A couple of decades ago I was still in the mood to see imminent world financial catastrophe. (Since then, I've gained a better appreciation for the weight of inertia in real economic affairs.) I didn't have much money, fresh out of school as I was, but I managed to put a wee bit aside. Where to invest?

A mutual fund called "Permanent Portfolio Fund" caught my eye. It proposed to insure its owners against disaster by diversifying resources across some unconventional dimensions such as gold, silver, and long-term bonds, in additional to the more ordinary stocks of publicly-traded corporations. This would, the argument went, protect against deflation, depression, runaway inflation, and other disasteristic scenarios.

It sounded reasonable, so I sent in a minimal amount and sat back to read the quarterly reports. They were entertaining, particularly as the international economy failed to collapse — and in fact, rather thrived — while the PPF's price stagnated. After a few years I threw in my hand, and moved back to the usual investment universe ... savings accounts, retirement plans, etc.

But PPF still occupies a warm place in my heart because of the most bizarre financial coincidence that I have ever experienced: ca. 1983, in the big bureaucracy where I worked, one day I discovered that my immediate neighbor — "NK", who sat at the very next desk beside mine — was also an investor in Permanent Portfolio Fund! With only a few thousand shareholders in the world, what are the odds of that? Not astronomically against, but surely less than one chance in 10,000.

Would that I could have placed a wager on that conjunction of events; I might have made some real money ...

(see also http://www.harrybrowne.org/articles/InvestmentRules.htm for some sensible advice by one of the founders of PPF; and see MoneyWisdom (20 May 2001), SilverSkepticism (29 Jul 2001), ...)

TopicPersonalHistory - 2003-06-02

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