M* -- Bond Investors Facing Worst Losses in Years Took profit, cashed out of PTIAX. That fund has been our "piggy bank." My delicious wife is always coming up with new and different ways to spend. At least we have something to show for it. A lovely new home in a shit-hole Asian country, for one thing. Savers vs. Spenders: they say "opposites attract," eh? I'm paying-off some bills with the PTIAX money. Why not use "the house's money" to do that, eh? I'm sure the profit has been low to moderate, but we've certainly not LOST money, over the several years we've owned PTIAX. And anyhow, we needed the furniture.
Very recently, i read a post, here or elsewhere, expressing that it makes sense to buy-back some beaten-down bond funds that you are convinced are otherwise solid, good investments. Then, in effect, the dividends are worth more than "face value." I can't find a good argument against that tactic. :)
Apart from that particular angle, it seems to me that bonds are dead money, currently. I like to stick to a plan, with pre-decided percentages in my allocations between cash, bonds and stocks. (I'm just NOW, after all these years, starting to seriously grow my cash, in order to keep some dry powder handy.) I don't impulsively switch around, but with the world all screwed up the way it is right now, changes must be made to the portfolio. What that means for me is: more stocks, but stocks with good dividends. Those divs are a hedge against mediocre to bad market results. How long will the shit-show last? We shall see. The human race has, from the starting gun, been unable to get out of its own way, time and time again. Ever since we became self-aware creatures.
M* -- Bond Investors Facing Worst Losses in Years I referenced this a couple weeks ago and was told by someone I “hadn’t been to enough rodeos.”
:)
Bond funds are hurting big time this year. I’d expect such from longer dated ones. But some shorter term and intermediate term funds are getting banged up as well. Takes a lot of change in interest rates to bring about that kind of carnage in intermediate and shorter duration bond funds. If investors are fleeing, as I suspect, that worsens the situation as managers need to unload holdings before they mature and at the least unattractive valuations.
Long predicted, rates are moving higher. I try and stick to an allocation model, so I’m not dumping all my bond funds. The portfolio is strong enough to stand up to a hit from any one area. But I have in recent
years been shifting more into
alternative type funds and out of both equities and bonds. Alternatives constitute 40% of my allocation now - the most ever. Included are multi-strategy, long-short, market neutral, hedged equity and style premia funds - plus probably some types I can’t remember.
So what exactly are those of you who are out of bond funds or considering dumping your bond funds going to do with the cash or proceeds of same?
@Mark makes a good point. If you jump into cash you pretty much commit to very low returns. It you throw it all into equities you increase your risk - though it may not feel that way at the moment. Commodities have been hot a long time. Chase them at your own peril.
M* -- Bond Investors Facing Worst Losses in Years No where to hide. Timely look at bond market conditions....
``It's unclear what the neutral rate is,” Vataru says. ``It's a slightly untethered market.”
Worst Losses in Years
There's gotta be a Natgas ETF I don't know about... I put some money into GASFX decades ago when I was convinced nat gas was the wave of the future. I was obviously right, but 20 years early.
I would be cautious with GASFX, if you want to invest in natural gas, as it is essentially a utility (80%) fund, and invests in an index of gas utilities and producers, but mostly utilities.
Fidelity had a natural gas fund, but ( just before Ukranian war) merged it into Fidelity select Energy
You could also buy the production companies in GASFX and skip the utilities.
There's gotta be a Natgas ETF I don't know about... On the mutual fund side there is GASFX, The last 10 years it has either been one of the best or one of the worst in its category.
VWINX Yep,
VYM+VCIT approximates
VWINX quite well. PV runs from 12/1/09-2/28/22 (12+
years). Elsewhere, other variations/refinements has also been tried.
LINK
Buy Sell Why: ad infinitum. Congratulation on your pick! Unless someone who can offer higher bid than Warren Buffet, Y will be part of Berkshire Hathaway after 25 days. He is known not to out-bid other competitors. Also he is buying the entire company, not just taking a major stake in the company as he did with Occidental. WB is over 90 years old and still maintain his edge.
