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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
  • BONDS, HIATUS ..... March 24, 2023
    @hank
    This is a one year chart of the 10 year UST. You may hover the cursor on the graph line to see the yield displayed for a date(s) area. You may also change the 250 day range at the bottom right of the chart with a 'right click' onto the 250 day. This will provide several range choices, or double click the 250 days and enter the number of days you want to display.
    BUT, I can't pick a particular 'yield sweet spot'; other than what appeared to be and is still in place for a short term top in the yield around October 25 that has held for 3 months. Going forward and for how long will the yield decrease??? Magic 8 Ball cracked.
    The IEF etf is the closest fit for 10 year UST, at least relative to an easily traded etf.
    IEF has a return of 5.94% since October 25, 2022.
    Is an ETF trade what you are thinking about?
  • BONDS, HIATUS ..... March 24, 2023
    Is there a particular spot in the 10-year treasury yield that might be advantageous for buying or selling if one were predisposed to timing? (speaking of investment grade intermediate term bonds). ISTM perhaps 3.5% might be in the ballpark - the “sweet spot” so to speak.
    In December the 10-year peaked around 4.33% but then receded to under 3.4% early this month. Interestingly, that drop in rates to below 3.4% appeared to spark some interest in buying on the board / likely elsewhere. But then late in the week it spiked back up sharply to 3.48%. That degree of fluctuation in rates may not sound like much, but can lead to significant gains or losses for anyone “playing” the bond market.
    I submit the question merely as a curiosity. Not seeking or offering investment advice.
  • Moderna Plans to Quadruple Covid Vaccine Price
    Since October 20 of 2022 when Pfizer made its announcement it would raise vaccine prices and the market reacted by expecting Moderna would too, Moderna's stock is up 64% while Pfizer's is up only 5%. This makes sense as Moderna is a much more pure-play on the vaccine while Pfizer makes many other drugs.
    The other interesting factor here is evidence of how commercialization in the case of pharmaceuticals doesn't reduce prices as Adam Smith would like it, but increases them as there are so few players--from $27 per dose to a soon over $100 a dose. Meanwhile, even the debt ceiling and the new Congress's unwillingness to subsidize vaccines for citizens may be playing a role in Moderna's announcement as now the "free market" amongst only three manufacturers will determine the price. KFF illustrates the situation in the above link:
    The federal government has spent more than $30 billion1 on COVID-19 vaccines, including the new bivalent boosters, incentivizing their development, guaranteeing a market, and ensuring that these vaccines would be provided free of charge to the U.S. population. However, the Biden Administration has announced that it no longer has funding, absent further Congressional action, to make further purchases and has begun to prepare for the transition of COVID-19 vaccines to the commercial market. This means that manufacturers will be negotiating prices directly with insurers and purchasers, not just the federal government, and prices are expected to rise. Elsewhere, we have analyzed the implications of commercialization for access to and coverage of COVID-19 vaccines, finding that most, but not all, people will still have free access. Still, the cost of purchasing vaccines for the population is likely to rise on a per dose basis, though the extent to which it affects total health spending is dependent on vaccine uptake and any negotiated discounts, among other factors.
  • Moderna Plans to Quadruple Covid Vaccine Price
    It was in the news a while ago that Moderna and the NIH were in a patent dispute over mRNA technology. Moderna had filed a sole patent for its mRNA vaccine but the NIH protested that it should have been included as co-owner. Moderna let its original patent application expire/slide and may refile with or without the NIH - their talks are ongoing. If the NIH is included, how the Government will share in the proceeds, or whether it will independently license the mRNA technology, will be seen later. So, this is an unfolding story.
    As this link below shows, Moderna and NIH cooperated under informal arrangements during the Covid crisis. But it wasn't like a regular Government grant/contract that do have a clause that the Government has the right of first refusal for any commercialized technology. To encourage Covid vaccine or drug developments, the Government guaranteed advance orders to 8 companies for any products they may successfully develop (5 were for vaccines, 3 were for other types of drugs). It turned out that startup Moderna (without any prior commercial products) was more cooperative with the NIH/Government than Pfizer. Recall that, later, Pfizer didn't even want to give the Government priority in any subsequent/follow-up orders (beyond its initial guaranteed advance orders) until the Government threatened to use its powers under import/export regulations.
