In their recent 100th episode of the VALUE: After Hours Podcast, Taylor, Brewster, Carlisle, and friends discuss Compounding Wealth With A Cockroach Portfolio. Here’s an excerpt from the podcast:
Tobias: How would you characterize yourself, Jason? I think of you as vol but you are broader than that, aren’t you global macro eventually?
Jason: Yeah, I was trying to–
Jason: Yes, Cockroach. I was trying not to be a Brewster. I was going to be like–
Jake: That’s like that, I didn’t say that in a disparaging way. Explain, Jason.
Jason: No, yeah. Sorry. Yeah, a lot of people think of us as long vol guys, but that was the first one we launched was long volatility an ensemble approach. But the idea was, retail didn’t have access to protect our portfolio. So, that’s why we built that first, but it was in the guise of we are always going to build a total portfolio solution. So, in September, we just launched our Cockroach portfolio, and the idea is it’s very visceral, but the idea of a cockroach is we want to maintain our wealth for multiple generations. So, the idea is, we pair global stocks, global bonds, long volatility, commodity trend managers, and a little bit of gold and cryptocurrencies for that fiat hedge.
The idea is rebalancing over time allows you actually to get on the value of each of them as your scale trading the equity curve of all the world asset classes. The idea is we created the least shitty portfolio. I’m not trying to be smart or outdo anybody. I just want to efficiently compound my wealth over time with as little drawdown as possible. So, I reduce that volatility tax. So, that’s why we created the Cockroach portfolio. So, we’re pretty profligate and we invest in basically all of the world’s asset classes.
Jake: It’s kind of reminds me of like Harry Browne’s Permanent Portfolio a little bit, but just updated with some new tools that are out there.
Bill: 100%. Couldn’t say it better. I am huge fan of Harry Browne, huge fan of the Permanent Portfolio, and I like to think if he was alive today, he might do it similar than what we did. The only difference is we use that ensemble approach with active managers, but also instead of cash, we use long volatility, and instead of gold, we use commodity trend advisors. We just feel that that’s a better solution but otherwise, it’s definitely a rip off of Harry Browne’s Permanent Portfolio and I say that with great pride.
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