Buy Sell Why: ad infinitum. “there’s what 25 days to see if Allegheny receives a better offer? You could always throw that 5% in a high flier like BRK.B ?”Ummm … Good point. I’m not familiar with the legalities here. Is Berkshire locked in to the offer for 25 days? I’d have to guess that’s a very generous offer. Will be surprised if anyone tops it. FWIW: I sold at $846 having put in a limit offer before open. Y closed at $844.60. So there was a slight drift down during the day.
Rocked my boat seeing it up 25% in the pre market hours. I’m very old and very conservative. Would have settled for 25% over 2 or 3
years. Already have 2 stocks in the growth sleeve. Having this one in the more conservative “alternative” sleeve was a real reach in the first place.
Below is a link to the
Barron’s article that whetted my appetite last November. I tracked and studied the company for over 3 months before deciding to take a bite. Averaged in during February / March while it was falling. Bottomed at $588 March 8. Currently $844.60
https://www.barrons.com/articles/buy-alleghany-stock-berkshire-hathaway-pick-51636151493But thanks for the thoughts.
BTW - I think
Barron’s is underappreciated.
2022’s Most & Least Federally Dependent States The fraud in the Covid relief is shameful, but it is misguided to assume that some billions fraudulently misappropriated in $5.1 trillion worth of two relief--2020 and 2021--packages indicate some sort of failure in policy:
https://cbpp.org/research/poverty-and-inequality/robust-covid-relief-achieved-historic-gains-against-poverty-and
When COVID-19 began to rapidly spread across the United States in March 2020, the economy quickly shed more than 20 million jobs. Amid intense fear and hardship, federal policymakers responded, enacting five relief bills in 2020 that provided an estimated $3.3 trillion of relief and the American Rescue Plan in 2021, which added another $1.8 trillion. This robust policy response helped make the COVID-19 recession the shortest on record and helped fuel an economic recovery that has brought the unemployment rate, which peaked at 14.8 percent in April 2020, down to 4.0 percent. One measure of annual poverty declined by the most on record in 2020, in data back to 1967, and the number of uninsured people remained stable, rather than rising as typically happens with large-scale job loss. Various data indicate that in 2021, relief measures reduced poverty, helped people access health coverage, and reduced hardships like inability to afford food or meet other basic needs.
These positive results contrast with the Great Recession of 2007-2009, when the federal response was large compared to measures taken in other post-World War II recessions but less than one-third as large as the fiscal policy measures adopted in 2020-2021, when measured as a share of the economy. While decried by some at the time as too large, the relief measures enacted during the Great Recession were undersized and ended too soon. As a result, the economy remained weak for longer than was necessary — and families suffered avoidable hardship. Two years after the Great Recession began, unemployment was still 9.9 percent and food insecurity remained one-third above its pre-recession level. While some of that difference stems from differences in the trigger to the downturn, some is clearly due to the strength of the policy response.
What I don't like is states and politicians claiming they don't need federal assistance and shouldn't have to pay taxes while taking loads of federal assistance.
U.S. inflation rate climbs again to 7.9%, CPI shows / MarketWatch Article @BaseballFan - I consider you a great asset to the board based on your investment related contributions over the
years. As long as everyone is civil no harm in voicing dissenting views. I actually pay $$ to subscribe to Bill Fleckenstein’s “Daily Rap.” His political opinions run similar to yours - and distinctly contrary to my own. But I’m willing to overlook that right wing dogma because it’s all about investing. And I think he, like you, has some interesting thoughts on investing.
It’s not for me to decide, but I would hope everyone tries their best to talk about “best ideas” for preserving and growing our capital and less about politics or which party is best for growing wealth. I do believe there are investments for every “season”. So let’s size up the current macro financial environment as it exists today and work to come up with investments that work.
deferred income annuity for ltc My parents bought LTC insurance that reimbursed my mother about $45,000 for the last year in Assisted living ( not a nursing home or SNF) at a max $108 a day out of a total allowable benefit of $130,000.
I don't know when they purchased the policy so I do not know how much it cost, but is was more than $45,000, and if that money had been in the SP500 would have accumulated far more than $130,000. I am sure they started the policy in the 1990's, so they paid on it for over 25 years.