    As they say, this stuff/mess is complicated.
    https://ipwatchdog.com/2022/03/31/nihs-fight-ownership-modernas-covid-19-patent-highlights-hazards-business-collaborations/id=148040/
  • BONDS, HIATUS ..... March 24, 2023
    Stuck In The Middle With You, Stealers Wheel, 1972, a partial lyric for Congress.

    'Clowns to the left of me
    Jokers to the right
    Here I am stuck in the middle with you'
    While it would be highly likely that a debt ceiling impasse would affect bonds of all flavors, no secret with this thought, I suspect; one may wonder what the path will be until the dust settles. Bond holdings at this house will remain, as we can't guess what will be.
    The vast majority of Congress enjoy the debt, eh? Spending OPM (other peoples money) is ultimate power of high political office; 'a look what I've done for you', even if it's a 'bridge to nowhere'.
    --- Wednesday, BOJ.....has been fiddling with yield curve since Dec. of 2022. They wanted to maintain a base yield on the BOJ 10 year bond. This attempt has kinda gone 'poof' as global traders have other concerns for inflation in Japan. The thinking has been that a higher10 year yield would repatriate Japanese monies, as well as other potential monies into the Japanese bond market; which would draw these monies away for other foreign bond investments, which would include the U.S. bond market. Well, today finds a large downward move in U.S. yields, as folks apparently want UST and related again, and/or still.
    --- Wednesday, weaker retail sales and PPI data. As well as thoughts 'again' about a mild U.S. recession.
    --- Wednesday. For a small dot of time in the investing time frame, IG bonds performed as they 'should' when equity takes a 'whack'.
    Read the current Real Yield thread for other details, that may or may not provide any clarity.
    The other days of the week found me away from the 'desk'.
    Relative to the below performance info for this week: Most bond returns in the list were positive this week; with a few longer term duration with profit taking(?) . Several bond sectors remain with YTD returns as good as, or better than some U.S. equity sectors.
    ----------------------------------------------------------------------------------------------------------------------------------------
    ---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
    NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
    For the WEEK/YTD, NAV price changes, January 16 - January 20, 2023
    ***** AGAIN, this week, FZDXX, MMKT yield has remained at 4.27% for one month. The core Fidelity MMKT's have continued a slow creep upward to about 3.95%. The holdings of these different funds account for the variances at this time.
    --- AGG = +.17% / +3.2% (I-Shares Core bond etf) widely used bond benchmark, (AAA-BBB holdings)
    --- MINT = +.23% / +.44% (PIMCO Enhanced short maturity, AAA-BBB rated)
    --- SHY = +.15% / +.67% (UST 1-3 yr bills)
    --- IEI = +.2% / +2.16% (UST 3-7 yr notes/bonds)
    --- IEF = +.18% / +3.5% (UST 7-10 yr bonds)
    --- TIP = +.44% / +2.08% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
    --- VTIP = +.26% / +.71% (Vanguard Short-Term Infl-Prot Secs ETF)
    --- STPZ = +.3% / +.78% (UST, short duration TIPs bonds, PIMCO)
    --- LTPZ = +.61% / +5.43% (UST, long duration TIPs bonds, PIMCO)
    --- TLT = -.52% / +6.7% (I shares 20+ Yr UST Bond
    --- EDV = -1% / +8.7% (UST Vanguard extended duration bonds)
    --- ZROZ = -1.67 / +8.8% (UST., AAA, long duration zero coupon bonds, PIMCO
    --- TBT = +.92% / -12.3% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
    --- TMF = -2.15% / +19.6% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
    --- BAGIX = +.2% / +3.02% (active managed, plain vanilla, high quality bond fund)
    *** Other, for reference:
    --- HYG = -.6% / +3.5% (high yield bonds, proxy ETF)
    --- LQD = +.07% / +4.9% (corp. bonds, various quality)
    --- FZDXX = 4.27% yield (7 day), Fidelity Premium MMKT fund
    *** FZDXX yield was .11%, April,2022. The rate of rise in the yield remained flat again this week.

    Comments and corrections, please.
