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Changing your mind as the facts emerge is nice work if you can get it. New Bill Gross: "End of...
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Tuesday, May 24, 2011, 6:15 PM ETChanging your mind as the facts emerge is nice work if you can get it. New Bill Gross: "End of QE2 may or may not lead to higher yields." Old Bill: Yields may "go higher, maybe even much higher" to attract buyers after QE2 ends. New Meredith Whitney: "I never said that there would be hundreds of billions" in muni defaults. Old Meredith: "This will amount to hundreds of billions of dollars’ worth of defaults."
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There was a good lunchtime read / article on marketwatch talking about Hedge fund secrets. Sell something short, tell everyone why it is going lower, scare them and make it go lower. Then buy it and tell them - now it's now going lower - it's going higher. Make money on both sides.
Billy G and the gang are just now coming around to what Gundlach has been saying for quite some time
However people can take the opposite side of the trade if they want and that is what makes a horserace.
Bill does not get paid for his opinions he is actually running a massive portfolio and if he is wrong it will cost him. Whitney is doing more research and opinions for money.
No, a stopped clock is right at least twice in a cycle. Meredith's only been right once.
She's the classic example of the "blind-squirrel" axiom.
We will see how she does from here but not many people make that kind of large call ever in their career.
Wow, she called the crisis in the 11th hour. Hooray for her.
Unfortunately, I didn't have the capital to do that but I began discussing a subprime/housing bubble back in 2004 on various websites, including Fatwallet finance forums, analystforums.com when I was taking the CFA exams among other places. When I was at one job in 2006 I discussed the need for enhanced liquidity protection beyond their plans and they implemented them. Most there were clueless as to what was coming, at what would be considered a pretty smartly run Fortune 100 business. They thought housing would never crash, lol.
You know when I really knew we were f'd? I was working down in Orlando for a large finance company. I had to drive on Kirkman Rd. to go to work. Every morning/evening I'd drive by these disgusting HoJo hotel/motel buildings, mold dripping off them, cops continually there for various reasons (drugs...etc). They started to advertise a "new" condo development there, remodeling the old HoJo rooms to 220k condos (some cheaper, some more expensive). I laughed so hard. Had the mania reached that level, had the 0 down financing and the option arms that they tried to pitch me when looking at a 250k condo (which had been 170k 6 months prior, and was 320k 12 months later, now they are at 120k).
That was in 2005.
articles.orlandosentin...
Whitney is nothing more than a Jenny-Come-Lately
I understand a lot of people were raising their eyebrows earlier but she was the first loud voice on Wall Street that I am aware of that said we are in trouble. That goes against the grain on Wall Street as good news is blasted out and bad news is hushed.
She also started to connect the mortgage problems with specific banks and talked about contraction of credit.
However if government gets their act together then we can avoid all this mess and she will not look as smart.
I'll be "early in my warning," too: you're going to die.
(Call me a genius. :-) )
Maybe you are a day trader and 5 minutes is an eternity and you are not sure what month you are in.
Anyways I believe the next 6 to 24 months are critical so you will not have to wait long. We are headed for $17 Trillion in debt by the end of 2012 if we raise the debt ceiling. After that who knows?
If we get an external shock or contagion from debt problems in Europe then buckle up. Subprime slime rolled along for many months so don't expect debt problems to appear and go away in one day.
You have me 100% backwards. I am a deep-value, high-yield investor, who buys and holds, collecting substantial dividends, until the value embedded in the issues I buy is rediscovered. When prices rise and yields decline, I roll that money out to new candidates.
So, you're worried about the next 6-24 months? What's your plan, hover in cash? Speculate in gold? What?
It's am impossible guessing game to try to figure out exactly what will happen in months, much less a year or two. The best approach, I have found over a long period of investing, is to find out-of-favor sectors, find issues with above-average dividends, then, buy and get paid to wait. Patience is always rewarded. Handsomely.
Like your investment approach. I have moved more money into Canada and Australia. Energy stocks and fertilizer. Looking for utilities also in those countries.
You may like my approach, but you're not emulating it. I think commodities and inflation hedges are oversubscribed, and Canada and Australia are commodity driven, nothing more. I'd definitely not find myself long those at this time.
Looking for contrarian value, I am in banks, REITs, BDCs, convertible bonds, floating-rate bonds and even some muni ETFs (I never buy munis because I hold most funds in a tax-free trust) because Meredith Whitney so terrified the market with her absurd prognostication that muni ETF's plunged way below their NAVs, making them too attractive to pass up.
Never said I was emulating it. More than one strategy can work.
Forgot to say I have some REITS. I am very patient on commodities as I have been buying them since 1986 when I bought Phillips Petroleum at $10.80. Mad a huge return in that investment and still going strong.
Don't get me wrong. I like energy, in general, and have significant holdings of VNR, RDS.A, EP.PR.C and CHK.PR.D. I just think that specific Aussie and Canuck plays are vulnerable.
They are vulnerable especially if the US gets its act together and stabliizes the USD. If they don't then they will do better.
I have roughly offsetting positions in USD and CDN and Aussie dollars in the even there is a big downswing either way.
That's better than changing your mind when facts don't change.
The Citibank dividend calls were made after the snowball was really starting to roll but if MM made the call on the dividend cut he was in a small group.
Also, changing you mind is a lot different than saying you never said something. When you said that something on 60 Minutes, it's kind of hard to claim it didn't happen.