I think there are two lessons
1) one of the reasons her LTC costs were so low was she lived in Texas, where the Assisted Living was "only" $4500 a month. IT was a high quality well run institution. If she had been in CT where we lived it would have been up to $10,000. Most of this is due to lower labor costs and much less regulation. SNF is far higher.
This would seem to recommend moving to Texas, but while I have not checked into it, Title 19 in Texas likely does not cover much in LTC, as it covers very little anything else.
In CT ( once you have exhausted all your money) the state will pay for your nursing home (only skilled nursing, not Assisted Living)
2) either way if your family can't keep you at home it is very expensive.
Short and distort - the inverse of pump and dump Nocera (following Greenberg) has been muddying the water b/w shorting, even aggressive and disinformation-spreading shorting, and naked shorting (increasing the float) for many
years now, building strawmen, blaming the victim, building defenses upon the low or zero effect of the wrongdoing. (Remember, thieves are a helpful reminder to lock our doors; we're all safer for it. A company so thoroughly crappy deserves to go down; if it was truly valuable someone would buy it and stop the shorting; studies show even naked shorting has no effect.' Etc.)
But naked shorting
is shorting more shares than there are in a company, and is unlawful. Weakly enforced, if at all. With it the stock volume can be larger than the tradable shares in the market. Does that sound like a good idea, or just the side of an argument, to be able to do this w impunity?
For those into detail:
https://deliverypdf.ssrn.com/delivery.php?ID=748001100113103125085064113123017030099042041058020023102082095068097107009022099065019107039057114029060023093091020114126106017070064086060028019031087094093094092088029095069067091094112081087093125081004003029075068094015106072026009099026083005083&EXT=pdf&INDEX=TRUENo one is going to read all that but the conclusion (the second one), about SEC overhaul and aggressiveness, is altogether warranted.
http://wrap.warwick.ac.uk/55474/1/WRAP_Raman_1173295-wbs-100713-nss_jfe_2011_784_resubmission_20121224_revised_manuscript.pdf This is thorough and does find delivery fails did not play a part in price declines in '08.
These could be superseded, but I could not find updates.
State of play, at least by the date:
https://www.natlawreview.com/article/sec-brings-naked-short-selling-case
U.S. inflation rate climbs again to 7.9%, CPI shows / MarketWatch Article “just as economists such as Summers predicted."
I follow Summers weekly on Bloomberg’s “Wall Street Week.” ISTM his main gripe has been with the Federal Reserve. They’re way behind the curve. (Wonder who nominated the current Chair?) As far as the parties go, didn’t the Rs initiate the mailing of stimulus checks? Why was it a good idea for Trump to send them out (accompanied by his personal signed letter) but a bad idea for the Ds to do the same?
Yeah - you can debate the whole ball of wax if you want to (tax policies, the impact of Covid, assorted legislation and years of very low interest rates). But let’s not oversimplify. You’ll find economists on various sides of the inflation issue (it’s complex and has more than 2 sides.)
I’ve always accepted in my mind that paper currencies eventually depreciate. Hence - the reason for investing is assets like homes, precious metals and stocks. The best way to make a paper currency “appreciate“ in buying power is to bring on a severe recession or depression that nobody wants.
ISTM Japan went down that road. Sure - the Yen appreciated, but their stock market was in the dumpster for 25 years.
Michael F Price, RIP @LewisBraham,
This is an excellent, very informative article.
I seldom read Fortune magazine these days, but don't recall seeing content of this caliber in recent
years.
Thanks for posting!
Michael F Price, RIP So sad to read of his passing. I also want to send my deepest heart felt condolences to his family.
He died way too soon, at only 70.
I too bought Mutual Shares as my first mutual fund in 1989 ( or before, but that is as far back as my available records go!) after reading everything I could find about him and his ideas about value investing. Over the years we put more and more in until it was my biggest position, with Mutual Discovery a close second.
When he sold the firm, I wrote him a long letter, thanking him for putting up such good returns, but also for teaching me about investing and the difference between the value of a company and the price of it's stock.
I can't think of any other well known investor, other than perhaps Buffett, who had a greater impact on my investment ideas ( or on our net worth!).
