The most exciting returns are to be had from an asset class where those who know it best love it...


The most exciting returns are to be had from an asset class where those who know it best love it least. What does it say when the first pick by Bill Gross at the Barron's Roundtable is gold? Gross isn't calling for an imminent bond bear market, but he doesn't see much upside either. For a fixed-income substitute, he recommends (what else) his BOND ETF, which trounced the competition in its first year and just added the use of derivatives to its toolbox.
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Comments (21)
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    Never listen to a man who recommends you buy something that he happens to be selling...
    2 Feb 2013, 09:11 AM Reply Like
  • martin3
    , contributor
    Comments (44) | Send Message
     
    How is it applicable here? Gross is not selling gold...
    2 Feb 2013, 11:05 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    But he is selling BOND: "For a fixed-income substitute, he recommends (what else) his BOND ETF".

     

    Just sayin. :-)
    2 Feb 2013, 12:58 PM Reply Like
  • PeakOiler
    , contributor
    Comments (299) | Send Message
     
    D_Virginia, Steve Jobs recommended I buy Apple products and I did. Couldn't be more satisfied. I think Gross is wrong about gold unless you want an asset class that is a near perfect hedge against currency gyrations, but little else.
    2 Feb 2013, 10:02 AM Reply Like
  • sikkabooyah
    , contributor
    Comments (457) | Send Message
     
    OK. D_Virginia stands corrected. Make that "Seldom listen to a man who recommends you buy something that he happens to be selling...".
    2 Feb 2013, 10:17 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    Yeah, what sikka said :-)
    2 Feb 2013, 10:26 AM Reply Like
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    Actually, I still disagree. You shouldn't have listened to Steve Jobs. You should have come to your own conclusion based on unbiased information. If that conclusion happened to match what Steve told you, great, but you still shouldn't have bought /just/ because Steve told you to.

     

    Same with Bill Gross. :-)
    2 Feb 2013, 10:27 AM Reply Like
  • tr4head
    , contributor
    Comments (316) | Send Message
     
    D-VA. As a liberal Democrat, you believe in your beloved massive government and what they say about inflation. These people you probably believe without hestitation have been proven time and again to be as wrong as the 16/19 OVERSTATED quarterly GDP estimates since your POTUS has been in office. Yes, they have been lying to us regularly and consistently and if you think they are reporting the truth about Inflation, its Kool Aid time for you.

     

    Hard assets and commodities/EMs are really the only place to be, and most smart people already know this.

     

    And yes, this means GOLD is the picture if you want to protect your investments from the coming Japanese like calamities.
    2 Feb 2013, 12:07 PM Reply Like
  • D_Virginia
    , contributor
    Comments (2278) | Send Message
     
    Jeez kiddies, lighten up, I was just knocking Billy boy's constant hawking of his bond wares, I made no comment on gold.

     

    However, since you asked. :-)

     

    Philosophically speaking, I'm with Buffett on gold. Despite what Glenn Beck would have you believe, it doesn't really have much intrinsic value. We dig it out of the ground, we melt it down, we pay people to stand around guarding it, and for what? So it can sit there and look pretty. Sure, it has some minor applications in the production of some electronics, etc, but otherwise it doesn't really DO anything that produces REAL value.

     

    Good businesses produce real value. Skilled people produce real value. Real value is inherent in some consumables like food and clean water, and commodities that produce goods that add real value. And if the world does actually implode, Glenn Beck style, then you won't want gold, you'll want food, water, and guns -- the people who have those things will laugh heartily at your gold...as they take it from you with their guns and then refuse to share their food and water with you. :-)

     

    Sure, the gyrations of the so-called markets will make gold appear to be valuable as a proxy of a proxy of a proxy for value, but the fact remains, you can't eat it, you can't drink it, and you can't build much with it.

     

    And yes, high inflation is coming, but not this year. Hyper inflation, Zimbabwe style, is not coming, at least not in the next couple decades. Sorry.

     

    Finally, while CPI is certainly a heavily flawed metric as it exists today, it's not /that/ far off from some of the arguably more accurate gauges, like MIT's Billion Product Price index: http://bpp.mit.edu/usa, so it's not worth starting any revolutions over it, not just yet.

     

    But, each to their own. Personally, I'm buying AAPL via vertical spreads. Best of luck to both of us. :-)
    2 Feb 2013, 01:17 PM Reply Like
  • toncuz
    , contributor
    Comments (50) | Send Message
     
    Unless you're a conservative Republican who believes in BIG BUSINESS, the people who steal our labor, bribe our conservative Congressmen and rape our pensions. I'll take my elected government democracy over the unelected corporate state right-wing central planners any day.
    2 Feb 2013, 02:37 PM Reply Like
  • toncuz
    , contributor
    Comments (50) | Send Message
     
    Be right back...I'm hungry...I have to go to McDonalds to trade a Big Mac for my gold bar.
    2 Feb 2013, 02:39 PM Reply Like
  • tr4head
    , contributor
    Comments (316) | Send Message
     
    Right Wing Central Planners? The only place that could have taught you this ridiculous notion is either from your typical College Professor or the rotten public school you probably went to. I won't even argue here with someone of your caliber.