    Remain curious,
    Catch
  • Moderna Plans to Quadruple Covid Vaccine Price
    Pfizer already announced a few months ago it was doing the same: https://reuters.com/business/healthcare-pharmaceuticals/pfizer-expects-price-covid-vaccine-110-130-per-dose-2022-10-20/
    Moderna’s stock actually rallied earlier after the Pfizer announcement in anticipation they would make the same move. There are so few dominant players here at a certain point it seems like collusion or cartel like behavior.
  • Moderna Plans to Quadruple Covid Vaccine Price
    American way - if you want to live, you have to pay.
    Why to stop at $130, life is much more precious.
  • Moderna Plans to Quadruple Covid Vaccine Price
    Good for stock investors’ profits, bad for the American people. A significant part of the cost will be born by Medicare and Medicaid, i.e., taxpayers. It could also cost lives of the uninsured here as well as in developing nations buying our vaccines:
    https://thenation.com/article/economy/big-pharma-greed-knows-no-bounds/tnamp/
    Just last week, the drug giant Moderna was scrambling to explain away concerns about its plans to quadruple the price for its Covid-19 vaccine, from $26 per dose to $110–130 per dose. “I would think,” claimed Moderna CEO Stephane Bancel, “this type of pricing is consistent with the value.”
    It costs Moderna as little as $2.85 to produce a dose of the vaccine. So we’re talking about a price that would be roughly $127 above the production cost for each shot that goes into someone’s arm. Even by the standard measures of pharmaceutical-company excess, this is, as Senators Elizabeth Warren (D-Mass.) and Peter Welch (D-Vt.) suggest, an example of “unseemly profiteering.”
    Does Moderna need the money? No. Over the past two years, the company has made more than $18 billion in profits from its vaccine. The company is literally awash in money—so much so that its CEO is now worth more than $6 billion, up from $4.3 billion in 2021. “This is what corporate greed looks like,” says former secretary of labor Robert Reich.
    But shouldn’t Moderna be able to profit from a vaccine it created? Actually, as the office of Senator Bernie Sanders notes, the Moderna vaccine was “developed in partnership with scientists from the National Institutes of Health (NIH), a U.S. government agency that is funded by U.S. taxpayers. The federal government directly provided $1.7 billion to Moderna’s COVID-19 vaccine research and development, and guaranteed the company billions more in sales.”
  • Bloomberg Real Yield
    "Another of them is named Yu. A real looker."
    OOPS. Katrina Yu is with Aljazeera:
    https://www.aljazeera.com/author/katrina_yu_150428095706090
  • Kind words for T. Rowe Price - Abby Joseph Cohen / Barron’s Roundtable
    Abby Joseph Cohen * is a panelist in “Round II” of Barron’s Annual Roundtable (current Barron’s print edition). Her five recommendations for investment in 2023 include TROW. Some interesting thoughts about the firm as well about active management.
    (Cohen): “My last pick is T. Rowe Price [TROW] … We are entering a period when good active management of portfolios is going to make a difference, after an extended time in which the market was largely momentum-driven. People invested in market-capitalization-weighted index-oriented strategies, such as exchange-traded funds, which became self-fulfilling ‘prophesies’, until they didn't. This approach led to a high concentration in the indexes of a small number of stocks which grew overvalued. A handful of good active managers were left by the wayside …..
    “The company's mutual funds outperformed their benchmarks 76% of the time in the past 10 years. T. Rowe … pioneered no-load mutual funds. The idea was to provide a high-quality product with low fees. The company's funds still tend to have fees at the lower end of the spectrum. The stock hasn't performed well in the past year, and it has an attractive valuation. It is trading for 13 times trailing 12-month earnings, with a dividend yield of 4.3%. The consensus earnings estimate for next year is $7.74 a share …..

