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35 posts tagged with "Bonds"
Investors, we are told, demand a risk premium for investing in stocks rather than bonds. Without that extra return, why invest in risky stocks if you can get guaranteed returns in bonds? This week we look at a brilliantly done paper examining whether or not investors have gotten better returns from...
Rules have consequences. And sometimes they have unintended consequences. If I told you that the US government was going to give multiple tens of billions of taxpayer dollars to hedge funds and private investors, you would justifiably not be happy. I think the word angry would come to mind. But...
It was only a few years ago that I use to sit down at this computer on Friday and wonder what I would write about. In today's environment, there is enough to write three e-letters and still leave interesting copy on the editing floor. Today we look at the rather disturbing developments in the...
The unemployment numbers came in today, and if you look under the hood of the data, it is worse than the headline loss of 4,000 jobs. Should the Fed cut the interest rates in two weeks? Will it make a difference? Are we headed into recession (as predicted here in my January 2007 forecast issue)?...
Investors are constantly seeking "alpha," that elusive substance which yields returns in excess of a simple market portfolio. While I am flying today to Prague, this week good friend Rob Arnott teams up with associate John West to show that it is just as important to eliminate negative alpha....
As predicted in this letter early this year, the credit markets have finally begun to tighten, as a major re-pricing of risk is underway as a direct result of the subprime markets. The subprime virus seems to be spreading, despite the view a few weeks ago that there would be no "contagion" in...
Last week we started a series on a very important book by friend Joe Ellis called "Ahead of the Curve."
We continue this week looking at specific indicators that Joe thinks give us a heads up when the economy is about to slow down and the stock market will being a bear market. I am then going...
The level of attention to the recent and mild inversion of the yield curve has bordered on hysteria in the media. Does it portend a recession? Or is, as Ethan Harris, the chief economist of Lehman Brothers suggests, the bond market simply on drugs? This week we pause in our series on trade...
When can we once again return to the stock market with some long term confidence? What's up with bonds and global reflation? This week we continue to meditate on the risks of lazy investing and single derivative thinking, ranging far and wide in an effort to understand the world in which we find...
One of today's trickiest investment questions revolves around interest rates and bond investing. We are in an economic environment in history like no other, so we have few direct parallels from which to draw wisdom. Should we keep our bond investments short-term and suffer pathetic yields, or move...
Two weeks ago we examined the changes in our lives. Last week we looked at imbalances in the economy. This week the theme that I see in my daily reading is the large number of major contradictions apparent in the markets. There are so many contradictions we will not get to them all, but let's...
Is this a critical time in the bond market or are we simply back to where we were a few months ago before the recent madness? If it was temporary insanity, what caused it? Why is the dollar rising? Why have the Japanese sold more foreign bonds in the past few weeks than in the past few years? Who...
September is the month set into my personal rhythms, and that of my generation, as a time to reflect upon the past and look to the future. The first week of school was always a time for review and to get a sense of what we would be looking forward to in the new school year. Even though school has...
I confess. I like jig-saw puzzles. My bride indulges this quaint past time by buying me a new puzzle from time to time. This last month, I must have done something bad, however, as she purchased a particularly fiendish puzzle, where too many pieces look the same. It is proving quite the challenge....
This week I have asked Greg Weldon, whom I frequently refer to, to give us a few examples of how seemingly different economic trends actually fit together, like pieces of a puzzle. If you can figure out how the puzzle pieces fit, you can develop ideas to profit from the picture they create. Greg...
Long time readers have been asking me to re-visit some of my old themes and recommendations. Today we are going to visit our old friends, The Three Amigos
, to see what these historically accurate indicators have to tell us about the direction of the economy. Is it safe to get back in the water?...
A lot of data has come out this week. I slice and dice it for you to help us figure out whether the economy is truly turning up, or is this just a head fake from the markets? Plus, we look at what some are calling a slam dunk investment. I agree it is as close as it comes to being a lock.
Wow! What a data downpour the last few days! We are going to cover Warren Buffett, junk bonds, Enron, deflation, corporate accounting hank-panky, and the wildest markets I can remember. Let's jump in and see where we end up.
What a week! There is so much to talk about, and the good news is that it is not all bad! The theme of today's e-letter is going to be : "The Games People Play". My less than sainted Dad was a games player. I have a letter on the wall over my desk from John Wayne to my Dad referring to some...
Last week we began a series on developing a philosophy of investing. This week we will continue with part 2 as we focus on what types of investments should do well after the economy turns around. Then we look at specific funds you can go into now.
