession, the outlook for another 2008-style credit crisis and what the average investor might want to think about doing in the face of all of this. Read more…

  • Book Review:

    May, 2011

    Debts, Deficits and the Demise of the American Economy

    Debts, Deficits and the Demise of the American Economy by Peter Tanous and Jeff Cox is about as close to the book I would write right now as I can imagine.  It explains today’s economic mess and the unfolding financial crisis in straightforward language that doesn’t require a degree in economics.

    Read more…
  • Video Review:

    January, 2011

    Quantitative Easing Explained

    A number of subscribers forwarded this video to me and it’s making the rounds in financial circles.  If you’re still unclear about the phenomenon I refer to as “Queasing,” this should clear up any questions.  Warning:  After watching this video, you may not be able to hear the name Ben Bernanke without wanting to call him “The Bernank.”  It’s like one of those songs that gets stuck in your head.  If you like the absurd, I think you’ll like “Quantitative Easing Explained.”

Plumb's Guide to Investing

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Over the years, many people have asked me for investment advice. This section is my answer to the question, “Chip, what are you doing with your portfolio?” It details the portfolio I use to implement my investment strategy— the Plumb Performance Portfolio©

  • What is the Plumb Performance Portfolio?
  • Our Philosophy
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  • Plumb Perspective Editorial Archive

Plumb Performance Portfolio

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Further details and return history about the Plumb Performance Portfolio.

  • PPP Asset Allocation
  • Last Month in Review
  • Rationale
  • Historical Results

Questions & Answers

  • May, 2011
    Q: Can you comment on building positions within the PPP?
  • June, 2010
    Q: How does the gold/silver ratio impact your allocation?
  • April, 2010
    Q: How important is it to adjust my allocations monthly?
  • January, 2010
    Q: What about individual TIPS vs. a TIPS fund?
  • November, 2009
    Q: Do you see REITs as totally miserable?

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“...an investor who proposes to ignore near-term market fluctuations needs great resources for safety and must not operate on so large a scale, if at all, with borrowed money. Finally, it is the long-term investor, he who promotes the public interest, who will in practice come in for the most criticism, wherever investment funds are managed by committee or boards or banks. For it is the essence of his behavior that he should be eccentric, unconventional and rash in the eyes of average opinion. If he is successful, that will only confirm the general belief in his rashness, and if in the short run he is unsuccessful, which is very likely, he will not receive much mercy. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.”

– Lord John Maynard Keynes


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©2009 PlumbReport.com

The opinions as to portfolio allocation and specific investment vehicles contained herein are solely the opinions of the author and are not intended to be specific recommendations which would be suitable for every investor. The suitability of any specific investment or recommendation is dependent upon many subjective factors and characteristics of the individual investor including, but not limited to, particular investment objectives, risk tolerance, investment horizon or timeline, net worth, overall portfolio allocation and income needs. Specific investments may be suitable for some investors and yet unsuitable for others due to different needs and objectives. All readers should carefully consider their individual objectives and needs and should consult with their investment and financial advisor as to the suitability of any particular investment. The author specifically disclaims any liability or responsibility for any losses, which may result from any investment or allocation referenced herein.