    ”If you believe that the U.S. economy will expand, T. Rowe will grow with it. The P/E ratio and dividend yield offer a layer of protection. The 52-week range on the stock is $93 to $194. The stock was trading on Jan. 6 at around $112. The concerns are priced in. What isn't priced in is greater interest in active investment.”
    (Excerpted from Barron’s - January 23, 2023 / edited for brevity)
    * Cohen once worked at T. Rowe Price as an analyst and had a long distinguished career at Goldman Sachs. She currently teaches business at Columbia University, NYC.
  • Bloomberg Real Yield
    +1 crash It just dawned on me that you were talking about Punahou School. My college roommate Sophomore year graduated from Punahou in 1979, the same class as Barack Obama, but of course nobody had heard of Barry Obama then. An elite high school and better than my college !
    Absolutely right. Another connection, for what it's worth: we moved last year out of the apartment block at Beretania @ Punahou where the future President lived, while with his grandparents. I'm sure things have changed since those days. The street noise was simply unbearable for us. We didn't have to go far, to find our new place. :)
  • Bloomberg Real Yield
    +1 crash It just dawned on me that you were talking about Punahou School. My college roommate Sophomore year graduated from Punahou in 1979, the same class as Barack Obama, but of course nobody had heard of Barry Obama then. An elite high school and better than my college !
  • How the Hospice Movement Became a For-Profit Hustle
    @derf
    I was at the VA until 1997. There are some very good VAs especially in the South where many Vets move when they retire.
    Since 1997 the VA budget has increased dramatically from all the post 9/11 vets flooding into the system.
    The problem I saw in the 90s was the budgets were determined by the population in the local access area, so when Vets retired and fled high tax states, the VA hospitals there should have been consolidated and closed, but rarely were because the local Congressperson would fight like hell to keep that from happening. So if the budget declines and you can't close the place, needed improvements didn't happen.
  • 2022 Year-End Review Webinar
    @Charles. Thank you for your upload. I found a pdf, but do you also have a video recording?
    Found the link. Thank you
  • Bloomberg Real Yield
    The Time Zones don't compute for me: I'm 2 hours behind L.A. and 3 hours, in summer. I would bet that Vonnie Quinn's brogue has held her back. Speaking as an Irishman, here. Seems to me she's done some work, rounding-out her words. She appears resistant to reciting that stupid spiel whenever any of them finishes their reports: "...128 countries on 14 continents, ... yada yada... THIS is Bloomberg." Wifey is Filipina, so I notice Lizzy Burden. Another is Kailey Leinz. Univ. of Virginia product. I want to have her children.
    https://www.lizzyburden.com/
    Burden is a fashion model, too.
    https://www.bso.org/profiles/kailey-leinz
    Emily Chang is from Kailua, and went to school just up the block from where I live.
    image
    Another of them is named Yu. A real looker.
  • Wealthtrack - Weekly Investment Show
    Here's that Pimco Jan. 11 outlook piece Clarida referred to (very detailed): Cyclical Outlook: Strained Markets, Strong Bonds.
    Didn't realize he's a Pimco guy.
    The missing piece in all the Fed discussions is this: what measurement are they talking about when they refer to the 2% inflation target? Clarida's statement that inflation now is running "about 5%" means he's looking at year-over-year change -- which, if that's also the Fed's take, at least in part contradicts his point that the Fed is "forward looking."
    Nothing says backward looking like a year-over-year measure, but what that choice would mean for the economy and investing is that they're going to stick with tightening for a good while beyond what more current measures of inflation would indicate is the best course of action, and so yes, the risk of overtightening is very real. I hope they're going to be willing to change course when needed. (They're not idiots; just very careful with communication, and in some ways not all that transparent.)
    P.S. Thanks @Bee; I'd forgotten to look for WealthTrack episodes lately, and this one was for sure worth a listen.