     

    Sadly, there is nothing but irrationality and childlike ranting emotion from anti business Socialists who have the nerve to complain about the very people that they use force to take their money. Unless you are living off the taxpayer, you are probably employed by a businessman. You might think about the hand that feeds you - its either a middle class taxpayer or one of those filthy businessmen.

     

    Of course, you could be running your own business, which would take hard work and brains. But I rejected that possibility out of hand as soon as I read that last sentence and that you eat at McDonalds.
    2 Feb 2013, 05:14 PM Reply Like
  • tr4head
    , contributor
    Comments (316) | Send Message
     
    D-V. Of course you would be with Warren. And Al G. And Bill G. I don't care who likes Gold or not, I make my own decisions and its the place to be right now.

     

    Gold stabilzed and found it's bottom. When the inevitable happens, you would be looking back and wondering why you believed our lying Govt hype about no or even low inflation, just like the almost always overstated GDP growth I mentioned earlier. Does that fact alone not bring you a little pause about things?

     

    The air will soon be out of our sails and Stagflation will be here. That may make you happy, getting back to the Jimmy Carter days and all ;-).

     

    BTW, Buffet is not right all the time, especially lately (his bet on rail for example).
    2 Feb 2013, 05:22 PM Reply Like
  • tr4head
    , contributor
    Comments (316) | Send Message
     
    For the sake of accuracy, it's 14/19 overstated GDP estimates. The 4th QTR 2012 was overstated by OVER 1%. Please review the 1-31-2013 WSJ article, A7 in print edition, which has all the GDP estimates charted since Obama took office.

     

    Anyone on either side should see that the Economic numbers out of Washington, including inflation, are highly questionable.

     

    Bernake has been quoted as saying that inflation is some sort of "mindset" vs a real number. If he believes this, then you can see why lying about inflation may be nothing more than ends justifying means.
    3 Feb 2013, 10:25 AM Reply Like
  • martin3
    , contributor
    Comments (44) | Send Message
     
    oh really? you ever heard of cooperatives?
    so if you don't argue with somebody of his "caliber" why did you reply?
    4 Feb 2013, 11:44 AM Reply Like
  • ace41
    , contributor
    Comments (11) | Send Message
     
    Just a few thoughts about Bill Gross and PTY. First, he has recommended PTY in at least two previous Barron"s Roundtables. Second, he pluts his money where his mouth is; on several occasions, in the past couple of years, he has invested several millions in PTY and other Pimco closed-end funds when their prices came under pressure. As an income seeking retiree, I have enjoyed the ride immensely in terms of both income and cap gains from PTY. One of the earlier commentors has it right. Check the facts, and if they confirm the sales pitch, don't be afraid to jump in.
    2 Feb 2013, 01:30 PM Reply Like
  • Rousseau SC
    , contributor
    Comments (284) | Send Message
     
    I can't think of Bill Gross without remembering his statement that the function of the financial system is to effect government policy. Now I interpret everything he says with that in mind. Is he playing Uncle Sam or is he a handsomely rewarded puppet?
    2 Feb 2013, 01:46 PM Reply Like
  • martin3
    , contributor
    Comments (44) | Send Message
     
    no. the government is the puppet. bill gross controls the government :)
    4 Feb 2013, 11:35 AM Reply Like
  • Value Doc
    , contributor
    Comments (854) | Send Message
     
    "It doesn't have much intrinsic value . . . it can sit there and look pretty. It doesn't really do anything that produces real value."

     

    Sounds a lot like my last girlfriend. She wasn't even much use in electronics applications either.
    2 Feb 2013, 03:56 PM Reply Like
  • patrjck
    , contributor
    Comments (15) | Send Message
     
    I read Bill Gross' speech and took away that bonds are way riskier than they are priced and to stay away. As in, please don't make me invest any more money in bonds because there is no place to put it! I had just bought a good amount of BOND and sold it after reading his column. Did I miss something?
    9 Feb 2013, 01:44 PM Reply Like
  • martin3
    , contributor
    Comments (44) | Send Message
     
    no you are correct. rates may stay like this for a while still but it seems much more likely they will be going up. especially considering the fed buying seems to have less and less impact on the bond market now.
    10 Feb 2013, 10:50 AM Reply Like
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