Joseph L. Shaefer

5 ETFs for a Bursting Bond Bubble

Fine article. May I suggest, for those with less faith in the ability of the national government to control inflation, some shorter-maturity Treasury ETFs, as well. Their current yield will be less but they will be less subject to decline in value if rates rise. Among those to consider might be SHY or TUZ.

For those really concerned about inflation, TIP would be appropriate.

For those seeking high-yield paper, expect a default rate that will keep the yields down around 10%, and note that all have moved higher these last couple months as investors once again embrace risk, but JNK, PHB and HYG might be possibilities.

Finally, for those in any bracket that might become a higher bracket thanks to a rising tax rate – probably, all of us -- municipals offer the biggest after-tax spread between Treasuries and the bond class. Choices include HYD, PRB, PMF or MAB.

Further research will yield a number of other good choices.

Fractured Wall Street Fairy Tales #2: Awful News Is the Same as Good News

Thomas, you're welcome to peruse our website or call us at the number on our Profile page. We'll do our best to answer any questions you might have and, if you then believe it would be a good fit, to assist as you direct.
With best regards,
Joe


On Jul 23 11:03 PM sheeple123jump wrote:

> Joe,Ive only glanced at your web site,as it seems to indicate you
> only handle high asset portfolios ,I should have inquired further...but
> I just presumed that our asset level wouldnt qualify.
> We are in the 500-600 K range ,and recently fired our neglectful
> and shortsighted financial manager...I'm learning to 'do it myself'
> and alongside being greatly appreciative of the education I get from
> people like yourself here in SA, I also think about just finding
> a good investment manager/firm (like yours) to do it for me. <br/>should
> I take another look at your web site? thanks for your good work here
> in SA.
> Thomas.
>

Fractured Wall Street Fairy Tales #2: Awful News Is the Same as Good News

Dear rrtzmd,

I’D LIKE TO EXTEND AN OFER TO YOU.

Even though, via your comments, you bring a can-opener to a gun fight…

And, even though you apparently ditched your last sign-on in which, of 700 comments, the SA community gave you a rating of minus 800…

And, even though your current rating from peers is consistently negative…


I’D LIKE TO INVITE YOU TO PERSONALLY AUDIT OUR PUBLICATION’S TRACK RECORD --

//// I’LL EVEN PAY YOU $500. ////

After all, you claim our performance can’t be tracked. That’s a lie. Our buys and sells are clearly stated and monitored every month in our financial letter.

We began our two portfolios January 1, 1999. We monitor all gains, losses and dividends. We don’t include commissions since everyone pays a different price. If you’d like to add $10 a trade, it could change our numbers – instead of being up 245% in our Growth & Value Portfolio (to the S&P’s -- MINUS 25%) why, we may only be up 240%!

I am willing to send you every single issue since January 1999. You would then << INDEPENDENTLY >> verify our calculations. You would track every printed-for-all-to-see... buy and sell, tally the profit or loss, and add the dividend income.

All I ask is two things:

PROVIDE AN EXCEL SPREADSHEET WITH YOUR CALCULATIONS SO WE CAN VERIFY THAT YOU REPORTED HONESTLY, and

IF OUR RECORD IS AS STATED, YOU EAT CROW. IF IT ISN’T, I’LL EAT CROW.

What do you say, rrtzmd? Are you willing to put up or shut up? I’m willing to put up $500. If you find errors in our previous calculations, I’m willing to fix any error and change our reporting to reflect it. I’m willing to subject our track record to the sunlight of public scrutiny.

How about you, rrtzmd? I know you would be the best person to do this audit because no one else would be as intent on picking a nit. Witness your July 8 diatribe, “...how's that GGN trade holding up?...looks like it's down about 10% since you recommended it June 18...gosh, that translates into an annual return of about, uhhhhhhhhh -- NEGATIVE 100%???...”

Really now -- extrapolating a 100% loss from 3 weeks’ action???!!!?? So now that GGN is above our entry price, by your logic we'd have to call it a winner. It isn’t. Not yet. Only time will tell. But the past is a different story. It’s documented. Please accept my offer. Put up or shut up.

We’ll provide complete access to what would be a delight for you if you could find skullduggery, and $500 to boot. On the other hand, if you are only willing to vilify and rant to every writer of every article, as a cursory review of your comments will show, but are unwilling to put up, I can waste no more electronic ink on you.

Respectfully submitted,
JS

Fractured Wall Street Fairy Tales #2: Awful News Is the Same as Good News

Responding to Appleton and Alan Young,

Thank you both for your comments and concern. You are correct that it is difficult to maintain even a small short position during such a period of euphoria. Fortunately, we are well-cushioned by the 90% of our holdings still in bond funds, long positions, and the income we generate from those long positions.

For perspective, we said in an article published March 30th, we were
“Long the following preferreds (partial list:) CHK-D, USB-E, G & J, WFC-J, WSF, FWF, WCO, HCN-G, HCP-E &F, KVN, AIV-G, KVF, KVW, KTN, PNH, PNU, PNC-L, KEY-A,B,D,E & F, WRB-A, and SIVBO. We will sell any and all as they are 60-80% above our entry prices. Currently holding oils like RDS.B and XOM, natural gas like CHK, ECA and IMO, and coal land-lease firms NRP and PVR. We will sell 50% of all if/as the market rises toward 8500 or so and will sell more if it goes to the 9000 area. We will also place our first limit order for the first of the inverse ETFs we plan to buy: EEV at a limit of 36.”

Those preferreds soared anywhere from 40 - 87%, providing a gain for the year that will be difficult to blow! And of course, we got killed on the early purchase of EEV, which we still hold (averaged down to 27.) Fortunately it is less than 1% of our total portfolio; all shorts taken together are less than 10%.

We also continued to buy other high-yield value offerings line Australia & New Zealand Banking Group (article of 31 March) and Gabelli Global Gold, Natural Resources & Income Trust (article of 18 June.) We continue to seek quality longs if we can find them.

Fortunately, we limited our short positions to the 10% our discipline dictated, so we aren’t really “hurting.” But neither are we doing as well as we would have had we waited to lay on these positions! Since our Full Disclosure should address what a new reader see as our current viewpoint, we don't list all these positions from previous articles, but do list the bond funds and inverse ETFs we think are most appropriate for someone making an allocation decision today.

April's Unemployment Report: Lies, Damned Lies, and Statistics

On May 12 03:42 AM Cetin Hakimoglu wrote:

> Can we stop dwelling on job loss? Those aren't important. ...<

JS responds > Thank you for your comment -- community discourse on these topics is important. And -- I must disagree, sir. Another half million households that may lose their home if they don't have a large savings account or don't find a new job ASAP may not be important to some Fat Cat banker whose toughest decision is whether to water the common stock at the shareholder's expense or take another bailout at the taxpayer's expense -- but it's important to the half million newly without income. And to the 16.5 million others I write about in a contiguous article who are looking for work.

They cannot simply say, as a befuddled Wall Streeter might, "So they'll lose their apartment in Mid-Town. Why don't they just go to their place in The Hamptons or Como?"