Article Review: Permanent Portfolio and Long-Term Asset Allocation | StocKlaw

Core Framework

Harry Browne’s design is mathematically self-consistent. Four 25% allocations match four economic scenarios:

Asset	Scenario	Boom	Recession	Inflation	Deflation
Stocks	Growth	✅ Up	❌ Down	❓	❌
Long Bonds	Deflation	↔	✅ Up	❌ Down	✅ Up
Gold	Inflation	↔	↔	✅ Up	❌
Cash	Stability	↔	✅	↔	↔

Low correlation between four assets, hedging each other, portfolio volatility crushed to极低 levels. Historical max drawdown only -4.9%. That’s real.

Three Problems the Post Doesn’t Really Address

1. Long bonds got destroyed in 2022.

Backtesting to 2008 looks beautiful, but 2022 was a stock-bond double kill. Long bond ETFs fell 30%+ in a single year, crashing alongside stocks — this is the permanent portfolio’s Achilles’ heel in a “rate hike + inflation” extreme scenario. The -4.9% of 1981 was light. If you held 25% TLT per the permanent portfolio, that one position alone cost you 7-8% of the portfolio in 2022.

2. Gold is already elevated in 2025-2026.

From mid-2024 to May 2026, gold surged from ~2000 to 3500+, nearly doubling. The deviation long ago exceeded the 35% rebalancing threshold. Per the rules, you should sell some. But do you have the nerve? The post says human nature looks down on 10% returns. I say human nature fears missing out more.

3. 10% annualized is US backtesting; forward-looking needs a discount.

The post itself admits the A-share version only delivers 7.5%. With US valuations at the 90th percentile historically, bond yield curve inversion only recently resolved, gold at highs — I’d give this portfolio a 60-70% probability of achieving 10% over the next decade.

On “Why Not Just Buy What Buffett Buys”

This is where I have real感触. The post uses the permanent portfolio to illustrate “looking down on 10% returns,” but the deeper reasons:

By the time you see Buffett’s holdings, he’s already moved. 13F filings come 45 days after quarter-end. When did Berkshire buy? How long has it held? What’s the average price? You don’t know. You’re looking at a 3-month-old static screenshot.
Buffett’s position management isn’t replicable with small capital. When he bought $30B of Apple, you buying 100 shares is a completely different game — he has no liquidity problems, board seats, and insurance float for contrarian adds. You have none of that.
Much of what Buffett buys isn’t in 13F. Acquisitions, preferred shares, private deals — no disclosure required. You’re seeing the tip of the iceberg.

Investment Implications

But you can’t say this portfolio is useless. For large capital ($500K+), retirement funds, or money you don’t want to think about, this is an顶级 approach. Low drawdown = can hold = won’t make mistakes = long-term compounding works. Many people die chasing “buy after it rises” and “sell after it drops.” The permanent portfolio’s discipline cuts off that loop.

Score: 7.5/10

Classic framework, but needs adjustment for the current environment (duration risk, gold overvaluation). Can’t be applied blindly — you need to add your own judgment layer.