Old Trader

Key Asset Categories vs. Cash

Thomas,

Although I think you're correct, I'd consider those subsets of debt/fixed income. I actually wrote about that in a couple of articles and blogposts on portfolio construction and asset allocation.

I'd be interested in getting your feedback on those articles/posts.


On Jul 14 06:00 PM Thomas MacLeod wrote:

> Don't overlook tips(tip) emg mkt bonds (pcy) or foreign treasuries
> (bwx). These are also asset classes in themselves.

Key Asset Categories vs. Cash

LMAO!


On Jul 14 09:28 PM Living4Dividends wrote:

> True, Old Trader
>
> during the great crash of 08 investors / traders were asked about
> their position: three answer arose as to their position
>
> stock-bond position
> all cash position
> fetal position

Key Asset Categories vs. Cash

Living4,

In classic theory, yes...but often, in practice, it seems relegated to "afterthought".


On Jul 14 01:50 PM Living4Dividends wrote:

> Old Trader - Cash is an asset class. That's why fomulas say things
> like " 60% stocks, 35% bonds, 5% cash. " If cash is NOT an asset
> class, what is then?

Key Asset Categories vs. Cash

I find it sort of interesting that "cash" seems to come and go, in terms of being considered an "asset class", a mistake, imo. At least until hard times approach.....then a whole slew of people "discover" (or rediscover) "religion".

Time for Income: Time for Bonds?

"The FED can manage short-term rates but excessive supply dependent on foreign buyers is going to cost more, which will exert a drag on any attempt at recovery in housing."

Marc,
The quote above, taken from the article, is why I'd be leery of going very far out, in terms of duration, via IEF. Otherwise, another good article.

The Green Shoots of April: Some Reasons for Market Optimism

I'm thinking many of these "green shoots" fall into the "mirage" category. The earnings posted by the financials are mostly the result of accounting gimmickry and "one time" gains on various investments, and many of the "less bad" earnings posted by non-financials result from cost cutting....something else that is not "sustainable". What I AM certain of, is that TPTB (The Powers That Be, for stat's benefit, *s*) will move heaven and earth in an attempt to keep the plates spinning and all of the balls in the air.

Time to Forsake Stocks for Bonds? Arnott and Arends Square Off

mahoney,

I know its said "don't mess with the Fed", but as deep as their pockets are, they don't have NEARLY enough money if the rest of the world develops a distaste/aversion to US debt.


On May 01 02:16 AM mahoney wrote:

> Mad Hedge Fund,
>
> I'm also taking a hard look at TBT, but my worry is that the Fed
> is going to keep buying up Treasuries as part of their quantitative
> easing strategy. Wouldn't that keep the Treasury bond prices high
> (at the expense of the US dollar)? Does anyone have any thoughts
> on this?

Screening for Trends

Mr. Shaw,

An interesting piece. As a relatively new student of TA, being a "fundie" at heart, I've wondered why some people prefered to use different DMAs, rather than the more or less "standard" 10, 30, 50, 200. Thank's for shedding some light.

Neitzsche or Roubini? Mixed Bag Markets

Mr. Shaw,

Another thought provoking piece, and I agree with those that commend you on your disclosure of both your personal circumstance, as well as that of the type of clients you and your firm serve. Personally, I'm in the same situation (i.e. "mature investor" not yet drawing on the portfolio, but also not able to easily make up any substantial losses), and my portfolio shares many traits with your's, although its perhaps a tad more "aggressive", just because of the my mental "make-up", *s*.

Building a Do-It-Yourself ETF Hedge Fund

A good article, with a lot of information to digest, but I've got a question. If one is trying to replicate hedge fund performance (specifically an absolute return strategy), why exclude the short/w2x shorts?

Normally, proper sector allocation would ensure exposure to non/low correlated asset classes, but as the last year, or so showed...periods of extreme "distress" causes correlations to narrow towards 1, negating the benefit of using non-correllated asset classes. Wouldn't one need to have a short exposure to achieve a positive return in the kind of market we've had recently?

It's a Winter Warming Spell - But More Snow Ahead for Markets

Sonia,

The pension issue is a good one that I'm seeing rising to the fore in various places. Supposedly CAT (on my watch list) and JNJ (in my core portfolio) are 2 possible "victims" of having to divert income to make up pension funds losses....and no doubt, there are many others.

old trader


On Mar 14 12:11 PM Sonia wrote:

> Good analysis. Also, consider the impact of "Mark to Market" on non-financial
> companies suffering a reduction in disposable earnings because they
> have to divert income to bolster pension plans shrunken in nominal
> value by the falling DOW and S&P. If the market rallies and/or
> "Mark to Market" is modified (or declared politically incorrect,)
> the nominal value of pension funds goes up and companies won't have
> this forced diversion of income. There are so many factors in the
> equation it's hard for investors to know what to do. If stocks are
> the frying pan, bonds may be the fire.

It's a Winter Warming Spell - But More Snow Ahead for Markets

Steve,

And what if your aunt had testicles? She'd be your uncle. How high a "probability" factor have you incorporated into your "what ifs"?

About the only thing that I see on your "wish list" that has a prayer of happening is a re-juggling of the S&P 500. None of the others are supported by fundamental or macro evidence.


On Mar 14 09:49 AM Steve Pasq wrote:

> What if the financials have write ups?
>
> What if the S&P 500 stock list changes because of the low capitalization
> of some of the companies?
>
> What if S&P 500 earnings are $60/share? A 15 multiple is 900
> and a 20 multiple is 1200. It is easy to imagine a high multiple
> if earnings do not go down as much as many predict.